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Banner Corporation Reports Net Income Of $25.4 Million, Or $1.27 Per Diluted Share, In Second Quarter; Net Income Highlighted By Strong Revenue Generation And Improved Credit Quality, Leading To A Recovery Of The Deferred Tax Asset
Banner Corporation (NASDAQ:BANR), the parent company of Banner Bank and Islanders Bank, today reported that net income increased to $25.4 million in the second quarter of 2012, compared to net income of $9.2 million in the preceding quarter and $2.2 million in the second quarter a year ago. For the first six months of 2012, Banner reported net income of $34.6 million, compared to a net loss of $5.6 million in the same period a year ago. Banner’s results for the quarter ended June 30, 2012 include a $31.8 million tax benefit as a result of the reversal of its deferred tax asset valuation allowance, which was partially offset by a net loss of $19.1 million for fair value adjustments.
“Banner’s continued successful execution of its strategic turnaround plan and return to profitability was punctuated in the second quarter by the elimination of nearly all of the valuation allowance against our deferred tax asset. This decision reflects our confidence in the sustainability of our future profitability,” said Mark J. Grescovich, President and Chief Executive Officer. “However, the real highlights of the second quarter were our continued improvement in asset quality, customer account growth and record revenues from core operations. Banner’s second quarter revenues from core operations* (net interest income before the provision for loan losses plus total other operating income excluding fair value adjustments) increased 8% when compared to the second quarter a year ago. Our net interest margin expanded 17 basis points to 4.26% in the second quarter compared to 4.09% in the second quarter a year ago. Our deposit fees and other service charge income remained strong, increasing by 10% compared to the second quarter a year ago, and revenues from mortgage banking operations were more than three times larger than the second quarter of 2011. This progress clearly demonstrates our strategic turnaround plan is effective and is building shareholder value.”