01/21/2022 | Press release | Distributed by Public on 01/21/2022 05:02
•
|
Revenues decreased 6% to $146.0 million, primarily due to a decline in SBA PPP loan forgiveness related interest income, compared to $155.5 million in the preceding quarter, and increased 1% when compared to $144.9 million in the fourth quarter a year ago.
|
•
|
Net interest income decreased to $121.5 million in the fourth quarter of 2021, compared to $130.1 million in the preceding quarter and increased compared to $121.4 million in the fourth quarter a year ago.
|
•
|
Net interest margin on a tax equivalent basis was 3.17%, compared to 3.47% in the preceding quarter and 3.64% in the fourth quarter a year ago.
|
•
|
Mortgage banking revenues decreased 41% to $5.6 million, compared to $9.6 million in the preceding quarter, and decreased 47% compared to $10.6 million in the fourth quarter a year ago.
|
•
|
Return on average assets was 1.18%, compared to 1.20% in the preceding quarter and 1.04% in the fourth quarter a year ago.
|
•
|
Net loans receivable decreased to $8.95 billion at December 31, 2021, compared to $9.08 billion at September 30, 2021, and decreased 8% compared to $9.70 billion at December 31, 2020.
|
•
|
Non-performing assets decreased to $23.7 million, or 0.14% of total assets, at December 31, 2021, compared to $29.7 million, or 0.18% of total assets in the preceding quarter, and decreased from $36.5 million, or 0.24% of total assets, at December 31, 2020.
|
•
|
The allowance for credit losses - loans was $132.1 million, or 1.45% of total loans receivable, as of December 31, 2021, compared to $139.9 million, or 1.52% of total loans receivable as of September 30, 2021 and $167.3 million, or 1.69% of total loans receivable as of December 31, 2020.
|
•
|
Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 1% to $13.49 billion at December 31, 2021, compared to $13.31 billion at September 30, 2021, and increased 16% compared to $11.65 billion a year ago. Core deposits represented 94% of total deposits at December 31, 2021.
|
•
|
Dividends to shareholders were $0.41 per share in the quarter ended December 31, 2021.
|
•
|
Common shareholders' equity per share increased 1% to $49.35 at December 31, 2021, compared to $48.67 at the preceding quarter end, and increased 4% from $47.39 a year ago.
|
•
|
Tangible common shareholders' equity per share* increased 2% to $38.02 at December 31, 2021, compared to $37.30 at the preceding quarter end, and increased 5% from $36.17 a year ago.
|
RESULTS OF OPERATIONS
|
Quarters Ended
|
Twelve Months Ended
|
||||||||||||||||||
(in thousands except shares and per share data)
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
|||||||||||||||
INTEREST INCOME:
|
||||||||||||||||||||
Loans receivable
|
$
|
104,929
|
$
|
116,487
|
$
|
115,545
|
$
|
445,731
|
$
|
466,360
|
||||||||||
Mortgage-backed securities
|
13,220
|
11,695
|
7,438
|
45,723
|
31,792
|
|||||||||||||||
Securities and cash equivalents
|
8,397
|
7,686
|
6,170
|
29,046
|
20,994
|
|||||||||||||||
126,546
|
135,868
|
129,153
|
520,500
|
519,146
|
||||||||||||||||
INTEREST EXPENSE:
|
||||||||||||||||||||
Deposits
|
2,384
|
2,749
|
4,392
|
11,770
|
25,015
|
|||||||||||||||
Federal Home Loan Bank advances
|
348
|
655
|
987
|
2,592
|
5,023
|
|||||||||||||||
Other borrowings
|
109
|
125
|
121
|
467
|
603
|
|||||||||||||||
Junior subordinated debentures and subordinated notes
|
2,175
|
2,193
|
2,216
|
8,780
|
7,204
|
|||||||||||||||
5,016
|
5,722
|
7,716
|
23,609
|
37,845
|
||||||||||||||||
Net interest income
|
121,530
|
130,146
|
121,437
|
496,891
|
481,301
|
|||||||||||||||
(RECAPTURE)/PROVISION FOR CREDIT LOSSES
|
(5,243
|
)
|
(8,638
|
)
|
602
|
(33,388
|
)
|
67,875
|
||||||||||||
Net interest income after (recapture)/provision for credit losses
|
126,773
|
138,784
|
120,835
|
530,279
|
413,426
|
|||||||||||||||
NON-INTEREST INCOME:
|
||||||||||||||||||||
Deposit fees and other service charges
|
10,341
|
10,457
|
8,293
|
39,495
|
34,384
|
|||||||||||||||
Mortgage banking operations
|
5,643
|
9,613
|
10,586
|
33,948
|
51,083
|
|||||||||||||||
Bank-owned life insurance
|
1,203
|
1,245
|
1,319
|
5,000
|
5,972
|
|||||||||||||||
Miscellaneous
|
4,702
|
2,185
|
1,410
|
12,875
|
6,821
|
|||||||||||||||
21,889
|
23,500
|
21,608
|
91,318
|
98,260
|
||||||||||||||||
Net (loss) gain on sale of securities
|
(136
|
)
|
56
|
197
|
482
|
1,012
|
||||||||||||||
Net change in valuation of financial instruments carried at fair value
|
2,721
|
1,778
|
1,704
|
4,616
|
(656
|
)
|
||||||||||||||
Total non-interest income
|
24,474
|
25,334
|
23,509
|
96,416
|
98,616
|
|||||||||||||||
NON-INTEREST EXPENSE:
|
||||||||||||||||||||
Salary and employee benefits
|
57,798
|
59,799
|
60,906
|
244,351
|
245,400
|
|||||||||||||||
Less capitalized loan origination costs
|
(7,647
|
)
|
(8,290
|
)
|
(9,415
|
)
|
(34,401
|
)
|
(34,848
|
)
|
||||||||||
Occupancy and equipment
|
13,885
|
13,153
|
14,248
|
52,850
|
53,362
|
|||||||||||||||
Information / computer data services
|
6,441
|
6,110
|
6,402
|
24,356
|
24,386
|
|||||||||||||||
Payment and card processing services
|
5,062
|
6,181
|
3,960
|
20,544
|
16,095
|
|||||||||||||||
Professional and legal expenses
|
2,251
|
12,324
|
5,643
|
22,274
|
12,093
|
|||||||||||||||
Advertising and marketing
|
2,071
|
1,521
|
2,828
|
6,036
|
6,412
|
|||||||||||||||
Deposit insurance expense
|
1,340
|
1,469
|
1,548
|
5,583
|
6,516
|
|||||||||||||||
State/municipal business and use taxes
|
976
|
1,219
|
1,071
|
4,343
|
4,355
|
|||||||||||||||
Real estate operations
|
49
|
53
|
(283
|
)
|
(22
|
)
|
(190
|
)
|
||||||||||||
Amortization of core deposit intangibles
|
1,574
|
1,575
|
1,865
|
6,571
|
7,732
|
|||||||||||||||
Loss on extinguishment of debt
|
2,284
|
-
|
-
|
2,284
|
-
|
|||||||||||||||
Miscellaneous
|
5,594
|
6,977
|
5,871
|
24,236
|
22,712
|
|||||||||||||||
91,678
|
102,091
|
94,644
|
379,005
|
364,025
|
||||||||||||||||
COVID-19 expenses
|
127
|
44
|
333
|
436
|
3,502
|
|||||||||||||||
Merger and acquisition-related expenses
|
-
|
10
|
579
|
660
|
2,062
|
|||||||||||||||
Total non-interest expense
|
91,805
|
102,145
|
95,556
|
380,101
|
369,589
|
|||||||||||||||
Income before provision for income taxes
|
59,442
|
61,973
|
48,788
|
246,594
|
142,453
|
|||||||||||||||
PROVISION FOR INCOME TAXES
|
9,515
|
12,089
|
9,831
|
45,546
|
26,525
|
|||||||||||||||
NET INCOME
|
$
|
49,927
|
$
|
49,884
|
$
|
38,957
|
$
|
201,048
|
$
|
115,928
|
||||||||||
Earnings per share available to common shareholders:
|
||||||||||||||||||||
Basic
|
$
|
1.46
|
$
|
1.45
|
$
|
1.11
|
$
|
5.81
|
$
|
3.29
|
||||||||||
Diluted
|
$
|
1.44
|
$
|
1.44
|
$
|
1.10
|
$
|
5.76
|
$
|
3.26
|
||||||||||
Cumulative dividends declared per common share
|
$
|
0.41
|
$
|
0.41
|
$
|
0.41
|
$
|
1.64
|
$
|
1.23
|
||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||||||
Basic
|
34,292,967
|
34,446,510
|
35,200,769
|
34,610,056
|
35,264,252
|
|||||||||||||||
Diluted
|
34,575,607
|
34,669,492
|
35,425,810
|
34,919,188
|
35,528,848
|
|||||||||||||||
Increase (decrease) in common shares outstanding
|
641
|
(298,897
|
)
|
632
|
(906,568
|
)
|
(592,376
|
)
|
FINANCIAL CONDITION |
|
|
|
|
|
|
|
|
|
|
|
Percentage Change |
||||||||
(in thousands except shares and per share data) |
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Prior
Qtr
|
Prior
Yr Qtr
|
|||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks
|
$
|
358,461
|
$
|
392,035
|
$
|
311,899
|
(8.6)
|
%
|
14.9
|
%
|
||||||||||
Interest-bearing deposits
|
1,775,839
|
1,808,547
|
922,284
|
(1.8)
|
%
|
92.5
|
%
|
|||||||||||||
Total cash and cash equivalents
|
2,134,300
|
2,200,582
|
1,234,183
|
(3.0)
|
%
|
72.9
|
%
|
|||||||||||||
Securities - trading
|
26,981
|
26,875
|
24,980
|
0.4
|
%
|
8.0
|
%
|
|||||||||||||
Securities - available for sale
|
3,638,993
|
3,446,575
|
2,322,593
|
5.6
|
%
|
56.7
|
%
|
|||||||||||||
Securities - held to maturity
|
520,922
|
447,708
|
421,713
|
16.4
|
%
|
23.5
|
%
|
|||||||||||||
Total securities
|
4,186,896
|
3,921,158
|
2,769,286
|
6.8
|
%
|
51.2
|
%
|
|||||||||||||
Federal Home Loan Bank stock
|
12,000
|
12,000
|
16,358
|
-
|
%
|
(26.6)
|
%
|
|||||||||||||
Securities purchased under agreements to resell
|
300,000
|
300,000
|
-
|
-
|
%
|
nm
|
||||||||||||||
Loans held for sale
|
96,487
|
63,678
|
243,795
|
51.5
|
%
|
(60.4)
|
%
|
|||||||||||||
Loans receivable
|
9,084,763
|
9,218,384
|
9,870,982
|
(1.4)
|
%
|
(8.0)
|
%
|
|||||||||||||
Allowance for credit losses - loans
|
(132,099
|
)
|
(139,915
|
)
|
(167,279
|
)
|
(5.6)
|
%
|
(21.0)
|
%
|
||||||||||
Net loans receivable
|
8,952,664
|
9,078,469
|
9,703,703
|
(1.4)
|
%
|
(7.7)
|
%
|
|||||||||||||
Accrued interest receivable
|
42,916
|
43,644
|
46,617
|
(1.7)
|
%
|
(7.9)
|
%
|
|||||||||||||
Real estate owned (REO) held for sale, net
|
852
|
852
|
816
|
-
|
%
|
4.4
|
%
|
|||||||||||||
Property and equipment, net
|
148,759
|
151,503
|
164,556
|
(1.8)
|
%
|
(9.6)
|
%
|
|||||||||||||
Goodwill
|
373,121
|
373,121
|
373,121
|
-
|
%
|
-
|
%
|
|||||||||||||
Other intangibles, net
|
14,855
|
16,429
|
21,426
|
(9.6)
|
%
|
(30.7)
|
%
|
|||||||||||||
Bank-owned life insurance
|
244,156
|
192,950
|
191,830
|
26.5
|
%
|
27.3
|
%
|
|||||||||||||
Operating lease right-of-use assets
|
55,257
|
58,523
|
55,367
|
(5.6)
|
%
|
(0.2)
|
%
|
|||||||||||||
Other assets
|
242,609
|
224,970
|
210,565
|
7.8
|
%
|
15.2
|
%
|
|||||||||||||
Total assets
|
$
|
16,804,872
|
$
|
16,637,879
|
$
|
15,031,623
|
1.0
|
%
|
11.8
|
%
|
||||||||||
LIABILITIES |
||||||||||||||||||||
Deposits: |
||||||||||||||||||||
Non-interest-bearing
|
$
|
6,385,177
|
$
|
6,400,864
|
$
|
5,492,924
|
(0.2)
|
%
|
16.2
|
%
|
||||||||||
Interest-bearing transaction and savings accounts
|
7,103,125
|
6,912,759
|
6,159,052
|
2.8
|
%
|
15.3
|
%
|
|||||||||||||
Interest-bearing certificates
|
838,631
|
851,054
|
915,320
|
(1.5)
|
%
|
(8.4)
|
%
|
|||||||||||||
Total deposits
|
14,326,933
|
14,164,677
|
12,567,296
|
1.1
|
%
|
14.0
|
%
|
|||||||||||||
Advances from Federal Home Loan Bank
|
50,000
|
50,000
|
150,000
|
-
|
%
|
(66.7)
|
%
|
|||||||||||||
Customer repurchase agreements and other borrowings
|
264,490
|
247,358
|
184,785
|
6.9
|
%
|
43.1
|
%
|
|||||||||||||
Subordinated notes, net
|
98,564
|
98,472
|
98,201
|
0.1
|
%
|
0.4
|
%
|
|||||||||||||
Junior subordinated debentures at fair value
|
119,815
|
124,853
|
116,974
|
(4.0)
|
%
|
2.4
|
%
|
|||||||||||||
Operating lease liabilities
|
59,756
|
62,946
|
59,343
|
(5.1)
|
%
|
0.7
|
%
|
|||||||||||||
Accrued expenses and other liabilities
|
148,303
|
175,960
|
143,300
|
(15.7)
|
%
|
3.5
|
%
|
|||||||||||||
Deferred compensation
|
46,684
|
46,494
|
45,460
|
0.4
|
%
|
2.7
|
%
|
|||||||||||||
Total liabilities
|
15,114,545
|
14,970,760
|
13,365,359
|
1.0
|
%
|
13.1
|
%
|
|||||||||||||
SHAREHOLDERS' EQUITY |
||||||||||||||||||||
Common stock
|
1,299,381
|
1,297,145
|
1,349,879
|
0.2
|
%
|
(3.7)
|
%
|
|||||||||||||
Retained earnings
|
390,762
|
355,035
|
247,316
|
10.1
|
%
|
58.0
|
%
|
|||||||||||||
Other components of shareholders' equity
|
184
|
14,939
|
69,069
|
(98.8)
|
%
|
(99.7)
|
%
|
|||||||||||||
Total shareholders' equity
|
1,690,327
|
1,667,119
|
1,666,264
|
1.4
|
%
|
1.4
|
%
|
|||||||||||||
Total liabilities and shareholders' equity
|
$
|
16,804,872
|
$
|
16,637,879
|
$
|
15,031,623
|
1.0
|
%
|
11.8
|
%
|
||||||||||
Common Shares Issued:
|
||||||||||||||||||||
Shares outstanding at end of period
|
34,252,632
|
34,251,991
|
35,159,200
|
|||||||||||||||||
Common shareholders' equity per share (1)
|
$
|
49.35
|
$
|
48.67
|
$
|
47.39
|
||||||||||||||
Common shareholders' tangible equity per share (1) (2)
|
$
|
38.02
|
$
|
37.30
|
$
|
36.17
|
||||||||||||||
Common shareholders' tangible equity to tangible assets (2)
|
7.93
|
%
|
7.86
|
%
|
8.69
|
%
|
||||||||||||||
Consolidated Tier 1 leverage capital ratio
|
8.76
|
%
|
8.79
|
%
|
9.50
|
%
|
(1)
|
Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
|
(2)
|
Common shareholders' tangible equity excludes goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. These ratios represent
non-GAAP financial measures. See also Non-GAAP Financial Measures reconciliation tables on the final two pages of the press release tables.
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Percentage Change
|
||||||||||||||||||||
LOANS
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Prior
Qtr
|
Prior Yr
Qtr
|
|||||||||||||||
Commercial real estate:
|
||||||||||||||||||||
Owner-occupied
|
$
|
1,131,828
|
$
|
1,122,275
|
$
|
1,076,467
|
0.9
|
%
|
5.1
|
%
|
||||||||||
Investment properties
|
1,990,461
|
1,980,284
|
1,955,684
|
0.5
|
%
|
1.8
|
%
|
|||||||||||||
Small balance CRE
|
598,212
|
601,751
|
573,849
|
(0.6)
|
%
|
4.2
|
%
|
|||||||||||||
Multifamily real estate
|
564,100
|
532,760
|
428,223
|
5.9
|
%
|
31.7
|
%
|
|||||||||||||
Construction, land and land development:
|
||||||||||||||||||||
Commercial construction
|
169,530
|
170,205
|
228,937
|
(0.4)
|
%
|
(25.9)
|
%
|
|||||||||||||
Multifamily construction
|
259,116
|
278,184
|
305,527
|
(6.9)
|
%
|
(15.2)
|
%
|
|||||||||||||
One- to four-family construction
|
568,753
|
571,431
|
507,810
|
(0.5)
|
%
|
12.0
|
%
|
|||||||||||||
Land and land development
|
313,454
|
308,164
|
248,915
|
1.7
|
%
|
25.9
|
%
|
|||||||||||||
Commercial business:
|
||||||||||||||||||||
Commercial business
|
1,039,502
|
1,039,731
|
1,133,989
|
-
|
%
|
(8.3)
|
%
|
|||||||||||||
SBA PPP
|
132,574
|
306,976
|
1,044,472
|
(56.8)
|
%
|
(87.3)
|
%
|
|||||||||||||
Small business scored
|
792,310
|
775,554
|
743,451
|
2.2
|
%
|
6.6
|
%
|
|||||||||||||
Agricultural business, including secured by farmland:
|
||||||||||||||||||||
Agricultural business, including secured by farmland
|
284,399
|
284,255
|
299,949
|
0.1
|
%
|
(5.2)
|
%
|
|||||||||||||
SBA PPP
|
1,354
|
3,214
|
-
|
(57.9)
|
%
|
nm
|
||||||||||||||
One- to four-family residential
|
683,268
|
682,368
|
717,939
|
0.1
|
%
|
(4.8)
|
%
|
|||||||||||||
Consumer:
|
||||||||||||||||||||
Consumer-home equity revolving lines of credit
|
458,533
|
462,819
|
491,812
|
(0.9)
|
%
|
(6.8)
|
%
|
|||||||||||||
Consumer-other
|
97,369
|
98,413
|
113,958
|
(1.1)
|
%
|
(14.6)
|
%
|
|||||||||||||
Total loans receivable
|
$
|
9,084,763
|
$
|
9,218,384
|
$
|
9,870,982
|
(1.4)
|
%
|
(8.0)
|
%
|
||||||||||
Restructured loans performing under their restructured terms
|
$
|
5,309
|
$
|
5,273
|
$
|
6,673
|
||||||||||||||
Loans 30 - 89 days past due and on accrual
|
$
|
11,558
|
$
|
6,911
|
$
|
12,291
|
||||||||||||||
Total delinquent loans (including loans on non-accrual), net
|
$
|
18,688
|
$
|
18,619
|
$
|
36,131
|
||||||||||||||
Total delinquent loans / Total loans receivable
|
0.21
|
%
|
0.20
|
%
|
0.37
|
%
|
LOANS BY GEOGRAPHIC LOCATION
|
Percentage Change
|
|||||||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Prior
Qtr
|
Prior Yr Qtr
|
||||||||||||||||||||
Amount
|
Percentage
|
Amount
|
Amount
|
|||||||||||||||||||||
Washington
|
$
|
4,264,590
|
47.0
|
%
|
$
|
4,319,008
|
$
|
4,647,553
|
(1.3)
|
%
|
(8.2)
|
%
|
||||||||||||
California
|
2,138,340
|
23.5
|
%
|
2,160,280
|
2,279,749
|
(1.0)
|
%
|
(6.2)
|
%
|
|||||||||||||||
Oregon
|
1,652,364
|
18.2
|
%
|
1,679,452
|
1,792,156
|
(1.6)
|
%
|
(7.8)
|
%
|
|||||||||||||||
Idaho
|
525,141
|
5.8
|
%
|
536,128
|
537,996
|
(2.0)
|
%
|
(2.4)
|
%
|
|||||||||||||||
Utah
|
74,913
|
0.8
|
%
|
89,620
|
80,704
|
(16.4)
|
%
|
(7.2)
|
%
|
|||||||||||||||
Other
|
429,415
|
4.7
|
%
|
433,896
|
532,824
|
(1.0)
|
%
|
(19.4)
|
%
|
|||||||||||||||
Total loans receivable
|
$
|
9,084,763
|
100.0
|
%
|
$
|
9,218,384
|
$
|
9,870,982
|
(1.4)
|
%
|
(8.0)
|
%
|
LOAN ORIGINATIONS
|
Quarters Ended
|
Twelve Months Ended
|
||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
||||||||||||||||
Commercial real estate
|
$
|
196,350
|
$
|
174,827
|
$
|
93,838
|
$
|
565,809
|
$
|
356,361
|
||||||||||
Multifamily real estate
|
25,933
|
26,155
|
7,900
|
110,640
|
27,119
|
|||||||||||||||
Construction and land
|
522,081
|
496,386
|
515,280
|
1,975,664
|
1,588,311
|
|||||||||||||||
Commercial business:
|
||||||||||||||||||||
Commercial business
|
203,549
|
229,859
|
133,112
|
731,315
|
628,981
|
|||||||||||||||
SBA PPP
|
-
|
907
|
-
|
485,077
|
1,176,018
|
|||||||||||||||
Agricultural business
|
13,061
|
9,223
|
11,552
|
61,997
|
76,096
|
|||||||||||||||
One-to four-family residential
|
52,251
|
49,594
|
28,402
|
206,662
|
116,713
|
|||||||||||||||
Consumer
|
101,365
|
145,102
|
97,416
|
465,213
|
423,526
|
|||||||||||||||
Total loan originations (excluding loans held for sale)
|
$
|
1,114,590
|
$
|
1,132,053
|
$
|
887,500
|
$
|
4,602,377
|
$
|
4,393,125
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
Quarters Ended
|
Twelve Months Ended
|
|||||||||||||||||||
CHANGE IN THE
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
|||||||||||||||
ALLOWANCE FOR CREDIT LOSSES - LOANS
|
||||||||||||||||||||
Balance, beginning of period
|
$
|
139,915
|
$
|
148,009
|
$
|
167,965
|
$
|
167,279
|
$
|
100,559
|
||||||||||
Beginning balance adjustment for adoption of ASC 326
|
-
|
-
|
-
|
-
|
7,812
|
|||||||||||||||
(Recapture)/provision for credit losses - loans
|
(8,127)
|
|
(8,850)
|
|
(593)
|
|
(33,112)
|
|
64,285
|
|||||||||||
Recoveries of loans previously charged off:
|
||||||||||||||||||||
Commercial real estate
|
635
|
923
|
31
|
1,729
|
275
|
|||||||||||||||
Construction and land
|
-
|
-
|
-
|
100
|
105
|
|||||||||||||||
One- to four-family real estate
|
47
|
19
|
194
|
199
|
467
|
|||||||||||||||
Commercial business
|
267
|
230
|
2,444
|
1,797
|
3,265
|
|||||||||||||||
Agricultural business, including secured by farmland
|
5
|
17
|
51
|
30
|
1,823
|
|||||||||||||||
Consumer
|
140
|
227
|
90
|
760
|
328
|
|||||||||||||||
1,094
|
1,416
|
2,810
|
4,615
|
6,263
|
||||||||||||||||
Loans charged off:
|
||||||||||||||||||||
Commercial real estate
|
(1)
|
|
-
|
(1,375)
|
|
(3,767)
|
|
(1,854)
|
|
|||||||||||
Multifamily real estate
|
(59)
|
|
-
|
-
|
(59)
|
|
(66)
|
|
||||||||||||
Construction and land
|
-
|
-
|
-
|
-
|
(100)
|
|
||||||||||||||
One- to four-family real estate
|
-
|
-
|
-
|
-
|
(136)
|
|
||||||||||||||
Commercial business
|
(488)
|
|
(362)
|
|
(1,019)
|
|
(1,762)
|
|
(7,253)
|
|
||||||||||
Agricultural business, including secured by farmland
|
-
|
(179)
|
|
(37)
|
|
(181)
|
|
(591)
|
|
|||||||||||
Consumer
|
(235)
|
|
(119)
|
|
(472)
|
|
(914)
|
|
(1,640)
|
|
||||||||||
(783)
|
|
(660)
|
|
(2,903)
|
|
(6,683)
|
|
(11,640)
|
|
|||||||||||
Net recoveries (charge-offs)
|
311
|
756
|
(93)
|
|
(2,068)
|
|
(5,377)
|
|
||||||||||||
Balance, end of period
|
$
|
132,099
|
$
|
139,915
|
$
|
167,279
|
$
|
132,099
|
$
|
167,279
|
||||||||||
Net recoveries (charge-offs) / Average loans receivable
|
0.003
|
%
|
0.008
|
%
|
(0.001)
|
%
|
(0.021)
|
%
|
(0.053)
|
%
|
ALLOCATION OF
|
||||||||||||
ALLOWANCE FOR CREDIT LOSSES - LOANS
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
|||||||||
Specific or allocated credit loss allowance:
|
||||||||||||
Commercial real estate
|
$
|
52,995
|
$
|
57,215
|
$
|
57,791
|
||||||
Multifamily real estate
|
7,043
|
6,657
|
3,893
|
|||||||||
Construction and land
|
27,294
|
29,342
|
41,295
|
|||||||||
One- to four-family real estate
|
8,205
|
9,460
|
9,913
|
|||||||||
Commercial business
|
26,421
|
26,873
|
35,007
|
|||||||||
Agricultural business, including secured by farmland
|
3,190
|
3,177
|
4,914
|
|||||||||
Consumer
|
6,951
|
7,191
|
14,466
|
|||||||||
Total allowance for credit losses - loans
|
$
|
132,099
|
$
|
139,915
|
$
|
167,279
|
||||||
Allowance for credit losses - loans / Total loans receivable
|
1.45
|
%
|
1.52
|
%
|
1.69
|
%
|
||||||
Allowance for credit losses - loans / Non-performing loans
|
578
|
%
|
485
|
%
|
470
|
%
|
Quarters Ended
|
Twelve Months Ended
|
|||||||||||||||||||
CHANGE IN THE
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
|||||||||||||||
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
|
||||||||||||||||||||
Balance, beginning of period
|
$
|
10,127
|
$
|
9,909
|
$
|
12,094
|
$
|
13,297
|
$
|
2,716
|
||||||||||
Beginning balance adjustment for adoption of ASC 326
|
-
|
-
|
-
|
-
|
7,022
|
|||||||||||||||
Provision/(recapture) for credit losses - unfunded loan commitments
|
2,305
|
218
|
1,203
|
(865
|
)
|
3,559
|
||||||||||||||
Balance, end of period
|
$
|
12,432
|
$
|
10,127
|
$
|
13,297
|
$
|
12,432
|
$
|
13,297
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||
(dollars in thousands)
|
||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
||||||||||
NON-PERFORMING ASSETS
|
||||||||||||
Loans on non-accrual status:
|
||||||||||||
Secured by real estate:
|
||||||||||||
Commercial
|
$
|
14,159
|
$
|
14,931
|
$
|
18,199
|
||||||
Construction and land
|
479
|
354
|
936
|
|||||||||
One- to four-family
|
2,711
|
3,182
|
3,556
|
|||||||||
Commercial business
|
2,156
|
2,700
|
5,407
|
|||||||||
Agricultural business, including secured by farmland
|
1,022
|
1,022
|
1,743
|
|||||||||
Consumer
|
1,754
|
1,850
|
2,719
|
|||||||||
22,281
|
24,039
|
32,560
|
||||||||||
Loans more than 90 days delinquent, still on accrual:
|
||||||||||||
Secured by real estate:
|
||||||||||||
Commercial
|
-
|
3,955
|
-
|
|||||||||
One- to four-family
|
436
|
772
|
1,899
|
|||||||||
Commercial business
|
2
|
61
|
1,025
|
|||||||||
Consumer
|
117
|
34
|
130
|
|||||||||
555
|
4,822
|
3,054
|
||||||||||
Total non-performing loans
|
22,836
|
28,861
|
35,614
|
|||||||||
REO
|
852
|
852
|
816
|
|||||||||
Other repossessed assets
|
17
|
17
|
51
|
|||||||||
Total non-performing assets
|
$
|
23,705
|
$
|
29,730
|
$
|
36,481
|
||||||
Total non-performing assets to total assets
|
0.14
|
%
|
0.18
|
%
|
0.24
|
%
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
||||||||||
LOANS BY CREDIT RISK RATING
|
||||||||||||
Pass
|
$
|
8,874,468
|
$
|
8,956,604
|
$
|
9,494,147
|
||||||
Special Mention
|
11,932
|
36,001
|
36,598
|
|||||||||
Substandard
|
198,363
|
225,779
|
340,237
|
|||||||||
Total
|
$
|
9,084,763
|
$
|
9,218,384
|
$
|
9,870,982
|
Quarters Ended
|
Twelve Months Ended
|
|||||||||||||||||||
REAL ESTATE OWNED
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
|||||||||||||||
Balance, beginning of period
|
$
|
852
|
$
|
763
|
$
|
1,795
|
$
|
816
|
$
|
814
|
||||||||||
Additions from loan foreclosures
|
-
|
89
|
-
|
512
|
1,588
|
|||||||||||||||
Proceeds from dispositions of REO
|
-
|
-
|
(1,555
|
)
|
(783
|
)
|
(2,360
|
)
|
||||||||||||
Gain on sale of REO
|
-
|
-
|
603
|
307
|
819
|
|||||||||||||||
Valuation adjustments in the period
|
-
|
-
|
(27
|
)
|
-
|
(45
|
)
|
|||||||||||||
Balance, end of period
|
$
|
852
|
$
|
852
|
$
|
816
|
$
|
852
|
$
|
816
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
DEPOSIT COMPOSITION
|
Percentage Change
|
|||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Prior Qtr
|
Prior Yr Qtr
|
||||||||||||||||
Non-interest-bearing
|
$
|
6,385,177
|
$
|
6,400,864
|
$
|
5,492,924
|
(0.2)
|
%
|
16.2
|
%
|
||||||||||
Interest-bearing checking
|
1,947,414
|
1,799,657
|
1,569,435
|
8.2
|
%
|
24.1
|
%
|
|||||||||||||
Regular savings accounts
|
2,784,716
|
2,773,995
|
2,398,482
|
0.4
|
%
|
16.1
|
%
|
|||||||||||||
Money market accounts
|
2,370,995
|
2,339,107
|
2,191,135
|
1.4
|
%
|
8.2
|
%
|
|||||||||||||
Total interest-bearing transaction and savings accounts
|
7,103,125
|
6,912,759
|
6,159,052
|
2.8
|
%
|
15.3
|
%
|
|||||||||||||
Total core deposits
|
13,488,302
|
13,313,623
|
11,651,976
|
1.3
|
%
|
15.8
|
%
|
|||||||||||||
Interest-bearing certificates
|
838,631
|
851,054
|
915,320
|
(1.5)
|
%
|
(8.4)
|
%
|
|||||||||||||
Total deposits
|
$
|
14,326,933
|
$
|
14,164,677
|
$
|
12,567,296
|
1.1
|
%
|
14.0
|
%
|
GEOGRAPHIC CONCENTRATION OF DEPOSITS
|
||||||||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Percentage Change
|
|||||||||||||||||||||
Amount
|
Percentage
|
Amount
|
Amount
|
Prior Qtr
|
Prior Yr Qtr
|
|||||||||||||||||||
Washington
|
$
|
7,952,376
|
55.5
|
%
|
$
|
7,877,919
|
$
|
7,058,404
|
0.9
|
%
|
12.7
|
%
|
||||||||||||
Oregon
|
3,067,054
|
21.4
|
%
|
3,030,109
|
2,604,908
|
1.2
|
%
|
17.7
|
%
|
|||||||||||||||
California
|
2,524,296
|
17.6
|
%
|
2,501,521
|
2,237,949
|
0.9
|
%
|
12.8
|
%
|
|||||||||||||||
Idaho
|
783,207
|
5.5
|
%
|
755,128
|
666,035
|
3.7
|
%
|
17.6
|
%
|
|||||||||||||||
Total deposits
|
$
|
14,326,933
|
100.0
|
%
|
$
|
14,164,677
|
$
|
12,567,296
|
1.1
|
%
|
14.0
|
%
|
INCLUDED IN TOTAL DEPOSITS
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
|||||||||
Public non-interest-bearing accounts
|
$
|
193,917
|
$
|
193,414
|
$
|
175,352
|
||||||
Public interest-bearing transaction & savings accounts
|
159,957
|
161,407
|
127,523
|
|||||||||
Public interest-bearing certificates
|
39,961
|
40,851
|
59,127
|
|||||||||
Total public deposits
|
$
|
393,835
|
$
|
395,672
|
$
|
362,002
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Actual
|
Minimum to be
categorized as
"Adequately
Capitalized"
|
Minimum to be
categorized as
"Well Capitalized"
|
||||||||||||||||||||||
REGULATORY CAPITAL RATIOS AS OF
DECEMBER 31, 2021
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Banner Corporation-consolidated:
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
$
|
1,663,943
|
14.71
|
%
|
$
|
904,633
|
8.00
|
%
|
$
|
1,130,791
|
10.00
|
%
|
||||||||||||
Tier 1 capital to risk-weighted assets
|
1,440,694
|
12.74
|
%
|
678,474
|
6.00
|
%
|
678,474
|
6.00
|
%
|
|||||||||||||||
Tier 1 leverage capital to average assets
|
1,440,694
|
8.76
|
%
|
658,091
|
4.00
|
%
|
n/a
|
n/a
|
||||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
1,305,194
|
11.54
|
%
|
508,856
|
4.50
|
%
|
n/a
|
n/a
|
||||||||||||||||
Banner Bank:
|
||||||||||||||||||||||||
Total capital to risk-weighted assets
|
1,552,204
|
13.73
|
%
|
904,159
|
8.00
|
%
|
1,130,199
|
10.00
|
%
|
|||||||||||||||
Tier 1 capital to risk-weighted assets
|
1,428,955
|
12.64
|
%
|
678,119
|
6.00
|
%
|
904,159
|
8.00
|
%
|
|||||||||||||||
Tier 1 leverage capital to average assets
|
1,428,955
|
8.69
|
%
|
657,882
|
4.00
|
%
|
822,353
|
5.00
|
%
|
|||||||||||||||
Common equity tier 1 capital to risk-weighted assets
|
1,428,955
|
12.64
|
%
|
508,589
|
4.50
|
%
|
734,629
|
6.50
|
%
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
|||||||||||||||||||||||||||||
(rates / ratios annualized)
|
|||||||||||||||||||||||||||||
ANALYSIS OF NET INTEREST
SPREAD
|
Quarters Ended
|
||||||||||||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
|||||||||||||||||||||||||||
Average
Balance
|
Interest
and
Dividends
|
Yield / Cost(3)
|
Average
Balance
|
Interest
and
Dividends
|
Yield / Cost(3)
|
Average
Balance
|
Interest
and
Dividends
|
Yield / Cost(3)
|
|||||||||||||||||||||
Interest-earning assets:
|
|||||||||||||||||||||||||||||
Held for sale loans
|
$
|
73,101
|
$
|
601
|
3.26
|
%
|
$
|
114,938
|
$
|
996
|
3.44
|
%
|
$
|
110,414
|
$
|
976
|
3.52
|
%
|
|||||||||||
Mortgage loans
|
7,362,363
|
83,059
|
4.48
|
%
|
7,245,962
|
83,803
|
4.59
|
%
|
7,251,101
|
84,634
|
4.64
|
%
|
|||||||||||||||||
Commercial/agricultural loans
|
1,460,486
|
14,966
|
4.07
|
%
|
1,534,978
|
15,776
|
4.08
|
%
|
1,626,508
|
19,143
|
4.68
|
%
|
|||||||||||||||||
SBA PPP loans
|
209,776
|
5,845
|
11.05
|
%
|
566,515
|
15,421
|
10.80
|
%
|
1,125,844
|
10,002
|
3.53
|
%
|
|||||||||||||||||
Consumer and other loans
|
119,658
|
1,749
|
5.80
|
%
|
120,112
|
1,774
|
5.86
|
%
|
135,498
|
2,057
|
6.04
|
%
|
|||||||||||||||||
Total loans(1)(3)
|
9,225,384
|
106,220
|
4.57
|
%
|
9,582,505
|
117,770
|
4.88
|
%
|
10,249,365
|
116,812
|
4.53
|
%
|
|||||||||||||||||
Mortgage-backed securities
|
2,838,759
|
13,344
|
1.86
|
%
|
2,560,027
|
11,820
|
1.83
|
%
|
1,429,635
|
7,536
|
2.10
|
%
|
|||||||||||||||||
Other securities
|
1,550,383
|
8,466
|
2.17
|
%
|
1,491,035
|
7,873
|
2.09
|
%
|
975,166
|
6,634
|
2.71
|
%
|
|||||||||||||||||
Equity securities
|
-
|
-
|
-
|
%
|
-
|
-
|
-
|
%
|
234,822
|
64
|
0.11
|
%
|
|||||||||||||||||
Interest-bearing deposits with banks
|
1,901,165
|
731
|
0.15
|
%
|
1,486,839
|
586
|
0.16
|
%
|
611,234
|
219
|
0.14
|
%
|
|||||||||||||||||
FHLB stock
|
12,000
|
135
|
4.46
|
%
|
13,957
|
135
|
3.84
|
%
|
16,361
|
162
|
3.94
|
%
|
|||||||||||||||||
Total investment securities (3)
|
6,302,307
|
22,676
|
1.43
|
%
|
5,551,858
|
20,414
|
1.46
|
%
|
3,267,218
|
14,615
|
1.78
|
%
|
|||||||||||||||||
Total interest-earning assets
|
15,527,691
|
128,896
|
3.29
|
%
|
15,134,363
|
138,184
|
3.62
|
%
|
13,516,583
|
131,427
|
3.87
|
%
|
|||||||||||||||||
Non-interest-earning assets
|
1,306,437
|
1,301,383
|
1,349,055
|
||||||||||||||||||||||||||
Total assets
|
$
|
16,834,128
|
$
|
16,435,746
|
$
|
14,865,638
|
|||||||||||||||||||||||
Deposits:
|
|||||||||||||||||||||||||||||
Interest-bearing checking accounts
|
$
|
1,875,097
|
289
|
0.06
|
%
|
$
|
1,771,869
|
282
|
0.06
|
%
|
$
|
1,483,183
|
315
|
0.08
|
%
|
||||||||||||||
Savings accounts
|
2,773,597
|
400
|
0.06
|
%
|
2,721,028
|
458
|
0.07
|
%
|
2,375,015
|
691
|
0.12
|
%
|
|||||||||||||||||
Money market accounts
|
2,367,861
|
559
|
0.09
|
%
|
2,322,453
|
668
|
0.11
|
%
|
2,165,960
|
1,047
|
0.19
|
%
|
|||||||||||||||||
Certificates of deposit
|
840,920
|
1,136
|
0.54
|
%
|
863,971
|
1,341
|
0.62
|
%
|
916,286
|
2,339
|
1.02
|
%
|
|||||||||||||||||
Total interest-bearing deposits
|
7,857,475
|
2,384
|
0.12
|
%
|
7,679,321
|
2,749
|
0.14
|
%
|
6,940,444
|
4,392
|
0.25
|
%
|
|||||||||||||||||
Non-interest-bearing deposits
|
6,523,149
|
-
|
-
|
%
|
6,275,634
|
-
|
-
|
%
|
5,499,240
|
-
|
-
|
%
|
|||||||||||||||||
Total deposits
|
14,380,624
|
2,384
|
0.07
|
%
|
13,954,955
|
2,749
|
0.08
|
%
|
12,439,684
|
4,392
|
0.14
|
%
|
|||||||||||||||||
Other interest-bearing liabilities:
|
|||||||||||||||||||||||||||||
FHLB advances
|
50,000
|
348
|
2.76
|
%
|
98,370
|
655
|
2.64
|
%
|
150,000
|
987
|
2.62
|
%
|
|||||||||||||||||
Other borrowings
|
266,559
|
109
|
0.16
|
%
|
252,720
|
125
|
0.20
|
%
|
187,560
|
121
|
0.26
|
%
|
|||||||||||||||||
Junior subordinated debentures and subordinated notes
|
246,510
|
2,175
|
3.50
|
%
|
247,944
|
2,193
|
3.51
|
%
|
247,944
|
2,216
|
3.56
|
%
|
|||||||||||||||||
Total borrowings
|
563,069
|
2,632
|
1.85
|
%
|
599,034
|
2,973
|
1.97
|
%
|
585,504
|
3,324
|
2.26
|
%
|
|||||||||||||||||
Total funding liabilities
|
14,943,693
|
5,016
|
0.13
|
%
|
14,553,989
|
5,722
|
0.16
|
%
|
13,025,188
|
7,716
|
0.24
|
%
|
|||||||||||||||||
Other non-interest-bearing liabilities(2)
|
216,940
|
202,918
|
195,965
|
||||||||||||||||||||||||||
Total liabilities
|
15,160,633
|
14,756,907
|
13,221,153
|
||||||||||||||||||||||||||
Shareholders' equity
|
1,673,495
|
1,678,839
|
1,644,485
|
||||||||||||||||||||||||||
Total liabilities and shareholders'
equity
|
$
|
16,834,128
|
$
|
16,435,746
|
$
|
14,865,638
|
|||||||||||||||||||||||
Net interest income/rate spread (tax equivalent)
|
$
|
123,880
|
3.16
|
%
|
$
|
132,462
|
3.46
|
%
|
$
|
123,711
|
3.63
|
%
|
|||||||||||||||||
Net interest margin (tax equivalent)
|
3.17
|
%
|
3.47
|
%
|
3.64
|
%
|
|||||||||||||||||||||||
Reconciliation to reported net interest income:
|
|||||||||||||||||||||||||||||
Adjustments for taxable equivalent basis
|
(2,350
|
)
|
(2,316
|
)
|
(2,274
|
)
|
|||||||||||||||||||||||
Net interest income and margin, as reported
|
$
|
121,530
|
3.11
|
%
|
$
|
130,146
|
3.41
|
%
|
$
|
121,437
|
3.57
|
%
|
|||||||||||||||||
Additional Key Financial Ratios:
|
|||||||||||||||||||||||||||||
Return on average assets
|
1.18
|
%
|
1.20
|
%
|
1.04
|
%
|
|||||||||||||||||||||||
Return on average equity
|
11.84
|
%
|
11.79
|
%
|
9.42
|
%
|
|||||||||||||||||||||||
Average equity/average assets
|
9.94
|
%
|
10.21
|
%
|
11.06
|
%
|
|||||||||||||||||||||||
Average interest-earning assets/average
interest-bearing liabilities
|
184.40
|
%
|
182.82
|
%
|
179.60
|
%
|
|||||||||||||||||||||||
Average interest-earning assets/average
funding liabilities
|
103.91
|
%
|
103.99
|
%
|
103.77
|
%
|
|||||||||||||||||||||||
Non-interest income/average assets
|
0.58
|
%
|
0.61
|
%
|
0.63
|
%
|
|||||||||||||||||||||||
Non-interest expense/average assets
|
2.16
|
%
|
2.47
|
%
|
2.56
|
%
|
|||||||||||||||||||||||
Efficiency ratio(4)
|
62.88
|
%
|
65.70
|
%
|
65.93
|
%
|
|||||||||||||||||||||||
Adjusted efficiency ratio(5)
|
59.71
|
%
|
59.65
|
%
|
64.31
|
%
|
(1)
|
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
|
(2)
|
Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
|
(3)
|
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.3 million for each of the three months ended December 31, 2021, September 30, 2021 and December 31, 2020. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the three months ended December 31, 2021 and $1.0 million for both the three months ended September 30, 2021 and December 31, 2020.
|
(4)
|
Non-interest expense divided by the total of net interest income and non-interest income.
|
(5)
|
Adjusted non-interest expense divided by adjusted revenue. These represent non-GAAP financial measures. See the non-GAAP Financial Measures on the final two pages of the press release tables.
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
(rates / ratios annualized)
|
||||||||||||||||||||||||
ANALYSIS OF NET INTEREST SPREAD
|
Twelve Months Ended
|
|||||||||||||||||||||||
Dec 31, 2021
|
Dec 31, 2020
|
|||||||||||||||||||||||
Average
Balance
|
Interest and
Dividends
|
Yield/Cost(3)
|
Average
Balance
|
Interest and
Dividends
|
Yield/Cost(3)
|
|||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Held for sale loans
|
$
|
94,252
|
$
|
3,066
|
3.25
|
%
|
$
|
144,220
|
$
|
5,482
|
3.80
|
%
|
||||||||||||
Mortgage loans
|
7,225,860
|
328,115
|
4.54
|
%
|
7,303,584
|
352,878
|
4.83
|
%
|
||||||||||||||||
Commercial/agricultural loans
|
1,498,808
|
62,479
|
4.17
|
%
|
1,765,265
|
80,567
|
4.56
|
%
|
||||||||||||||||
SBA PPP loans
|
770,041
|
49,854
|
6.47
|
%
|
760,912
|
23,133
|
3.04
|
%
|
||||||||||||||||
Consumer and other loans
|
122,520
|
7,298
|
5.96
|
%
|
147,827
|
9,208
|
6.23
|
%
|
||||||||||||||||
Total loans(1)(3)
|
9,711,481
|
450,812
|
4.64
|
%
|
10,121,808
|
471,268
|
4.66
|
%
|
||||||||||||||||
Mortgage-backed securities
|
2,451,110
|
46,199
|
1.88
|
%
|
1,330,355
|
32,188
|
2.42
|
%
|
||||||||||||||||
Other securities
|
1,336,974
|
30,114
|
2.25
|
%
|
777,378
|
21,839
|
2.81
|
%
|
||||||||||||||||
Equity securities
|
429
|
-
|
-
|
%
|
182,846
|
373
|
0.20
|
%
|
||||||||||||||||
Interest-bearing deposits with banks
|
1,392,619
|
1,955
|
0.14
|
%
|
272,725
|
907
|
0.33
|
%
|
||||||||||||||||
FHLB stock
|
13,966
|
592
|
4.24
|
%
|
18,952
|
947
|
5.00
|
%
|
||||||||||||||||
Total investment securities(3)
|
5,195,098
|
78,860
|
1.52
|
%
|
2,582,256
|
56,254
|
2.18
|
%
|
||||||||||||||||
Total interest-earning assets
|
14,906,579
|
529,672
|
3.55
|
%
|
12,704,064
|
527,522
|
4.15
|
%
|
||||||||||||||||
Non-interest-earning assets
|
1,268,348
|
1,262,170
|
||||||||||||||||||||||
Total assets
|
$
|
16,174,927
|
$
|
13,966,234
|
||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Interest-bearing checking accounts
|
$
|
1,755,293
|
1,188
|
0.07
|
%
|
$
|
1,385,252
|
1,479
|
0.11
|
%
|
||||||||||||||
Savings accounts
|
2,652,018
|
1,833
|
0.07
|
%
|
2,194,418
|
4,257
|
0.19
|
%
|
||||||||||||||||
Money market accounts
|
2,305,814
|
2,670
|
0.12
|
%
|
1,996,870
|
6,275
|
0.31
|
%
|
||||||||||||||||
Certificates of deposit
|
876,509
|
6,079
|
0.69
|
%
|
1,030,722
|
13,004
|
1.26
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
7,589,634
|
11,770
|
0.16
|
%
|
6,607,262
|
25,015
|
0.38
|
%
|
||||||||||||||||
Non-interest-bearing deposits
|
6,132,875
|
-
|
-
|
%
|
4,929,768
|
-
|
-
|
%
|
||||||||||||||||
Total deposits
|
13,722,509
|
11,770
|
0.09
|
%
|
11,537,030
|
25,015
|
0.22
|
%
|
||||||||||||||||
Other interest-bearing liabilities:
|
||||||||||||||||||||||||
FHLB advances
|
97,945
|
2,592
|
2.65
|
%
|
215,093
|
5,023
|
2.34
|
%
|
||||||||||||||||
Other borrowings
|
240,817
|
467
|
0.19
|
%
|
193,862
|
603
|
0.31
|
%
|
||||||||||||||||
Junior subordinated debentures and subordinated notes
|
247,583
|
8,780
|
3.55
|
%
|
198,490
|
7,204
|
3.63
|
%
|
||||||||||||||||
Total borrowings
|
586,345
|
11,839
|
2.02
|
%
|
607,445
|
12,830
|
2.11
|
%
|
||||||||||||||||
Total funding liabilities
|
14,308,854
|
23,609
|
0.16
|
%
|
12,144,475
|
37,845
|
0.31
|
%
|
||||||||||||||||
Other non-interest-bearing liabilities(2)
|
206,774
|
197,422
|
||||||||||||||||||||||
Total liabilities
|
14,515,628
|
12,341,897
|
||||||||||||||||||||||
Shareholders' equity
|
1,659,299
|
1,624,337
|
||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$
|
16,174,927
|
$
|
13,966,234
|
||||||||||||||||||||
Net interest income/rate spread (tax equivalent)
|
$
|
506,063
|
3.39
|
%
|
$
|
489,677
|
3.84
|
%
|
||||||||||||||||
Net interest margin (tax equivalent)
|
3.39
|
%
|
3.85
|
%
|
||||||||||||||||||||
Reconciliation to reported net interest income:
|
||||||||||||||||||||||||
Adjustments for taxable equivalent basis
|
(9,172
|
)
|
(8,376
|
)
|
||||||||||||||||||||
Net interest income and margin, as reported
|
$
|
496,891
|
3.33
|
%
|
$
|
481,301
|
3.79
|
%
|
||||||||||||||||
Additional Key Financial Ratios:
|
||||||||||||||||||||||||
Return on average assets
|
1.24
|
%
|
0.83
|
%
|
||||||||||||||||||||
Return on average equity
|
12.12
|
%
|
7.14
|
%
|
||||||||||||||||||||
Average equity/average assets
|
10.26
|
%
|
11.63
|
%
|
||||||||||||||||||||
Average interest-earning assets/average interest-bearing liabilities
|
|
182.32
|
%
|
176.09
|
%
|
|||||||||||||||||||
Average interest-earning assets/average funding liabilities
|
104.18
|
%
|
104.61
|
%
|
||||||||||||||||||||
Non-interest income/average assets
|
0.60
|
%
|
0.71
|
%
|
||||||||||||||||||||
Non-interest expense/average assets
|
2.35
|
%
|
2.65
|
%
|
||||||||||||||||||||
Efficiency ratio(4)
|
64.06
|
%
|
63.73
|
%
|
||||||||||||||||||||
Adjusted efficiency ratio(5)
|
60.22
|
%
|
60.76
|
%
|
(1)
|
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
|
(2)
|
Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
|
(3)
|
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $5.1 million and $4.9 million for the twelve months ended December 31, 2021 and December 31, 2020, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.1 million and $3.5 million for the twelve months ended December 31, 2021 and December 31, 2020, respectively.
|
(4)
|
Non-interest expense divided by the total of net interest income and non-interest income.
|
(5)
|
Adjusted non-interest expense divided by adjusted revenue. These represent non-GAAP financial measures. See the non-GAAP Financial Measures on the final two pages of the press release tables.
|
ADDITIONAL FINANCIAL INFORMATION
|
|||||||||
(dollars in thousands)
|
|||||||||
* Non-GAAP Financial Measures
|
|||||||||
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:
|
ADJUSTED REVENUE
|
Quarters Ended
|
Twelve Months Ended
|
||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
||||||||||||||||
Net interest income
|
$
|
121,530
|
$
|
130,146
|
$
|
121,437
|
$
|
496,891
|
$
|
481,301
|
||||||||||
Total non-interest income
|
24,474
|
25,334
|
23,509
|
96,416
|
98,616
|
|||||||||||||||
Total revenue (GAAP)
|
146,004
|
155,480
|
144,946
|
593,307
|
579,917
|
|||||||||||||||
Exclude net loss (gain) on sale of securities
|
136
|
(56)
|
|
(197)
|
|
(482)
|
|
(1,012)
|
|
|||||||||||
Exclude net change in valuation of financial instruments carried at
fair value
|
(2,721)
|
|
(1,778)
|
|
(1,704)
|
|
(4,616)
|
|
656
|
|||||||||||
Adjusted revenue (non-GAAP)
|
$
|
143,419
|
$
|
153,646
|
$
|
143,045
|
$
|
588,209
|
$
|
579,561
|
ADJUSTED EARNINGS
|
Quarters Ended
|
Twelve Months Ended
|
||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
||||||||||||||||
Net income (GAAP)
|
$
|
49,927
|
$
|
49,884
|
$
|
38,957
|
$
|
201,048
|
$
|
115,928
|
||||||||||
Exclude net loss (gain) on sale of securities
|
136
|
(56
|
)
|
(197
|
)
|
(482
|
)
|
(1,012
|
)
|
|||||||||||
Exclude net change in valuation of financial instruments carried at
fair value
|
(2,721
|
)
|
(1,778
|
)
|
(1,704
|
)
|
(4,616
|
)
|
656
|
|||||||||||
Exclude merger and acquisition-related expenses
|
-
|
10
|
579
|
660
|
2,062
|
|||||||||||||||
Exclude COVID-19 expenses
|
127
|
44
|
333
|
436
|
3,502
|
|||||||||||||||
Exclude Banner Forward expenses
|
1,157
|
7,592
|
-
|
11,604
|
-
|
|||||||||||||||
Exclude loss on extinguishment of debt
|
2,284
|
-
|
-
|
2,284
|
-
|
|||||||||||||||
Exclude related net tax (benefit) expense
|
(236
|
)
|
(1,395
|
)
|
237
|
(2,373
|
)
|
(1,239
|
)
|
|||||||||||
Total adjusted earnings (non-GAAP)
|
$
|
50,674
|
$
|
54,301
|
$
|
38,205
|
$
|
208,561
|
$
|
119,897
|
||||||||||
Diluted earnings per share (GAAP)
|
$
|
1.44
|
$
|
1.44
|
$
|
1.10
|
$
|
5.76
|
$
|
3.26
|
||||||||||
Diluted adjusted earnings per share (non-GAAP)
|
$
|
1.47
|
$
|
1.57
|
$
|
1.08
|
$
|
5.97
|
$
|
3.37
|
ADDITIONAL FINANCIAL INFORMATION
|
||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||
ADJUSTED EFFICIENCY RATIO
|
Quarters Ended
|
Twelve Months Ended
|
||||||||||||||||||
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
Dec 31, 2021
|
Dec 31, 2020
|
||||||||||||||||
Non-interest expense (GAAP)
|
$
|
91,805
|
$
|
102,145
|
$
|
95,556
|
$
|
380,101
|
$
|
369,589
|
||||||||||
Exclude merger and acquisition-related expenses
|
-
|
(10
|
)
|
(579
|
)
|
(660
|
)
|
(2,062
|
)
|
|||||||||||
Exclude COVID-19 expenses
|
(127
|
)
|
(44
|
)
|
(333
|
)
|
(436
|
)
|
(3,502
|
)
|
||||||||||
Exclude Banner Forward expenses
|
(1,157
|
)
|
(7,592
|
)
|
-
|
(11,604
|
)
|
-
|
||||||||||||
Exclude CDI amortization
|
(1,574
|
)
|
(1,575
|
)
|
(1,865
|
)
|
(6,571
|
)
|
(7,732
|
)
|
||||||||||
Exclude state/municipal tax expense
|
(976
|
)
|
(1,219
|
)
|
(1,071
|
)
|
(4,343
|
)
|
(4,355
|
)
|
||||||||||
Exclude REO operations
|
(49
|
)
|
(53
|
)
|
283
|
22
|
190
|
|||||||||||||
Exclude loss on extinguishment of debt
|
(2,284
|
)
|
-
|
-
|
(2,284
|
)
|
-
|
|||||||||||||
Adjusted non-interest expense (non-GAAP)
|
$
|
85,638
|
$
|
91,652
|
$
|
91,991
|
$
|
354,225
|
$
|
352,128
|
||||||||||
Net interest income (GAAP)
|
$
|
121,530
|
$
|
130,146
|
$
|
121,437
|
$
|
496,891
|
$
|
481,301
|
||||||||||
Non-interest income (GAAP)
|
24,474
|
25,334
|
23,509
|
96,416
|
98,616
|
|||||||||||||||
Total revenue
|
146,004
|
155,480
|
144,946
|
593,307
|
579,917
|
|||||||||||||||
Exclude net loss (gain) on sale of securities
|
136
|
(56
|
)
|
(197
|
)
|
(482
|
)
|
(1,012
|
)
|
|||||||||||
Exclude net change in valuation of financial instruments carried at
fair value
|
(2,721
|
)
|
(1,778
|
)
|
(1,704
|
)
|
(4,616
|
)
|
656
|
|||||||||||
Adjusted revenue (non-GAAP)
|
$
|
143,419
|
$
|
153,646
|
$
|
143,045
|
$
|
588,209
|
$
|
579,561
|
||||||||||
Efficiency ratio (GAAP)
|
62.88
|
%
|
65.70
|
%
|
65.93
|
%
|
64.06
|
%
|
63.73
|
%
|
||||||||||
Adjusted efficiency ratio (non-GAAP)
|
59.71
|
%
|
59.65
|
%
|
64.31
|
%
|
60.22
|
%
|
60.76
|
%
|
TANGIBLE COMMON SHAREHOLDERS' EQUITY TO TANGIBLE ASSETS
|
Dec 31, 2021
|
Sep 30, 2021
|
Dec 31, 2020
|
|||||||||
Shareholders' equity (GAAP)
|
$
|
1,690,327
|
$
|
1,667,119
|
$
|
1,666,264
|
||||||
Exclude goodwill and other intangible assets, net
|
387,976
|
389,550
|
394,547
|
|||||||||
Tangible common shareholders' equity (non-GAAP)
|
$
|
1,302,351
|
$
|
1,277,569
|
$
|
1,271,717
|
||||||
Total assets (GAAP)
|
$
|
16,804,872
|
$
|
16,637,879
|
$
|
15,031,623
|
||||||
Exclude goodwill and other intangible assets, net
|
387,976
|
389,550
|
394,547
|
|||||||||
Total tangible assets (non-GAAP)
|
$
|
16,416,896
|
$
|
16,248,329
|
$
|
14,637,076
|
||||||
Common shareholders' equity to total assets (GAAP)
|
10.06
|
%
|
10.02
|
%
|
11.09
|
%
|
||||||
Tangible common shareholders' equity to tangible assets (non-GAAP)
|
7.93
|
%
|
7.86
|
%
|
8.69
|
%
|
||||||
TANGIBLE COMMON SHAREHOLDERS' EQUITY PER SHARE
|
||||||||||||
Tangible common shareholders' equity (non-GAAP)
|
$
|
1,302,351
|
$
|
1,277,569
|
$
|
1,271,717
|
||||||
Common shares outstanding at end of period
|
34,252,632
|
34,251,991
|
35,159,200
|
|||||||||
Common shareholders' equity (book value) per share (GAAP)
|
$
|
49.35
|
$
|
48.67
|
$
|
47.39
|
||||||
Tangible common shareholders' equity (tangible book value) per share (non-GAAP)
|
$
|
38.02
|
$
|
37.30
|
$
|
36.17
|