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Banner Corporation Reports Net Income Of $5.1 Million In Fourth Quarter; 2011 Net Income Highlighted By Improved Credit Quality And Strong Revenue Generation

Conference Call

Banner will host a conference call on Thursday, January 26, 2012, at 8:00 a.m. PST, to discuss its fourth quarter and year end results. The conference call can be accessed live by telephone at (480) 629-9770 to participate in the call. To listen to the call online, go to the Company’s website at www.bannerbank.com. A replay will be available for a week at (303) 590-3030, using access code 4503316.

About the Company

Banner Corporation is a $4.26 billion bank holding company operating two commercial banks in Washington, Oregon and Idaho. Banner serves the Pacific Northwest region with a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.

This press release contains statements that the Company believes are “forward-looking statements.” These statements relate to the Company’s financial condition, results of operations, plans, objectives, future performance or business. You should not place undue reliance on these statements, as they are subject to risks and uncertainties. When considering these forward-looking statements, you should keep in mind these risks and uncertainties, as well as any cautionary statements the Company may make. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to the Company. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors which could cause actual results to differ materially include, but are not limited to, the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets and may result in our allowance for loan losses not being adequate to cover actual losses; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates and the relative differences between short and long-term interest rates, loan and deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Board of Governors of the Federal Reserve System and of our bank subsidiaries by the FDIC, the Washington DFI or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or any of the Banks which could require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; our compliance with regulatory enforcement actions; the requirements and restrictions that have been imposed upon Banner Corporation and Banner Bank under the memoranda of understanding with the Federal Reserve Bank of San Francisco (in the case of Banner Corporation) and the FDIC and the Washington DFI (in the case of Banner Bank) and the possibility that Banner Corporation and Banner Bank will be unable to fully comply with the memoranda of understanding, which could result in the imposition of additional requirements or restrictions; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules; our ability to attract and retain deposits; increases in premiums for deposit insurance; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets and liabilities, which estimates may prove to be incorrect and result in significant changes in valuations; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; the failure or security breach of computer systems on which we depend; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common and preferred stock and interest or principal payments on our junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; future legislative changes in the United States Department of Treasury Troubled Asset Relief Program Capital Purchase Program; and other risks detailed in Banner Corporation’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2012 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect our operating and stock price performance.

 

 

           

RESULTS OF OPERATIONS

Quarters Ended

Twelve Months Ended

(in thousands except shares and per share data) Dec 31, 2011 Sep 30, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
   
INTEREST INCOME:
Loans receivable $ 45,115 $ 45,641 $ 49,390 $ 184,357 $ 205,784
Mortgage-backed securities 922 799 902 3,455 4,045
Securities and cash equivalents 2,414   3,121   1,936   9,751   8,253  
48,451 49,561 52,228 197,563 218,082
 
INTEREST EXPENSE:
Deposits 5,169 6,169 9,521 26,164 52,320
Federal Home Loan Bank advances 64 64 314 370 1,318
Other borrowings 559 559 584 2,265 2,448
Junior subordinated debentures 1,073   1,041   1,052   4,193   4,226  
6,865   7,833   11,471   32,992   60,312  
Net interest income before provision for loan losses 41,586 41,728 40,757 164,571 157,770
 
PROVISION FOR LOAN LOSSES 5,000   5,000   20,000   35,000   70,000  
Net interest income 36,586 36,728 20,757 129,571 87,770
 
OTHER OPERATING INCOME:
Deposit fees and other service charges 5,894 6,096 5,515 22,962 22,009
Mortgage banking operations 1,936 1,401 2,086 5,154 6,370
Loan servicing fees 136 289 177 1,078 951
Miscellaneous 972   586   514   2,420   2,302  
8,938 8,372 8,292 31,614 31,632
Other-than-temporary impairment recovery (loss) - - 3,000 - - 3,000 (4,231 )
Net change in valuation of financial instruments carried at fair value (1,787 ) (1,032 ) (706 ) (624 ) 1,747  
Total other operating income 7,151 10,340 7,586 33,990 29,148
 
OTHER OPERATING EXPENSE:
Salary and employee benefits 18,730 18,226 17,045 72,499 67,490
Less capitalized loan origination costs (2,404 ) (1,929 ) (2,123 ) (8,001 ) (7,199 )
Occupancy and equipment 5,379 5,352 5,501 21,561 22,232
Information / computer data services 1,388 1,547 1,531 6,023 6,132
Payment and card processing services 2,156 2,132 1,942 7,874 7,067
Professional services 1,210 1,950 1,740 6,017 6,401
Advertising and marketing 2,036 1,602 1,740 7,281 7,457
Deposit insurance 1,367 1,299 1,999 6,024 8,622
State/municipal business and use taxes 562 553 616 2,153 2,259
Real estate operations 4,365 6,698 7,044 22,262 26,025
Amortization of core deposit intangibles 555 554 600 2,276 2,459
Miscellaneous 3,323   3,054   3,399   12,135   11,856  
Total other operating expense 38,667   41,038   41,034   158,104   160,801  
Income (loss) before provision for (benefit from) income taxes 5,070 6,030 (12,691 ) 5,457 (43,883 )
 
PROVISION FOR (BENEFIT FROM ) INCOME TAXES - -   - -   - -   - -   18,013  
 
NET INCOME (LOSS) 5,070   6,030   (12,691 ) 5,457   (61,896 )
 
PREFERRED STOCK DIVIDEND AND DISCOUNT ACCRETION:
Preferred stock dividend 1,550 1,550 1,550 6,200 6,200
Preferred stock discount accretion 425   425   398   1,701   1,593  
 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ 3,095   $ 4,055   $ (14,639 ) $ (2,444 ) $ (69,689 )
 
Earnings (loss) per share available to common shareholder
Basic $ 0.18 $ 0.24 $ (0.91 ) $ (0.15 ) $ (7.21 )
Diluted $ 0.18 $ 0.24 $ (0.91 ) $ (0.15 ) $ (7.21 )
 
Cumulative dividends declared per common share $ 0.01 $ 0.01 $ 0.07 $ 0.10 $ 0.28
 
Weighted average common shares outstanding
Basic 17,269,269 16,808,589 16,008,467 16,724,113 9,664,906
Diluted 17,298,004 16,837,324 16,008,467 16,752,848 9,664,906
 
Common shares issued in connection with exercise of stock options or DRIP 522,223 346,489 241,653 1,375,185 836,989
 
   

 

       

FINANCIAL CONDITION

(in thousands except shares and per share data) Dec 31, 2011 Sep 30, 2011 Dec 31, 2010
 

ASSETS

Cash and due from banks $ 62,678 $ 53,503 $ 39,756
Federal funds and interest-bearing deposits 69,758 234,824 321,896
Securities - at fair value 80,727 85,419 95,379
Securities - available for sale 465,795 383,670 200,227
Securities - held to maturity 75,438 79,289 72,087
Federal Home Loan Bank stock 37,371 37,371 37,371
Loans receivable:
Held for sale 3,007 2,003 3,492
Held for portfolio 3,293,331 3,223,243 3,399,625
Allowance for loan losses (82,912 ) (86,128 ) (97,401 )
3,213,426 3,139,118 3,305,716
Accrued interest receivable 15,570 16,101 15,927
Real estate owned held for sale, net 42,965 66,459 100,872
Property and equipment, net 91,435 92,454 96,502
Other intangibles, net 6,331 6,887 8,609
Bank-owned life insurance 58,563 58,058 56,653
Other assets 37,255   38,611   55,087  
$ 4,257,312   $ 4,291,764   $ 4,406,082  

LIABILITIES

Deposits:
Non-interest-bearing $ 777,563 $ 763,008 $ 600,457
Interest-bearing transaction and savings accounts 1,447,594 1,461,383 1,433,248
Interest-bearing certificates 1,250,497   1,313,043   1,557,493  
3,475,654 3,537,434 3,591,198
 
Advances from Federal Home Loan Bank at fair value 10,533 10,572 43,523
Customer repurchase agreements and other borrowings 152,128 139,704 175,813
Junior subordinated debentures at fair value 49,988 48,770 48,425
 
Accrued expenses and other liabilities

23,253

19,593 21,048
Deferred compensation

13,306

  14,200   14,603  
3,724,862 3,770,273 3,894,610

STOCKHOLDERS' EQUITY

Preferred stock - Series A 120,702 120,276 119,000
Common stock 531,149 523,284 509,457
Retained earnings (accumulated deficit) (119,465 ) (122,384 ) (115,348 )
Other components of stockholders' equity 64   315   (1,637 )
532,450   521,491   511,472  
$ 4,257,312   $ 4,291,764   $ 4,406,082  
Common Shares Issued:
Shares outstanding at end of period 17,553,472 17,031,249 16,164,781
Less unearned ESOP shares at end of period 34,340   34,340   34,340  
Shares outstanding at end of period excluding unearned ESOP shares 17,519,132   16,996,909   16,130,441  
Common stockholders' equity per share (1) $ 23.50 $ 23.61 $ 24.33
Common stockholders' tangible equity per share (1) (2) $ 23.14 $ 23.20 $ 23.80
 
Common stockholders' tangible equity to tangible assets (2) 9.54 % 9.20 % 8.73 %
Consolidated Tier 1 leverage capital ratio 13.44 % 13.19 % 12.24 %
 

(1) - Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding and excludes unallocated shares in the ESOP.

 

(2) - Common stockholders' tangible equity excludes preferred stock, core deposit and other intangibles. Tangible assets excludes other intangible assets. These ratios represent non-GAAP financial measures.

 

   

 

           
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
   
Dec 31, 2011 Sep 30, 2011 Dec 31, 2010

LOANS (including loans held for sale):

Commercial real estate
Owner occupied $ 469,806 $ 474,863 $ 515,093

 

Investment properties 621,622 586,652 550,610
Multifamily real estate 139,710 134,146 134,634
Commercial construction 42,391 38,124 62,707
Multifamily construction 19,436 16,335 27,394
One- to four-family construction 144,177 145,776 153,383
Land and land development
Residential 97,491 96,875 167,764
Commercial 15,197 19,173 32,386
Commercial business 601,440 580,876 585,457
Agricultural business including secured by farmland 218,171 211,571 204,968
One- to four-family real estate 642,501 639,909 682,924
Consumer 103,347 98,794 99,761
Consumer secured by one- to four-family real estate 181,049   182,152   186,036  
 
Total loans outstanding $ 3,296,338   $ 3,225,246   $ 3,403,117  

 

 
Restructured loans performing under their restructured terms $ 54,533   $ 51,990   $ 60,115  

 

 
Loans 30 - 89 days past due and on accrual $ 9,962   $ 7,895   $ 28,847  

 

 
Total delinquent loans (including loans on non-accrual) $ 85,274   $ 91,044   $ 180,336  

 

 
Total delinquent loans / Total loans outstanding 2.59 % 2.82 % 5.30 %
 
 

GEOGRAPHIC CONCENTRATION OF LOANS AT

 

December 31, 2011

 

Washington Oregon Idaho Other Total
 
Commercial real estate
Owner occupied $ 352,965 $ 62,354 $ 51,321 $ 3,166 $ 469,806
Investment properties 478,798 94,855 42,736 5,233 621,622
Multifamily real estate 121,699 9,344 8,260 407 139,710
Commercial construction 24,386 2,255 15,750 - - 42,391
Multifamily construction 19,436 - - - - - - 19,436
One- to four-family construction 79,294 63,058 1,825 - - 144,177
Land and land development
Residential 49,611 43,382 4,498 - - 97,491
Commercial 12,874 890 1,433 - - 15,197
Commercial business 392,390 81,984 66,156 60,910 601,440
Agricultural business including secured by farmland 106,212 49,721 62,210 28 218,171
One- to four-family real estate 399,566 213,782 26,901 2,252 642,501
Consumer 72,349 25,871 5,127 - - 103,347
Consumer secured by one- to four-family real estate 126,507   42,412   11,631   499   181,049  
 
Total loans outstanding $ 2,236,087   $ 689,908   $ 297,848   $ 72,495   $ 3,296,338  
 
Percent of total loans 67.8 % 20.9 % 9.0 % 2.3 % 100.0 %
 
 
DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT
  December 31, 2011 Washington Oregon Idaho Other Total
 
Residential
Acquisition & development $ 13,200 $ 17,343 $ 3,607 $ - - $ 34,150
Improved lots 22,651 23,055 408 - - 46,114
Unimproved land 13,760   2,984   483   - -   17,227  
 
Total residential land and development $ 49,611   $ 43,382   $ 4,498   $ - -   $ 97,491  
Commercial & industrial
Acquisition & development $ 2,557 $ - - $ 481 $ - - $ 3,038
Improved land 5,892 - - 191 - - 6,083
Unimproved land 4,425   890   761   - -   6,076  
 
Total commercial land and development $ 12,874   $ 890   $ 1,433   $ - -   $ 15,197  
 
   

 

         
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
   
Quarters Ended

Twelve Months Ended

CHANGE IN THE Dec 31, 2011 Sep 30, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010

ALLOWANCE FOR LOAN LOSSES

 
Balance, beginning of period $ 86,128 $ 92,000 $ 96,435 $ 97,401 $ 95,269
 
Provision 5,000 5,000 20,000 35,000 70,000
 
Recoveries of loans previously charged off:
Commercial real estate 37 1 - - 53 - -
Multifamily real estate - - - - - - - - - -
Construction and land 762 89 112 1,602 897
One- to four-family real estate 241 34 11 356 136
Commercial business 511 414 776 1,082 2,865
Agricultural business, including secured by farmland 5 10 36 20 45
Consumer 73   69   79   304   284  
1,629 617 1,014 3,417 4,227
Loans charged off:
Commercial real estate (1,575 ) (1,644 ) (1,575 ) (6,079 ) (1,668 )
Multifamily real estate (11 ) - - - - (682 ) - -
Construction and land (3,269 ) (6,445 ) (11,811 ) (26,328 ) (43,592 )
One- to four-family real estate (3,324 ) (2,483 ) (2,483 ) (9,910 ) (7,860 )
Commercial business (1,172 ) (863 ) (3,211 ) (8,396 ) (15,244 )
Agricultural business, including secured by farmland (188 ) - - (460 ) (477 ) (1,940 )
Consumer (306 ) (54 ) (508 ) (1,034 ) (1,791 )
(9,845 ) (11,489 ) (20,048 ) (52,906 ) (72,095 )
Net charge-offs (8,216 ) (10,872 ) (19,034 ) (49,489 ) (67,868 )
 
Balance, end of period $ 82,912   $ 86,128   $ 97,401   $ 82,912   $ 97,401  
 
Net charge-offs / Average loans outstanding 0.25 % 0.33 % 0.55 % 1.50 % 1.88 %
 
 
ALLOCATION OF

ALLOWANCE FOR LOAN LOSSES

Dec 31, 2011 Sep 30, 2011 Dec 31, 2010
Specific or allocated loss allowance
Commercial real estate $ 16,457 $ 14,217 $ 11,779

 

Multifamily real estate 3,952 2,958 3,963
Construction and land 18,184 22,683 33,121
Commercial business 15,159 16,894 24,545
Agricultural business, including secured by farmland 1,548 1,257 1,846
One- to four-family real estate 12,299 11,249 5,829
Consumer 1,253   1,277   1,794  
 
Total allocated 68,852 70,535 82,877
 
Estimated allowance for undisbursed commitments 678 508 1,426
Unallocated 13,382   15,085   13,098  
 
Total allowance for loan losses $ 82,912   $ 86,128   $ 97,401  

 

 
Allowance for loan losses / Total loans outstanding 2.52 % 2.67 % 2.86 %
 
Allowance for loan losses / Non-performing loans 110 % 104 % 64 %
 
   

 

         
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
     
Dec 31, 2011 Sep 30, 2011 Dec 31, 2010
 

NON-PERFORMING ASSETS

 
Loans on non-accrual status
Secured by real estate:
Commercial $ 9,226 $ 8,908 $ 24,727

 

Multifamily 362 - - 1,889
Construction and land 27,731 35,841 75,734
One- to four-family 17,408 15,274 16,869
Commercial business 13,460 15,754 21,100
Agricultural business, including secured by farmland 1,896 1,301 5,853
Consumer 2,905 4,232 2,332
     
72,988 81,310 148,504
 
Loans more than 90 days delinquent, still on accrual
Secured by real estate:
Commercial - - - - - -
Multifamily - - - - - -
Construction and land - - - - - -
One- to four-family 2,147 1,111 2,955
Commercial business 4 687 - -
Agricultural business, including secured by farmland - - - - - -
Consumer 173 41 30
     
2,324 1,839 2,985
     
Total non-performing loans 75,312 83,149 151,489
Securities on non-accrual 500 1,942 1,896
Real estate owned (REO) and repossessed assets 43,039   66,538   100,945  
 
Total non-performing assets $ 118,851   $ 151,629   $ 254,330  

 

 
Total non-performing assets / Total assets 2.79 % 3.53 % 5.77 %
 
DETAIL & GEOGRAPHIC CONCENTRATION OF
NON-PERFORMING ASSETS AT
    December 31, 2011     Washington Oregon Idaho Other Total
Secured by real estate:
Commercial $ 8,723 $ 368 $ 135 $ - - $ 9,226
Multifamily 362 - - - - - - 362
Construction and land
One- to four-family construction 4,039 2,278 306 - - 6,623
Commercial construction 949 - - - - - - 949
Multifamily construction - - - - - - - - - -
Residential land acquisition & development 6,668 3,709 1,592 - - 11,969
Residential land improved lots 1,563 3,352 73 - - 4,988
Residential land unimproved 702 916 485 - - 2,103
Commercial land acquisition & development 308 - - - - - - 308
Commercial land improved 454 - - - - - - 454
Commercial land unimproved 337   - -   - -   - - 337
Total construction and land 15,020 10,255 2,456 - - 27,731
One- to four-family 14,830 3,376 1,349 - - 19,555
Commercial business 12,627 113 724 - - 13,464
Agricultural business, including secured by farmland 1,486 - - 410 - - 1,896
Consumer 2,441 131 506 - - 3,078
         
Total non-performing loans 55,489 14,243 5,580 - - 75,312
Securities on non-accrual - - - - 500 - - 500
Real estate owned (REO) and repossessed assets 18,380 17,967 6,692 - - 43,039
         
Total non-performing assets at end of the period $ 73,869   $ 32,210   $ 12,772   $ - - $ 118,851
 
 

 

         
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
 

Quarters Ended

Twelve Months Ended

REAL ESTATE OWNED

Dec 31, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
 
Balance, beginning of period $ 66,459 $ 107,159 $ 100,872 $ 77,743
Additions from loan foreclosures 7,482 16,855 53,197 87,761
Additions from capitalized costs 150 1,650 4,404 4,006
Dispositions of REO (28,299 ) (19,095 ) (99,070 ) (51,651 )
Gain (loss) on sale of REO (170 ) (524 ) (1,374 ) (1,891 )
Valuation adjustments in the period (2,657 ) (5,173 )   (15,064 ) (15,096 )
 
Balance, end of period $ 42,965   $ 100,872   $ 42,965   $ 100,872  
 
 
Quarters Ended

REAL ESTATE OWNED - FIVE COMPARATIVE QUARTERS

Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011 Dec 31, 2010
 
Balance, beginning of period $ 66,459 $ 71,205 $ 94,945 $ 100,872 $ 107,159
Additions from loan foreclosures 7,482 18,881 11,918 14,916 16,855
Additions from capitalized costs 150 1,107 1,532 1,615 1,650
Dispositions of REO (28,299 ) (19,440 ) (32,437 ) (18,894 ) (19,095 )
Gain (loss) on sale of REO (170 ) (725 ) 58 (537 ) (524 )
Valuation adjustments in the period (2,657 ) (4,569 ) (4,811 ) (3,027 ) (5,173 )
 
Balance, end of period $ 42,965   $ 66,459   $ 71,205   $ 94,945   $ 100,872  
 
 

REAL ESTATE OWNED - BY TYPE AND STATE

Washington Oregon Idaho Total
 
Commercial real estate $ 1,852 $ - - $ 1,620 $ 3,472
One- to four-family construction 405 2,323 - - 2,728
Land development- commercial 3,876 112 200 4,188
Land development- residential 5,333 11,881 3,316 20,530
One- to four-family real estate 6,896   3,651   1,500   12,047  
 
Total $ 18,362   $ 17,967   $ 6,636   $ 42,965  
 
   

 

       
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
   
 

DEPOSITS & OTHER BORROWINGS

Dec 31, 2011 Sep 30, 2011 Dec 31, 2010
DEPOSIT COMPOSITION  
 
Non-interest-bearing $ 777,563 $ 763,008   $ 600,457

 

 
Interest-bearing checking 362,542 362,090 357,702
Regular savings accounts 669,596 670,210 616,512
Money market accounts 415,456 429,083   459,034
 
Interest-bearing transaction & savings accounts 1,447,594 1,461,383   1,433,248
 
Interest-bearing certificates 1,250,497 1,313,043   1,557,493
 
Total deposits $ 3,475,654 $ 3,537,434   $ 3,591,198

 

 
 
INCLUDED IN TOTAL DEPOSITS
 
Public transaction accounts $ 72,064 $ 67,753 $ 64,482

 

Public interest-bearing certificates 67,112 69,321   81,809
 
Total public deposits $ 139,176 $ 137,074   $ 146,291

 

 
 
Total brokered deposits $ 49,194 $ 59,576   $ 102,984

 

 
 
 
INCLUDED IN OTHER BORROWINGS
Customer repurchase agreements / "Sweep accounts" $ 102,131 $ 89,633   $ 125,140

 

 
 
 
GEOGRAPHIC CONCENTRATION OF DEPOSITS AT
  December 31, 2011   Washington Oregon Idaho Total
 
$ 2,657,016 $ 595,801   $ 222,837 $ 3,475,654  
 
 
 
Minimum for Capital Adequacy

REGULATORY CAPITAL RATIOS AT

Actual or "Well Capitalized"
    December 31, 2011   Amount Ratio Amount Ratio
 
Banner Corporation-consolidated
Total capital to risk-weighted assets $ 615,091 18.07 % $ 272,242 8.00 %
Tier 1 capital to risk-weighted assets 572,036 16.80 % 136,121 4.00 %
Tier 1 leverage capital to average assets 572,036 13.44 % 169,639 4.00 %
 
Banner Bank
Total capital to risk-weighted assets 511,614 15.81 % 323,499 10.00 %
Tier 1 capital to risk-weighted assets 470,668 14.54 % 194,100 6.00 %
Tier 1 leverage capital to average assets 470,668 11.71 % 200,955 5.00 %
 
Islanders Bank
Total capital to risk-weighted assets 30,627 16.06 % 19,068 10.00 %
Tier 1 capital to risk-weighted assets 28,237 14.81 % 11,441 6.00 %
Tier 1 leverage capital to average assets 28,237 12.08 % 11,689 5.00 %
 
   

 

         
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
 
  Quarters Ended

Twelve Months Ended

OPERATING PERFORMANCE

Dec 31, 2011 Sep 30, 2011 Dec 31, 2010 Dec 31, 2011 Dec 31, 2010
 
 
Average loans $ 3,237,305 $ 3,271,728 $ 3,458,400 $ 3,297,650 $ 3,607,151
Average securities 670,807 544,468 418,647 548,446 398,297
Average interest earning cash 148,070 224,993 368,194 219,025 291,968
Average non-interest-earning assets 207,609   206,420   254,242   215,646   262,888  
 
Total average assets $ 4,263,791   $ 4,247,609   $ 4,499,483   $ 4,280,767   $ 4,560,304  
 
Average deposits $ 3,477,587 $ 3,498,594 $ 3,669,442 $ 3,510,274 $ 3,768,748
Average borrowings 294,675 270,648 344,906 292,555 350,636
Average non-interest-bearing liabilities (38,703 ) (41,337 ) (38,355 ) (40,266 ) (37,378 )
 
Total average liabilities 3,733,559 3,727,905 3,975,993 3,762,563 4,082,006
 
Total average stockholders' equity 530,232   519,704   523,490   518,204   478,298  
`
Total average liabilities and equity $ 4,263,791   $ 4,247,609   $ 4,499,483   $ 4,280,767   $ 4,560,304  
 
Interest rate yield on loans 5.53 % 5.53 % 5.67 % 5.59 % 5.70 %
Interest rate yield on securities 1.92 % 2.75 % 2.46 % 2.32 % 2.91 %
Interest rate yield on cash 0.23 % 0.26 % 0.26 % 0.23 % 0.24 %
 

Interest rate yield on interest-earning assets

4.74 % 4.87 % 4.88 % 4.86 % 5.07 %
 
Interest rate expense on deposits 0.59 % 0.70 % 1.03 % 0.75 % 1.39 %
Interest rate expense on borrowings 2.28 % 2.44 % 2.24 % 2.33 % 2.28 %
 
Interest rate expense on interest-bearing liabilities 0.72 % 0.82 % 1.13 % 0.87 % 1.46 %
 
Interest rate spread 4.02 % 4.05 % 3.75 % 3.99 % 3.61 %
 
Net interest margin 4.07 % 4.10 % 3.81 % 4.05 % 3.67 %
 
Other operating income / Average assets 0.67 % 0.97 % 0.67 % 0.79 % 0.64 %
 

Other operating income EXCLUDING fair value and OTTI adjustments / Average assets (1)

0.83 % 0.78 % 0.73 % 0.74 % 0.69 %
 
Other operating expense / Average assets 3.60 % 3.83 % 3.62 % 3.69 % 3.53 %
 
Efficiency ratio (other operating expense / revenue) 79.34 % 78.82 % 84.88 % 79.62 % 86.03 %
 
Return (Loss) on average assets 0.47 % 0.56 % (1.12 %) 0.13 % (1.36 %)
 
Return (Loss) on average equity 3.79 % 4.60 % (9.62 %) 1.05 % (12.94 %)
 
Return (Loss) on average tangible equity (2) 3.84 % 4.67 % (9.78 %) 1.07 % (13.21 %)
 
Average equity / Average assets 12.44 % 12.24 % 11.63 % 12.11 % 10.49 %
 

(1) - Earnings information excluding fair value and OTTI adjustments (alternately referred to as other operating income from core operations or revenues from core operations) represent non-GAAP financial measures.

 

(2) - Average tangible equity excludes core deposit and other intangibles and represents a non-GAAP financial measure.

 




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