Exhibit 99.1
 |  | Contact: Mark J. Grescovich, President & CEO Lloyd W. Baker, CFO (509) 527-3636 News Release |
Banner Corporation Earns $17.0 Million, or $0.88 Per Diluted Share, in Second Quarter 2014;
Second Quarter Highlighted by Strong Loan Growth and Oregon Branch Acquisition
Walla Walla, WA - July 23, 2014 - Banner Corporation (NASDAQ GSM: BANR), the parent company of Banner Bank and Islanders Bank, today reported net income in the second quarter of 2014 of $17.0 million, or $0.88 per diluted share, compared to $10.6 million, or $0.54 per diluted share, in the preceding quarter and $11.8 million, or $0.60 per diluted share, for the second quarter a year ago. Banner’s second quarter 2014 results were augmented by a bargain purchase gain related to the acquisition of six branches in Oregon, which net of related expenses added $0.23 per diluted share. In the first six months of 2014, net income was $27.6 million, or $1.42 per diluted share, compared to $23.3 million, or $1.20 per diluted share, in the first six months of 2013.
“Banner’s results for the second quarter continue to reflect solid revenue generation driven by balance sheet growth, client acquisition and improved mortgage banking activity, as we continue to successfully execute our strategies designed to deliver sustainable profitability to our shareholders,” said Mark J. Grescovich, President and Chief Executive Officer. “In the second quarter, our performance again resulted in significant loan growth and increased core deposits, which confirm that our value proposition is being well-received, and coupled with strong margins and further improvements in asset quality, demonstrate that our strategic execution is producing positive results.”
“During the quarter and throughout the past four years, we have continued to invest in our franchise,” Grescovich stated. “We have added talented commercial and retail bankers in all of our markets, and we recently completed the purchase of six branches from Umpqua Bank. This acquisition further expands our presence in Oregon with five of the six branches located in Coos County, Oregon and the sixth branch located in Douglas County, Oregon. In connection with the acquisition, as of June 20, 2014 Banner acquired approximately $211 million in deposits, $88 million in loans and 10,500 new customer relationships.”
Second Quarter 2014 Highlights (compared to second quarter 2013, except as noted)
| • | Net income was $17.0 million, or $0.88 per diluted share, compared to $11.8 million, or $0.60 per diluted share in the second quarter of 2013. |
| • | Annualized return on average assets was 1.51%. |
| • | Annualized return on average equity was 12.29%. |
| • | Revenues from core operations* increased 2% to $54.4 million, compared to $53.1 million in the second quarter a year ago. |
| • | Net interest margin was 4.06%, compared to 4.07% in the first quarter of 2014 and 4.20% in the second quarter a year ago. |
| • | Core deposits increased 19% and represent 76% of total deposits. |
| • | Deposit fees and other service charges increased 11% to $7.3 million. |
| • | Total loans increased $239.7 million during the quarter and increased 15% compared to a year ago. |
| • | Non-performing assets decreased 8% compared to three months earlier to $24.2 million, or 0.51% of total assets, at June 30, 2014, and declined 27% from a year earlier. |
| • | Common stockholders' tangible equity per share increased to $28.57 at June 30, 2014 compared to $27.87 in the preceding quarter and $26.49 in the second quarter a year ago. |
| • | The ratio of tangible common equity to tangible assets* remained strong at 11.79% at June 30, 2014. |
BANR - Second Quarter 2014 Results
July 23, 2014
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*Earnings information excluding acquisition bargain purchase gain, 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) 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.
Income Statement Review
Reflecting strong balance sheet growth, Banner’s second quarter net interest income, before the provision for loan losses, improved to $43.8 million, compared to $42.3 million in the preceding quarter and $42.2 million in the second quarter a year ago. In the first six months of 2014, net interest income was $86.1 million, compared to $83.2 million in the first six months of 2013.
“Our second quarter net interest margin remained relatively strong as a result of further improvement in our earning asset mix as well as a nominal decline in our funding costs, which coupled with growth in earning assets produced increased net interest income,” said Grescovich. Banner's net interest margin was 4.06% for the second quarter of 2014, compared to 4.07% in the preceding quarter and 4.20% in the second quarter a year ago. In the first six months of the year, Banner’s net interest margin was 4.06% compared to 4.18% for the same period a year earlier.
Earning asset yields decreased two basis points compared to the preceding quarter and decreased 22 basis points from the second quarter a year ago. Loan yields decreased by four basis points compared to the preceding quarter and were 39 basis points lower than the second quarter a year ago. Deposit costs as well as the total cost of funds decreased by one basis point in the second quarter of 2014 compared to the preceding quarter and eight basis points compared to the second quarter a year ago.
"Banner’s mortgage banking activities improved during the second quarter of 2014. While the mortgage refinance market is slower than the elevated pace of a year ago, our originations for home purchases increased compared to prior periods and led to an increase in mortgage banking activity and revenues during the current quarter compared to the preceding quarter," noted Grescovich. Mortgage banking operations contributed $2.6 million to second quarter revenues compared to $1.8 million in the preceding quarter and $3.6 million in the second quarter of 2013. In the first six months of the year, mortgage banking operations contributed $4.4 million to revenues, compared to $6.4 million in the first six months of 2013.
Deposit fees and other service charges were $7.3 million in the second quarter of 2014, an 11% increase compared to $6.6 million in both the preceding quarter and in the second quarter a year ago. Primarily due to successful marketing initiatives, the increases in deposit fees and service charges continue to reflect additional client acquisition and growth in the number of deposit accounts. In the first six months of 2014, deposit fees and other service charges increased 8% to $13.9 million, compared to $12.9 million in the first six months of 2013.
Revenues from core operations* (revenues excluding the bargain purchase gain, gain on the sale of securities and fair value adjustments) were $54.4 million in the second quarter compared to $51.4 million in the preceding quarter and $53.1 million in the second quarter of 2013. In the first six months of 2014, revenues from core operations* were $105.8 million, compared to $104.0 million in the first six months of 2013.
Banner's second quarter 2014 results included a $9.1 million acquisition bargain purchase gain based upon preliminary estimates of the fair value of the assets acquired and liabilities assumed as a result of the completed purchase of six branches from Umpqua Bank, an Oregon state-chartered bank and successor to Sterling Savings Bank, a Washington state-chartered bank, as well as a $464,000 net gain 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 net loss of $255,000 for fair value adjustments and a $35,000 gain on sale of securities, and in the second quarter of 2013 Banner recorded a net loss of $255,000 for fair value adjustments and a $12,000 gain on sale of securities.
Total other operating income, which includes the acquisition bargain purchase gain, the gain on sale of securities and changes in the valuation of financial instruments, was $20.1 million in the second quarter of 2014, compared to $8.9 million in the first quarter of 2014 and $10.6 million in the second quarter a year ago. Year-to-date total other operating income was $29.0 million compared
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July 23, 2014
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to $20.6 million in the first six months of 2013. Other operating income from core operations,* which excludes the acquisition bargain purchase gain, the gain on the sale of securities and fair value adjustments, was $10.6 million for the second quarter of 2014, compared to $9.1 million for the preceding quarter and $10.9 million for the second quarter a year ago. In the first six months of 2014, other operating income from core operations* was $19.7 million compared to $20.8 million in the first six months of 2013.
Banner’s total other operating expenses (non-interest expenses) were $38.4 million in the second quarter of 2014, compared to $35.6 million in the preceding quarter and $35.5 million in the second quarter of 2013. Operating expenses for the current quarter increased largely as a result of $2.0 million in estimated acquisition-related costs. Year-to-date, Banner’s operating expenses were $74.0 million compared to $69.6 million in the first six months of 2013 with almost half of the increase attributable to acquisition-related costs.
For the second quarter of 2014, Banner recorded $8.5 million in state and federal income tax expense for an effective tax rate of 33.3%, which reflects normal marginal tax rates reduced by the impact of tax-exempt income and certain tax credits.
Credit Quality
“Again this quarter, our credit quality metrics reflect our moderate risk profile, and our non-performing assets have been reduced another 8% compared to the first quarter of 2014, and 27% compared to June 30, 2013,” said Grescovich. “Additionally, our reserve levels remain substantial, and no provision for loan losses was required during the second quarter despite significant loan growth.”
Banner's allowance for loan losses was $74.3 million at June 30, 2014, or 1.97% of total loans outstanding and 376% of non-performing loans. Banner had net charge-offs of $61,000, or less than 0.01% of average loans outstanding in the second quarter, compared to net recoveries of $113,000 in the preceding quarter, and net charge-offs of $275,000 in the second quarter a year ago. As a result, Banner did not record a provision for loan losses for the second quarter of 2014 or for either the preceding or year-ago quarter. Non-performing loans decreased 14% to $19.7 million at June 30, 2014, compared to $22.9 million at March 31, 2014, and decreased 24% when compared to $26.1 million at June 30, 2013.
REO and repossessed assets increased slightly to $4.5 million at June 30, 2014, compared to $3.5 million at March 31, 2014, but decreased 35% when compared to $6.8 million a year ago.
Banner's non-performing assets were 0.51% of total assets at June 30, 2014, compared to 0.59% at March 31, 2014 and 0.78% a year ago. Non-performing assets decreased 8% to $24.2 million at June 30, 2014, compared to $26.4 million at March 31, 2014, and decreased 27% compared to $32.9 million a year ago.
Balance Sheet Review
“Banner had another strong quarter for loan production,” said Grescovich. “In addition, we acquired $88 million of loans in connection with the acquisition of the six branches from Umpqua Bank. As a result, total loans increased by $240 million, or 7%, compared to the prior quarter end and increased 15% compared to a year ago. Further, we continue to see significant potential for growth in our loan origination pipelines.”
Net loans were $3.69 billion at June 30, 2014, compared to $3.45 billion at March 31, 2014, and $3.21 billion a year ago. Commercial real estate and multifamily real estate loans increased 10% to $1.54 billion at June 30, 2014 compared to $1.40 billion at March 31, 2014 and increased 25% compared to $1.23 billion a year ago. Commercial and agricultural business loans increased 6% to $980.9 million at June 30, 2014, compared to $925.4 million three months earlier and increased 12% compared to $873.8 million a year ago. Total construction and land and land development loans decreased 8% to $349.6 million at June 30, 2014, compared to $378.8 million at March 31, 2014, and decreased 1% compared to $353.7 million a year earlier.
Total assets increased 7% to $4.75 billion at June 30, 2014, compared to $4.49 billion at March 31, 2014 and increased 12% compared to $4.24 billion a year ago. The total of securities and interest-bearing deposits held at other banks was nearly unchanged at $709.7 million at June 30, 2014, compared to $704.1 million at March 31, 2014 and $696.1 million a year ago. The average effective duration of Banner's securities portfolio was approximately 3.3 years at June 30, 2014.
Banner’s total deposits increased 6% to $3.92 billion at June 30, 2014, compared to $3.68 billion at March 31, 2014 primarily as a result of $211 million of deposits acquired through the branch acquisition, and increased 13% when compared to $3.46 billion a
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year ago. Non-interest-bearing account balances increased 10% to $1.21 billion at June 30, 2014, compared to $1.10 billion three months earlier and increased 26% compared to $958.7 million a year ago. Interest-bearing transaction and savings accounts increased 5% to $1.77 billion at June 30, 2014, compared to $1.68 billion at March 31, 2014 and increased 14% compared to $1.56 billion a year ago. Certificates of deposit increased to $937.0 million at June 30, 2014, compared to $905.0 million at March 31, 2014, but declined compared to $944.1 million a year earlier. The increase in certificate balances in the current quarter reflects a $28.9 million increase in brokered deposits to provide additional funding to support the strong loan growth. Brokered deposits totaled $88.2 million at June 30, 2014 compared to $7.2 million at June 30, 2013.
“We continue to focus on enhancing our core deposit franchise, which includes reducing our funding costs by remixing our deposits away from higher-priced CDs, adding new client relationships and improving our core funding position,” said Grescovich. “To that point, our total non-certificate core deposits increased by 7% during the quarter and increased by 19% compared to a year ago.
Banner’s core deposits represented 76% of total deposits at June 30, 2014, compared to 73% of total deposits a year earlier. The cost of deposits declined one basis point to 0.21% for the quarter ended June 30, 2014, compared to 0.22% for the quarter ended March 31, 2014, and declined eight basis points from 0.29% for the quarter ended June 30, 2013.
At June 30, 2014, total common stockholders' equity was $563.0 million, or $28.77 per share, compared to $547.5 million, or $27.97 per share at March 31, 2014, and to $520.3 million, or $26.66 per share, a year ago. Banner had 19.6 million shares of common stock outstanding at June 30, 2014, compared to 19.5 million shares one year earlier. At quarter end, tangible common stockholders' equity*, which excludes other intangible assets, was $559.1 million, or 11.79% of tangible assets, compared to $545.6 million, or 12.16% of tangible assets, at March 31, 2014, and $517.1 million, or 12.22% of tangible assets, a year ago. Banner's tangible book value per share increased to $28.57 at June 30, 2014, compared to $26.49 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 13.65% and its total capital to risk-weighted assets ratio was 16.45% at June 30, 2014.
Conference Call
Banner will host a conference call on Thursday, July 23, 2014, at 8:00 a.m. PDT, to discuss its second quarter results. To listen to the call on-line, go to the Company's website at www.bannerbank.com. Investment professionals are invited to dial (888) 317-6016 to participate in the call. A replay will be available for one month at (877) 344-7529 using access code 1004871, or at www.bannerbank.com.
About the Company
Banner Corporation is a $4.74 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 Banner’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, increased competitive pressures; changes in the interest rate environment; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and other factors described in Banner’s latest annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission-which are available on our website at www.bannerbank.com and on the SEC’s website at www.sec.gov. 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 2014 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.
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| Quarters Ended | Six Months Ended | |||||||||||||||||||
| (in thousands except shares and per share data) | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Jun 30, 2014 | Jun 30, 2013 | |||||||||||||||
| INTEREST INCOME: | ||||||||||||||||||||
| Loans receivable | $ | 43,199 | $ | 41,743 | $ | 42,292 | $ | 84,942 | $ | 83,781 | ||||||||||
| Mortgage-backed securities | 1,446 | 1,471 | 1,394 | 2,917 | 2,566 | |||||||||||||||
| Securities and cash equivalents | 1,895 | 1,892 | 1,885 | 3,787 | 3,733 | |||||||||||||||
| 46,540 | 45,106 | 45,571 | 91,646 | 90,080 | ||||||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||||
| Deposits | 1,910 | 1,964 | 2,490 | 3,874 | 5,210 | |||||||||||||||
| Federal Home Loan Bank advances | 51 | 38 | 40 | 90 | 64 | |||||||||||||||
| Other borrowings | 45 | 44 | 51 | 89 | 107 | |||||||||||||||
| Junior subordinated debentures | 726 | 721 | 742 | 1,446 | 1,482 | |||||||||||||||
| 2,732 | 2,767 | 3,323 | 5,499 | 6,863 | ||||||||||||||||
| Net interest income before provision for loan losses | 43,808 | 42,339 | 42,248 | 86,147 | 83,217 | |||||||||||||||
| PROVISION FOR LOAN LOSSES | — | — | — | — | — | |||||||||||||||
| Net interest income | 43,808 | 42,339 | 42,248 | 86,147 | 83,217 | |||||||||||||||
| OTHER OPERATING INCOME: | ||||||||||||||||||||
| Deposit fees and other service charges | 7,346 | 6,602 | 6,628 | 13,947 | 12,928 | |||||||||||||||
| Mortgage banking operations | 2,600 | 1,840 | 3,574 | 4,440 | 6,412 | |||||||||||||||
| Miscellaneous | 644 | 636 | 664 | 1,281 | 1,455 | |||||||||||||||
| 10,590 | 9,078 | 10,866 | 19,668 | 20,795 | ||||||||||||||||
| Gain on sale of securities | — | 35 | 12 | 35 | 1,018 | |||||||||||||||
| Other-than-temporary impairment recovery | — | — | — | — | 409 | |||||||||||||||
| Net change in valuation of financial instruments carried at fair value | 464 | (255 | ) | (255 | ) | 209 | (1,601 | ) | ||||||||||||
| Acquisition bargain purchase gain | 9,079 | — | — | 9,079 | — | |||||||||||||||
| Total other operating income | 20,133 | 8,858 | 10,623 | 28,991 | 20,621 | |||||||||||||||
| OTHER OPERATING EXPENSE: | ||||||||||||||||||||
| Salary and employee benefits | 22,330 | 21,156 | 21,224 | 43,486 | 41,953 | |||||||||||||||
| Less capitalized loan origination costs | (3,282 | ) | (2,195 | ) | (3,070 | ) | (5,477 | ) | (5,941 | ) | ||||||||||
| Occupancy and equipment | 5,540 | 5,696 | 5,415 | 11,236 | 10,744 | |||||||||||||||
| Information / computer data services | 1,918 | 1,935 | 1,923 | 3,853 | 3,643 | |||||||||||||||
| Payment and card processing services | 2,746 | 2,515 | 2,449 | 5,261 | 4,753 | |||||||||||||||
| Professional services | 1,109 | 1,038 | 820 | 2,115 | 1,726 | |||||||||||||||
| Advertising and marketing | 1,370 | 1,055 | 1,798 | 2,425 | 3,297 | |||||||||||||||
| Deposit insurance | 637 | 576 | 617 | 1,213 | 1,263 | |||||||||||||||
| State/municipal business and use taxes | 388 | 159 | 538 | 547 | 1,003 | |||||||||||||||
| Real estate operations | (109 | ) | 39 | (195 | ) | (70 | ) | (446 | ) | |||||||||||
| Amortization of core deposit intangibles | 450 | 479 | 477 | 929 | 982 | |||||||||||||||
| Acquisition related costs | 1,979 | 45 | — | 2,024 | — | |||||||||||||||
| Miscellaneous | 3,359 | 3,083 | 3,461 | 6,473 | 6,580 | |||||||||||||||
| Total other operating expense | 38,435 | 35,581 | 35,457 | 74,015 | 69,557 | |||||||||||||||
| Income before provision for income taxes | 25,506 | 15,616 | 17,414 | 41,123 | 34,281 | |||||||||||||||
| PROVISION FOR INCOME TAXES | 8,499 | 5,046 | 5,661 | 13,545 | 10,945 | |||||||||||||||
| NET INCOME | $ | 17,007 | $ | 10,570 | $ | 11,753 | $ | 27,578 | $ | 23,336 | ||||||||||
| Earnings per share available to common shareholders: | ||||||||||||||||||||
| Basic | $ | 0.88 | $ | 0.55 | $ | 0.61 | $ | 1.43 | $ | 1.21 | ||||||||||
| Diluted | $ | 0.88 | $ | 0.54 | $ | 0.60 | $ | 1.42 | $ | 1.20 | ||||||||||
| Cumulative dividends declared per common share | $ | 0.18 | $ | 0.18 | $ | 0.12 | $ | 0.36 | $ | 0.24 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 19,342,023 | 19,345,732 | 19,333,470 | 19,343,867 | 19,323,204 | |||||||||||||||
| Diluted | 19,409,601 | 19,409,584 | 19,397,171 | 19,406,215 | 19,385,389 | |||||||||||||||
| Change in common shares | (7,831 | ) | 32,766 | 92,133 | 24,935 | 99,651 | ||||||||||||||
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| (in thousands except shares and per share data) | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | ||||||||||||
| ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 83,571 | $ | 73,316 | $ | 54,368 | $ | 69,711 | ||||||||
| Federal funds and interest-bearing deposits | 62,990 | 71,459 | 67,080 | 67,638 | ||||||||||||
| Securities - at fair value | 61,393 | 58,387 | 65,524 | 62,472 | ||||||||||||
| Securities - available for sale | 455,353 | 464,657 | 469,137 | 470,280 | ||||||||||||
| Securities - held to maturity | 133,186 | 109,567 | 94,336 | 102,513 | ||||||||||||
| Federal Home Loan Bank stock | 31,191 | 33,288 | 36,040 | 35,390 | ||||||||||||
| Loans receivable: | ||||||||||||||||
| Held for sale | 7,322 | 3,239 | 6,393 | 2,734 | ||||||||||||
| Held for portfolio | 3,755,277 | 3,519,673 | 3,283,808 | 3,415,711 | ||||||||||||
| Allowance for loan losses | (74,310 | ) | (74,371 | ) | (76,853 | ) | (74,258 | ) | ||||||||
| 3,688,289 | 3,448,541 | 3,213,348 | 3,344,187 | |||||||||||||
| Accrued interest receivable | 15,579 | 15,202 | 14,648 | 13,996 | ||||||||||||
| Real estate owned held for sale, net | 4,388 | 3,236 | 6,714 | 4,044 | ||||||||||||
| Property and equipment, net | 91,912 | 89,440 | 87,896 | 90,267 | ||||||||||||
| Other intangibles, net | 3,892 | 1,970 | 3,247 | 2,449 | ||||||||||||
| Bank-owned life insurance | 62,815 | 62,377 | 60,894 | 61,945 | ||||||||||||
| Other assets | 50,740 | 56,856 | 63,058 | 64,006 | ||||||||||||
| $ | 4,745,299 | $ | 4,488,296 | $ | 4,236,290 | $ | 4,388,898 | |||||||||
| LIABILITIES | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Non-interest-bearing | $ | 1,210,068 | $ | 1,095,665 | $ | 958,674 | $ | 1,115,346 | ||||||||
| Interest-bearing transaction and savings accounts | 1,771,865 | 1,681,854 | 1,557,513 | 1,629,885 | ||||||||||||
| Interest-bearing certificates | 936,986 | 905,016 | 944,137 | 872,695 | ||||||||||||
| 3,918,919 | 3,682,535 | 3,460,324 | 3,617,926 | |||||||||||||
| Advances from Federal Home Loan Bank at fair value | 45,251 | 48,351 | 54,262 | 27,250 | ||||||||||||
| Customer repurchase agreements | 88,946 | 89,921 | 90,779 | 83,056 | ||||||||||||
| Junior subordinated debentures at fair value | 77,313 | 74,135 | 73,471 | 73,928 | ||||||||||||
| Accrued expenses and other liabilities | 35,619 | 29,189 | 22,010 | 31,324 | ||||||||||||
| Deferred compensation | 16,238 | 16,641 | 15,111 | 16,442 | ||||||||||||
| 4,182,286 | 3,940,772 | 3,715,957 | 3,849,926 | |||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||||
| Common stock | 567,483 | 566,964 | 568,408 | 569,028 | ||||||||||||
| Retained earnings (accumulated deficit) | (4,541 | ) | (18,026 | ) | (42,440 | ) | (25,073 | ) | ||||||||
| Other components of stockholders' equity | 71 | (1,414 | ) | (5,635 | ) | (4,983 | ) | |||||||||
| 563,013 | 547,524 | 520,333 | 538,972 | |||||||||||||
| $ | 4,745,299 | $ | 4,488,296 | $ | 4,236,290 | $ | 4,388,898 | |||||||||
| Common Shares Issued: | ||||||||||||||||
| Shares outstanding at end of period | 19,568,704 | 19,576,535 | 19,553,189 | 19,543,769 | ||||||||||||
| Less unearned ESOP shares at end of period | — | — | 34,340 | 34,340 | ||||||||||||
| Shares outstanding at end of period excluding unearned ESOP shares | 19,568,704 | 19,576,535 | 19,518,849 | 19,509,429 | ||||||||||||
Common stockholders' equity per share (1) | $ | 28.77 | $ | 27.97 | $ | 26.66 | $ | 27.63 | ||||||||
Common stockholders' tangible equity per share (1) (2) | $ | 28.57 | $ | 27.87 | $ | 26.49 | $ | 27.50 | ||||||||
Common stockholders' tangible equity to tangible assets (2) | 11.79 | % | 12.16 | % | 12.22 | % | 12.23 | % | ||||||||
| Consolidated Tier 1 leverage capital ratio | 13.65 | % | 13.53 | % | 13.26 | % | 13.64 | % | ||||||||
| (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 other intangibles. Tangible assets excludes other intangible assets. These ratios represent non-GAAP financial measures. |
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| (dollars in thousands) | ||||||||||||||||
| Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | |||||||||||||
| LOANS (including loans held for sale): | ||||||||||||||||
| Commercial real estate: | ||||||||||||||||
| Owner occupied | $ | 541,558 | $ | 504,429 | $ | 500,812 | $ | 502,601 | ||||||||
| Investment properties | 807,499 | 746,670 | 595,896 | 692,457 | ||||||||||||
| Multifamily real estate | 188,792 | 153,003 | 137,027 | 137,153 | ||||||||||||
| Commercial construction | 12,638 | 11,146 | 25,629 | 12,168 | ||||||||||||
| Multifamily construction | 39,864 | 63,862 | 39,787 | 52,081 | ||||||||||||
| One- to four-family construction | 213,414 | 219,169 | 191,003 | 200,864 | ||||||||||||
| Land and land development: | ||||||||||||||||
| Residential | 73,030 | 73,733 | 86,037 | 75,695 | ||||||||||||
| Commercial | 10,679 | 10,864 | 11,228 | 10,450 | ||||||||||||
| Commercial business | 735,128 | 716,546 | 639,840 | 682,169 | ||||||||||||
| Agricultural business including secured by farmland | 245,742 | 208,817 | 233,967 | 228,291 | ||||||||||||
| One- to four-family real estate | 558,744 | 517,621 | 552,698 | 529,494 | ||||||||||||
| Consumer: | ||||||||||||||||
| Consumer secured by one- to four-family real estate | 209,511 | 177,855 | 163,339 | 173,188 | ||||||||||||
| Consumer-other | 126,000 | 119,197 | 112,938 | 121,834 | ||||||||||||
| Total loans outstanding | $ | 3,762,599 | $ | 3,522,912 | $ | 3,290,201 | $ | 3,418,445 | ||||||||
| Restructured loans performing under their restructured terms | $ | 37,462 | $ | 40,165 | $ | 51,732 | $ | 47,428 | ||||||||
| Loans 30 - 89 days past due and on accrual | $ | 7,670 | $ | 12,662 | $ | 5,902 | $ | 8,784 | ||||||||
| Total delinquent loans (including loans on non-accrual) | $ | 27,415 | $ | 24,602 | $ | 32,002 | $ | 22,010 | ||||||||
| Total delinquent loans / Total loans outstanding | 0.73 | % | 0.70 | % | 0.97 | % | 0.64 | % | ||||||||
| GEOGRAPHIC CONCENTRATION OF LOANS AT | ||||||||||||||||||||
| June 30, 2014 | Washington | Oregon | Idaho | Other | Total | |||||||||||||||
| Commercial real estate: | ||||||||||||||||||||
| Owner occupied | $ | 388,662 | $ | 85,787 | $ | 54,529 | $ | 12,580 | $ | 541,558 | ||||||||||
| Investment properties | 535,393 | 116,493 | 59,700 | 95,913 | 807,499 | |||||||||||||||
| Multifamily real estate | 146,291 | 27,175 | 14,932 | 394 | 188,792 | |||||||||||||||
| Commercial construction | 11,770 | — | 868 | — | 12,638 | |||||||||||||||
| Multifamily construction | 33,454 | 6,410 | — | — | 39,864 | |||||||||||||||
| One- to four-family construction | 127,627 | 83,832 | 1,955 | — | 213,414 | |||||||||||||||
| Land and land development: | ||||||||||||||||||||
| Residential | 40,492 | 31,358 | 1,180 | — | 73,030 | |||||||||||||||
| Commercial | 5,163 | 2,605 | 2,911 | — | 10,679 | |||||||||||||||
| Commercial business | 397,570 | 120,286 | 66,940 | 150,332 | 735,128 | |||||||||||||||
| Agricultural business including secured by farmland | 134,477 | 59,120 | 52,145 | — | 245,742 | |||||||||||||||
| One- to four-family real estate | 332,850 | 202,853 | 22,025 | 1,016 | 558,744 | |||||||||||||||
| Consumer: | ||||||||||||||||||||
| Consumer secured by one- to four-family real estate | 125,888 | 68,272 | 14,314 | 1,037 | 209,511 | |||||||||||||||
| Consumer-other | 81,884 | 37,708 | 6,000 | 408 | 126,000 | |||||||||||||||
| Total loans outstanding | $ | 2,361,521 | $ | 841,899 | $ | 297,499 | $ | 261,680 | $ | 3,762,599 | ||||||||||
| Percent of total loans | 62.7 | % | 22.4 | % | 7.9 | % | 7.0 | % | 100.0 | % | ||||||||||
BANR - Second Quarter 2014 Results
July 23, 2014
Page 8
| (dollars in thousands) | ||||||||||||||||||||
| Quarters Ended | Six Months Ended | |||||||||||||||||||
| CHANGE IN THE | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Jun 30, 2014 | Jun 30, 2013 | |||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||
| Balance, beginning of period | $ | 74,371 | $ | 74,990 | $ | 76,396 | $ | 74,990 | $ | 76,759 | ||||||||||
| Provision | — | — | — | — | — | |||||||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||
| Commercial real estate | 274 | 296 | 378 | 570 | 1,964 | |||||||||||||||
| Construction and land | 472 | 232 | 337 | 704 | 438 | |||||||||||||||
| One- to four-family real estate | 204 | 188 | 3 | 392 | 119 | |||||||||||||||
| Commercial business | 286 | 293 | 666 | 579 | 1,052 | |||||||||||||||
| Agricultural business, including secured by farmland | 311 | 350 | 310 | 661 | 347 | |||||||||||||||
| Consumer | 58 | 282 | 117 | 340 | 219 | |||||||||||||||
| 1,605 | 1,641 | 1,811 | 3,246 | 4,139 | ||||||||||||||||
| Loans charged off: | ||||||||||||||||||||
| Commercial real estate | (1,001 | ) | (238 | ) | (418 | ) | (1,239 | ) | (766 | ) | ||||||||||
| Construction and land | (207 | ) | — | (419 | ) | (207 | ) | (854 | ) | |||||||||||
| One- to four-family real estate | (14 | ) | (379 | ) | (402 | ) | (393 | ) | (1,053 | ) | ||||||||||
| Commercial business | (260 | ) | (738 | ) | (398 | ) | (998 | ) | (1,327 | ) | ||||||||||
| Consumer | (184 | ) | (173 | ) | (449 | ) | (357 | ) | (777 | ) | ||||||||||
| (1,666 | ) | (1,528 | ) | (2,086 | ) | (3,194 | ) | (4,777 | ) | |||||||||||
| Net (charge-offs) recoveries | (61 | ) | 113 | (275 | ) | 52 | (638 | ) | ||||||||||||
| Balance, end of period | $ | 74,310 | $ | 74,371 | $ | 76,121 | $ | 74,310 | $ | 76,121 | ||||||||||
| Net charge-offs / Average loans outstanding | 0.002 | % | (0.003 | )% | 0.008 | % | (0.001 | )% | 0.020 | % | ||||||||||
| ALLOCATION OF | ||||||||||||||||
| ALLOWANCE FOR LOAN LOSSES | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | ||||||||||||
| Specific or allocated loss allowance: | ||||||||||||||||
| Commercial real estate | $ | 18,884 | $ | 17,412 | $ | 14,898 | $ | 16,759 | ||||||||
| Multifamily real estate | 5,765 | 5,652 | 4,973 | 5,306 | ||||||||||||
| Construction and land | 17,837 | 18,620 | 16,625 | 17,640 | ||||||||||||
| One- to four-family real estate | 9,270 | 10,913 | 14,974 | 11,486 | ||||||||||||
| Commercial business | 12,014 | 11,363 | 10,806 | 11,773 | ||||||||||||
| Agricultural business, including secured by farmland | 2,824 | 2,636 | 3,805 | 2,841 | ||||||||||||
| Consumer | 748 | 912 | 1,011 | 1,335 | ||||||||||||
| Total allocated | 67,342 | 67,508 | 67,092 | 67,140 | ||||||||||||
| Unallocated | 6,968 | 6,863 | 9,029 | 7,118 | ||||||||||||
| Total allowance for loan losses | $ | 74,310 | $ | 74,371 | $ | 76,121 | $ | 74,258 | ||||||||
| Allowance for loan losses / Total loans outstanding | 1.97 | % | 2.11 | % | 2.31 | % | 2.17 | % | ||||||||
| Allowance for loan losses / Non-performing loans | 376 | % | 325 | % | 292 | % | 300 | % | ||||||||
BANR - Second Quarter 2014 Results
July 23, 2014
Page 9
| (dollars in thousands) | |||||||||||||||
| Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | ||||||||||||
| NON-PERFORMING ASSETS | |||||||||||||||
| Loans on non-accrual status: | |||||||||||||||
| Secured by real estate: | |||||||||||||||
| Commercial | $ | 2,692 | $ | 6,201 | $ | 4,810 | $ | 6,287 | |||||||
| Multifamily | 422 | — | 335 | — | |||||||||||
| Construction and land | 1,296 | 2,135 | 2,775 | 1,193 | |||||||||||
| One- to four-family | 9,354 | 10,587 | 11,465 | 12,532 | |||||||||||
| Commercial business | 925 | 977 | 2,819 | 723 | |||||||||||
| Agricultural business, including secured by farmland | 104 | — | — | — | |||||||||||
| Consumer | 1,205 | 1,399 | 1,938 | 1,173 | |||||||||||
| 15,998 | 21,299 | 24,142 | 21,908 | ||||||||||||
| Loans more than 90 days delinquent, still on accrual: | |||||||||||||||
| Secured by real estate: | |||||||||||||||
| Commercial | 993 | — | — | — | |||||||||||
| One- to four-family | 2,181 | 1,465 | 1,897 | 2,611 | |||||||||||
| Commercial business | 280 | — | 4 | — | |||||||||||
| Agricultural business, including secured by farmland | — | 104 | — | 105 | |||||||||||
| Consumer | 293 | — | 58 | 144 | |||||||||||
| 3,747 | 1,569 | 1,959 | 2,860 | ||||||||||||
| Total non-performing loans | 19,745 | 22,868 | 26,101 | 24,768 | |||||||||||
| Real estate owned (REO) | 4,388 | 3,236 | 6,714 | 4,044 | |||||||||||
| Other repossessed assets | 69 | 273 | 118 | 115 | |||||||||||
| Total non-performing assets | $ | 24,202 | $ | 26,377 | $ | 32,933 | $ | 28,927 | |||||||
| Total non-performing assets / Total assets | 0.51 | % | 0.59 | % | 0.78 | % | 0.66 | % | |||||||
| DETAIL & GEOGRAPHIC CONCENTRATION OF | |||||||||||||||
| NON-PERFORMING ASSETS AT | |||||||||||||||
| June 30, 2014 | Washington | Oregon | Idaho | Total | |||||||||||
| Secured by real estate: | |||||||||||||||
| Commercial | $ | 3,685 | $ | — | $ | — | $ | 3,685 | |||||||
| Multifamily | 422 | — | — | 422 | |||||||||||
| Construction and land: | |||||||||||||||
| Residential land acquisition & development | — | 750 | — | 750 | |||||||||||
| Residential land improved lots | — | 546 | — | 546 | |||||||||||
| Total construction and land | — | 1,296 | — | 1,296 | |||||||||||
| One- to four-family | 8,279 | 2,672 | 584 | 11,535 | |||||||||||
| Commercial business | 1,163 | 42 | — | 1,205 | |||||||||||
| Agricultural business, including secured by farmland | 104 | — | — | 104 | |||||||||||
| Consumer | 1,356 | 6 | 136 | 1,498 | |||||||||||
| Total non-performing loans | 15,009 | 4,016 | 720 | 19,745 | |||||||||||
| Real estate owned (REO) | 1,801 | 2,380 | 207 | 4,388 | |||||||||||
| Other repossessed assets | 69 | — | — | 69 | |||||||||||
| Total non-performing assets at end of the period | $ | 16,879 | $ | 6,396 | $ | 927 | $ | 24,202 | |||||||
BANR - Second Quarter 2014 Results
July 23, 2014
Page 10
| (dollars in thousands) | |||||||||||||||
| Quarters Ended | Six Months Ended | ||||||||||||||
| REAL ESTATE OWNED | Jun 30, 2014 | Jun 30, 2013 | Jun 30, 2014 | Jun 30, 2013 | |||||||||||
| Balance, beginning of period | $ | 3,236 | $ | 11,160 | $ | 4,044 | $ | 15,778 | |||||||
| Additions from loan foreclosures | 1,996 | 418 | 2,703 | 1,504 | |||||||||||
| Additions from capitalized costs | 33 | — | 37 | 46 | |||||||||||
| Proceeds from dispositions of REO | (1,034 | ) | (5,305 | ) | (2,675 | ) | (11,787 | ) | |||||||
| Gain on sale of REO | 157 | 667 | 316 | 1,472 | |||||||||||
| Valuation adjustments in the period | — | (226 | ) | (37 | ) | (299 | ) | ||||||||
| Balance, end of period | $ | 4,388 | $ | 6,714 | $ | 4,388 | $ | 6,714 | |||||||
| REAL ESTATE OWNED- BY TYPE AND STATE | |||||||||||||||
| June 30, 2014 | Washington | Oregon | Idaho | Total | |||||||||||
| Commercial real estate | $ | — | $ | — | $ | 175 | $ | 175 | |||||||
| Land development- residential | 614 | 1,637 | 32 | 2,283 | |||||||||||
| One- to four-family real estate | 1,187 | 743 | — | 1,930 | |||||||||||
| Total | $ | 1,801 | $ | 2,380 | $ | 207 | $ | 4,388 | |||||||
BANR - Second Quarter 2014 Results
July 23, 2014
Page 11
| (dollars in thousands) | ||||||||||||||||
| DEPOSITS & OTHER BORROWINGS | ||||||||||||||||
| Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | |||||||||||||
| DEPOSIT COMPOSITION | ||||||||||||||||
| Non-interest-bearing | $ | 1,210,068 | $ | 1,095,665 | $ | 958,674 | $ | 1,115,346 | ||||||||
| Interest-bearing checking | 437,810 | 435,910 | 399,302 | 422,910 | ||||||||||||
| Regular savings accounts | 843,950 | 829,282 | 751,475 | 798,764 | ||||||||||||
| Money market accounts | 490,105 | 416,662 | 406,736 | 408,211 | ||||||||||||
| Interest-bearing transaction & savings accounts | 1,771,865 | 1,681,854 | 1,557,513 | 1,629,885 | ||||||||||||
| Interest-bearing certificates | 936,986 | 905,016 | 944,137 | 872,695 | ||||||||||||
| Total deposits | $ | 3,918,919 | $ | 3,682,535 | $ | 3,460,324 | $ | 3,617,926 | ||||||||
| GEOGRAPHIC CONCENTRATION OF DEPOSITS AT | ||||||||||||||||
| June 30, 2014 | Washington | Oregon | Idaho | Total | ||||||||||||
| $ | 2,835,383 | $ | 848,991 | $ | 234,545 | $ | 3,918,919 | |||||||||
| 72.3 | % | 21.7 | % | 6.0 | % | 100.0 | % | |||||||||
| INCLUDED IN TOTAL DEPOSITS | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Dec 31, 2013 | ||||||||||||
| Public non-interest-bearing accounts | $ | 23,886 | $ | 18,931 | $ | 22,160 | $ | 21,699 | ||||||||
| Public interest-bearing transaction & savings accounts | 69,664 | 65,909 | 56,429 | 65,822 | ||||||||||||
| Public interest-bearing certificates | 48,180 | 57,202 | 51,759 | 51,465 | ||||||||||||
| Total public deposits | $ | 141,730 | $ | 142,042 | $ | 130,348 | $ | 138,986 | ||||||||
| Total brokered deposits | $ | 88,209 | $ | 59,304 | $ | 7,152 | $ | 4,291 | ||||||||
| OTHER BORROWINGS | ||||||||||||||||
| Customer repurchase agreements / "Sweep accounts" | $ | 88,946 | $ | 89,921 | $ | 90,779 | $ | 83,056 | ||||||||
| Minimum for Capital Adequacy | ||||||||||||||
| REGULATORY CAPITAL RATIOS AT | Actual | or "Well Capitalized" | ||||||||||||
| June 30, 2014 | Amount | Ratio | Amount | Ratio | ||||||||||
| Banner Corporation-consolidated: | ||||||||||||||
| Total capital to risk-weighted assets | $ | 667,027 | 16.45 | % | $ | 324,294 | 8.00 | % | ||||||
| Tier 1 capital to risk-weighted assets | 616,055 | 15.20 | % | 162,147 | 4.00 | % | ||||||||
| Tier 1 leverage capital to average assets | 616,055 | 13.65 | % | 180,496 | 4.00 | % | ||||||||
| Banner Bank: | ||||||||||||||
| Total capital to risk-weighted assets | 582,843 | 15.08 | % | 386,574 | 10.00 | % | ||||||||
| Tier 1 capital to risk-weighted assets | 534,223 | 13.82 | % | 231,945 | 6.00 | % | ||||||||
| Tier 1 leverage capital to average assets | 534,223 | 12.50 | % | 213,685 | 5.00 | % | ||||||||
| Islanders Bank: | ||||||||||||||
| Total capital to risk-weighted assets | 35,697 | 19.26 | % | 18,538 | 10.00 | % | ||||||||
| Tier 1 capital to risk-weighted assets | 33,376 | 18.00 | % | 11,123 | 6.00 | % | ||||||||
| Tier 1 leverage capital to average assets | 33,376 | 13.96 | % | 11,954 | 5.00 | % | ||||||||
BANR - Second Quarter 2014 Results
July 23, 2014
Page 12
| (dollars in thousands) | ||||||||||||||||||||
| (rates / ratios annualized) | ||||||||||||||||||||
| Quarters Ended | Six Months Ended | |||||||||||||||||||
| OPERATING PERFORMANCE | Jun 30, 2014 | Mar 31, 2014 | Jun 30, 2013 | Jun 30, 2014 | Jun 30, 2013 | |||||||||||||||
| Average loans | $ | 3,588,654 | $ | 3,475,369 | $ | 3,250,808 | $ | 3,532,324 | $ | 3,233,116 | ||||||||||
| Average securities | 689,323 | 687,764 | 718,948 | 688,548 | 696,249 | |||||||||||||||
| Average interest earning cash | 54,887 | 58,352 | 68,130 | 56,610 | 87,930 | |||||||||||||||
| Average non-interest-earning assets | 197,796 | 200,227 | 212,661 | 199,005 | 215,006 | |||||||||||||||
| Total average assets | $ | 4,530,660 | $ | 4,421,712 | $ | 4,250,547 | $ | 4,476,487 | $ | 4,232,301 | ||||||||||
| Average deposits | $ | 3,700,736 | $ | 3,619,299 | $ | 3,489,625 | $ | 3,660,242 | $ | 3,495,764 | ||||||||||
| Average borrowings | 279,266 | 262,378 | 249,692 | 270,869 | 230,185 | |||||||||||||||
Average non-interest-bearing other liabilities (1) | (4,204 | ) | (6,083 | ) | (12,390 | ) | (5,138 | ) | (12,888 | ) | ||||||||||
| Total average liabilities | 3,975,798 | 3,875,594 | 3,726,927 | 3,925,973 | 3,713,061 | |||||||||||||||
| Total average stockholders' equity | 554,862 | 546,118 | 523,620 | 550,514 | 519,240 | |||||||||||||||
| Total average liabilities and equity | $ | 4,530,660 | $ | 4,421,712 | $ | 4,250,547 | $ | 4,476,487 | $ | 4,232,301 | ||||||||||
| Interest rate yield on loans | 4.83 | % | 4.87 | % | 5.22 | % | 4.85 | % | 5.23 | % | ||||||||||
| Interest rate yield on securities | 1.92 | % | 1.96 | % | 1.80 | % | 1.94 | % | 1.79 | % | ||||||||||
| Interest rate yield on cash | 0.31 | % | 0.31 | % | 0.27 | % | 0.31 | % | 0.26 | % | ||||||||||
| Interest rate yield on interest-earning assets | 4.31 | % | 4.33 | % | 4.53 | % | 4.32 | % | 4.52 | % | ||||||||||
| Interest rate expense on deposits | 0.21 | % | 0.22 | % | 0.29 | % | 0.21 | % | 0.30 | % | ||||||||||
| Interest rate expense on borrowings | 1.18 | % | 1.24 | % | 1.34 | % | 1.21 | % | 1.45 | % | ||||||||||
| Interest rate expense on interest-bearing liabilities | 0.28 | % | 0.29 | % | 0.36 | % | 0.28 | % | 0.37 | % | ||||||||||
| Interest rate spread | 4.03 | % | 4.04 | % | 4.17 | % | 4.04 | % | 4.15 | % | ||||||||||
| Net interest margin | 4.06 | % | 4.07 | % | 4.20 | % | 4.06 | % | 4.18 | % | ||||||||||
| Other operating income / Average assets | 1.78 | % | 0.81 | % | 1.00 | % | 1.31 | % | 0.98 | % | ||||||||||
Core operating income / Average assets (2) | 0.94 | % | 0.83 | % | 1.03 | % | 0.89 | % | 0.99 | % | ||||||||||
| Other operating expense / Average assets | 3.40 | % | 3.26 | % | 3.35 | % | 3.33 | % | 3.31 | % | ||||||||||
| Efficiency ratio (other operating expense / revenue) | 60.11 | % | 69.50 | % | 67.06 | % | 64.28 | % | 66.99 | % | ||||||||||
Efficiency ratio (other operating expense / core operating revenue)(2) | 67.02 | % | 69.11 | % | 66.76 | % | 68.03 | % | 66.87 | % | ||||||||||
| Return on average assets | 1.51 | % | 0.97 | % | 1.11 | % | 1.24 | % | 1.11 | % | ||||||||||
| Return on average equity | 12.29 | % | 7.85 | % | 9.00 | % | 10.10 | % | 9.06 | % | ||||||||||
Return on average tangible equity (3) | 12.33 | % | 7.88 | % | 9.06 | % | 10.14 | % | 9.13 | % | ||||||||||
| Average equity / Average assets | 12.25 | % | 12.35 | % | 12.32 | % | 12.30 | % | 12.27 | % | ||||||||||
| (1) | Average non-interest-bearing liabilities include fair value adjustments related to FHLB advances and Junior Subordinated Debentures. |
| (2) | Core operating income (or core operating revenue) excludes gain/(loss) on sale of securities, fair value and other-than-temporary impairment (OTTI) adjustments and, in the current quarter and year, an acquisition bargain purchase gain and related expenses, which represents non-GAAP financial measures. |
| (3) | Average tangible equity excludes other intangibles and represents a non-GAAP financial measure. |