Exhibit 99.1
|
| Contact: D. Michael Jones, President and CEO Lloyd W. Baker, CFO (509) 527-3636 News Release |
Banner Corporation Announces Fourth Quarter Results;
Reports Net Interest Margin Expansion and Strong Core Deposit Growth
Walla Walla, WA – January 27, 2010 - Banner Corporation (NASDAQ GMS: BANR), the parent company of Banner Bank and Islanders Bank, today reported that it had a net loss of $3.5 million for the fourth quarter ended December 31, 2009, compared to a net loss of $6.4 million in the immediately preceding quarter. The current quarter’s results include a $17.0 million provision for loan losses and a $1.4 million loss from the valuation of financial instruments carried at fair value.
“The strong performance of our retail deposit franchise during the entire year ended December 31, 2009 was particularly evident in our improved operating results for the fourth quarter, as solid core deposit growth and changes in the mix of our funding over the past twelve months resulted in a significant expansion of our net interest margin which increased by 19 basis points to 3.49% compared to the immediately preceding quarter and 25 basis points compared to the same quarter a year ago,” said D. Michael Jones, President and CEO. “This improvement reflects continuing growth in customer relationships as a result of the determined efforts and quality service provided by our entire staff and the further maturing of the expanded branch network we worked to create over the past five years. Despite the current difficult economic environment, we are optimistic that the strength of this deposit franchise will provide the foundation for better operating results in future periods.”
“The difficult economic environment and resulting credit costs have been a persistent challenge throughout all of 2009,” Jones continued. “As a direct result, the provision for loan losses, while substantially less than both the preceding quarter and the same quarter a year ago, remained high in the fourth quarter, reflecting still significant, though moderating, levels of non-performing loans and net charge-offs. Charge-offs and delinquencies continue to be concentrated in loans for the construction of single-family homes and for acquisition and development of land for residential properties. However, we are encouraged by the further reduction in our exposure to residential construction loans during the quarter and the slowdown in the surfacing of new problem assets. By contrast to our construction and development loan portfolio, the non-housing related segments of our loan portfolio have continued to perform with only normal levels of credit problems given the serious economic slowdown.”
In the fourth quarter, Banner paid a $1.6 million dividend on the $124 million of senior preferred stock it issued to the U.S. Treasury in the fourth quarter of 2008 in connection with its participation in the Treasury’s Capital Purchase Program. In addition, Banner accrued $373,000 for related discount accretion. Including the preferred stock dividend and related accretion, the net loss to common shareholders was $5.5 million, or $0.27 per diluted share, for the fourth quarter of 2009, compared to a net loss of $79.4 million or $4.72 per diluted share, for the fourth quarter a year ago. Fourth quarter 2008 results included a $71.1 million goodwill impairment charge and a preferred dividend of $689,000.
Credit Quality
“Distressed property values, particularly for land and developed building lots, placed further stress on certain borrowers and projects during the quarter resulting in additional charge-offs and impairment reserves,” said Jones. “As a result, our provision for loan losses for the fourth quarter, while decreased significantly from the preceding quarter, was again in excess of our normal expectations. Although property values have declined, sales of finished homes have continued, our reserve levels are substantial, and both our impairment analysis and charge-off actions reflect current appraisals and valuation estimates as well as recent regulatory examination results. We remain hopeful that the final resolution of many of these loans will occur at a reasonable pace and that credit costs will moderate over time. We also are confident that we have the capital and human resources necessary to manage our problem assets in the current economic environment.”
Banner recorded a $17.0 million provision for loan losses in the fourth quarter, compared to $25.0 million in the preceding quarter and $33.0 million in the fourth quarter of 2008. The allowance for loan losses at December 31, 2009 totaled $95.3 million, representing 2.51% of total loans outstanding. Non-performing loans totaled $ 213.9 million at December 31, 2009, compared to $243.3 million in the preceding quarter and $187.3 million at December 31, 2008. Banner’s real estate owned and repossessed assets totaled $77.8 million at December 31, 2009, compared to $53.8 million three months earlier and $21.9 million a year ago. Banner’s net charge-offs in the quarter totaled $16.9 million, or 0.44% of average loans outstanding.
At December 31, 2009, the geographic distribution of construction and land development loans, including residential and commercial properties, is approximately 32% in the greater Puget Sound market, 38% in the greater Portland, Oregon market, and 7% in the greater Boise, Idaho market, with the remaining 23% distributed in various eastern Washington, eastern Oregon and northern Idaho
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BANR-Fourth Quarter 2009 Results
January 27, 2010
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markets served by Banner Bank. One-to-four family residential construction and related lot and land loans represent 14% of the total loan portfolio and 48% of non-performing assets. The geographic distribution of non-performing construction, land and land development loans and real estate owned included approximately $103 million, or 43%, in the greater Puget Sound market, $78 million, or 33%, in the greater Portland market and $24 million, or 10%, in the greater Boise market.
Income Statement Review
Banner’s net interest margin was 3.49% for the fourth quarter, a 19 basis point improvement compared to the preceding quarter and a 25 basis point improvement compared to the fourth quarter a year ago. “Our improved net interest margin is driven by a continued decline in funding costs as well as our core deposit growth,” said Jones. “While loan yields have been very stable for a number of quarters now, asset yields declined slightly primarily as a result of the growth of our on-balance-sheet liquidity which is currently invested at very low short-term interest rates.”
For the quarter ended December 31, 2009, funding costs decreased 31 basis points compared to the previous quarter and 89 basis points from the same quarter a year ago. Deposit costs decreased by 33 basis points compared to the preceding quarter and 91 basis points compared to the fourth quarter a year earlier. Asset yields decreased ten basis points from the prior linked quarter and 59 basis points from the fourth quarter a year ago. Loan yields decreased by one basis point compared to the third quarter and by 35 basis points compared to the fourth quarter of 2008. Non-accruing loans reduced the margin by approximately 37 basis points in the fourth quarter of 2009 compared to approximately 42 basis points in the preceding quarter and approximately 34 basis points in the fourth quarter of 2008.
For the fourth quarter of 2009, net interest income before the provision for loan losses was $38.3 million, compared to $36.4 million in the preceding quarter and $35.7 million in the fourth quarter a year ago. Revenues from core operations* (net interest income before the provision for loan losses plus total other operating income excluding fair value adjustments) were $45.4 million in the fourth quarter of 2009, compared to $45.2 million in the third quarter of 2009 and $42.9 million for the fourth quarter a year ago.
Banner’s results for the quarter included a net loss of $1.4 million ($0.9 million after tax), compared to a net gain of $13.7 million ($8.8 million after tax) in the fourth quarter a year ago, for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value.
Total other operating income, which includes the changes in the valuation of financial instruments noted above, was $5.6 million in the fourth quarter, compared to $13.5 million in the preceding quarter and $21.0 million for the fourth quarter a year ago. Total other operating income from core operations* (excluding fair value adjustments) for the current quarter was $7.0 million, compared to $8.8 million in the preceding quarter and $7.2 million for the same quarter a year ago. Income from deposit fees and other service charges decreased to $5.3 million in the fourth quarter compared to $5.7 million in the preceding quarter and was unchanged from the fourth quarter a year ago. Income from mortgage banking operations decreased to $1.3 million in the fourth quarter compared to $2.1 million in the preceding quarter and $1.4 million for the fourth quarter a year ago.
“Our payment processing business continues to be adversely affected by the soft economy, as activity levels for deposit customers, cardholders and merchants remained lower than in previous years,” said Jones. “Additionally, mortgage banking revenues declined compared to the preceding quarter and the fourth quarter a year ago, as seasonal factors and rising mortgage rates slowed originations. However, for the full year mortgage banking revenues were well above the levels achieved in 2008 and we are encouraged by our market share position and improved efficiencies as we continue to address the needs of home buyers in the communities we serve. Unfortunately, continuing high levels of refinancing activity and a soft market for mortgage servicing rights was reflected in the impairment of loan servicing revenues in the fourth quarter. Amortization and write-off of mortgage servicing rights totaled $974,000 for the fourth quarter of 2009, compared to $415,000 in the third quarter and $193,000 in the fourth quarter a year ago.”
“We had another good quarter of managing controllable operating expenses; however, collection and legal costs, including charges related to acquired real estate, remained high,” said Jones. “We have made significant progress in improving our core operating efficiency as compensation, occupancy and other manageable operating expenses have been reduced steadily over the past twelve months. However, compared to a year ago FDIC insurance expense has increased substantially and offset much of the improvement in other operating expenses. FDIC insurance charges were $2.2 million and $10.0 million, respectively, for the quarter and year ended December 31, 2009, compared to $2.3 million and $4.0 million, respectively, for the quarter and year ended December 31, 2008. In addition, expenses associated with acquired real estate increased to $1.9 million for the quarter and $7.1 million for the year ended December 31, 2009, compared to $676,000 and $2.8 million, respectively, for the same quarter and twelve-month period a year ago. We anticipate collection costs, acquired real estate expenses and FDIC insurance premiums will continue above historical levels for a number of future quarters.”
Total other operating expenses from core operations* (excluding the goodwill write-off in 2008), or non-interest expenses, were $34.8 million in the fourth quarter, compared to $36.6 million in the preceding quarter and $36.0 million in the fourth quarter a year ago.
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January 27, 2010
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Operating expenses from core operations as a percentage of average assets was 3.00% in the fourth quarter of 2009, compared to 3.17% in the preceding quarter and 3.06% in the fourth quarter a year ago.
*Earnings information excluding fair value adjustments and the goodwill impairment charge (alternately referred to as total other operating income from core operations, total other operating expenses from core operations, revenues from core operations, or operating expenses from core operations) represent non-GAAP (Generally Accepted Accounting Principles) 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 the Company’s core operations reflected in the current quarter’s and year-to-date’s results. Where applicable, the Company has also presented comparable earnings information using GAAP financial measures.
Balance Sheet Review
Net loans were $3.69 billion at December 31, 2009, compared to $3.80 billion at the end of the preceding quarter and $3.89 billion a year earlier. Total assets were $4.72 billion at December 31, 2009, compared to $4.79 billion at the end of the preceding quarter and $4.58 billion a year ago.
“Largely as a result of substantially reducing construction and land development loans, our total loan balances declined compared to a year ago,” said Jones. “Home sales have improved, although they are still slower than historical levels, contributing to a $182 million reduction in our portfolio of one-to-four family construction loans over the past twelve months, including a $38.3 million decrease in the most recent quarter. As a result, at December 31, 2009 our one-to-four family construction loans totaled $239 million, a decline of $416 million from their peak quarter-end balance of $655 million at June 30, 2007. Reflecting the economic environment, demand for business and consumer loans has been modest, further contributing to the decrease in total loans. By contrast, mortgage loans for one- to four-family properties have shown steady growth primarily as a result of financing the purchase of newly constructed homes.”
Deposits totaled $3.87 billion at December 31, 2009, compared to $3.86 billion at the end of the preceding quarter and $3.78 billion a year ago. Non-interest-bearing accounts increased by $36 million during the quarter to $582 million at December 31, 2009, compared to $547 million at September 30, 2009 and $509 million a year ago. Interest-bearing accounts declined by $31 million during the fourth quarter, primarily due to a decrease in brokered deposits, to $3.28 billion at December 31, 2009 compared to $3.31 billion at September 30, 2009, but increased by $13.3 million compared to a year ago. At December 31, 2008, interest-bearing accounts totaled $3.27 billion.
“Our retail deposit franchise had another strong quarter and we have now more than replaced all of the public funds and brokered deposits that we have chosen to run off,” said Jones. “Over the past year, we have allowed $173 million in public funds to run off as the new higher collateralization requirements and the shared risk exposure requirements under the Washington and Oregon State requirements have made retaining those deposits less desirable than in the past. In addition, although brokered deposits have never been an important component of our funding, we have reduced brokered deposits by $103 million over the same twelve-month period. At the same time, our retail deposit growth has allowed us to steadily build our short-term liquidity, a key operating goal, lower our loan-to-deposits ratio towards our long-term goal of 95% and substantially lower our cost of deposits and funding.”
Banner Corporation and its subsidiary banks continue to maintain capital levels significantly in excess of the requirements to be categorized as “well-capitalized” under applicable regulatory standards. Banner Corporation’s Tier 1 leverage capital to average assets ratio was 9.62% and its total capital to risk-weighted assets ratio was 12.73% at December 31, 2009.
Tangible stockholders’ equity at December 31, 2009 was $394.1 million, including $117.4 million attributable to preferred stock, compared to $419.6 million a year ago. Tangible book value per common share was $12.99 at quarter-end, compared to $17.96 a year earlier. At December 31, 2009, Banner had 21.3 million shares outstanding, while it had 16.9 million shares outstanding a year ago. Tangible common stockholders’ equity was $276.7 million at December 31, 2009, or 5.87% of tangible assets, compared to $303.7 million, or 6.64% of tangible assets a year earlier.
On December 18, 2009 Banner announced that it had decided to terminate its previously announced common stock offering in light of current market conditions. Banner plans to commence a new offering in 2010 after market conditions become more favorable.
Conference Call
Banner will host a conference call on Thursday, January 28, 2010, at 8:00 a.m. PST, to discuss fourth quarter 2009 results. The conference call can be accessed live by telephone at 480-629-9818 using access code 4198992 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 4198992.
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BANR-Fourth Quarter 2009 Results
January 27, 2010
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About the Company
Banner Corporation is a $4.7 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; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes and other properties and fluctuations in real estate values in our market areas; results of examinations of us by the Board of Governors of the Federal Reserve System and our bank subsidiaries by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require us to increase our reserve for loan losses or to write-down assets; fluctuations in agricultural commodity prices, crop yields and weather conditions; our ability to control operating costs and expenses; our ability to implement our branch expansion strategy; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we have acquired or may in the future 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; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; legislative or regulatory changes that adversely affect our business; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; our ability to pay dividends; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board; war or terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and other risks detailed in Banner’s reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
BANR-Fourth Quarter 2009 Results
January 27, 2010
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| RESULTS OF OPERATIONS | | | Quarters Ended | | Year Ended |
| (in thousands except shares and per share data) | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | Dec 31, 2009 | | Dec 31, 2008 |
| | | | | | | | | | | | | | | |
| INTEREST INCOME: | | | | | | | | | | | | |
| | Loans receivable | | | $ | 55,013 | $ | 56,175 | $ | 60,674 | $ | 223,035 | $ | 257,211 |
| | Mortgage-backed securities | | | 1,265 | | 1,422 | | 1,359 | | 6,057 | | 4,639 |
| | Securities and cash equivalents | | | 2,030 | | 1,976 | | 2,934 | | 8,278 | | 11,308 |
| | | | | | | 58,308 | | 59,573 | | 64,967 | | 237,370 | | 273,158 |
| INTEREST EXPENSE: | | | | | | | | | | | | |
| | Deposits | | | | 17,663 | | 20,818 | | 25,868 | | 83,211 | | 110,314 |
| | Federal Home Loan Bank advances | | | 602 | | 630 | | 1,097 | | 2,627 | | 5,407 |
| | Other borrowings | | | | 652 | | 655 | | 397 | | 2,205 | | 2,271 |
| | Junior subordinated debentures | | | 1,054 | | 1,118 | | 1,954 | | 4,754 | | 7,353 |
| | | | | | | 19,971 | | 23,221 | | 29,316 | | 92,797 | | 125,345 |
| | Net interest income before provision for loan losses | | | 38,337 | | 36,352 | | 35,651 | | 144,573 | | 147,813 |
| | | | | | | | | | | | | | | |
| PROVISION FOR LOAN LOSSES | | | 17,000 | | 25,000 | | 33,000 | | 109,000 | | 62,500 |
| | Net interest income | | | | 21,337 | | 11,352 | | 2,651 | | 35,573 | | 85,313 |
| | | | | | | | | | | | | | | |
| OTHER OPERATING INCOME: | | | | | | | | | | | |
| | Deposit fees and other service charges | | | 5,345 | | 5,705 | | 5,263 | | 21,394 | | 21,540 |
| | Mortgage banking operations | | | 1,253 | | 2,065 | | 1,351 | | 8,893 | | 6,045 |
| | Loan servicing fees | | | | (167) | | 282 | | 407 | | 93 | | 1,703 |
| | Miscellaneous | | | | 592 | | 768 | | 205 | | 2,292 | | 1,185 |
| | | | | | | 7,023 | | 8,820 | | 7,226 | | 32,672 | | 30,473 |
| | Increase (Decrease) in valuation of financial instruments carried at fair value | (1,411) | | 4,633 | | 13,740 | | 11,018 | | 9,156 |
| | Total other operating income | | | 5,612 | | 13,453 | | 20,966 | | 43,690 | | 39,629 |
| OTHER OPERATING EXPENSE: | | | | | | | | | | | |
| | Salary and employee benefits | | | 16,166 | | 17,379 | | 18,481 | | 68,674 | | 76,104 |
| | Less capitalized loan origination costs | | | (1,853) | | (2,060) | | (1,730) | | (8,863) | | (8,739) |
| | Occupancy and equipment | | | 5,699 | | 5,715 | | 6,197 | | 23,396 | | 24,010 |
| | Information / computer data services | | | 1,580 | | 1,551 | | 1,309 | | 6,264 | | 6,698 |
| | Payment and card processing services | | | 1,610 | | 1,778 | | 1,781 | | 6,396 | | 6,993 |
| | Professional services | | | | 2,251 | | 1,456 | | 1,175 | | 6,084 | | 4,378 |
| | Advertising and marketing | | | 1,701 | | 1,899 | | 2,009 | | 7,639 | | 6,676 |
| | Deposit insurance | | | | 2,150 | | 2,219 | | 2,308 | | 9,968 | | 3,969 |
| | State/municipal business and use taxes | | | 524 | | 558 | | 545 | | 2,154 | | 2,257 |
| | Real estate operations | | | | 1,920 | | 2,799 | | 676 | | 7,147 | | 2,828 |
| | Miscellaneous | | | | 3,019 | | 3,335 | | 3,218 | | 13,221 | | 13,725 |
| | | | | | | 34,767 | | 36,629 | | 35,969 | | 142,080 | | 138,899 |
| | Goodwill write-off | | | | - - | | - - | | 71,121 | | - - | | 121,121 |
| | Total other operating expense | | | 34,767 | | 36,629 | | 107,090 | | 142,080 | | 260,020 |
| | Income (Loss) before provision (benefit) for income taxes | | | (7,818) | | (11,824) | | (83,473) | | (62,817) | | (135,078) |
| PROVISION FOR (BENEFIT FROM ) INCOME TAXES | | | (4,276) | | (5,376) | | (4,942) | | (27,053) | | (7,085) |
| NET INCOME (LOSS) | | | $ | (3,542) | $ | (6,448) | $ | (78,531) | $ | (35,764) | $ | (127,993) |
| PREFERRED STOCK DIVIDEND AND DISCOUNT ACCRETION | | | | | | | | | | |
| | Preferred stock dividend | | | | 1,550 | | 1,550 | | 689 | | 6,200 | | 689 |
| | Preferred stock discount accretion | | | 373 | | 373 | | 161 | | 1,492 | | 161 |
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ | (5,465) | $ | (8,371) | $ | (79,381) | $ | (43,456) | $ | (128,843) |
| Earnings (Loss) per share available to common shareholder | | | | | | | | | | | |
| | | Basic | | | $ | (0.27) | $ | (0.44) | $ | (4.72) | $ | (2.33) | $ | (7.94) |
| | | Diluted | | | $ | (0.27) | $ | (0.44) | $ | (4.72) | $ | (2.33) | $ | (7.94) |
| Cumulative dividends declared per common share | | $ | 0.01 | $ | 0.01 | $ | 0.05 | $ | 0.04 | $ | 0.50 |
| Weighted average common shares outstanding | | | | | | | | | | | |
| | | Basic | | | | 20,616,861 | | 19,022,522 | | 16,820,350 | | 18,646,836 | | 16,225,225 |
| | | Diluted | | | | 20,616,861 | | 19,022,522 | | 16,820,350 | | 18,646,836 | | 16,225,225 |
| Common shares repurchased during the period | | | - - | | - - | | 200 | | - - | | 614,103 |
| Common shares issued in connection with exercise of stock options or DRIP | 1,605,647 | | 1,507,485 | | 171,770 | | 4,387,552 | | 1,499,992 |
BANR-Fourth Quarter 2009 Results
January 27, 2010
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| | FINANCIAL CONDITION | | | | | | | | |
| | (in thousands except shares and per share data) | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 |
| | | | | | | | | | | |
| | ASSETS | | | | | | | | |
| | Cash and due from banks | | | $ | 78,364 | $ | 60,531 | $ | 89,964 |
| | Federal funds and interest-bearing deposits | | | 244,641 | | 270,623 | | 12,786 |
| | Securities - at fair value | | | | 147,151 | | 167,944 | | 203,902 |
| | Securities - available for sale | | | | 74,834 | | 74,527 | | 53,272 |
| | Securities - held to maturity | | | | 95,667 | | 76,630 | | 59,794 |
| | Federal Home Loan Bank stock | | | 37,371 | | 37,371 | | 37,371 |
| | Loans receivable: | | | | | | | | |
| | | Held for sale | | | | 4,497 | | 4,781 | | 7,413 |
| | | Held for portfolio | | | | 3,785,624 | | 3,891,413 | | 3,953,995 |
| | | Allowance for loan losses | | | | (95,269) | | (95,183) | | (75,197) |
| | | | | | | 3,694,852 | | 3,801,011 | | 3,886,211 |
| | Accrued interest receivable | | | | 18,998 | | 20,912 | | 21,219 |
| | Real estate owned held for sale, net | | | 77,743 | | 53,576 | | 21,782 |
| | Property and equipment, net | | | | 103,542 | | 104,469 | | 97,647 |
| | Goodwill and other intangibles, net | | | 11,070 | | 11,718 | | 13,716 |
| | Bank-owned life insurance | | | | 54,596 | | 54,037 | | 52,680 |
| | Other assets | | | | 83,392 | | 54,659 | | 34,024 |
| | | | | | $ | 4,722,221 | $ | 4,788,008 | $ | 4,584,368 |
| | | | | | | | | | | |
| | LIABILITIES | | | | | | | | |
| | Deposits: | | | | | | | | |
| | | Non-interest-bearing | | | $ | 582,480 | $ | 546,956 | $ | 509,105 |
| | | Interest-bearing transaction and savings accounts | | | 1,341,145 | | 1,305,546 | | 1,137,878 |
| | | Interest-bearing certificates | | | 1,941,925 | | 2,008,673 | | 2,131,867 |
| | | | | | | 3,865,550 | | 3,861,175 | | 3,778,850 |
| | | | | | | | | | | |
| | Advances from Federal Home Loan Bank at fair value | | | 189,779 | | 255,806 | | 111,415 |
| | Customer repurchase agreements and other borrowings | | | 176,842 | | 174,770 | | 145,230 |
| | Junior subordinated debentures at fair value | | | 47,694 | | 47,859 | | 61,776 |
| | | | | | | | | | | |
| | Accrued expenses and other liabilities | | | 24,020 | | 28,715 | | 40,600 |
| | Deferred compensation | | | | 13,208 | | 12,960 | | 13,149 |
| | | | | | | 4,317,093 | | 4,381,285 | | 4,151,020 |
| | | | | | | | | | | |
| | STOCKHOLDERS' EQUITY | | | | | | | | |
| | Preferred stock - Series A | | | | 117,407 | | 117,034 | | 115,915 |
| | Common stock | | | | 331,538 | | 327,385 | | 316,740 |
| | Retained earnings (accumulated deficit) | | | (42,077) | | (36,402) | | 2,150 |
| | Other components of stockholders' equity | | | (1,740) | | (1,294) | | (1,457) |
| | | | | | | 405,128 | | 406,723 | | 433,348 |
| | | | | | $ | 4,722,221 | $ | 4,788,008 | $ | 4,584,368 |
| | Common Shares Issued: | | | | | | | | |
| | Shares outstanding at end of period | | | 21,539,590 | | 19,933,943 | | 17,152,038 |
| | | Less unearned ESOP shares at end of period | | | 240,381 | | 240,381 | | 240,381 |
| | Shares outstanding at end of period excluding unearned ESOP shares | | 21,299,209 | | 19,693,562 | | 16,911,657 |
| | Common stockholders' equity per share (1) | | $ | 13.51 | $ | 14.71 | $ | 18.77 |
| | Common stockholders' tangible equity per share (1) (2) | | $ | 12.99 | $ | 14.11 | $ | 17.96 |
| | | | | | | | | | | |
| | Tangible common stockholders' equity to tangible assets | | | 5.87% | | 5.82% | | 6.64% |
| | Consolidated Tier 1 leverage capital ratio | | | 9.62% | | 9.66% | | 10.32% |
| | (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) | - Tangible common equity excludes preferred stock, goodwill, core deposit and other intangibles. | | | |
| | | | | | | | | | | |
BANR-Fourth Quarter 2009 Results
January 27, 2010
Page 7
| | ADDITIONAL FINANCIAL INFORMATION | | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | | | | |
| | LOANS (including loans held for sale): | | | | | | | | | | | | |
| | Commercial real estate | | | | | | | | | | | | | |
| | | Owner occupied | | | $ | 509,464 | $ | 481,698 | $ | 459,446 | | | | | |
| | | Investment properties | | | | 573,495 | | 585,206 | | 554,263 | | | | | |
| | Multifamily real estate | | | | 153,497 | | 152,832 | | 151,274 | | | | | |
| | Commercial construction | | | | 80,236 | | 83,937 | | 104,495 | | | | | |
| | Multifamily construction | | | | 57,422 | | 62,614 | | 33,661 | | | | | |
| | One- to four-family construction | | | 239,135 | | 277,419 | | 420,673 | | | | | |
| | Land and land development | | | | | | | | | | | | | |
| | | Residential | | | | 284,331 | | 322,030 | | 401,129 | | | | | |
| | | Commercial | | | | 43,743 | | 47,182 | | 62,128 | | | | | |
| | Commercial business | | | | 637,823 | | 678,187 | | 679,867 | | | | | |
| | Agricultural business including secured by farmland | | 205,307 | | 225,603 | | 204,142 | | | | | |
| | One- to four-family real estate | | | | 703,277 | | 676,928 | | 599,169 | | | | | |
| | Consumer | | | | 302,391 | | 302,558 | | 291,161 | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | Total loans outstanding | | | $ | 3,790,121 | $ | 3,896,194 | $ | 3,961,408 | | | | | |
| | | | | | | | | | | | | | | | | |
| | Restructured loans performing under their restructured terms | $ | 43,683 | $ | 39,173 | $ | 23,635 | | | | | |
| | Loans 30 - 89 days past due and on accrual | | $ | 34,156 | $ | 21,243 | $ | 61,124 | | | | | |
| | Total delinquent loans (including loans on non-accrual) | $ | 248,006 | $ | 264,531 | $ | 248,469 | | | | | |
| | Total delinquent loans / Total loans outstanding | | 6.54% | | 6.79% | | 6.27% | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | GEOGRAPHIC CONCENTRATION OF LOANS AT | | | | | | | | | | |
| | | | December 31, 2009 | | | | Washington | | Oregon | | Idaho | | Other | | Total | |
| | | | | | | | | | | | | | | | | |
| | Commercial real estate | | | | | | | | | | | | | |
| | | Owner occupied | | | $ | 401,392 | $ | 61,821 | $ | 46,251 | $ | - - | $ | 509,464 | |
| | | Investment properties | | | | 413,570 | | 105,956 | | 43,684 | | 10,285 | | 573,495 | |
| | Multifamily real estate | | | | 127,748 | | 13,672 | | 8,776 | | 3,301 | | 153,497 | |
| | Commercial construction | | | | 57,493 | | 13,625 | | 9,118 | | - - | | 80,236 | |
| | Multifamily construction | | | | 29,956 | | 27,466 | | - - | | - - | | 57,422 | |
| | One- to four-family construction | | | 107,067 | | 120,395 | | 11,673 | | - - | | 239,135 | |
| | Land and land development | | | | | | | | | | | | | |
| | | Residential | | | | 140,539 | | 112,945 | | 30,847 | | - - | | 284,331 | |
| | | Commercial | | | | 29,130 | | 12,122 | | 2,491 | | - - | | 43,743 | |
| | Commercial business | | | | 451,531 | | 92,289 | | 70,803 | | 23,200 | | 637,823 | |
| | Agricultural business including secured by farmland | | 94,452 | | 50,419 | | 60,436 | | - - | | 205,307 | |
| | One- to four-family real estate | | | | 485,185 | | 185,573 | | 30,064 | | 2,455 | | 703,277 | |
| | Consumer | | | | 216,315 | | 65,564 | | 20,011 | | 501 | | 302,391 | |
| | | | Total loans outstanding | | | $ | 2,554,378 | $ | 861,847 | $ | 334,154 | $ | 39,742 | $ | 3,790,121 | |
| | | | | | | | | | | | | | | | | |
| | | | Percent of total loans | | | | 67.4% | | 22.7% | | 8.8% | | 1.1% | | 100.0% | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT | | | | | | | | | | |
| | | | December 31, 2009 | | | | Washington | | Oregon | | Idaho | | Other | | Total | |
| | | | | | | | | | | | | | | | | |
| | Residential | | | | | | | | | | | | | |
| | | Acquisition & development | | | $ | 56,540 | $ | 74,496 | $ | 8,946 | $ | - - | $ | 139,982 | |
| | | Improved lots | | | | 48,102 | | 31,461 | | 2,013 | | - - | | 81,576 | |
| | | Unimproved land | | | | 35,897 | | 6,988 | | 19,888 | | - - | | 62,773 | |
| | | | Total residential land and development | | $ | 140,539 | $ | 112,945 | $ | 30,847 | $ | - - | $ | 284,331 | |
| | Commercial & industrial | | | | | | | | | | | | | |
| | | Acquisition & development | | | $ | 8,531 | $ | - - | $ | 552 | $ | - - | $ | 9,083 | |
| | | Improved land | | | | 9,072 | | 10,643 | | - - | | - - | | 19,715 | |
| | | Unimproved land | | | | 11,527 | | 1,479 | | 1,939 | | - - | | 14,945 | |
| | | | Total commercial land and development | | $ | 29,130 | $ | 12,122 | $ | 2,491 | $ | - - | $ | 43,743 | |
| | | | | | | | | | | | | | | | | |
BANR-Fourth Quarter 2009 Results
January 27, 2010
Page 8
| ADDITIONAL FINANCIAL INFORMATION | | | | | | | | | | |
| (dollars in thousands) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | Quarters Ended | | | Year Ended |
| CHANGE IN THE | | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | Dec 31, 2009 | | Dec 31, 2008 |
| ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Balance, beginning of period | | $ | 95,183 | $ | 90,694 | $ | 58,846 | $ | 75,197 | $ | 45,827 |
| | | | | | | | | | | | | | | |
| Provision | | | | 17,000 | | 25,000 | | 33,000 | | 109,000 | | 62,500 |
| | | | | | | | | | | | | | | |
| Recoveries of loans previously charged off: | | | | | | | | | | |
| | | Commercial real estate | | | | - - | | - - | | - - | | - - | | 1,530 |
| | | Multifamily real estate | | | | - - | | - - | | - - | | - - | | - - |
| | | Construction and land | | | | 98 | | 299 | | 144 | | 715 | | 192 |
| | | One- to four-family real estate | | | 26 | | 21 | | 1 | | 138 | | 45 |
| | | Commercial business | | | | 106 | | 120 | | 81 | | 545 | | 471 |
| | | Agricultural business, including secured by farmland | | 10 | | 6 | | 430 | | 38 | | 1,048 |
| | | Consumer | | | | 60 | | 152 | | 59 | | 275 | | 185 |
| | | | | | | 300 | | 598 | | 715 | | 1,711 | | 3,471 |
| Loans charged-off: | | | | | | | | | | | | |
| | | Commercial real estate | | | | (1) | | - - | | - - | | (1) | | (7) |
| | | Multifamily real estate | | | | - - | | - - | | - - | | - - | | - - |
| | | Construction and land | | | | (12,245) | | (16,614) | | (13,404) | | (64,456) | | (27,020) |
| | | One- to four-family real estate | | | (1,557) | | (856) | | (523) | | (8,795) | | (934) |
| | | Commercial business | | | | (2,249) | | (3,060) | | (2,884) | | (11,541) | | (7,323) |
| | | Agricultural business, including secured by farmland | | (692) | | - - | | - - | | (3,877) | | (60) |
| | | Consumer | | | | (470) | | (579) | | (553) | | (1,969) | | (1,257) |
| | | | | | | (17,214) | | (21,109) | | (17,364) | | (90,639) | | (36,601) |
| | | Net charge-offs | | | | (16,914) | | (20,511) | | (16,649) | | (88,928) | | (33,130) |
| Balance, end of period | | | $ | 95,269 | $ | 95,183 | $ | 75,197 | $ | 95,269 | $ | 75,197 |
| | | | | | | | | | | | | | | |
| Net charge-offs / Average loans outstanding | | 0.44% | | 0.53% | | 0.42% | | 2.28% | | 0.84% |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| ALLOCATION OF | | | | | | | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | | | |
| Specific or allocated loss allowance | | | | | | | | | | | |
| | Commercial real estate | | | $ | 7,631 | $ | 7,580 | $ | 4,199 | | | | |
| | Multifamily real estate | | | | 90 | | 89 | | 87 | | | | |
| | Construction and land | | | | 43,746 | | 49,829 | | 38,253 | | | | |
| | One- to four-family real estate | | | 3,026 | | 2,304 | | 752 | | | | |
| | Commercial business | | | | 21,754 | | 20,906 | | 16,533 | | | | |
| | Agricultural business, including secured by farmland | | 918 | | 1,540 | | 530 | | | | |
| | Consumer | | | | 1,778 | | 1,758 | | 1,730 | | | | |
| | | | | | | | | | | | | | | |
| | | Total allocated | | | | 78,943 | | 84,006 | | 62,084 | | | | |
| | | | | | | | | | | | | | | |
| | Estimated allowance for undisbursed commitments | | 1,591 | | 2,202 | | 1,108 | | | | |
| | Unallocated | | | | 14,735 | | 8,975 | | 12,005 | | | | |
| | | | | | | | | | | | | | | |
| | | Total allowance for loan losses | | $ | 95,269 | $ | 95,183 | $ | 75,197 | | | | |
| | | | | | | | | | | | | | | |
| Allowance for loan losses / Total loans outstanding | | 2.51% | | 2.44% | | 1.90% | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
(more)
BANR-Fourth Quarter 2009 Results
January 27, 2010
Page 9
| | ADDITIONAL FINANCIAL INFORMATION | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | | | |
| | | | | | | | | | | | | | | | | |
| | NON-PERFORMING ASSETS | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | Loans on non-accrual status | | | | | | | | | | | |
| | | Secured by real estate: | | | | | | | | | | | | |
| | | | | Commercial | | | $ | 7,300 | $ | 8,073 | $ | 12,879 | | | | |
| | | | | Multifamily | | | | 383 | | - - | | - - | | | | |
| | | | | Construction and land | | | 159,264 | | 193,281 | | 154,823 | | | | |
| | | | | One- to four-family | | | | 14,614 | | 18,107 | | 8,649 | | | | |
| | | Commercial business | | | | 21,640 | | 15,070 | | 8,617 | | | | |
| | | Agricultural business, including secured by farmland | | 6,277 | | 5,868 | | 1,880 | | | | |
| | | Consumer | | | | 3,923 | | - - | | 130 | | | | |
| | | | | | | | | 213,401 | | 240,399 | | 186,978 | | | | |
| | | | | | | | | | | | | | | | | |
| | Loans more than 90 days delinquent, still on accrual | | | | | | | | | | |
| | | Secured by real estate: | | | | | | | | | | | | |
| | | | | Commercial | | | | - - | | - - | | - - | | | | |
| | | | | Multifamily | | | | - - | | - - | | - - | | | | |
| | | | | Construction and land | | | - - | | 2,090 | | - - | | | | |
| | | | | One- to four-family | | | | 358 | | 690 | | 124 | | | | |
| | | Commercial business | | | | - - | | - - | | - - | | | | |
| | | Agricultural business, including secured by farmland | | - - | | - - | | - - | | | | |
| | | Consumer | | | | 91 | | 109 | | 243 | | | | |
| | | | | | | | | 449 | | 2,889 | | 367 | | | | |
| | Total non-performing loans | | | | 213,850 | | 243,288 | | 187,345 | | | | |
| | Securities on non-accrual | | | | 4,232 | | 1,236 | | - - | | | | |
| | Real estate owned (REO) / Repossessed assets | | 77,802 | | 53,765 | | 21,886 | | | | |
| | | | | Total non-performing assets | | $ | 295,884 | $ | 298,289 | $ | 209,231 | | | | |
| | | | | | | | | | | | | | | | | |
| | Total non-performing assets / Total assets | | | 6.27% | | 6.23% | | 4.56% | | | | |
| | | | | | | | | | | | | | | | | |
| | DETAIL & GEOGRAPHIC CONCENTRATION OF | | | | | | | | | | |
| | | NON-PERFORMING ASSETS AT | | | | | | | | | | | |
| | | | | December 31, 2009 | | | | Washington | | Oregon | | Idaho | | Other | | Total |
| | Secured by real estate: | | | | | | | | | | | | |
| | | Commercial | | | $ | 6,095 | $ | 716 | $ | 489 | $ | - - | $ | 7,300 |
| | | Multifamily | | | | 383 | | - - | | - - | | - - | | 383 |
| | | Construction and land | | | | | | | | | | | | |
| | | | One- to four-family construction | | | 21,819 | | 24,760 | | 6,810 | | - - | | 53,389 |
| | | | Commercial construction | | | 1,561 | | - - | | - - | | - - | | 1,561 |
| | | | Residential land acquisition & development | | 16,775 | | 25,920 | | 3,987 | | - - | | 46,682 |
| | | | Residential land improved lots | | | 10,743 | | 8,287 | | 588 | | - - | | 19,618 |
| | | | Residential land unimproved | | | 22,414 | | 241 | | 321 | | - - | | 22,976 |
| | | | Commercial land acquisition & development | | - - | | - - | | - - | | - - | | - - |
| | | | Commercial land improved | | | - - | | 10,656 | | - - | | - - | | 10,656 |
| | | | Commercial land unimproved | | | 4,382 | | �� - - | | - - | | - - | | 4,382 |
| | | | | Total construction and land | | | 77,694 | | 69,864 | | 11,706 | | - - | | 159,264 |
| | | One- to four-family | | | | 8,666 | | 5,548 | | 758 | | - - | | 14,972 |
| | Commercial business | | | | 14,825 | | 633 | | 1,195 | | 4,987 | | 21,640 |
| | Agricultural business, including secured by farmland | | 365 | | 214 | | 5,698 | | - - | | 6,277 |
| | Consumer | | | | 3,029 | | 372 | | 183 | | 430 | | 4,014 |
| | Total non-performing loans | | | | 111,057 | | 77,347 | | 20,029 | | 5,417 | | 213,850 |
| | Securities on non-accrual | | | | 3,000 | | - - | | - - | | 1,232 | | 4,232 |
| | Real estate owned (REO) and repossessed assets | | 44,330 | | 17,909 | | 15,563 | | - - | | 77,802 |
| | | | | Total non-performing assets at end of the period | $ | 158,387 | $ | 95,256 | $ | 35,592 | $ | 6,649 | $ | 295,884 |
| | | | | | | | | | | | | | | | | |
(more)
BANR-Fourth Quarter 2009 Results
ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) | | | | | | | | | |
| | | | | | | | | | |
| DEPOSITS & OTHER BORROWINGS | | | | | | | | | |
| | | | | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | |
| | BREAKDOWN OF DEPOSITS | | | | | | | | | |
| | | | | | | | | | | | | |
| | Non-interest-bearing | | | $ | 582,480 | $ | 546,956 | $ | 509,105 | | |
| | Interest-bearing checking | | | | 360,256 | | 329,820 | | 378,952 | | |
| | Regular savings accounts | | | | 538,765 | | 521,663 | | 474,885 | | |
| | Money market accounts | | | | 442,124 | | 454,063 | | 284,041 | | |
| | | Interest-bearing transaction & savings accounts | | | 1,341,145 | | 1,305,546 | | 1,137,878 | | |
| | | | | | | | | | | | | |
| | Interest-bearing certificates | | | | 1,941,925 | | 2,008,673 | | 2,131,867 | | |
| | | | | | | | | | | | | |
| | | Total deposits | | | $ | 3,865,550 | $ | 3,861,175 | $ | 3,778,850 | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | INCLUDED IN TOTAL DEPOSITS | | | | | | | | | |
| | | | | | | | | | | | | |
| | Public transaction accounts | | | $ | 78,202 | $ | 44,645 | $ | 117,402 | | |
| | Public interest-bearing certificates | | | 88,186 | | 98,906 | | 221,915 | | |
| | | Total public deposits | | | $ | 166,388 | $ | 143,551 | $ | 339,317 | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Total brokered deposits | | | $ | 165,016 | $ | 186,087 | $ | 268,458 | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | INCLUDED IN OTHER BORROWINGS | | | | | | | | | |
| | Customer repurchase agreements / "Sweep accounts" | $ | 124,330 | $ | 124,795 | $ | 145,230 | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | GEOGRAPHIC CONCENTRATION OF DEPOSITS AT | | | | | | | | |
| | | December 31, 2009 | | | | Washington | | Oregon | | Idaho | | Total |
| | | | | | | | | | | | | |
| | | | | | $ | 2,979,985 | $ | 611,180 | $ | 274,385 | $ | 3,865,550 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | Minimum for Capital Adequacy |
| REGULATORY CAPITAL RATIOS AT | | | Actual | | or "Well Capitalized" |
| | | December 31, 2009 | | | | Amount | | Ratio | | Amount | | Ratio |
| | | | | | | | | | | | | |
| Banner Corporation-consolidated | | | | | | | | | |
| | | Total capital to risk-weighted assets | | $ | 489,827 | | 12.73% | $ | 334,879 | | 8.00% |
| | | Tier 1 capital to risk-weighted assets | | | 441,160 | | 11.47% | | 167,440 | | 4.00% |
| | | Tier 1 leverage capital to average assets | | | 441,160 | | 9.62% | | 183,421 | | 4.00% |
| | | | | | | | | | | | | |
| Banner Bank | | | | | | | | | | |
| | | Total capital to risk-weighted assets | | | 474,831 | | 12.95% | | 400,522 | | 10.00% |
| | | Tier 1 capital to risk-weighted assets | | | 428,420 | | 11.69% | | 240,313 | | 6.00% |
| | | Tier 1 leverage capital to average assets | | | 428,420 | | 9.74% | | 219,431 | | 5.00% |
| | | | | | | | | | | | | |
| Islanders Bank | | | | | | | | | | |
| | | Total capital to risk-weighted assets | | | 26,728 | | 13.17% | | 20,301 | | 10.00% |
| | | Tier 1 capital to risk-weighted assets | | | 24,732 | | 12.18% | | 12,180 | | 6.00% |
| | | Tier 1 leverage capital to average assets | | | 24,732 | | 11.58% | | 10,679 | | 5.00% |
BANR-Fourth Quarter 2009 Results
January 27, 2010
Page 11
| | ADDITIONAL FINANCIAL INFORMATION | | | | | | | | | | | |
| | (dollars in thousands) | | | | | | | | | | | | |
| | (rates / ratios annualized) | | | | | | | | | | | | |
| | | | | | | Quarters Ended | | Year Ended |
| | | | | | | | | | | | | | | |
| | OPERATING PERFORMANCE | | | Dec 31, 2009 | | Sep 30, 2009 | | Dec 31, 2008 | | Dec 31, 2009 | | Dec 31, 2008 |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Average loans | | | $ | 3,829,717 | $ | 3,905,763 | $ | 3,988,531 | $ | 3,900,569 | $ | 3,935,039 |
| | Average securities and deposits | | | 528,754 | | 461,360 | | 391,560 | | 447,386 | | 345,827 |
| | Average non-interest-earning assets | | | 235,007 | | 219,780 | | 296,927 | | 212,126 | | 325,235 |
| | | | | | | | | | | | | | | |
| | | Total average assets | | | $ | 4,593,478 | $ | 4,586,903 | $ | 4,677,018 | $ | 4,560,081 | $ | 4,606,101 |
| | | | | | | | | | | | | | | |
| | Average deposits | | | $ | 3,836,327 | $ | 3,821,065 | $ | 3,750,383 | $ | 3,758,156 | $ | 3,722,012 |
| | Average borrowings | | | | 378,376 | | 377,976 | | 456,383 | | 400,596 | | 425,713 |
| | Average non-interest-bearing liabilities | | | (32,296) | | (25,527) | | 25,459 | | (21,122) | | 30,335 |
| | | | | | | | | | | | | | | |
| | | Total average liabilities | | | | 4,182,407 | | 4,173,514 | | 4,232,225 | | 4,137,630 | | 4,178,060 |
| | | | | | | | | | | | | | | |
| | Total average stockholders' equity | | | 411,071 | | 413,389 | | 444,793 | | 422,451 | | 428,041 |
| | | | | | | ` | | | | | | | | |
| | | Total average liabilities and equity | | $ | 4,593,478 | $ | 4,586,903 | $ | 4,677,018 | $ | 4,560,081 | $ | 4,606,101 |
| | | | | | | | | | | | | | | |
| | Interest rate yield on loans | | | | 5.70% | | 5.71% | | 6.05% | | 5.72% | | 6.54% |
| | Interest rate yield on securities and deposits | | | 2.47% | | 2.92% | | 4.36% | | 3.20% | | 4.61% |
| | | | | | | | | | | | | | | |
| | | Interest rate yield on interest-earning assets | | | 5.31% | | 5.41% | | 5.90% | | 5.46% | | 6.38% |
| | | | | | | | | | | | | | | |
| | Interest rate expense on deposits | | | 1.83% | | 2.16% | | 2.74% | | 2.21% | | 2.96% |
| | Interest rate expense on borrowings | | | 2.42% | | 2.52% | | 3.01% | | 2.39% | | 3.53% |
| | | | | | | | | | | | | | | |
| | | Interest rate expense on interest-bearing liabilities | | | 1.88% | | 2.19% | | 2.77% | | 2.23% | | 3.02% |
| | | | | | | | | | | | | | | |
| | Interest rate spread | | | | 3.43% | | 3.22% | | 3.13% | | 3.23% | | 3.36% |
| | | | | | | | | | | | | | | |
| | Net interest margin | | | | 3.49% | | 3.30% | | 3.24% | | 3.33% | | 3.45% |
| | | | | | | | | | | | | | | |
| | Other operating income / Average assets | | | 0.48% | | 1.16% | | 1.78% | | 0.96% | | 0.86% |
| | | | | | | | | | | | | | | |
| | Other operating income (loss) EXCLUDING change in valuation of | | | | | | | | | | |
| | | financial instruments carried at fair value / Average assets (1) | | 0.61% | | 0.76% | | 0.61% | | 0.72% | | 0.66% |
| | | | | | | | | | | | | | | |
| | Other operating expense / Average assets | | | 3.00% | | 3.17% | | 9.11% | | 3.12% | | 5.65% |
| | | | | | | | | | | | | | | |
| | Other operating expense EXCLUDING goodwill write-off / Average assets (1) | | 3.00% | | 3.17% | | 3.06% | | 3.12% | | 3.02% |
| | | | | | | | | | | | | | | |
| | Efficiency ratio (other operating expense / revenue) | | | 79.11% | | 73.54% | | 189.15% | | 75.47% | | 138.72% |
| | | | | | | | | | | | | | | |
| | Return (Loss) on average assets | | | (0.31%) | | (0.56%) | | (6.68%) | | (0.78%) | | (2.78%) |
| | | | | | | | | | | | | | | |
| | Return (Loss) on average equity | | | (3.42%) | | (6.19%) | | (70.24%) | | (8.47%) | | (29.90%) |
| | | | | | | | | | | | | | | |
| | Return (Loss) on average tangible equity (2) | | | (3.52%) | | (6.37%) | | (86.69%) | | (8.72%) | | (40.34%) |
| | | | | | | | | | | | | | | |
| | Average equity / Average assets | | | 8.95% | | 9.01% | | 9.51% | | 9.26% | | 9.29% |
| | | | | | | | | | | | | | | |
| | (1) | - Earnings information excluding the fair value adjustments and goodwill impairment charge (alternately referred to as operating | | | |
| | | income (loss) from core operations and expenses from core operations) represent non-GAAP (Generally Accepted | | | | |
| | | Accounting Principles) financial measures. | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | (2) | - Average tangible equity excludes goodwill, core deposit and other intangibles. | | | | | | | |
