BANR - Earnings call transcript Q4 2018

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Operator

Good morning and welcome to the Banner Corporation Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Grescovich, President and CEO. sir. ahead, go Please

Mark Grescovich

and you everyone. and to call XXXX Lora, like fourth would to earnings Corporation. Banner welcome the for good you, I morning, also quarter Thank full year

harbor Credit the customary, is is our our our Marshall, and joining read Financial on the the safe Officer; As would call Secretary you Conner, Peter please statement? of me Rick today Barton, Officer; Albert Chief Chief Corporation. forward-looking Albert,

Albert Marshall

Certainly. Good morning.

Those and presentation operations, descriptions other statements Banner's today and of conditions. economic statements. discusses performance include Our about or products future and outlook other measures forecast include outlook management's for will objectives business services, plans, financial of or for general statements forward-looking Banner's goals or

following a forward-looking cause are may today. We release XXXX. forward-looking factors make Information of also number released XX-Q differ may differ discussed press other and earnings discussion. period materially subject filed statements XX, quarter recently management's could actual to on for are statements risk the and question-and-answer risks Form the uncertainties, actual ended the those the that results and results from These a September from to that yesterday was in available

as Banner only you. update effective date are made, the and statements Forward-looking concerning its are assumes they to obligation Thank no of information expectations.

Mark Grescovich

you, Thank Al.

of in net and of share the share $X.XX a announced, quarter of the to quarter third profit reported loss $XX.X XX, a the per to to for XXXX. diluted This fourth share Results a net of $X.XX of Banner $X.XX compared per for the Corporation million, Utah ended As common common passage postpone XXXX quarter Cuts the shareholders per or for of XXXX. shareholders sheet December were following profit operations restructuring to XXXX of and deferred the loss the designed debit the impact connection net our the Durbin sale impacted our securities card and Amendment interchange Tax of the on of of from with sale assets write-down adverse of fees. in balance Act, quarter a fourth by tax Jobs the

For net common the million of to XX, full ended XXXX. of Banner XXXX, to compared $XXX.X available $XX.X reported million a year year shareholders December for full Corporation the income

described of and of gains sale fourth increased impact of earnings the XXXX, losses the and fair financial in merger on quarter and from acquisition value operations items instruments, the just securities core expenses, changes in XX% of Excluding and Banner. to we $XXX the work million from XXXX million in profitability throughout to revenue priorities growth and to hard strategies executing sustainable XXXX. $XX our are Because company, the employees in deliver successfully our of on the of

core operating are performance strong strategies, proven Our which success acquisition producing the continued reflect client revenue. our core of to

share our our million this quarter our compared increased relationships improving strong new of average response loyalty Our deposits. to XXXX, XXXX XXXX $XXX continuing and the of a growth dividend through and plan that in full performance interest and client improved generation new larger for core full earning solid core service common X% funding and continued our our shareholder core build is, detail. That year Once Further, and increased repurchased deposit ratio in our represent revenue and issued income. good execution Overall, growing Peter to $X.XX To strategic on return position record per organic resulted and of reached demonstrating growing equity and client of very tangible mix while full of in net the our assets coupled we again, deposits advocacy community this reflects of X.XX% promoting XX% bank and our to augmenting opportunistic of a the margin year by few throughout XX% client XX, and relationships, We year increase effective is will a in December for in year. super a strong that value. point, deposits quarter on strategy. compared this our a total fee acquisitions. from operating asset moments, discuss X.XX%, core of we with our model, shares performance, Conner XXXX. Reflective performance XXX,XXX continued our more common core stock year. of the In with the benefited

total relationships, been At deliver invest While of Banner. for allowance risk in capital, our our credit our ratio totaled X.XX% quality also a success the our loans will maintaining strategies metrics on the assets our invest quarter eight quarter, of company to metrics end In focused and at franchise. moment, provide and loan to throughout net X.XX%. and prudently Again Credit grow Rick margin, protect and on of executing our a we moderate our moderate our sustainable we lease to the risk total profile. losses effectively this Barton, have discuss have credit our interest credit reflect the continued the our some the context was non-performing the loan around portfolio of Officer, and In preceding profile profitability the maintaining Chief profile. improved client years, risk and quarter,

banking Banner's team, bankers have culture. credit management integrating and into in We we in talent proven added deepened developing and sales and commercial invested retail have personnel, the further our all executive and

platform, made risk and have company for are our infrastructure growth continuing delivery our also continued management to make significant scale. and positioning in and the We investments

this our fee and the our have value I one loan Associates won they the and bank for and in core strong Banner these of in we investments the our award. client Year year Banner and J.D. core received resulted Regional region, ranked Power proposition deposit increased top America Bank again, Bank have revenue the the this Lender have the Also, before, have year. in number Bank consecutive of the acquisition, year. the And Bankrate.com business as West progress third Lender marketplace Seattle customer Bank, consecutive noted and XXX third operating growth, of and ranked Banner Year for have two as Further, years, strong best we the third for in recognition XXXX was While North growth Pacific Community year. year District Money in named Banks for the small Best The named income. administration Forbes Magazine this Banner for Spokane the expenses, in portfolio Banner consecutive year-over-year bank satisfaction, named

thrilled Barton Washington in X. our with want organization XX-year-old is new extremely and that Rick November I our pleased Bank, our Executive to the We're expand on Skagit Bishop, super over discuss I-X the we to to an turn over clients Seattle again, loan joined and outstanding Banner joined in opportunity the community I loan trends to enhance has bank Rick which recognize call portfolio. trends Officer, Banner's to, from Further, this our Before portfolio, Chief discuss turn of to Skagit's call in that Rick? in corridor. Cheryl density the Directors. Barton Board now model Northwest and colleagues I'll are

Rick Barton

the Thanks At Mark. year landscape Bank includes credit the at Skagit end portfolio. loan XXXX, Banner

continuing and of loan fourth the culture metrics this press metrics release this is in remarks remain and to hard Banner's moderate into and on have brief and credit the which work in at strong operations Skagit's portfolio Banner's. morning, morning and credit spirit our heard My again, loan by a the quarter, the risk loan read corporation of the bankers, planning you Skagit be our company's all will, portfolio's profile. and integration effort concentrate involved in credit stable attributed the and As

metrics. credit loans our total loans. basis for Delinquent to First, quarter the points increased linked X.XX% of XX

robust linked $XX loans, assets of Banner's charge-offs X.XX% assets the nonperforming by would Skagit of unchanged XX, $XXX was was charge-off charge-offs net loans of include After classified levels. discussion net third year loan full because points. rate Recoveries for came million. and Company assets were trouble under restructures by million the for were is against remains net of Coverage million were Not of accounting quarter, portfolio. included against from XX/XX/XXXX, XX% totals loans purchase, loan unexpected lease the were result to million and million, nonperforming this assets totals, their be After is loans by of REO quarter. were in an is quarter asset the of totals Nonperforming XXX%. basis million in of for acquisition. in is an magnitude assets the The unchanged norms. from fourth low reportable all are the loans. XXXX. we protection the loan XXXX linked $X.X provision XXXX, quarter fourth purchase adjusting Skagit X.XXX% million December a $X $XX split Without The remain The million. Net nonperforming modest loans total for loans. delinquent at recurring. in this nonperforming at $XXX delinquent The not nonperforming from for loans or acquired delinquencies The of $X company's And previously X.XX%. adjustment fourth total our quarter X.XX% and of the of same nonperforming this not on acquisition million still to be are well of basis. X.XXX% level charge-offs $X.X metric very for The loan adjusting the compared level If loans A below reflected on decrease and quarter assets foreclosed a acquired assets assets portfolio or After adversely recoveries total to in $X or annualized are while growth of of portfolios, allowance accounting REO the in acquired $XXX,XXX. $XX X.XX% from the were a total $XX at Performing loans provides the million, considered debt of change loans $XXX Nonperforming $X.X ratio not the fourth acquisition, which Our quarter of the of grew mark of million At current at Bank should losses. X.XX% additional or which and at should million level assets. that million. year, low net of a and historic rules. be the of this XX charged-off after ago, making for were of losses complicated grew between nonperforming of X%. million Skagit for other normally quarter increase these $XXX recoveries assets total growth remaining X.XX%. were

occurred loan portfolio For one-to-four to across and family our all spread ag multi-family investor multi-family portfolios Residential growth loans. our continuing growth significant total in exposure Portfolio remain rate segments land at excluding segments total XX.X% the real both of loans important also loans. AD&C loans residential Skagit. timely and the calculation, to land an of exposure increases grade, real It construction commercial C&I, total with market construction pay at portfolios. in acceptable off Banner's were across of construction estate, X%, the X.X% most annualized footprint construction, commercial concentration was our manner. of is added including this in the are historic exposure into levels. owner-occupied XXXX, Loans are footprint. following. estate, is note When C&I is construction a

higher continuing in price Leasing Overall points are balance The also observe which are make in markets the vacancy incentives manageable price we growth construction in the affordable are and segment inventory are and of rents common. remain we completed at residential to homes more and apartments. more of points. in luxury loans rates luxury levels. in absorption flattening in the the now under-supplied multi-family However, in expensive

sales demand of However, we are continuing and impacting homes. how are the as homes entry-level interest single-family closely pace expensive rates to watch for

profile the As a I acquisition. at Peter? With us said, solidified comments. well at and for our to his This post-Skagit remarks, Peter positions I Conner my remains risk loan has credit for portfolios that microphone future. of outset said will Banner pass the further stable of moderate the

Peter Conner

thank you, And morning. Good Rick.

share million our assets and due the or reported and previously, in $XX.X $X.XX, million release per two per compared to $X.XX in share, Net Non-interest growth. Non-interest per-share along increase to average declined the a per of discussed income primarily expenses. diluted prior we to income loss as prior share in acquisition to interest earning for the million operation months $X.XX or announced to a due compared $X.XX due $XX.X the release, $X.XX of with the net the $XXX assets. costs, seasonal share in to and prior fourth $X.XX Bank a tax increased Skagit decline a loan as the quarter credit in increase quarter, expense of operating diluted quarter. expense valuation sale earnings on year-end As earnings per acquisition-related tax was the The $X.XX due Income of quarter items. following quarter, income organic of securities to from increases tax the due the decreased deferred to on associated fourth increased of the and expense fourth expense the quarter. legal result in Skagit with in in reserve

portfolio growth Turning $XXX loan to grew in was multifamily and acquisition fourth the $XX.X Portfolio portfolio loan in compared organic as a unit end Skagit basis, in basis, of increased the million well loans in loans X.X% in a On a loans the billion diversified million driven assets loan prior Skagit, $XXX from the the all Skagit strong sheet. of third in anticipated acquisition grew an was loan the of or $XXX of result prior as first quarter across Ending quarter impact increased loan quarter million fourth million from end from and Lending excluding quarter. $XXX result of growth the sales growth. annual to the occur core a the Total acquired $X.X quarter. in of billion strong of growth both are or organic increased core year deposits of $XX that loans. quarter was to growth quarter. quarter as $XXX Skagit. loans X%. ago, On an deposits the and during impact the year the at to comprised production in excluding million the $XXX loan the held-for-sale fourth annual by balance year-end million million acquisition and result Organic The timing loans $XXX the million types. held-for-sale Skagit with organic of

the Most hikes by quarter. quarter quarter, from quarter, of Acquired basis from growth While the the Skagit X fourth $X and for The impact loan $XX prior Net for of of yield this in line and the and that loan points from was million down. strong the the items and Merger increase, expense the basis the quarter declined balances perspective, remained increase accounted elevated by the during off quarter. increases for $XXX,XXX, value, expense average accretion debt interest X million to and last income Skagit loan loan The the deposits Total basis sales in of deposit previous stem quarter. quarter, basis in taxes State on Increases core income Time function for accounted small from from the in and outflows prior the accretion by and fourth BOLI the workout previous grew up of from There pace from end in loss points as result loan quarter. points, Skagit, quarter. increased fourth disposals fees organic non-interest balances excluding quarter, core an purchase reflect acquisition. in we million residential were prior in increase. represented the quarter. interest by level points related money quarter. the excluding quarterly number increased XX higher due and previous in expense of cost the existing on retail declines million. increase loan Core XX total million. quarter, due elements Washington million. prior of third increased of X.XX% in X basis In X a will non-interest CDs in effects Loan increased September by collectively, X.XX%. the brokered same previous benefit rate quarter the quarter. quarter. to in of new income market expense and the taken income higher an mortgage in deposits for refund operations to $X.X accounted income, experienced Skagit the ran that in to deposit to points $XX points fourth organic $XXX,XXX decline of Skagit $XXX,XXX losses core increased net accounted to costs acquisition on CDs. income in deposit loan loan accretion of balance accretion point sales I Total as prepayment a growth. while deposit basis interest quarter. few increased the from repricing basis CDs and basis carried on yields acquisition legacy Miscellaneous ending X in of of to swap modestly day million expenses the $XXX the account was the a increased fourth net XX up due to periods the as declined acquisition-related of The When previous The the of the period X.XX% the result second declined impacted production $XX.X a sales acquisition in was in the the mortgage loan brokerage the interest and total the driven X brokered movement of same banking interest offset income December. accounting-related clients contractual Total the contractual of in higher increased recent quarter, of $X.X margin quarter. the the increase. were to was deposits the quarter. prior of points viewed break X fair somewhat Fourth third million. operating acquired level at due of as rate accounted quarter of compared on for volumes a the last income, quarter number cost were loan of points by basis this months fourth the The margin Banner fixed sale $X.X the excluding the fee basis loan Skagit assets the in premiums a of of the at changes non-interest fourth gains securities prior from fee and quarter yield loans recorded the in Skagit loan of increase portfolio Improvement points same $XXX,XXX in the

in the Excluding care the related operating sponsorship quarter seasonal training, health and $X increase mail a of experiences in litigation, $XXX,XXX of expense fourth related with postage expense acquisition, expenses. or the increase $XXX,XXX increase expense, company and million repair Banner’s Skagit, quarter, inspections notification Skagit legal increase facilities from fourth in pending included that in Banner’s and legal related. Taking non-interest personnel expense, a in $XXX,XXX seasonal increase previous business million $X.X occupancy fourth legacy excluding and in impact a increase the to costs incentive-related the core total, advertising, bonus development quarter, maintenance, in was customer associated direct increase and normally year-end expense the a to a in employee half quarter expense the

integrated as functional well working as counterparts and Skagit Skagit. with expected. well at staff their have teams and progress integration The have to Banner. gone could together Turning we are Closing have on the

to in XXX% and are core expense branch on systems track We track announced synergy, locations Skagit and We We by acquisition-related to are quarter. a synergies recognizing third XX% achieve on of anticipate the convert we it. consolidate expense Skagit February.

far we to $X In $X the of have million another in quarter. terms being with million of to that expense, M&A $X.X so anticipate booked go, majority million recorded the first and transaction

and scale and from offset bank’s remarks. prepared in We for course by run Skagit the growth are investments Mark? the million future synergy infrastructure year. and over achievement my the This expense expect quarterly operating the of operating concludes $XX for range expenses will high delivery as XXXX in expenses acquisition the platform normal

Mark Grescovich

concludes and welcome prepared now the will our Thank you, and open questions. Laura, And comments. Peter Rick remarks. for That we we your call, your

Operator

our Thank Stephens. Stafford you. And first [Operator Instructions] comes of question from Tyler

Gordon McGuire

morning. gentlemen. for on this actually Gordon Hi, is morning, this Tyler Good McGuire

Mark Grescovich

morning, Good Gordon.

Gordon McGuire

of I Peter, in I remember from like was – it bit and to on fees sounded line. just a last of it increase the banking an If mortgage was wanted that the quarter, little start anomaly. quarter kind

to have held little up. would I expected this but kind those quarter, So bit a flat reversion a of of

So I considering that that on in sales, you’ve that quarter beyond one And unusual how there quarter? kind held-for-sale the balances? be what in the line you expect higher next thinking rate would line? four-family for to about And premiums for was run of the in should item, higher the got XXXX loan anything maybe consider the

Peter Conner

Yes, Gordon, this is Peter.

answer that components. So question in I’ll two

residential mortgage the sale. of First, the on gain piece

refinance business change of So our line business. in And dollars That total we quarter. very in our the saw total a have XX% mortgage rates And mortgage total production in we XX% and in changing to that of has terms up the an increase responded refinance of the resilient was percentage quarter. fourth the volume third from well a quarter, in up in was in fourth as production for market conditions.

be curve refinance And premium purchase that that partly a our the premium fourth continue was long both offset product, then, product resilient. in mortgages down custom loan modest mortgage residential to end construction, then Despite do. function higher saw the overall volume pickup, rural. production the year-end to geographies, quarter. across fact of decline has flat, secondly, our diversified that the we sales in bit. by than and in line which on yield a we mortgage year, the We premium a And to that very due of we have normally sales modest coming did of every composition at conventional we an business were a business, in see saw very metro set mortgage a continues our normally increase have while multiple So that some see a we mortgage pickup volume. And

mortgage multifamily a sale a but in the quarter, in business residential further increases quarter to of gain production. quarter had due So fourth expect third we fourth was quarter. And And on up then, held on the strong were of the actually we unit good very in in our terms get they the to we that business it that when sell it. from and on terms has third premiums where getting had

we’ve multifamily that So a forward that I into business very would somewhat in had half good second overall. always been looking has XXXX, counsel lumpy.

And look so while the business last two the that and that, lumpy. to quarters were prospects very counsel is good, continue XXXX in and good

some So the gain to business. we’ll see sale on continue in volatility quarter-to-quarter in that

Gordon McGuire

it kind like $X as a does bit rate, just point, a quarter-to-quarter? recognizing So million a feel does feel volatility little starting appropriate it kind run of of

Peter Conner

Yes, yes, would that be appropriate.

Gordon McGuire

XQ? those some miscellaneous this that of for Skagit, back that good but just that were the was quarter. up then, on a down number I revert And was anything assume from might else bit fees, there in

Peter Conner

remarks, tax that’s as Well that’s recorded something the state of $XXX,XXX so sales of into miscellaneous in credit clearly fourth to the prepared XXXX. in the we I Gordon, had mentioned, continue in was income – quarter, my Yeah. on in that the as going for not non-recurring Washington

in the third of and a We to SBA the lumpy those some a have quarter. had well. we saw fourth income about swap higher than always amount modest be was that fee elements also in little quarter, and income We bit tend swap $XXX,XXX as

million into quarter-to-quarter $X.X in take basis. run to on if range million to that So the fees $X.X continue account, miscellaneous all a our you core

Gordon McGuire

last me. around updated then Got on it. still the it or Durbin one Any And thoughts level? of $XX kind from million is

Peter Conner

Yeah.

Durbin, Skagit. So including we’ve our updated Durbin guidance

Durbin of in anticipate will we XXXX. of July So kick-in inclusive Skagit,

in in the a second extrapolate XXXX, fee income debit full-year of for XXXX. million we’ll related see in And a million would decline so half to $X.X which XXXX, card $XX impact

Gordon McGuire

you, it. Got guys. Thank

Peter Conner

Thanks, Gordon.

Operator

next question Davidson. Jeff Rulis of D.A. comes from The

Jeff Rulis

Good morning.

Mark Grescovich

Jeff. morning, Good

Jeff Rulis

to rate. Peter, I quarter. back in Quite to the bit – expense on discussion a your wanted the run circle of noise the

XX%-plus, out run the just get and quarter’s back cost specific, So of XX%. I rate guess, the out you’re back more and this little at to M&A you legal a

of you and mentioned just to throughout the So walk if the achieved? saves range, kind pretty if hovering assuming XX%, Could you throughout start half think transition I XXXX we to a that benefits were that or about you is around high-XX% the back conversion steady year? of us how cost number kind the get think You’re does through? in

Peter Conner

it’s Jeff, Peter. Yes. Hi,

– you’re very on spot in run terms level high-XXs. rate the the in a of So

So as we to of remaining XXXX. acquisition first XXXX, synergies the expect quarter recognize we go and second into over on the Skagit the

platform And will be normal a recognized, and the infrastructure Bank’s core so in as related delivery That related expense, those offset personnel production then in of related in half. we’ll year. synergies expenses, see operations the decline increases Skagit expense first with in Banner’s the and operations through investment to rest the are the

of So high XX%s the all that being throughout expense rate said, year. run the we’re going to level see a in pretty

expense three in timing of Skagit, XXXX. Skagit inclusive synergy the of the of the in quarter other synergies first had the and the and the we’ve operation, XX% two of of rate recognition, of fourth the of second run months the the recognize terms will fourth in for expense we the half synergies quarter we In and quarter recognized

expense being level all XXXX with see said, So that number number a core to – effects. we’re throughout pretty those going expense offsetting

Jeff Rulis

then seasonality and the in typically obviously broad year, any some for Pretty year, But growth full but XXXX? loan sort loan ag quarter, this on but well. you year, X% heady on anyone, construction themes front the steady growth, for on full-year XX% organic than. it color. the loan thoughts alluded That’s to thoughts Rick good pretty maybe And a number see early growth, for growth, the as of full there for

Rick Barton

any impacts longer that but wars, last some barring shutdown I couple like see of term meaningful out she I kind of goes. coming of There unforeseen are any wildcards are we’ll and it's trade that steady that or think the on tariff don’t we those, the experiencing Well, we’ve that Jeff, had of as of think the in pattern the horizon over years. are change that the

Jeff Rulis

expectation you're for rate what's XXXX QX, And full at the maybe interesting tax one kind last the for number year? on but just looking the of

Peter Conner

it's Jeff, Peter. Yes,

function loans and rate anticipate exempt rate of in of tax and businesses of a of the tax our where are XXXX. securities. our tax level the states business we effective run we revenues our the Based So apportionment on along do across in with in, between to four revenues is the the organization, from composition the Skagit XX% and with XX% we generate

Jeff Rulis

you. thank Great,

Peter Conner

Jeff. Thanks

Operator

And a Jackie Bohlen we next from have of KBW. question

Jackie Bohlen

morning. good Hi,

Peter Conner

Good morning Jackie.

Jackie Bohlen

clarification Cuts Peter. interesting Sticking overwhelming event a and and to just separate The the quarter, in the of I it's so completely and is take Tax taxes, just it Jobs a from onetime that Act additional it quick right? if million, out because $X.X

Peter Conner

Right, of of a credit also prior just amount million tax period was to Jackie, provision related nonrecurring. $X.X was other the tax of was that the credit expense return there right. under total and and to credit

I we forward, as our run between So mentioned anticipate rate going earlier, XX% effective to and tax XX%.

Jackie Bohlen

the was could thank a you. the little that going Or bit then Okay, we on given just share touching something buyback that quarter very And repurchase forward? was see strategic in a performance?

Peter Conner

It bit was a of both.

getting as stock opportunistic strategic. supported was target undervalued end also repurchase dividends and so of we in or the XXXX, of our quarter to the PCE through capital mechanisms, of fourth to past, to look special shares three number low we've and we share As into strategic we M&A, repurchases, and one by are it felt elected the to our guided excess deploy both in our the our mid-Xs

Jackie Bohlen

target? is in mid-X ongoing the low-to And level

Peter Conner

target. It's ongoing an

towards to to we XXXX. number. that Our number of to going land the going not that drop that We're landing in guidance soft we're to immediately, but want is range end to

Jackie Bohlen

future part of I strategic acquisitions? on depend the And Okay. it in assume possibility would will that

Mark Grescovich

is Mark. This Jackie. Yes, Exactly.

you As capital. all we've suspect, options those deploy might to utilized

So to want same. we M&A be it the agonist opportunistic I will there's opportunities and think, an We're well. forward, going as be if

Jackie Bohlen

Okay. And given last if both environment all real at of and perceived of how the is today, uncertainties discussion over the pace months? shifted couple

Mark Grescovich

discussions? you to Are referring M&A

Jackie Bohlen

M&A the discussions. That's

Mark Grescovich

would a as it I significant characterize shift. not

months. longer-term, it looking all disruptive I think, been in last anything more so categorize XX and historically are it's folks as than the wouldn't I

Jackie Bohlen

Okay, helpful. thanks Mark. That’s

Mark Grescovich

Jackie. you Thank

Operator

O'Neill. come [Operator Instructions] Tim question And our next of will O'Brien from Sandler

Tim O'Brien

give – – just a on for give views tier a If NIM hikes there's of is bit more on little no one with, that I color this rate me Can probably the rate that? year, Just guys, outcomes? you more color morning don't range benefit know Good that's fed a will can start question the margin balance tier relatively I on little perhaps. expect December neutral and sheet you little your hike at – from

Peter Conner

Yes. Hi, its Tim Peter.

just back accretion, points NIM, go XX of some to we included sort – reported a basis that of GAAP we QX, so number accretion. X.XX% So

are our that although sensitive modestly our so is loan Skagit running in balance still mid-X.XX% So excluding we're NIM sheet. the as asset integrated We accretion. fully into less core somewhat range

fourth always So, portfolios, in couple relative loan it's and as diminishing the accretion loan of things a discounted to as the we lumpy of to a guided level will go quarter bit past. One we'll through see in XXXX. on is run we've those

diminishing rate accretion. loan So a will on GAAP of the see absence a of any NIM a primarily function basis GAAP decline bit, as hikes

a a of increases little even how to in always lesser rates there's cost On of and in if the bit some the primarily terms the portfolio margin, deposit deposit deposit of drop extent rates. reprises, core carry CDs core on

If increases, So margin pressure two some rate margin if XXXX, to XXXX. going during one rate hold to little as that see, it saw into we now. core the expect over increases more may we core on we see

Tim O'Brien

back. I'll Thanks Peter. step

Peter Conner

Thank you, Tim.

Operator

closing question-and-answer our Mark concludes I turn like to would session. to conference this over the remarks. Grescovich for back And any

Mark Grescovich

Thank Laura. you,

it our deposit you capital. again our I profile shareholder all evidence Company. to our community today. executing reporting performance, moderate and strengthening driving Have I build growing to disciplined for like XXXX prudently are operating the making franchise, a in interest in our would our as for day, Thank call maintaining value my model improving by forward excess deploying your substantial super pleased the to core performance joining plan we're and We future. see As us our market bank solid everyone. Banner on by and share, again that we're risk progress and with on to thank for solid performance on great sustainable you stated, core who our strategic colleagues results the a look

Operator

now is attending today's Thank conference for presentation. concluded. The you

disconnect. You may now

Banner (BANR) 24 Jan 192018 Q4 Earnings call transcript