During the second quarter of 2012, Banner reversed most of its deferred tax asset valuation allowance, reflecting Banner’s return to profitability and its expectation of sustainable profitability in future periods. This expectation also led to the significant adjustment of the fair value estimate for the junior subordinated debentures issued by the Company. The substantial changes to both of these significant accounting estimates were directly linked to the improved performance and profitability of the Company. In the third quarter of 2012, Banner reversed an additional $4.0 million of the deferred tax valuation allowance, which substantially reduced the provision for income tax expense for the quarter, and the remaining $3.0 million balance will be recovered in the fourth quarter.
Banner’s third quarter 2012 results included a $473,000 net gain for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, which was largely offset by $409,000 of OTTI charges related to certain equity securities issued by government sponsored entities. In the preceding quarter, Banner recorded a net loss of $19.1 million for fair value adjustments, which largely resulted from a $21.2 million increase in the estimated value of the junior subordinated debentures issued by the Company, which was partially offset by increases in the estimated value of similar trust preferred securities owned by the Company. Banner’s year-to-date results included net charges of $16.9 million for fair value adjustments compared to a net gain of $1.2 million for the same period a year ago. For the nine months ended September 30, 2012, OTTI charges were $409,000 compared to a recovery of $3.0 million for the nine months ended September 30, 2011. The third quarter and year-to-date results included an additional $2.5 million increase in the estimated fair value of the junior subordinated debentures, which primarily reflects management’s judgment with respect to further tightening in general market credit spreads. The impact of this adjustment was partially offset by similar adjustments to the fair value estimates for certain investment securities also carried at fair value.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV