BANR - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the Banner Corporation's Second Quarter 2021 Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mark Grescovich, President and CEO. Please go ahead.

Mark Grescovich

good and Riley you, morning everyone. Thank also quarter XXXX would like Corporation. to second the to you earnings welcome I call Banner for

As would Officer; on Conner, me Arnold, Harbor our Credit is statement. today Investor Rich read customary, Peter Relations. our of is Safe Rich Officer; the and our please Rice, Jill call Financial Head our you Chief Chief joining forward-looking

Rich Arnold

morning. Good Mark. Sure

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

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

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

Mark Grescovich

Thank you, Rich.

all four will all effects hope on we communities with are continue First our virus, Today families of variants, items we I cover its and you the you. to as COVID well your and its battle the primary and economy.

on high-level First, I will provide Banner's second performance. comments quarter you

our clients, shareholders. and our take support of team, including Banner stakeholders our our to actions Banner communities, continues to the Second, our all

quarter. It right performance current our economic thing for finally, right company portfolio. up provide shareholders these colleagues Conner report thing that Jill hard and all source and is continue is a X,XXX more our XXX that to are communities, to the our company, detail critically thanking we our team our exactly the through values, change events. as will do. lived commerce by Peter of years. of the times. important operating reliable my and summed status and pleased and Banner our our of loan comments I begin during And Third, consistent Banner living to Rice I provide difficult our will in communities to our colleagues, our core entire capital we doing on for assist am working our want to clients values. clients, for do extremely am has that continue cycles of very provide core all that to what I the are the on proud

overview to performance. Now, let of turn me second an quarter our

available to announced the of compared of $X.XX June per share Banner second Corporation the share per ended common for shareholders per for of net profit to common quarter reported As $X.XX for or XXXX. first net XXXX $X.XX a quarter diluted and share a quarter million of This XXXX. XXth, to $XX.X profit the shareholders

will instruments, $XX.X earnings earnings and impact expenses, losses production, acquisition were income pretax SBA for Paycheck and attention expenses, believe fee items earnings of more the of loan loan shortly. Banner. and banking financial revenue discuss the fair with changes your excluding compared gains quarter loans. This forgiveness of the with illustrating sale the coupled and the of million to impacted continued in for risk value merger COVID liquidity the strategy pre-provision maintain the moderate This rates, on to of securities, second core allowance quarter's good a recapture, for continued losses inflow low very were a by credit of mortgage Directing power and XX%. $XX.X and associated Protection in I is increase deferred the million to previous an of XXXX of of interest earnings in our Peter acceleration detail profile, quarter, these helpful measure,

new super community to XXXX, quarter, bank relationships. with coupled our performance, share To issued client again, tangible a performance client loans. pandemic deposits. $XXX.X a $XXX.X strategy, our loan banking to on net and X% growing common margin, repurchased client our XXX,XXX quarter, equity relationships, promoting revenue the quarter our core funding of per mix, increased XXXX new that deferred in earning resulted responsive advocacy and of model. XX% million growing we fees deposits, and compared represent by core fee is share reflects of compared operations this compared a for June equity mentioned continued dividend We expense organic to acceleration that benefited even position XXXX. common and from of and to larger ratio, core mortgage continued associated on million interest Further, with X.XX% a quarter PPP quarter with asset we the tangible of service XX% Reflective stock. revenue, core solid in challenges from our the good control, in quarter the the of Overall, loyalty through deposits a of Second increased of the in common to shareholders' good return this strong average per assets our a our shares increase generation of Once the core point, execution and adding $X.XX solid strong of second XXXX. total our previously first X% XX,

provide our and crisis, return significant Bank operational investment have emergency million provide local and our we clients. in assistance programs. for financial First payroll contributions made protection made available we Federal $X.X environment we Our has million footprint, States; United to working Also, XX,XXX basic for safe Broadway commitment and and our support minority-owned are the in depository regional to have for City billion a a needs nearly clients. workplace branches black-led our begun and an institution $X financial funds in totaling several the To to through provided Banner our businesses and flexible SBA the equity largest that footprint. important provided in policies this now approximately in support $X.X phasing Bank, fully support clients for nonprofits; employees

now turn portfolio. our discuss credit over portfolio her to loan loan on me trends quality and and the Jill Banner's in Let comments Jill? call to

Jill Rice

Mark, and everyone. morning, you, Thank good

As you continue in read of our press as work economic the we credit to impact Banner's release, have stable remained through the pandemic. metrics

the are to delinquent positive. as future loans group to currently to and business of business markets interruption, rating total relationships, across as While to of commercial fully acknowledge as $XXX,XXX the as am a of X.XX% the variant small the pace classified and other are represent The points a note classified to non-performing XX, potential of as due loans down our X.XX% June and represent loans Adversely of in as of business loans, we quarter nominal X.XX% of related more of owner assets last reflects has linked-quarter $XX.X XX, operations. basis $X.X continued million Non-performing quarter, XX, decrease comprised June loans improvement were in both to compared June Delta total our and X.XX% more well represent total had spread from down XX compared commercial to Assets in XX, XXXX. as XX and the XXXX. as upgrades for happy Similar of June risk real and from well have de-banking of reopened normalized of of prior adversely our I all assets million, loans for of the assets. quarter our and the the REO as and X.XX% of as Special in estate. X.XX% spread that the Banner's sentiment classified returned is investor relationships, upgrades, COVID-related borrowers success of quarter June

As March from XX, total X.XX% totaled of our million $XXX and XX, as XXXX. June X.XX% to of ACL June total XX, X.XX% loans compared of down or of reported of as loans, reserve

$X.X release finally million of June reserve as that we asset were losses were Loan of Excluding all coverage negligible provided combined continues reopen, for upon by loans rates of at $X.X and fully million loans businesses provide credit at $X XXX% and current held and in vaccination significant commitments. follows additional of and our sale and quarter to offset XXX% Paycheck our for for strong our as released reaching indicators nonperforming to recoveries. for X.XX% the $XXX,XXX Protection unfunded improvement quarter, commitments. an during of million $X.X quality, losses unfunded loan for the coverage for of reserve reserve loans. the ACL coverage Based XX the $X.X losses credit total continued delinquent prior fully of loans million of or markets and of This loans a economic million our

we pandemic were have consistent the to downgrading that I impacted and being early remains due As proactively methodology in reserve said our downturn. economic before the conservative. by credits Banner's reserve built

provisioning future risk be Our of economic in loan mix the and combination rate upon will and a growth, ratings indicators. changes portfolio the of current based

are pandemic-induced our for on market conditions impact that not we over well performance X.XX% appropriate current reserve and date While may loan as is is conditions, to monitoring remains of in portfolio's operating total and considered footprint, of strains reserve the the at our as strong. losses credit have loans cycle variant credit across light the recapture the the

loans are the down book, portfolio loan at X.X% Paycheck year-over-year. our Looking of loans Protection net

of as estate XX loan compared Banner the an for balances now that spite portfolio flat However, the real -- of $XXX I in are the year-end balances. continue XXXX X.X% loan in to annualized PPP am or that trend net reversed to declining June balances and residential growing of or is million X.X% report payoffs loan on Portfolio of pleased when X-quarter for basis. portfolios. investment within balances, This consumer investment the held portfolio quarter

X% our market be mortgage XX.X% to annualized of as and to specific year-over-year. In and will X.X% footprint. we are totals remains equity commercial continued XX% quarter at down home our loans, product utilization refinance and increase loan the utilization the line reduce market line XXXX. however XX.X% well, an for credit and down outstanding credit to the C&I up lines increased by saw quarter and to that when quarter-over-quarter the quarter refinance impacted PPP X.X% Residential loan the June down quarter or see closings I note did X.X% begin in on compared are X% also has across for year-over-year. excluding Looking up the loans basis. continued The

both serve. spread respectively balances and decline among multifamily construction construction totals X.X% the the of buckets. the and continues we Demand supply with ADC discussed construction to portfolios CRE multifamily reflect the to commercial are conversion continue loans down, and on permanent we market housing X.X% housing the all of as The This As estate to the almost outstrip construction completed show now completion residential homes real strong very the and continues in growth for affordable markets to homes quarter. is to the last of quarter commercial price the activity pools in points upon quarter-over-quarter available continues at robust undersupplied. strong Sales be remains of markets single-family serve. the

to pipelines of and exposure delayed build the construction commercial in build commercial and include residential make investments portfolio and real commercial up total is and that construction we year total and total to continue we the commercial borrowers exposure when the X.X% Our inventories. construction as of The still is capital half XX.X% multifamily of will land investments anticipate now estate begin second pick our loans.

within at-risk excess to borrowers borrowings. of have their However, Briefly X% health largest The of foodservice liquidity X%; XX% I closing recreation nearly the wrap the utilize or asset on touching believe of loans new an the retail on we for much balance quarter another continue by one in from stating located care-related and/or a are loans credit be reported hand XX% liquidity $XX.X classified XX%; that significant of sheet XX% assets and the total. located X.X% adversely before. balance adversely for on on of they from heard to segment business account with up many what total down for with recognize book. adversely of in quarter. X% continue of is and substandard which nor million any next lines associated the million The line. classified and amount that are restaurant hospitality you've rated declined accounts credits industry. Approximately leisure up in utilizing quality, and not before the located will will are $XX.X remaining of or we XX.X% at-risk concentrated our the they within segment within classified relationships credits substandard of are industries, linked the segment

reflective regulatory Our credit microphone significantly future. and in continue for moderate of for the continue to Peter? levels hand I be requirements. be the we to portfolio that, positioned our with credit robust strong, Banner's continues excess loan Peter well are his remain capital reserves for metrics profile over losses to and will comments. risk of And

Peter Conner

Thank you, Jill.

of announced in as quarter. and prior the value million to average diluted as the at a to a for per revenue the earning PPP loss and financial in of $XXX,XXX a result and reported net and losses excluding income in by expenses exclude an an net result core fair offset primarily $X.XX acceleration COVID-related costs, in quarter, million per compared previously per recapture expense which The income securities carried compensation services Core share discussed $X.X primarily diluted in increased loan $XX.X of instruments increase deposits. our fair in due loan in or M&A release, driven earnings of As $X.XX or increase provision. assets prior activity increase gains share interest and from PPP of partially was earnings forgiveness, of Core and expense. an by value loan $X.XX forgiveness quarter on the higher lower changes growth second professional million share $XX.X we decreased

decline loans balance held decline increase and the for of $XX end sheet. decreased loans by SBA investment Total million in PPP held partially an loans in a prior sale, $XXX to from the loans. offset a as for Turning result a $XXX quarter million in million

quarter growth ending combination in million new cost declined first $XXX average the at core of a end from rolling deposit grew prior the end quarter $XX to balances quarter an second the due of loans. sale and higher decreased loans quarter Excluding deposit loans occurred client for More average million at term of loan quarter. sales acquisition. and increased an significantly, deposit production, loans lower increase utilization increased to in Held prior mortgage of to over held-for-sale pace core deposits line residential $XXX portfolio end. from million sale PPP and and slower $XXX acceleration end carried fewer much higher rates. million, are the Time over by Ending due of portfolio the on loans levels for fixed CDs in $XXX retention balances client in loans multifamily the as growth at million bulk deposits due as loan prepayments

assets loan Turning to a loan statement. increased income yields acceleration XX as the in Net million to the to an loan points deposit growth. income forgiven due interest the unamortized PPP on increase by processing in $XXX quarter, to result fees of from prior Compared increased yields $X.X due activity and a higher SBA PPP a earning basis loan million loans. core of combination increase forgiveness average of

quarter. and Excluding prior the basis of X loan from prepayment coupon interest forgiveness recoveries penalties, the the impact loan declined average loan points accretion, acquired

interest of rate and along cost cash a in to declined X repricing by retail originated deposits net a over deposit modest higher-yielding and X% rates quarter and in continue of to X second slowed, to with The basis a are deposits yield at yielding as an points basis decline lower funds of result loan deceleration the of margin. deposit loan and margin combined rates interest-bearing floors total securities. at lower prior was on interest-bearing forgiveness, total in net due invested to deposit lower the average on loan excess invested in costs. loans driven pace a cost mortgage-backed anticipate in partially and core by points commensurate low of ratio from to X increase In from mix yield the The the in liquidity deposit XX Total PPP points the the mature. overnight rates securities. the average headwinds and due declined investment increase declines overnight borrowing basis quarter, larger points declined fixed on basis and $XXX of prepayments in balances by acceleration by quarter, interest points Total new a rate elevated cash as and the The equivalent funded we pace core the second X adjustable while quarter. increased loans loan the quarter prior the book. The growth payoffs, While coming PPP basis. in a ongoing was increase in balances basis investment PPP has the XX of to increased offset XX% X.XX% tax with forgiveness million decline CD funds deposits

noninterest shifts the laddering Core a and securities changes core anticipate effect $X.X the $XXX,XXX portfolio liquidity curve. volume million on market percentage at Total banking will outflows be service the yield mortgage of refinance due mortgage accounts. the quarter $X demand higher fair declined spreads continue residential -- income prior due quarter. with in while even second of at near-term, half securities the changes measured Total have yields, asset remaining down charges in on deposit card on to we total declined lower production into conditions. a the sales. on the In prior of primarily generated and a gains income we into pace, value sale prior of $X.X in due to income prior an in the deposit income the While expense Multifamily carried income quarter. declined mortgage quarter. from anticipate loan the XX% on XX% Total million from $XXX,XXX margin deposit noninterest loan flexible Within liquidity $X.X of sales the excess increased Deposit to in to declined on from branch fee million. income forward in closed Miscellaneous security remained in fees function the loan interchange greater and will second million increased securities and to earning quarter. sale production, growth gains guidance excluding increase gain declined on the locations. residential by loan positive and the noninterest

Excluding for in experienced Salary first the and came deferred we costs into declined $X.X branch by consolidations streamlining In the expense rising company function support core salary core the expense in declined normally $X of $XXX,XXX former loan matter. operating Banner with the by at and subsidiary and the loan by Bank on-balance and at low-cost to of reflecting offset administrative the taxes expenses quarter. were Bank the of loan of and significant reductions of to SBA Miscellaneous to recent prior and liquidity sheet due Bank renewed expense related were production increased a due first second in the benefit in in The increases Professional Merger expense litigation costs, due credit Islanders demand, base $XXX,XXX specific payroll to to a origination in well-positioned quarters. final loan a due processing result software program quarter. by merger while portfolio $XXX,XXX. $XXX,XXX capitalized ample a declines close is that Merit-related to and merger to pandemic primarily PPP legal declined loan data staff effective million with noninterest closing, severance compared reductions in Islanders end of compensation. in declined a a expense, loan SBA costs. the primarily prior phase declined expense costs increased deposit Information to due rates primarily as expense. the services as of operating second end decreased the production reduction million the quarter $XXX,XXX, PPP settlement for the core expenses support the granular prior increased costs to subsidiary completion quarter. quarter

quarter. remarks. as concludes during the noted, Mark? part As my prepared This ongoing repurchased shares XXXXXX capital Mark management company the of our

Mark Grescovich

open performance the call the Jill for we and remarks. and Peter, your color will you, prepared quarter. our Riley and the Thank your concludes now That company's welcome for questions. second And comments on

Operator

the session. begin with Piper question-and-answer Our first question today come will Andrew Instructions] We Liesch Sandler. [Operator will now from

Andrew Liesch

Hi, everyone. Good morning.

Mark Grescovich

Good morning Andrew.

Andrew Liesch

good be Just come guidance to specific the And make this on using? know one I are to this question your still be Is been quick growth, balances had accelerate quarter. your or things from growth you what point? a hearing that flat guidance to And year-end. will loan will through think Anything for continue other certainly I you guess that back from to encouraging clients?

Jill Rice

which what Good given being Yes, is everybody morning, started have the XXXX Jill. year, and balance have the believe balance for we we the Andrew, is XXXX quarter the growth reopened, a flat flat get uptick that us will the for of we're we holding line the still in we to guidance do the saw landing that although this PPP the for positive utilization for single-digit sentiment to business after will the low paydown. of year, this

terms In borrowers, our positive it's very reopened. our we hearing we're finally just what markets, in of because from

to be about us. So the things we are discussions seeing good about everyone's we and the the variant That of good are that as does now markets quarter, that. has a take where in terms feeling in inside ended little feeling and with we bit masking serve. But what countered up Delta really

Andrew Liesch

realized? the the will that's be be it. in with it's believe -- $XX.X into have on It then spill there remaining do of any million Page sense over is all going year, unamortized fees XXXX? the on going or presentation on this Got XX to done the any to you -- be on guys And the how I timing

Peter Conner

I is address can This that. Peter. Yes.

that million it's quarter. the we at really in function the of yes, -- on the of of forgiveness loan end the a balance pace portfolio existed the of the So $XXX remaining

did quarter forgave Given we what the in we million. second $XXX

XX% core soft $XXX QX, it tail landing remaining we this forgiveness. That based million to in balance going quarter their forgiven of And a slow in will a anticipate amount then will see gradual the bit will some that XX% out that of I maturity. and PPP decline anticipate down we'll third forgiveness quarter would and ultimately had the we into a year. big at that down gradual So early term what be seeing in as five-year the to have of on out quarter. some won't of rest forgiven of get of residual through that kind that this I won't And portfolio forgiven. amount there'll go quarter-to-quarter and But small get would the we're pace

Andrew Liesch

That's taking question. very for Okay. helpful. I’ll go back. the Thanks

Peter Conner

Andrew. you, Thank

Operator

with Our next Davidson. Jeff comes question from D.A. Rulis

Jeff Rulis

Thanks. Good morning.

Mark Grescovich

Good morning, Jeff.

Jeff Rulis

the Just checking you in kind on know consolidation that rate you've to takeouts I hold where cost back could we're the been or the expenses. in I past achieved? could don't at get you've And of detail you want -- to sit the of kind and think guess there if -- catalysts to provide just to it's terms kind And I've the what comp a growth? the had on given now kind administrative has those some expenses? had a that that that of of I of expense in of us of of checked hoping branch run looking it savings Thanks. some you excluding to don't it's are ahead you some adjustments, moderate

Peter Conner

Peter. it's Jeff, Yes,

what I'd downsizing. call recent of I due costs related severance quarter in line that my our we So some professional tail principally to prepared had of some restructuring emerged recent And noted we still some item settlement to yes, year. last elevation we and remarks, litigation this late had in as -- some some then services

at we've some year. expense that rate second consolidations rate. potentially of this million the this both the our to to the this half we out run into represent there's we we'll go effected, expenses core rest go have that number out in million to we million branch run look for $X we If of reduced benefits quarter, opportunities already some that costs As mine to would around as staff-related and our year, continue $XX.X somewhere were $X of but

costs kind how timing restructuring volatility of services laid it. I'd But get use that for the But I'd that then professional some on there's benchmark. a that characterize ongoing always and number. some of that's top of So costs as

what's are have still positive will So the expense. continue that effect in we're the the done. of for lot getting a a been pipeline of additional that this benefits There's on through the half reductions to second of core year operating some

Jeff Rulis

$XX as if I if mean, a of more million kind you as of right, you read core And Okay. -- kind ? can I sounds that approach of it

Peter Conner

fair. big program that's originations originations That's other piece the QX obviously that number. had a PPP That the effect – that's quarter just been big loan on function the here Yeah. I And again, Yeah. had think loan is And we cost. has a capitalized production. origination of And PPP ended. we because amount volatile a That's of quarter. effectively in of a very We in the in program. small this very of

forward from we'd the the should bigger to so pace of increase, see expense or it benefit expense origination costs loan going on production capitalized continue the element loan core number. The other that's And basis. our a

Jeff Rulis

talked California. obviously Northern But there as want buyback front Thanks. you've well of in an M&A to just Great. of capital – how appetite was there about on months as the front interest activity the M&A Thanks. for check the a on going on in the you appetite And Mark, think has I in update management well recent lot kind I that buyback as the continued. forward feel as just on now? about

Mark Grescovich

you Yeah. the Thank question, for Jeff.

consistent where the it's think been in probably has market, pullback of more I in than deployment changed. is the it with not anything view history. capital If recent our

this you if and/or of there. any kind continued repurchase repurchase as plenty of stock in dividend, franchise XXX,XXX capital investment itself, opportunities. tends authorization market, the we about of have M&A Obviously repurchased room well dividend Obviously, does favor core special the dividends. deployment special to as and we in include have think the So and the waterfall X.X million shares, we've of

front, has the conversations – We been don't do transactions. negotiated style On and M&A transactions. our look consistent continue. auction very we We do that

the that's is over XXXX, year partner as continue the the course of right half of the combination right second comes franchise years. into really be we Banner five and So to the to help who the into to to three going successful it what's enter and next down

do you So the well question when I as be as in conversation know happen. to those to as can and have timing those continues, but is opportunistic always

Jeff Rulis

you. Thank Great.

Mark Grescovich

Jeff. you, Thank

Operator

Our next with KBW. from Bohlen comes question Jackie

Jackie Bohlen

Good morning. Hi.

Mark Grescovich

morning, Good Jackie.

Jackie Bohlen

hospitality forward. on wanted this roughly off this start relates just anecdotally, assets of to sounds good is it quarter to with dependent look a understood XX% the loans. I that realize really the vacation Mark. to hospitality. I kind criticized it like like I somewhat correctly, off the in improvement Hi, summer. we're of geography of And that, this But sounds season If

if wondering, grades? might trends forward from And of would reserve that kind expect fact in migration impact I'm so that the how you risk necessity? is case, And what those

Jill Rice

Good quarter, we vacation our to I hospitality And morning, I indicated season. and great with and a last run are see think we up expecting starting numbers break as forward Jackie. have. pick off Certainly, were spring to we

we've of it at is And the terms started and because some portfolio classified, where repayment of really function of of source. portfolio in running the and located low May are for numbers, on end as from of this and the you'd down XX%, occupied. we – we So – that primary the increase. still think be they a have running fully XX% a people the impact now where And in is occupancy I rate they're the kept whole adversely at approximately, would on with

So do but not how the improve? see see where guide quickly to portfolio Can prepared we're we go? to I'm continuing you think I to going in that's tell roll off, to those will to are quarter-over-quarter. I it Yes. improvement going

guidance we metrics – reserve, economic where But with total will don't be. give as expect trend loans about loan one improvement, to a solid could downward as that over the growth, you'd you level that as our continued the reserve to expect time. As – of and to percentage think look you and credit reserve

Jackie Bohlen

And or that that has performance indicate uptick been are you Okay. anything That's you're an you still good in just throughout seeing tremendous mean – color. I watching charge-offs? indicate would the entire would anything closely are pandemic. just

Jill Rice

No.

were conserved we charge-off, we on problems. my towards this It's would identify quarter, it, quickly in because you to anything given our had it. clean me I if we act have think quiver seen take just when methodology how those it take I

Jackie Bohlen

a Okay. this you. heard closed it quantified. a sounds of bit question. in was there a was I a I a could just if bit that – like from And gain location of get then correctly, wondering, branch non-interest little I income a If Thank technical quarter.

Mark Grescovich

settle it was a They give that that was several It Jackie, were sell and or of group. bit year. time gain. Yes, There of take. were closed part take $X around or last roughly to million

Jackie Bohlen

I excess then it And quarter? these much that litigation offset pretty realize unrelated the but like expense Okay. sounds are the in

Mark Grescovich

Yes, less that's But a say. little yes, true. I would

Jackie Bohlen

thank everyone. Okay. Thanks, Peter and you,

Peter Conner

Thank Jackie. you,

Operator

from next question Our comes Terrell Stephens. Andrew with Instructions] [Operator

Andrew Terrell

thanks, Hey, good morning.

Mark Grescovich

Good morning, Andrew.

Andrew Terrell

steps XX% up for next different $XXX organic imply about the of of just that sound two guidance you? PPP of right growth to of Does maybe on the from low $XXX remaining so balances assume quarters perspective. kind to into the Jill kind to guess a million I perspective of to kind a forgiveness or drill XX% that organic an the XX% annualized. million number If kind growth I or would

Jill Rice

that You rate? say mean can – the you again annualized growth

Andrew Terrell

would this a rate. I'm just be type it low correctly. I'm about trying growth teens make kind thinking Yes, to sure annualized of

Jill Rice

the about in growth have I'm this I'd and just to what Yes, you the But was quarter, XX%. we even did back if think the rate double check annualized – last C&I math. go

utilization to XX%. room to was rate June of XX%, utilization it up some about That So as people compared utilization average XXXX, a average we The are X%, in uptick has of these we segments, decent line was grow. rate when think as seeing – historically.

being to construction I residential to net actually will as commercial don't start your those question. it see year. and answered well, again out come back the drawn, we single-digit the that up rest when if of But low know So to for

Andrew Terrell

you I I Yes. might it. No appreciate branch attrition we that from seen Mark late was curious, I that to And update the then an kind was closures of have saw year. on helpful. last wanted just any get

less months? have in seen notable the past quarter. last But three I than customer kind we spoke you of attrition was think X% when it any last over change

Mark Grescovich

that. I'll Peter let on comment

in on be happen continue the Obviously, caution Jill's Let everything the projected and on to terms growth. to comments loan and add me whatever its we new just impact may reopened portfolio the strong. variants economy with ability the and to of on

make Peter So front. comment on that to I sure on attrition we just want the want to cautionary you stay do rates?

Peter Conner

Yes. Yes.

So, we continue yes, and what happen locations see of think balances. will as and do deposit closely and we've low of and attrition closed commented past, we expectation that pretty and have monitor to in we very the the measure attrition an account rates track in

clients, do locations. running a those some about stick the we clients tend business what running clients to lot remaining the So smaller And of the again, larger closed trip, larger is, of -- balance balances branch. X% find especially with the with about it's still of a but

we don't this tailed so, the expect there. closed through attrition and point. more much material of It's we what really year any were pretty at experience And off we attrition last

Andrew Terrell

one last Understood. Thank one. Peter, you. And then,

the quarter? kind have recognized the what through And was? Just, average loans do NI balance net this that then, you revenue of of was PPP PPP

Peter Conner

got the second just I've the terms quarter the so the the for coupon it quarter. in deferred was and million interest $XX PPP second Yes, $XX.X of -- from accelerated of portfolio, forgiveness income It was the million. -- -- just including under the was impact the

portfolio effective average on the So the the portfolio, yield PPP was X.XX%.

quarter the just, bit this reference, PPP we from program And for first forgiveness the million. way was acceleration So of quite benefit did a by the $X quarter. number

from more QX income QX. we to impact the than So doubled interest to

Andrew Terrell

Perfect. Thank taking Okay. for my you questions.

Peter Conner

Thank you, Andrew.

Operator

to Mark for the Grescovich concludes session. over call like closing any back to remarks. This our turn I'd question-and-answer

Mark Grescovich

Eillie. you, Thank

and a one another. our for future. results Thank look the in to everyone. day forward reporting again in as the proud COVID you to stated, thing call today. and economy to the its we're impacts our right its communities we you our your battle of As great the and we team, very I've We as and Have variants on Banner all for virus interest Banner do joining the and continue

Operator

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

You may now disconnect.

Banner (BANR) 22 Jul 212021 Q2 Earnings call transcript