Exhibit 99.1
 |  | Contact: Mark J. Grescovich, President & CEO Lloyd W. Baker, CFO (509) 527-3636 |
Banner Corporation's Net Income Totals $11.6 Million, or $0.60 Per Diluted Share, in First Quarter;
Net Income Highlighted by Strong Revenue Generation and Further Improved Credit Quality
Walla Walla, WA - April 22, 2013 - Banner Corporation (NASDAQ GSM: BANR), the parent company of Banner Bank and Islanders Bank, today reported net income available to common shareholders of $11.6 million, or $0.60 per diluted share, in the first quarter of 2013, compared to $7.2 million, or $0.40 per diluted share, in the first quarter a year ago. Banner's net income available to common shareholders was $13.3 million, or $0.69 per diluted share, in the quarter ended December 31, 2012.
“We are pleased with our first quarter performance and with the continuation of the successful execution of our strategies and priorities to deliver sustainable profitability to Banner,” said Mark J. Grescovich, President and Chief Executive Officer. “Our further improvement in asset quality, strong revenue generation and additional client acquisition demonstrate that through the hard work of our employees, Banner's super community bank strategy is working. This marks the fourteenth consecutive quarter that we have achieved a year-over-year increase in revenues from core operations* (net interest income before provision for loan losses plus total other operating income excluding gain on the sale of securities, other-than-temporary impairment recovery and fair value adjustments). Although the Banking Industry faces the continuing challenges of a low interest rate environment and modest economic growth, Banner is well positioned to meet this challenging environment because of our strong balance sheet, much improved operations and well received and acknowledged client value proposition.”
“An additional highlight from the first quarter is that we meaningfully increased our dividend,” Grescovich added. “The regular quarterly cash dividend was increased to $0.12 per share from $0.01 per share, which reflects our strong performance and our expectation of continued success in 2013.”
First Quarter 2013 Highlights (compared to first quarter 2012, except as noted)
| • | Net income available to common shareholders was $11.6 million, compared to $7.2 million for the first quarter a year ago. |
| • | Return on average assets was 1.11% compared to 0.88% for the first quarter a year ago. |
| • | Revenues from core operations* totaled $50.9 million compared to $50.4 million for the first quarter a year ago. |
| • | Net interest margin was 4.16%, compared to 4.13% for the preceding quarter and 4.15% for the first quarter a year ago. |
| • | Deposit fees and other service charges increased 7%. |
| • | Revenues from mortgage banking increased 15%. |
| • | Non-performing assets decreased to $44.9 million, or 1.06% of total assets, at March 31, 2013, an 11% decrease compared to three months earlier and a 52% decrease compared to a year earlier. |
| • | Non-performing loans decreased to $33.4 million at March 31, 2013, a 3% decrease compared to three months earlier and a 49% decrease compared to a year earlier. |
| • | The ratio of tangible common equity to tangible assets increased to 12.10% at March 31, 2013.* |
| • | Banner increased its regular quarterly cash dividend to $0.12 per share. |
*Earnings information excluding gain on sale of securities, fair value and other-than-temporary impairment (OTTI) adjustments (alternately referred to as other operating income from core operations or revenues from core operations) and the ratio of tangible common equity (which excludes other intangible assets and preferred stock) to tangible assets 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 Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. Where applicable, comparable earnings information using GAAP financial measures is also presented.
BANR - First Quarter 2013 Results
April 22, 2013
Page 2
Income Statement Review
“Our net interest margin expansion compared to both the preceding quarter and the first quarter a year ago reflects important reductions in deposit and other funding costs, as well as a further reduction in the adverse effect of non-performing assets and a favorable change in the mix of interest-earning assets,” said Grescovich. “However, the continuing impact of exceptionally low market interest rates is evident in declining loan and securities yields.” Banner's net interest margin was 4.16% in the first quarter of 2013, compared to 4.13% in the preceding quarter and 4.15% in the first quarter a year ago.
Deposit costs decreased by four basis points in the first quarter compared to the preceding quarter and 21 basis points compared to the first quarter a year ago. Total funding costs for the first quarter of 2013 decreased four basis points compared to the preceding quarter and 27 basis points from the first quarter a year ago. Asset yields were unchanged compared to the preceding quarter and decreased 24 basis points from the first quarter a year ago. However, loan yields decreased by eight basis points compared to the preceding quarter and decreased 26 basis points from the first quarter a year ago. Nonaccrual loans reduced the margin by approximately four basis points in the first quarter of 2013 compared to approximately six basis points in the preceding quarter and approximately 13 basis points in the first quarter of 2012. Securities yields decreased by seven basis points compared to the preceding quarter and were 14 basis points lower than the first quarter of 2012.
Banner's first quarter net interest income, before the provision for loan losses, was $41.0 million, compared to $41.5 million in the first quarter a year ago, as the increase in the net interest margin was offset by a modest decrease in the average balance of interest-earning assets and the effect of one additional day in the first quarter of 2012 which was a leap year. In spite of the modest increase in the net interest margin, net interest income also decreased from $41.9 million in the immediately preceding quarter, largely reflecting the fewer number of days in the current quarter and expected seasonal decreases in agricultural loan balances and non-interest-bearing deposits.
Continuing homeowner refinance activity, as well as increased home purchase transactions, contributed to revenues from mortgage banking activities, which increased 15% to $2.8 million compared to $2.5 million in the first quarter a year ago, but declined compared to $3.9 million in the fourth quarter of 2012 when homeowner refinance activity was at its peak. Deposit fees and other service charges were $6.3 million in the first quarter of 2013, compared to $6.4 million in the preceding quarter and increased 7% compared to $5.9 million in the first quarter a year ago. Revenues from core operations* were $50.9 million in the first quarter compared to $54.5 million in the fourth quarter of 2012 and $50.4 million in the first quarter a year ago.
Banner's first quarter 2013 results included a gain on the sale of securities of $1.0 million and an other than temporary impairment (OTTI) recovery of $409,000, both of which resulted from the sale of securities that had been fully written off in previous periods, as well as a $1.3 million net loss for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value. In the preceding quarter, Banner recorded a small $3,000 gain on the sale of securities and a net gain of $386,000 for fair value adjustments, while in the first quarter of 2012 Banner recorded a net gain of $1.7 million for fair value adjustments with no gains or losses on securities sales.
Total other operating income, which includes the gain on sale of securities, OTTI recovery and changes in the valuation of financial instruments, was $10.0 million in the first quarter of 2013 compared to $13.0 million in the fourth quarter of 2012 and $10.6 million in the first quarter a year ago. Other operating income from core operations* (total other operating income, excluding gain on the sale of securities, fair value and OTTI adjustments) was $9.9 million for the first quarter of 2013, compared to $12.6 million for the preceding quarter and $8.9 million for the first quarter a year ago.
“Operating expenses declined in the first quarter compared to the preceding quarter and the first quarter a year ago, largely due to lower costs associated with loan collections and the real estate owned portfolio, as well as decreases in advertising costs, FDIC deposit insurance charges and other miscellaneous expenses,” said Grescovich. Total other operating expenses (non-interest expenses) were $34.1 million in the first quarter of 2013, compared to $34.5 million in the preceding quarter and $37.9 million in the first quarter of 2012.
For the quarter ended March 31, 2013, Banner recorded $5.3 million in state and federal income tax expense for an effective tax rate of approximately 31.3%, which reflects normal marginal tax rates reduced by the impact of tax-exempt income and certain tax credits. For the quarter ended March 31, 2012, Banner had no provision for income taxes as a result of the full valuation allowance for its deferred tax assets (DTA) at that date. The DTA valuation allowance was eliminated during the final three quarters of 2012 which resulted in the substantially reduced provision for income taxes of $4.6 million, or an effective rate of 24.0%, in the fourth quarter of 2012.
Credit Quality
“All of Banner's key credit quality metrics have improved over the last year, including further progress during the first quarter, while our reserve levels have remained substantial,” said Grescovich, “providing us additional benefit in the current quarter's earnings.” As a result of substantial reserves already in place representing 2.38% of total loans outstanding, as well as declining net charge-offs, Banner did not record a provision for loan losses in the first quarter of 2013. This compares to a $1.0 million provision in the preceding quarter and a $5.0 million provision in the first quarter a year ago. The allowance for loan losses at
BANR - First Quarter 2013 Results
April 22, 2013
Page 3
March 31, 2013 was $77.1 million, representing 231% of non-performing loans. Non-performing loans decreased by 3% to $33.4 million at March 31, 2013, compared to $34.4 million three months earlier, and decreased 49% when compared to $64.9 million a year earlier.
Real estate owned and repossessed assets decreased 28% to $11.5 million at March 31, 2013, compared to $15.9 million three months earlier, and decreased 59% when compared to $27.7 million a year ago. Net charge-offs in the first quarter of 2013 totaled $363,000, or 0.01% of average loans outstanding, compared to $2.3 million, or 0.07% of average loans outstanding in the fourth quarter of 2012 and $6.4 million, or 0.20% of average loans outstanding in the first quarter a year ago.
At March 31, 2013, Banner's non-performing assets were 1.06% of total assets, compared to 2.24% a year ago and 1.18% at December 31, 2012. Non-performing assets decreased 52% to $44.9 million at March 31, 2013, compared to $93.1 million a year ago and decreased 11% compared to $50.2 million at December 31, 2012.
Balance Sheet Review
“Total loans outstanding increased modestly during the quarter, despite an expected seasonal reduction in agricultural loans and additional refinance driven payoffs in residential loans, as our bankers' calling efforts continued to produce reasonable results,” said Grescovich. “Nonetheless, credit line utilizations remained low, and we expect a continued challenging environment going forward as businesses and consumers maintain their cautious approach to spending and borrowing. However, we are encouraged by the potential in our loan origination pipelines and are optimistic about capturing more market share.” Net loans were $3.16 billion at March 31, 2013, nearly unchanged from three months earlier. Net loans were $3.15 billion a year ago. Commercial real estate and multifamily real estate loans increased 2% to $1.23 billion at March 31, 2013 compared to $1.21 billion at both December 31 and March 31, 2012. Commercial and agricultural business loans were $829.7 million at March 31, 2013, a decrease from $848.0 million three months earlier but an increase of 4% compared to $798.5 million a year ago. Total construction and development loans increased 9% during the quarter to $331.7 million at March 31, 2013 compared to $304.6 million at December 31, 2012, and increased 7% compared to $311.0 million a year earlier.
The aggregate total of securities and interest-bearing deposits declined to $729.2 million at March 31, 2013 compared to $745.5 million at December 31, 2012, but increased from $685.2 million at March 31, 2012. The change in the mix of interest-bearing deposits and securities holdings compared to a year ago reflects both an increase in our overall securities holdings and a modest extension of the expected duration of our securities holdings designed to increase the yield relative to interest-bearing deposits. The securities purchased in recent periods were primarily short- to intermediate-term U.S. Government Agency notes and mortgage-backed securities and, to a lesser extent, intermediate-term taxable and tax-exempt municipal securities. The average duration of Banner's securities portfolio was approximately 4.6 years at March 31, 2013.
Total deposits were $3.52 billion at March 31, 2013, compared to $3.56 billion three months earlier and $3.43 billion a year ago. Following a normal seasonal pattern, non-interest-bearing account balances declined 2% to $962.2 million at March 31, 2013, compared to $981.2 million at December 31, 2012, but increased 25% compared to $771.8 million a year ago. Interest-bearing transaction and savings accounts totaled $1.58 billion at March 31, 2013, compared to $1.55 billion at December 31, 2012 and $1.46 billion a year ago, while certificates of deposit further decreased to $982.9 million at March 31, 2013, compared to $1.03 billion at December 31, 2012 and $1.20 billion a year earlier. Non-certificate core deposits represented 72% of total deposits at the end of the first quarter, compared to 65% of total deposits a year earlier.
“Our super community bank strategy that involves lowering our funding costs by reducing our reliance on high-priced certificates of deposit, growing new client relationships, and improving our core funding position is consistently producing results and enhancing our deposit franchise,” said Grescovich. “As a result, Banner's cost of deposits declined another four basis points to 0.31% for the quarter ended March 31, 2013 compared to 0.35% for the quarter ended December 31, 2012, and declined 21 basis points from 0.52% for the quarter ended March 31, 2012.”
Total assets were $4.24 billion at March 31, 2013, compared to $4.16 billion a year ago and $4.27 billion at December 31, 2012. At March 31, 2013, total common stockholders' equity was $516.1 million, or $26.56 per share. Banner had 19.5 million shares of common stock outstanding at quarter end, compared to 18.0 million shares of common stock outstanding a year ago. The number of shares increased primarily as a result of common stock issued through Banner's Dividend Reinvestment and Direct Stock Purchase and Sale Plan during the first eight months of 2012. At March 31, 2013, tangible common stockholders' equity, which excludes other intangible assets, was $512.3 million, or 12.10% of tangible assets, compared to $502.7 million, or 11.80% of tangible assets, at December 31, 2012 and $422 million, or 10.15% of tangible assets, a year ago. Banner's tangible book value per share increased to $26.37 at March 31, 2013, compared to $23.45 per share a year ago.
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 13.28% and its total capital to risk-weighted assets ratio was 17.06% at March 31, 2013.
BANR - First Quarter 2013 Results
April 22, 2013
Page 4
Conference Call
Banner will host a conference call on Tuesday, April 23, 2013, at 8:00 a.m. PDT, to discuss its first quarter results. The conference call can be accessed live by telephone at (480) 629-9771 to participate in the call. To listen to the call on-line, go to the Company's website at www.bannerbank.com. A replay will be available for one week at (303) 590-3030, using access code 4610343.
About the Company
Banner Corporation is a $4.24 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” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to the Company's financial condition, liquidity, 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 from the results anticipated or implied by our forward-looking statements include, but are not limited to, the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for loan losses and provision for loan losses that may be impacted by deterioration in the housing and commercial real estate markets and may lead to increased losses and non-performing assets and may result in our allowance for loan losses not being adequate to cover actual losses and require us to materially increase our reserves; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates and the relative differences between short and long-term interest rates, loan and deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Board of Governors of the Federal Reserve System and of our bank subsidiaries by the Federal Deposit Insurance Corporation, the Washington State Department of Financial Institutions or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or any of the Banks which could require us to increase our reserve for loan losses, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits, or impose additional requirements and restrictions on us, any of which could adversely affect our liquidity and earnings; legislative or regulatory changes that adversely affect our business including changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules including changes related to Basel III; the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing regulations; our ability to attract and retain deposits; increases in premiums for deposit insurance; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets and liabilities, which estimates may prove to be incorrect and result in significant changes in valuations; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our workforce and potential associated charges; the failure or security breach of computer systems on which we depend; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common stock and interest or principal payments on our junior subordinated debentures; adverse changes in the securities markets; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of war or terrorist activities; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed in Banner Corporation's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2012. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements whether as a result of new information, future events or otherwise. These risks could cause our actual results for 2013 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect our operating and stock price performance.
BANR - First Quarter 2013 Results
April 22, 2013
Page 5
| RESULTS OF OPERATIONS | | Quarters Ended |
| (in thousands except shares and per share data) | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| | | | | | | |
| INTEREST INCOME: | | | | | | |
| Loans receivable | | $ | 41,489 | | | $ | 42,698 | | | $ | 44,352 | |
| Mortgage-backed securities | | 1,172 | | | 1,165 | | | 927 | |
| Securities and cash equivalents | | 1,847 | | | 2,019 | | | 2,283 | |
| | | 44,508 | | | 45,882 | | | 47,562 | |
| INTEREST EXPENSE: | | | | | | |
| Deposits | | 2,719 | | | 3,088 | | | 4,448 | |
| Federal Home Loan Bank advances | | 24 | | | 63 | | | 63 | |
| Other borrowings | | 56 | | | 64 | | | 549 | |
| Junior subordinated debentures | | 741 | | | 776 | | | 1,012 | |
| | | 3,540 | | | 3,991 | | | 6,072 | |
| Net interest income before provision for loan losses | | 40,968 | | | 41,891 | | | 41,490 | |
| PROVISION FOR LOAN LOSSES | | — | | | 1,000 | | | 5,000 | |
| Net interest income | | 40,968 | | | 40,891 | | | 36,490 | |
| OTHER OPERATING INCOME: | | | | | | |
| Deposit fees and other service charges | | 6,301 | | | 6,433 | | | 5,869 | |
| Mortgage banking operations | | 2,838 | | | 3,879 | | | 2,475 | |
| Miscellaneous | | 790 | | | 2,253 | | | 578 | |
| | | 9,929 | | | 12,565 | | | 8,922 | |
| Gain on sale of securities | | 1,006 | | | 3 | | | — | |
| Other-than-temporary impairment recovery | | 409 | | | — | | | — | |
| Net change in valuation of financial instruments carried at fair value | | (1,347 | ) | | 386 | | | 1,685 | |
| Total other operating income | | 9,997 | | | 12,954 | | | 10,607 | |
| OTHER OPERATING EXPENSE: | | | | | | |
| Salary and employee benefits | | 20,729 | | | 20,182 | | | 19,510 | |
| Less capitalized loan origination costs | | (2,871 | ) | | (2,752 | ) | | (2,250 | ) |
| Occupancy and equipment | | 5,329 | | | 5,320 | | | 5,477 | |
| Information / computer data services | | 1,720 | | | 1,836 | | | 1,515 | |
| Payment and card processing services | | 2,305 | | | 2,263 | | | 1,890 | |
| Professional services | | 905 | | | 850 | | | 1,344 | |
| Advertising and marketing | | 1,499 | | | 1,602 | | | 2,066 | |
| Deposit insurance | | 645 | | | 715 | | | 1,363 | |
| State/municipal business and use taxes | | 464 | | | 574 | | | 568 | |
| Real estate operations | | (251 | ) | | 91 | | | 2,598 | |
| Amortization of core deposit intangibles | | 505 | | | 509 | | | 552 | |
| Miscellaneous | | 3,120 | | | 3,329 | | | 3,280 | |
| Total other operating expense | | 34,099 | | | 34,519 | | | 37,913 | |
| Income before provision for income taxes | | 16,866 | | | 19,326 | | | 9,184 | |
| PROVISION FOR INCOME TAXES | | 5,284 | | | 4,638 | | | — | |
| NET INCOME | | 11,582 | | | 14,688 | | | 9,184 | |
| PREFERRED STOCK DIVIDEND AND ADJUSTMENTS: | | | | | | |
| Preferred stock dividend | | — | | | 611 | | | 1,550 | |
| Preferred stock discount accretion | | — | | | 1,174 | | | 454 | |
| Gain on repurchase and retirement of preferred stock | | — | | | (401 | ) | | — | |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | | $ | 11,582 | | | $ | 13,304 | | | $ | 7,180 | |
| Earnings per share available to common shareholders: | | | | | | |
| Basic | | $ | 0.60 | | | $ | 0.69 | | | $ | 0.40 | |
| Diluted | | $ | 0.60 | | | $ | 0.69 | | | $ | 0.40 | |
| Cumulative dividends declared per common share | | $ | 0.12 | | | $ | 0.01 | | | $ | 0.01 | |
| Weighted average common shares outstanding: | | | | | | |
| Basic | | 19,312,824 | | | 19,312,761 | | | 17,761,667 | |
| Diluted | | 19,423,244 | | | 19,420,612 | | | 17,790,402 | |
| Common shares issued via restricted stock grants, DRIP and stock purchases (net) | | 58 | | | 86 | | | 474,296 | |
BANR - First Quarter 2013 Results
April 22, 2013
Page 6
| FINANCIAL CONDITION | | | | | | |
| (in thousands except shares and per share data) | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| | | | | | | |
| ASSETS | | | | | | |
| Cash and due from banks | | $ | 59,414 | | | $ | 66,370 | | | $ | 55,723 | |
| Federal funds and interest-bearing deposits | | 96,300 | | | 114,928 | | | 143,885 | |
| Securities - at fair value | | 67,761 | | | 71,232 | | | 77,706 | |
| Securities - available for sale | | 476,683 | | | 472,920 | | | 386,716 | |
| Securities - held to maturity | | 88,408 | | | 86,452 | | | 76,853 | |
| Federal Home Loan Bank stock | | 36,373 | | | 36,705 | | | 37,371 | |
| Loans receivable: | | | | | | |
| Held for sale | | 5,384 | | | 11,920 | | | 4,623 | |
| Held for portfolio | | 3,234,937 | | | 3,223,794 | | | 3,225,039 | |
| Allowance for loan losses | | (77,128 | ) | | (77,491 | ) | | (81,544 | ) |
| | | 3,163,193 | | | 3,158,223 | | | 3,148,118 | |
| Accrued interest receivable | | 15,235 | | | 13,930 | | | 16,047 | |
| Real estate owned held for sale, net | | 11,160 | | | 15,778 | | | 27,723 | |
| Property and equipment, net | | 88,414 | | | 89,117 | | | 90,106 | |
| Other intangibles, net | | 3,724 | | | 4,230 | | | 5,777 | |
| Bank-owned life insurance | | 60,425 | | | 59,891 | | | 59,056 | |
| Other assets | | 70,536 | | | 75,788 | | | 35,683 | |
| | | $ | 4,237,626 | | | $ | 4,265,564 | | | $ | 4,160,764 | |
| LIABILITIES | | | | | | |
| Deposits: | | | | | | |
| Non-interest-bearing | | $ | 962,156 | | | $ | 981,240 | | | $ | 771,812 | |
| Interest-bearing transaction and savings accounts | | 1,575,525 | | | 1,547,271 | | | 1,457,030 | |
| Interest-bearing certificates | | 982,903 | | | 1,029,293 | | | 1,197,328 | |
| | | 3,520,584 | | | 3,557,804 | | | 3,426,170 | |
| Advances from Federal Home Loan Bank at fair value | | 278 | | | 10,304 | | | 10,467 | |
| Customer repurchase agreements and other borrowings | | 88,446 | | | 76,633 | | | 91,253 | |
| Junior subordinated debentures at fair value | | 73,220 | | | 73,063 | | | 49,368 | |
| Accrued expenses and other liabilities | | 24,157 | | | 26,389 | | | 21,136 | |
| Deferred compensation | | 14,879 | | | 14,452 | | | 13,580 | |
| | | 3,721,564 | | | 3,758,645 | | | 3,611,974 | |
| STOCKHOLDERS' EQUITY | | | | | | |
| Preferred stock - Series A | | — | | | — | | | 121,156 | |
| Common stock | | 568,116 | | | 567,907 | | | 540,068 | |
| Retained earnings (accumulated deficit) | | (51,851 | ) | | (61,102 | ) | | (112,465 | ) |
| Other components of stockholders' equity | | (203 | ) | | 114 | | | 31 | |
| | | 516,062 | | | 506,919 | | | 548,790 | |
| | | $ | 4,237,626 | | | $ | 4,265,564 | | | $ | 4,160,764 | |
| Common Shares Issued: | | | | | | |
| Shares outstanding at end of period | | 19,462,483 | | | 19,454,965 | | | 18,027,768 | |
| Less unearned ESOP shares at end of period | | 34,340 | | | 34,340 | | | 34,340 | |
| Shares outstanding at end of period excluding unearned ESOP shares | | 19,428,143 | | | 19,420,625 | | | 17,993,428 | |
Common stockholders' equity per share (1) | | $ | 26.56 | | | $ | 26.10 | | | $ | 23.77 | |
Common stockholders' tangible equity per share (1) (2) | | $ | 26.37 | | | $ | 25.88 | | | $ | 23.45 | |
Common stockholders' tangible equity to tangible assets (2) | | 12.10 | % | | 11.80 | % | | 10.15 | % |
| Consolidated Tier 1 leverage capital ratio | | 13.28 | % | | 12.74 | % | | 14.00 | % |
| (1) | Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding and excludes unallocated shares in the ESOP. |
| (2) | Common stockholders' tangible equity excludes preferred stock and other intangibles. Tangible assets excludes other intangible assets. These ratios represent non-GAAP financial measures. |
BANR - First Quarter 2013 Results
April 22, 2013
Page 7
ADDITIONAL FINANCIAL INFORMATION | | | | | | |
| (dollars in thousands) | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| LOANS (including loans held for sale): | | | | | | |
| Commercial real estate: | | | | | | |
| Owner occupied | | $ | 497,442 | | | $ | 489,581 | | | $ | 468,318 | |
| Investment properties | | 602,761 | | | 583,641 | | | 612,617 | |
| Multifamily real estate | | 134,290 | | | 137,504 | | | 132,306 | |
| Commercial construction | | 34,762 | | | 30,229 | | | 40,276 | |
| Multifamily construction | | 34,147 | | | 22,581 | | | 20,654 | |
| One- to four-family construction | | 171,876 | | | 160,815 | | | 148,717 | |
| Land and land development: | | | | | | |
| Residential | | 78,446 | | | 77,010 | | | 89,329 | |
| Commercial | | 12,477 | | | 13,982 | | | 12,044 | |
| Commercial business | | 619,478 | | | 618,049 | | | 609,497 | |
| Agricultural business including secured by farmland | | 210,225 | | | 230,031 | | | 188,955 | |
| One- to four-family real estate | | 566,730 | | | 581,670 | | | 619,511 | |
| Consumer: | | | | | | |
| Consumer secured by one- to four-family real estate | | 165,305 | | | 170,123 | | | 180,460 | |
| Consumer-other | | 112,382 | | | 120,498 | | | 106,978 | |
| Total loans outstanding | | $ | 3,240,321 | | | $ | 3,235,714 | | | $ | 3,229,662 | |
| Restructured loans performing under their restructured terms | | $ | 54,611 | | | $ | 57,460 | | | $ | 53,391 | |
| Loans 30 - 89 days past due and on accrual | | $ | 6,984 | | | $ | 11,685 | | | $ | 14,336 | |
| Total delinquent loans (including loans on non-accrual) | | $ | 40,390 | | | $ | 45,300 | | | $ | 79,249 | |
| Total delinquent loans / Total loans outstanding | | 1.25 | % | | 1.40 | % | | 2.45 | % |
| GEOGRAPHIC CONCENTRATION OF LOANS AT | | | | | | | | | | |
| March 31, 2013 | | Washington | | Oregon | | Idaho | | Other | | Total |
| Commercial real estate: | | | | | | | | | | |
| Owner occupied | | $ | 376,330 | | | $ | 58,671 | | | $ | 57,363 | | | $ | 5,078 | | | $ | 497,442 | |
| Investment properties | | 467,720 | | | 87,184 | | | 43,750 | | | 4,107 | | | 602,761 | |
| Multifamily real estate | | 112,625 | | | 13,208 | | | 8,196 | | | 261 | | | 134,290 | |
| Commercial construction | | 23,636 | | | 6,566 | | | 1,207 | | | 3,353 | | | 34,762 | |
| Multifamily construction | | 15,566 | | | 18,581 | | | — | | | — | | | 34,147 | |
| One- to four-family construction | | 97,016 | | | 72,729 | | | 2,131 | | | — | | | 171,876 | |
| Land and land development: | | | | | | | | | | |
| Residential | | 47,106 | | | 29,614 | | | 1,726 | | | — | | | 78,446 | |
| Commercial | | 7,482 | | | 3,043 | | | 1,952 | | | — | | | 12,477 | |
| Commercial business | | 393,638 | | | 83,574 | | | 55,047 | | | 87,219 | | | 619,478 | |
| Agricultural business including secured by farmland | | 105,886 | | | 38,934 | | | 65,405 | | | — | | | 210,225 | |
| One- to four-family real estate | | 352,209 | | | 188,804 | | | 23,660 | | | 2,057 | | | 566,730 | |
| Consumer: | | | | | | | | | | |
| Consumer secured by one- to four-family real estate | | 111,010 | | | 41,897 | | | 11,721 | | | 677 | | | 165,305 | |
| Consumer-other | | 76,807 | | | 30,233 | | | 5,337 | | | 5 | | | 112,382 | |
| Total loans outstanding | | $ | 2,187,031 | | | $ | 673,038 | | | $ | 277,495 | | | $ | 102,757 | | | $ | 3,240,321 | |
| Percent of total loans | | 67.5 | % | | 20.8 | % | | 8.5 | % | | 3.2 | % | | 100.0 | % |
| DETAIL OF LAND AND LAND DEVELOPMENT LOANS AT | | | | | | | | |
| March 31, 2013 | | Washington | | Oregon | | Idaho | | Other | | Total |
| Residential: | | | | | | | | | | |
| Acquisition & development | | $ | 8,982 | | | $ | 12,071 | | | $ | 1,523 | | | — | | | $ | 22,576 | |
| Improved lots | | 29,463 | | | 17,093 | | | 203 | | | — | | | 46,759 | |
| Unimproved land | | 8,661 | | | 450 | | | — | | | — | | | 9,111 | |
| Total residential land and development | | $ | 47,106 | | | $ | 29,614 | | | $ | 1,726 | | | — | | | $ | 78,446 | |
| Commercial & industrial: | | | | | | | | | | |
| Acquisition & development | | $ | — | | | — | | | $ | 482 | | | — | | | $ | 482 | |
| Improved land | | 4,143 | | | 136 | | | 541 | | | — | | | 4,820 | |
| Unimproved land | | 3,339 | | | 2,907 | | | 929 | | | — | | | 7,175 | |
| Total commercial land and development | | $ | 7,482 | | | $ | 3,043 | | | $ | 1,952 | | | — | | | $ | 12,477 | |
BANR - First Quarter 2013 Results
April 22, 2013
Page 8
| ADDITIONAL FINANCIAL INFORMATION | | | | | | |
| (dollars in thousands) | | | | | | |
| | | Quarters Ended |
| CHANGE IN THE | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| ALLOWANCE FOR LOAN LOSSES | | | | | | |
| Balance, beginning of period | | $ | 77,491 | | | $ | 78,783 | | | $ | 82,912 | |
| Provision | | — | | | 1,000 | | | 5,000 | |
| Recoveries of loans previously charged off: | | | | | | |
| Commercial real estate | | 1,586 | | | 159 | | | 614 | |
| Multifamily real estate | | — | | | — | | | — | |
| Construction and land | | 101 | | | 1,499 | | | 370 | |
| One- to four-family real estate | | 116 | | | 174 | | | 5 | |
| Commercial business | | 386 | | | 1,395 | | | 236 | |
| Agricultural business, including secured by farmland | | 37 | | | 4 | | | — | |
| Consumer | | 102 | | | 108 | | | 136 | |
| | | 2,328 | | | 3,339 | | | 1,361 | |
| Loans charged off: | | | | | | |
| Commercial real estate | | (348 | ) | | (558 | ) | | (1,323 | ) |
| Multifamily real estate | | — | | | — | | | — | |
| Construction and land | | (435 | ) | | (1,301 | ) | | (2,924 | ) |
| One- to four-family real estate | | (651 | ) | | (1,748 | ) | | (966 | ) |
| Commercial business | | (929 | ) | | (1,094 | ) | | (1,407 | ) |
| Agricultural business, including secured by farmland | | — | | | (155 | ) | | (275 | ) |
| Consumer | | (328 | ) | | (775 | ) | | (834 | ) |
| | | (2,691 | ) | | (5,631 | ) | | (7,729 | ) |
| Net charge-offs | | (363 | ) | | (2,292 | ) | | (6,368 | ) |
| Balance, end of period | | $ | 77,128 | | | $ | 77,491 | | | $ | 81,544 | |
| Net charge-offs / Average loans outstanding | | 0.01 | % | | 0.07 | % | | 0.20 | % |
| ALLOCATION OF | | | | | | |
| ALLOWANCE FOR LOAN LOSSES | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| Specific or allocated loss allowance: | | | | | | |
| Commercial real estate | | $ | 14,776 | | | $ | 15,322 | | | $ | 17,083 | |
| Multifamily real estate | | 5,075 | | | 4,506 | | | 3,261 | |
| Construction and land | | 15,214 | | | 14,991 | | | 15,871 | |
| One- to four-family real estate | | 15,930 | | | 16,475 | | | 13,123 | |
| Commercial business | | 10,011 | | | 9,957 | | | 1,887 | |
| Agricultural business, including secured by farmland | | 2,282 | | | 2,295 | | | 12,869 | |
| Consumer | | 1,238 | | | 1,348 | | | 1,274 | |
| Total allocated | | 64,526 | | | 64,894 | | | 65,368 | |
| Estimated allowance for undisbursed commitments | | 631 | | | 758 | | | 651 | |
| Unallocated | | 11,971 | | | 11,839 | | | 15,525 | |
| Total allowance for loan losses | | $ | 77,128 | | | $ | 77,491 | | | $ | 81,544 | |
| Allowance for loan losses / Total loans outstanding | | 2.38 | % | | 2.39 | % | | 2.52 | % |
| Allowance for loan losses / Non-performing loans | | 231 | % | | 225 | % | | 126 | % |
BANR - First Quarter 2013 Results
April 22, 2013
Page 9
| ADDITIONAL FINANCIAL INFORMATION | | | | | |
| (dollars in thousands) | | | | | |
| | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| NON-PERFORMING ASSETS | | | | | |
| Loans on non-accrual status: | | | | | |
| Secured by real estate: | | | | | |
| Commercial | $ | 6,726 | | | $ | 6,579 | | | $ | 10,541 | |
| Multifamily | 339 | | | — | | | — | |
| Construction and land | 3,729 | | | 3,673 | | | 18,601 | |
| One- to four-family | 12,875 | | | 12,964 | | | 19,384 | |
| Commercial business | 4,370 | | | 4,750 | | | 10,121 | |
| Agricultural business, including secured by farmland | — | | | — | | | 1,481 | |
| Consumer | 3,078 | | | 3,395 | | | 2,572 | |
| | 31,117 | | | 31,361 | | | 62,700 | |
| Loans more than 90 days delinquent, still on accrual: | | | | | |
| Secured by real estate: | | | | | |
| Commercial | — | | | — | | | — | |
| Multifamily | — | | | — | | | — | |
| Construction and land | — | | | — | | | — | |
| One- to four-family | 2,243 | | | 2,877 | | | 2,129 | |
| Commercial business | — | | | — | | | — | |
| Agricultural business, including secured by farmland | — | | | — | | | — | |
| Consumer | 46 | | | 152 | | | 84 | |
| | 2,289 | | | 3,029 | | | 2,213 | |
| Total non-performing loans | 33,406 | | | 34,390 | | | 64,913 | |
| Securities on non-accrual | — | | | — | | | 500 | |
| Real estate owned (REO) and repossessed assets | 11,458 | | | 15,853 | | | 27,731 | |
| Total non-performing assets | $ | 44,864 | | | $ | 50,243 | | | $ | 93,144 | |
| Total non-performing assets / Total assets | 1.06 | % | | 1.18 | % | | 2.24 | % |
| DETAIL & GEOGRAPHIC CONCENTRATION OF | | | | | | | |
| NON-PERFORMING ASSETS AT | | | | | | | |
| March 31, 2013 | Washington | | Oregon | | Idaho | | Total |
| Secured by real estate: | | | | | | | |
| ��Commercial | $ | 5,965 | | | — | | | $ | 761 | | | $ | 6,726 | |
| Multifamily | — | | | — | | | 339 | | | 339 | |
| Construction and land: | | | | | | | |
| One- to four-family construction | 1,522 | | | — | | | 430 | | | 1,952 | |
| Residential land acquisition & development | — | | | 1,386 | | | — | | | 1,386 | |
| Residential land improved lots | — | | | 31 | | | — | | | 31 | |
| Residential land unimproved | — | | | — | | | — | | | — | |
| Commercial land improved | 119 | | | — | | | — | | | 119 | |
| Commercial land unimproved | 241 | | | — | | | — | | | 241 | |
| Total construction and land | 1,882 | | | 1,417 | | | 430 | | | 3,729 | |
| One- to four-family | 10,813 | | | 2,286 | | | 2,019 | | | 15,118 | |
| Commercial business | 4,299 | | | 71 | | | — | | | 4,370 | |
| Agricultural business, including secured by farmland | — | | | — | | | — | | | — | |
| Consumer | 2,227 | | | 429 | | | 468 | | | 3,124 | |
| Total non-performing loans | 25,186 | | | 4,203 | | | 4,017 | | | 33,406 | |
| Real estate owned (REO) and repossessed assets | 3,378 | | | 7,812 | | | 268 | | | 11,458 | |
| Total non-performing assets at end of the period | $ | 28,564 | | | $ | 12,015 | | | $ | 4,285 | | | $ | 44,864 | |
BANR - First Quarter 2013 Results
April 22, 2013
Page 10
| ADDITIONAL FINANCIAL INFORMATION | |
| (dollars in thousands) | |
| | Quarters Ended |
| REAL ESTATE OWNED | Mar 31, 2013 | | Mar 31, 2012 |
| Balance, beginning of period | $ | 15,778 | | | $ | 42,965 | |
| Additions from loan foreclosures | 1,086 | | | 1,601 | |
| Additions from capitalized costs | 46 | | | 127 | |
| Proceeds from dispositions of REO | (6,481 | ) | | (15,441 | ) |
| Gain on sale of REO | 804 | | | 100 | |
| Valuation adjustments in the period | (73 | ) | | (1,629 | ) |
| Balance, end of period | $ | 11,160 | | | $ | 27,723 | |
| | Quarters Ended |
| REAL ESTATE OWNED- FIVE COMPARATIVE QUARTERS | Mar 31, 2013 | | Dec 31, 2012 | | Sep 30, 2012 | | Jun 30, 2012 | | Mar 31, 2012 |
| Balance, beginning of period | $ | 15,778 | | | $ | 20,356 | | | $ | 25,816 | | | $ | 27,723 | | | $ | 42,965 | |
| Additions from loan foreclosures | 1,086 | | | 2,332 | | | 3,111 | | | 6,886 | | | 1,601 | |
| Additions from capitalized costs | 46 | | | 17 | | | 97 | | | 7 | | | 127 | |
| Proceeds from dispositions of REO | (6,481 | ) | | (7,306 | ) | | (10,368 | ) | | (7,799 | ) | | (15,441 | ) |
| Gain on sale of REO | 804 | | | 1,105 | | | 2,955 | | | 566 | | | 100 | |
| Valuation adjustments in the period | (73 | ) | | (726 | ) | | (1,255 | ) | | (1,567 | ) | | (1,629 | ) |
| Balance, end of period | $ | 11,160 | | | $ | 15,778 | | | $ | 20,356 | | | $ | 25,816 | | | $ | 27,723 | |
| REAL ESTATE OWNED- BY TYPE AND STATE | | | | | | | |
| March 31, 2013 | Washington | | Oregon | | Idaho | | Total |
| Commercial real estate | $ | — | | | — | | | $ | 198 | | | $ | 198 | |
| One- to four-family construction | 401 | | | — | | | — | | | 401 | |
| Land development- commercial | — | | | — | | | — | | | — | |
| Land development- residential | 1,610 | | | 6,321 | | | 70 | | | 8,001 | |
| Agricultural land | — | | | — | | | — | | | — | |
| One- to four-family real estate | 1,077 | | | 1,483 | | | — | | | 2,560 | |
| Total | $ | 3,088 | | | $ | 7,804 | | | $ | 268 | | | $ | 11,160 | |
BANR - First Quarter 2013 Results
April 22, 2013
Page 11
| ADDITIONAL FINANCIAL INFORMATION | | | | | | |
| (dollars in thousands) | | | | | | |
| | | | | | | |
| DEPOSITS & OTHER BORROWINGS | | | | | | |
| | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| DEPOSIT COMPOSITION | | | | | | |
| Non-interest-bearing | | $ | 962,156 | | | $ | 981,240 | | | $ | 771,812 | |
| Interest-bearing checking | | 400,598 | | | 410,316 | | | 368,810 | |
| Regular savings accounts | | 759,866 | | | 727,957 | | | 673,704 | |
| Money market accounts | | 415,061 | | | 408,998 | | | 414,516 | |
| Interest-bearing transaction & savings accounts | | 1,575,525 | | | 1,547,271 | | | 1,457,030 | |
| Interest-bearing certificates | | 982,903 | | | 1,029,293 | | | 1,197,328 | |
| Total deposits | | $ | 3,520,584 | | | $ | 3,557,804 | | | $ | 3,426,170 | |
| | | | | | | |
| INCLUDED IN TOTAL DEPOSITS | | | | | | |
| Public transaction accounts | | $ | 73,273 | | | $ | 79,955 | | | $ | 68,590 | |
| Public interest-bearing certificates | | 53,552 | | | 60,518 | | | 69,856 | |
| Total public deposits | | $ | 126,825 | | | $ | 140,473 | | | $ | 138,446 | |
| Total brokered deposits | | $ | 15,709 | | | $ | 15,702 | | | $ | 30,978 | |
| | | | | | | |
| OTHER BORROWINGS | | | | | | |
| Customer repurchase agreements / "Sweep accounts" | | $ | 88,446 | | | $ | 76,633 | | | $ | 91,253 | |
| GEOGRAPHIC CONCENTRATION OF DEPOSITS AT | | | | | | | | |
| March 31, 2013 | | Washington | | Oregon | | Idaho | | Total |
| | | $ | 2,665,776 | | | $ | 618,161 | | | $ | 236,647 | | | $ | 3,520,584 | |
| | | | | | | Minimum for Capital Adequacy | |
| REGULATORY CAPITAL RATIOS AT | | Actual | | | or "Well Capitalized" | |
| March 31, 2013 | | Amount | | Ratio | | Amount | | Ratio |
| | | | | | | | | |
| Banner Corporation-consolidated: | | | | | | | | |
| Total capital to risk-weighted assets | | $ | 600,052 | | | 17.06 | % | | $ | 281,339 | | | 8.00 | % |
| Tier 1 capital to risk-weighted assets | | 555,684 | | | 15.80 | % | | 140,670 | | | 4.00 | % |
| Tier 1 leverage capital to average assets | | 555,684 | | | 13.28 | % | | 167,373 | | | 4.00 | % |
| Banner Bank: | | | | | | | | |
| Total capital to risk-weighted assets | | 540,659 | | | 16.19 | % | | 334,048 | | | 10.00 | % |
| Tier 1 capital to risk-weighted assets | | 498,503 | | | 14.92 | % | | 200,429 | | | 6.00 | % |
| Tier 1 leverage capital to average assets | | 498,503 | | | 12.57 | % | | 198,241 | | | 5.00 | % |
| Islanders Bank: | | | | | | | | |
| Total capital to risk-weighted assets | | 33,369 | | | 18.20 | % | | 18,335 | | | 10.00 | % |
| Tier 1 capital to risk-weighted assets | | 31,068 | | | 16.94 | % | | 11,001 | | | 6.00 | % |
| Tier 1 leverage capital to average assets | | 31,068 | | | 13.53 | % | | 11,481 | | | 5.00 | % |
BANR - First Quarter 2013 Results
April 22, 2013
Page 12
| ADDITIONAL FINANCIAL INFORMATION | | | | | | |
| (dollars in thousands) | | | | | | |
| (rates / ratios annualized) | | | | | | |
| | | Quarters Ended |
| OPERATING PERFORMANCE | | Mar 31, 2013 | | Dec 31, 2012 | | Mar 31, 2012 |
| Average loans | | $ | 3,215,228 | | | $ | 3,201,389 | | | $ | 3,250,767 | |
| Average securities | | 673,298 | | | 660,731 | | | 660,638 | |
| Average interest earning cash | | 107,950 | | | 175,441 | | | 111,536 | |
| Average non-interest-earning assets | | 219,211 | | | 227,728 | | | 185,035 | |
| Total average assets | | $ | 4,215,687 | | | $ | 4,265,289 | | | $ | 4,207,976 | |
| Average deposits | | $ | 3,501,972 | | | $ | 3,507,202 | | | $ | 3,421,448 | |
| Average borrowings | | 210,462 | | | 214,275 | | | 280,439 | |
Average non-interest-bearing other liabilities (1) | | (11,558 | ) | | (2,208 | ) | | (36,699 | ) |
| Total average liabilities | | 3,700,876 | | | 3,719,269 | | | 3,665,188 | |
| Total average stockholders' equity | | 514,811 | | | 546,020 | | | 542,788 | |
| Total average liabilities and equity | | $ | 4,215,687 | | | $ | 4,265,289 | | | $ | 4,207,976 | |
| Interest rate yield on loans | | 5.23 | % | | 5.31 | % | | 5.49 | % |
| Interest rate yield on securities | | 1.78 | % | | 1.85 | % | | 1.92 | % |
| Interest rate yield on cash | | 0.25 | % | | 0.26 | % | | 0.23 | % |
| Interest rate yield on interest-earning assets | | 4.52 | % | | 4.52 | % | | 4.76 | % |
| Interest rate expense on deposits | | 0.31 | % | | 0.35 | % | | 0.52 | % |
| Interest rate expense on borrowings | | 1.58 | % | | 1.68 | % | | 2.33 | % |
| Interest rate expense on interest-bearing liabilities | | 0.39 | % | | 0.43 | % | | 0.66 | % |
| Interest rate spread | | 4.13 | % | | 4.09 | % | | 4.10 | % |
| Net interest margin | | 4.16 | % | | 4.13 | % | | 4.15 | % |
| Other operating income / Average assets | | 0.96 | % | | 1.21 | % | | 1.01 | % |
| Other operating income EXCLUDING fair value | | | | | | |
adjustments / Average assets (2) | | 1.05 | % | | 1.17 | % | | 0.85 | % |
| Other operating expense / Average assets | | 3.28 | % | | 3.22 | % | | 3.62 | % |
| Efficiency ratio (other operating expense / revenue) | | 66.91 | % | | 62.94 | % | | 72.77 | % |
Efficiency ratio EXCLUDING fair value adjustments(2) | | 65.70 | % | | 63.39 | % | | 75.21 | % |
| Return on average assets | | 1.11 | % | | 1.37 | % | | 0.88 | % |
| Return on average equity | | 9.12 | % | | 10.70 | % | | 6.81 | % |
Return on average tangible equity (3) | | 9.20 | % | | 10.79 | % | | 6.88 | % |
| Average equity / Average assets | | 12.21 | % | | 12.80 | % | | 12.90 | % |
| (1) | Average non-interest-bearing liabilities include fair value adjustments related to FHLB advances and Junior Subordinated Debentures. |
| (2) | Earnings information excluding fair value adjustments (alternately referred to as other operating income from core operations or revenues from core operations) represent non-GAAP financial measures. |
| (3) | Average tangible equity excludes other intangibles and represents a non-GAAP financial measure. |
