BANR - Earnings call transcript Q3 2024

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Operator

Good morning or good afternoon. Welcome to the Banner Corporation Third Quarter 2024 Conference Call and Webcast. My name is Adam, and I'll be your operator for today. [Operator Instructions] I will now hand the floor to Mark Grescovich to begin.

So Mark, please go ahead when you are ready.

Mark J. Grescovich

good and Adam, you, morning, everyone. Thank also Quarter XXXX would like Corporation. to Third the to you Earnings welcome I Call Banner for

Joining Rice, today Chief call Head of and me Butterfield, our on Corporation's Relations. Banner Rich is Arnold, Financial Chief our Rob Jill Investor Credit Officer; Officer; the

read forward-looking harbor statement? would Rich, our you please safe

Rich Arnold

Sure, morning. Mark. Good

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

We also question-and-answer the in other may forward-looking statements discussion. period following management's make

differ risk a are XX, Information statements recently subject to release filed Form materially of factors forward-looking ended and those may are for released number on quarter the most cause from discussed that differ that today. June to and was actual XXXX. results yesterday the uncertainties, could the risks press These earnings from available and results XX-Q actual the

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

Mark?

Mark J. Grescovich

Rich. you, Thank

items As will is we X you. cover customary, primary today, with

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

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

our more as on the balance our well portfolio. loan our detail Rob performance quarter on will of provide status sheet. Jill comments provide will on Third, Rice And finally, for comments Butterfield as operating the

colleagues doing thing in values, lived working communities. who want summed to our Banner core again has Before for XXX all extremely up clients I my assist are thank I company years. past right as get X,XXX and of the the our our hard to started,

our to very all commerce economic that capital you and be provide am of the through source I'm do. do the is of I report shareholders and cycles communities, clients, our our core to living thing are we and our entire reliable goal team to exactly a values. again overarching pleased right and to proud change consistent events. for company to continue continues our colleagues, that what Banner our Our to and

let turn an our Now of overview to me performance.

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

have make to these in moderate that strategy items his well results. we to Our continue and and headwinds, and performance in Rob will with positioned quarter's have this investments a recent improve to maintain our remarks. to saw the made operating detail we company risk profile market more weather discuss the

pretax would Banner, of financial changes securities earnings of and earnings, illustrate power excluding core I of To your the and instruments. on in value losses gains preprovision attention to direct the sale fair

of increase XXXX. third from an Banner's quarter compared million for was $XX XXXX second earnings revenue to quarter. to million XXXX quarter prior the compared the operations $XXX $X approximately million $XX third of core Our were core quarter million,

average resulted and continue core a strong XXXX. third for assets be to good the a in banner this the quarter has highly We to a X.XX% and loyal interest in resilient return wake have deposit of of net base competitive a that Overall, margin. to proven of environment very on

and all point, our XX% our safety strategy, deposits service super events. responsive soundness operating and community total our loyalty for bank execution and very cycles deposits. economic represent we are that on our performance new banks, Although core funding in client relationships, reflects position our growing core is: of client a continued model maintaining that promoting our change demonstrating environment through advocacy To through and core difficult commercial

we the we over of fact with X% XX% same year. year, performance, the Further, generation tangible share $X.XX common period our Reflective coupled same our dividend increased relationships, per organic the common our per last increased of the ratios new a solid that and loans by equity we of our period strong from and core continue last regulatory share. capital announced

clients, and Earlier reflect the of this commitment has communities our that all to the our which change report, communities in right environmental, year, meant our ESG. The maturation report to the colleagues. committed to thing released the social accomplishments Banner are we we and creating highlighted positive serve. our in stakeholders we and of deep doing our been of to with support continued in always serve reflects the have governance this our connection many approach we

am one in to value Forbes. the say receive by I that Finally, our banks world we Best the marketplace Banner our America's again recognition named of to validation of and was of business Banks and and pleased one best continue proposition. model XXX

Banks the best, Top more than Intelligence country. billion the recently of ranked for Public assets. the Banner's Banks financial $XX in America Market with Excellence. Banner banking the digital again Newsweek Global performance just the their Bank XX QX among Banner Banner And world awarded Year and the Best Trustworthy one S&P Holdings, of of year, provider, one the Regional in Most this in named and Companies named

ratings, examination. affirmed Agency deposit received recent Bond CRA and Banner's Kroll CRA noted Bank our most the outstanding in all debt rating Rating as we've and Banner of an investment-grade Additionally, previously,

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

Jill Rice

good and morning, Thank you, Mark, everyone.

XX, X.XX% ended represents of consist the at $X.X loans linked remained million million from strong X.XX%, in of Delinquent REO. September nonperforming now from X metrics classified the as by Adversely and slight of when by $XX $XX million driven Our represent X.XX% quarter in as XXXX. X.XX% quarter, loans XX. and overall increased assets quarter, increased of up up loans, basis and the points quarter June and in part compared total X.XX% in in of assets XX the relationships, deterioration reported. isolated large the total to Nonperforming million spite loans in credit $XX of

net losses collateral-dependent After the $XXX,XXX totaling loans. $XXX.X X.XX% our for Loan provision modest was loans. a the totals $X for portfolio commitments. quarter the and quarter The and includes million this primarily by coverage evaluated release provides million by losses offset unfunded loans an individually $X.X reserve credit The provision losses provision losses a driven the coverage were nonperforming related and in loan reserve was of a were recoveries for in quarter of and credit XXX% $XXX,XXX for to $XXX,XXX. million the loan the and increase for partially provision,

of for comparison, loan of XXXX. was X.XX% portfolio the way of coverage loan family by our quarter to total, the X.XX% quarter losses of for the modest with year-over-year X%. decision held increased million By provided sale. to quarter In this muted X% loan coverage portfolio X-to-X and portfolio growth $XX reserve further linked growth as from a of million and or as was balances impacted move Loan $XX September the linked from the

year-over-year their CRE reflects real in in loan permanent The several multifamily to growth, the growth large reported my quarter, a was real solid up increase across the new the the X% Given estate of into growth well again growth will transitioned be the investor shift from permanent this as we as mini-firm as from movement in construction into and portfolio projects X% with construction footprint. comments estate originations and owner-occupied brief. The combination status. limited spread the portfolio,

loans. with and mix a XX% approximately multifamily construction Residential the and of slight to Similar housing when shift construction commercial in family residential is portfolio the quarters, exposure total exposure mortgage remains we reflects and moderate XX% land, previous X-to-X at construction construction X% for-sale XX%. include custom

that resale Conversely, environment, speculative to housing builders slowly inventory inventories, the limited by across be the given to have market interest the continue starts markets our the past construction absorption remains quarters. higher driven slowed rebuild continuing levels. timely the Given custom originations dynamics our rate few over with of

C&I growth balances And was, last largely X% in agricultural line business as by again reduced quarter-over-quarter. the by utilization, is small portfolio. compared down reflected utilization, due driven increased to quarter X% to decline additional expected, in up line This this however, offset quarter. The

that the remained classified in of as commercial any real in risk total spike estate and and repricing reserved we remains well, increasing nonaccrual multifamily specific exposure. overall assets modest concentration no agricultural The Northern believe continue metrics or industry California segments to stated book a with manageable. the be relationship, of perform earlier, of adequately loans for potential while loss are I our adversely we continues and The As credit percentage is office a strong, tree level market. nut loans any to

properly vast The not has the solid quarter, guarantees book last sponsorship, credit collateral over last decade. loan majority the our criteria stated course support. I margined of As personal and changed has of materially our underwriting

losses Our have reserve our balance for robust capital the for well sheet. future. remained positioned remain loan which a to and continue strong, base, further we We solidifies

the With that, over Rob to hand his will I for Rob? comments. call

Robert Butterfield

million was million. of $X.XX to was loans compared Thank increase held-for-sale increasing per share for quarter quarter to The primarily during reported held-for-sale to second per to $XXX lower increase $XX million expenses portfolio $XX $X.XX held or the the primarily earnings $X.XX income prior increased from loans to in Great. in and an $X.XX quarter. the held increasing due transferring -- investment for for and per net loans diluted due We Jill. share with quarter. share loans you, compared the diluted $XX sale. Total prior in million loans for interest The increase

ended partially to interest the during ratio due the flows. increases million, decreases loan-to-deposit by portfolio normal offset increased result Total XX%. $XX a The quarter quarter, fair the cash rate at securities value primarily of as

to during the due deposits time core increase of increasing an deposits. partially time deposits Core million. quarter offset increasing million quarter $XXX noninterest-bearing by deposits. to partially $XXX million, the million decreasing $X decreasing by total deposits offset ended included million, XX% in million retail increased $XX deposits $XX increase in core of by which deposits due was The $XXX Deposits deposits at brokered

growth borrowings remain borrowings funding continue reduce deposits wholesale quarter advances. on a a FHLB growth was low Banner's base, Total and decreased loan robust and core to as capital used significant million the to capacity. sheet $XX with profile the liquidity reliance core borrowing off-balance during fund and in strong

well-capitalized $XXX basis million tax in levels. of and X.XX%. margin are all primarily increased earning equivalent assets interest the increasing In ratios regulatory of $X.X X addition, from net capital Net average to due excess interest to prior points income million quarter, our increasing

yield well the quarter. Compared points, yields as offset increase $XX to to new increased million. assets average by investment increasing decreasing to total come higher prior The in loan balances loan balances basis $XXX rate quarter earning was production overall loan rates cash partially The in yield. and driven was for by amount. average yields in as portfolio of million. increased the This increase on quarter, the loan was repricing average production interest-bearing X.XX% X interest new the compared on prior X.XX% result adjustable loans above on at continue the The rate equal

basis XXX to XXX deposit of cost due XXX the primarily quarter to September X products. much basis growth the cost deposits, were points increase Total month higher of of The to partially cost basis of points core the increased basis an offset of cost during occurring balances. in in deposits lower cost funds in points Total of for deposits basis of borrowing increased points, to due points. the deposits XX by

the XX% at basis our variable The of ended are funds to limited reduction. amount loans The that the on middle the XX of days of margin prior in equal portfolio Noninterest-bearing loan of the rate XX% net rate in in September reduction total fed point impact quarter. current will deposits, identical quarter. down our in within reprice had deposits XX interest

moderate interest deposit to net lag portfolio in quarter. fourth margin some the resulting expect the We in reductions repricing, cost in compression

income from fair also loss write-downs lower instruments prior quarter, value value. carried a increased to including The noninterest quarter having fair value prior Total benefited primarily on early. fair at on the $XXX,XXX from $XXX,XXX current the a quarter due called bond

lower decrease from of refund and tax million and expense by $X.X by expense a million. decreases service $XXX,XXX prior benefited finalizing partially from of were the reflected payroll quarter. decreased current quarter the expense due legal quarter to an The X as expense offset reversal $X prior noninterest expense expense processing card and medical Total These lower related to had payment matters. The expense. REO benefit also legal decreasing higher self-insured $XXX,XXX lower

position Our and us capital to our continue bank business liquidity super well execute to positions model. community on

This concludes my prepared comments.

turn it Mark? I'll over Now back Mark. to

Mark J. Grescovich

open the prepared our for Adam, That will we concludes Thank welcome and you, your call Jill detailed and remarks. comments. Rob, now And questions.

Operator

from [Operator our first Terrell Stephens. And Andrew question Instructions] comes from

Andrew Terrell

expense just the could side. I If on start

in kind million of $X a quarter. drop saw we compensation this So

medical called and think compensation. I was premiums out, it

this dropped help run rate comp, understand you than that of was into then from Can the in of XQ? here? Should you just fluctuation -- expense normalize Just outlook might've lower overall quarter expected? the kind expense better and higher kind us the

Robert Butterfield

Yes. Thanks, Andrew. This is Rob.

don't quarter-to-quarter. benefited couple So a to we were Clearly, I yes, of mean dollars bounce expenses think for that it's a I around expected. million from not couple of of quarter, kind items this unusual

the So a this lower was run quarter. that expect normalize. would bit rate I to

mean, normalize carry tax item. not trend QX. over there. into to back We medical payroll going the the eventually, we of ongoing Certainly refund could that's expected normal an received, expense I that it's levels to But self-insured see

item. long-term a So I think don't that's

our normalization we'll I'm see expenses. in So that forward as we move expecting some

Andrew Terrell

seen quite kind absent inflation XXXX? single at if think at of range. growing expenses it generally the low past any operating low Is in, come it, of digits fair bit. Okay. down call I back guess to of a kind we've growth few years, continue single could digits into that A that, look you overall you've the then expense And M&, just been I kind

Robert Butterfield

to Yes. we to a there's for the you it. is on way our of In about about period. that is so going increases that particular think just would I in X/X if expenses, think some pressures whatever obviously inflationary increases, year, expect inflationary next normal general, it be expenses, compensation inflation normal due would

say would make organization. to investments continue I Beyond strategic we the that in that,

those we little bit so continue if there to could related investments, of were And make going be to to a expense additional that.

Andrew Terrell

moving cuts broadly, as your we've talk deposits just future what as to either kind spot repricing deposit then lower to were Can XX or approach of basis And of at the total, just of then where already And more about end costs, seen you period? in over the expected Okay. the margin the for kind quickly. is interest-bearing points cuts? well

Rich Arnold

Sure.

fed basis of Just, for rate basis to related to reduction. think September, XXX points, did the the so of make in deposits about approach how first, costs some reductions reduction the on we the cost was middle deposit number. it in reduction If we that X higher than we September, of quarter the in funds point subsequent kind

CD advertised initially. If XX went you look those points down our by at specials, basis

price also we And high-yield in reductions savings some did also our the in doing of take think a the those was I would additional deposits and that what so. And CD point, on we'll this that basis tiers then or We say, we're just able points book. repricing monitoring we portion what to in of probably at exception some account. and to the in our environment, competitors be overall, the did did that similar we month are XX

Operator

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

Jeff Rulis

just follow maybe Rob, margin. to the on

of XX% bit we like the little a or do 'XX sheet's So into positioned, either think on If specific A competition. margin, wait and got little that the big the balance think you've sounds into further a quarter, the how where loans into cuts, to see you mentioned and out could kind bit further a your comments you balance I of expectations picture, variable. how margin fourth reacts it about 'XX? -- see and

Robert Butterfield

Yes, sure.

the it see our that And scenarios right kind point negative comes we funds rate be to fed investor a ramp a their that's where over Moody's basis and provided you So play, our presentation. X% the the now ramp-down in XX the I interest gradual the We if scenario, used asset in next income XXX to we're net seems would forecast decline interest for would rate. of to down in sensitive suggests that months. that point we reduction slightly if at the scenario look forecast,

deposit it XX%. downside assumes of deposit that the also the is XX%. flat experienced situation. beta The is isn't reality that's upside course, the on that which we've has then Of that sheet, a a balance on the assuming And what of beta

want I that. kind I is what read get competitor behavior chance So see rates outperform is on better what start a as to to to behavior deposits we think of have think decline, to But that. we or a

Jeff Rulis

Jill, mentioned you Northern The to in outline million hopping the additions nonaccruals, think credit. California just over credit. just sounds isolated I increase you $XX few ag quarter? It was Could the it this into a like credits.

Jill Rice

Yes.

it the the relationship nonperforming, in tree related. was that, The So $XXX,XXX. the space in of that ag outside But home rest consumer then larger the of roughly loan primarily that in nonperforming business X-to-X of was equity and driver size family average one small nuts. were primary

Jeff Rulis

Got it, climate sort it ag -- been on credit, pricing? sort commodity the to or get the the of more operator industry. the challenged a industry? Is is that's not more of mean, And issues? is this pressures okay. that I Or operator

Jill Rice

is would I it a just walnut large not almonds. This issues. ag the both yes, operation, suggest is and commodities involves of one, And mix This those processing a of pricing.

Jeff Rulis

your guess, yes, little -- in have then the guess conversations for And to credit in the Northwest Okay. But I just lastly, impacts that I Mark. I on no -- you pretty activity? as been aggressive. thoughts or on You've in Any expectations a thoughts terms how impact. interested unions of Mark question M&A

see Just any if you on that thought I'd bounce and it off have activity. thoughts

Mark J. Grescovich

these of banks. is you on you of of anticipate, you Coast, absorb want I of an afford specifically number limited the are might how as models. terms relates probably would Banner, I that advantage the question. is it for those. Well, in and buyers -- Jeff, unions Probably there's that what the some published one there suggest business as West to their thank nothing to credit to unfair But can fortunately,

that are the Banner, at looked market unions have that credit the our of these is but not them are suspect other institutions just buyers some can be acquired, purchasing you if I well. think the market to what So buyers, in in the as

criticize not I'm business to So decisions. their here

However, want dynamic some to take terms And that they do extent cash, creates in unfair to well. warrant of a pricing. institutions the an of as these different that advantage whole

So credit buyers that looked fair West assess have in that it's say the -- institutions to purchasing. the the I fair at to unions are the Coast think

Operator

comes Feaster next question Raymond David from James. The from

David Feaster

deposit wanted to I on landscape. the touch

core you deposits great deposits. Where to I'm are you see of curious and kind You drive growing ability in expect to about your loan think do there? guys have how continue to good you to success that? done a continue outpacing having broadly, especially and the just maybe deposit NIB. job able would to deposits increase brokered And core to reduce growth growth be core continuing borrowings

Robert Butterfield

it's David, Yes. Mark additional comments. if I'll could any or Rob, -- Jill has see and

outpace But that loan maybe last our think, growth if deposit probably expect on going We point we're growth deposits we first. deposit growth. outpace we would loan growth. the would term, have core to will our would grow don't long But to I long grow that book. expect loan term,

some think I Better describe to historical a QX in third quarter the Historically, is saw we about good is be for way I'd talked that the best I that our went mean, we quarter. seasonality into mean, QX. it we I expected QX us. we before quarter. than

and in didn't see I as we we through really see the think in we the June, some is second Normally, build what quarter. from we where move deposits the that quarter especially, we -- quarter. into second carryover some second saw saw

like the and think payment that. just there after back carryover build I quarter, some from normal the stuff of So taxes was second

to that stuff. some of also we deposits the had that, in some brokerage had accounts, core some back bank, of success that deposits type quarter this kind to Beyond left some bringing core

to we organization. those success back some had the so bringing And core in of some deposits

comes think growth That's percentage the long historically. think if the really it, us about I where good balances. been for from really small term, is loan you the a core area as very deposit business of

standpoint. the really And have a lending. are pretty typically business loan-to-deposit small on and us from business deposits focused that lending, of ratio with as We part it rich come small

to there. don't Mark add pause I there. guys Jill, know, if or want anything I'll you

Mark J. Grescovich

well. No, it I think covered you

David Feaster

Okay. just payoffs book, on growth -- of side, CRE how I'm of drivers What to on the We've growth? to is pricing that kind curious, and mid-single-digit refi could you X do low early are in within then or year how weigh think for great. potential you forward, expect maybe And about growth. That's activity -- be other growth? given kind the as on loan maybe key trending? talked pace. is we seeing touching touching loan look you where do And which demand of you is, where are CRE any about

Jill Rice

question, the any yet. with as would last Yes. refinance, I well that to way want we market do to can started they see to looking part I to if rate. be CRE of Thanks, come that really your that David. is we haven't payoffs accelerated address if we Starting that as see guess looking of should hold a we to that at it And

year. They're continued newer relationship commercial The pipelines our throughout rebuild the bolstered to managers. by success the of being have

So good feel that. about I

We're would projecting refinance. to where low mid-single looking out And estate into would real I probably further for was barring digit that I anticipate massive -- XXXX, is think mid-single a if we digit XXXX. still that I

David Feaster

Okay.

the a static about of kind XXXX? you margin as of how how like of moving side. the kind fruition, forward. mean, margin. a helpful. horse to you do the trajectory? look that's back timing repricing just don't of here, rate trough lot think I'm assumptions just other that, I'm but just And kind I comes in you forward a obviously. mean, a sheet. trajectory you potential Okay, lag curve how dead about of balance Or going because the There's of kind we I do assuming impact I to to about then on said, talk other the the beat want the there's about in thinking, parts curious, -- you think did the curious because assume -- think just

Robert Butterfield

have mean, there is about scenarios I'd I way the David, out as the stuff. The ramp Yes. it, some about I far talked and we scenarios as -- of think

certainly if And which it interest just those think to margin to standpoint, current did see we as was about picture I back so point increase cut. a in from big during I started mean, before the the I'd an well. But quarter, net fed

up the cycle, long guess, So higher I kind or longer during -- for there. of we the troughed cycle,

in And I a something think there, what's certainly there, just that, things we see there. fed's quarter, we basis and up I scenario. as as aggressive going some margin overall, the higher approach, the lag compression happen more could could the points decline that, to funding takes that a approach of to where takes balanced more the overcome a deposit in see flat that XX basis and fed kind or it's as If moderate balanced long cost to points can or we initial like XX a think quarter

curve. back whole to, longer think to a is I we the really industry shape But back get yield term, want wants to I get what and to, normal think

think And so back to start think normal if to longer, I I really shape get curve. really we we margin is expand yield that can out once again that's where

David Feaster

Has bit help margin, that and just maybe there the repositioning accelerate math for rates been in to a painful? anything less decline change appetite some maybe little or of securities is given in the any your

Robert Butterfield

sure. Yes,

stay an have to there's opportunities us of limited where kind that if earn-back period time. for a within to out there Currently, barometer we that were within probably X-year that we make going we've of willing to security So X-year earn-back. had are repositioning

to expand So that earn-back do we that. order would in to have

to the also and at this continuing Certainly, we in there as environment planned that do time, can't to sense rate change, say point have we flexible that we're evaluate whether or to but continue continues evaluations. not. makes remaining anything I

I will currently never say it we happen or have it So planned. happen, anything can't but won't don't

Operator

next Sandler. comes question Piper Andrew from Liesch from The

Andrew Liesch

can guys Just and the mean, over I market? you on the the is you How of guess West your the how a up me environment. M&A out? few the the have in inbound chatter -- going Mark, because you is you Coast M&A down been? lot better got Are you question last pace different acquire in for Are the What's regions. interest? how currency one getting here reaching chatter? months. the chatter are I much M&A

Mark J. Grescovich

for has Andrew, the philosophy never you, our Look, changed. Thank Great. question.

you're So probably story, a and dialogue we is on West with all recognize those our of organization, there fit partners have be we same would for which continue tired great the Coast some parties. hearing to my of are that

I think we have a great reputation.

very integration We have a strong team.

-- right, And of timing is conversations the is the so timing when those continues. the that right, if

again, focused itself, that extent a there's is growth that. on position the organic take And of strategy. business to But will very to are opportunistic we're we our in presents something the we -- good news advantage

Andrew Liesch

or a range you is too Got certain targeting it. size big size perspective, to there that a From too you're that would like do small? something or

Mark J. Grescovich

think don't so. I No,

time. itself, lot less than an don't you position of What want out yourself for make just sense lock on because that a is period regulatory end, do $X certainly billion think the a right? you where something find of doesn't current with the regulators I environment, presents the in a smaller to opportunity

as think be to sense. my what parties, rule to a are in thoughtful But in lot colleagues just deals is $XXX million it doesn't out of any small M&A. all going but very of being approach We've all I million asset $XXX me, size small I make as So size. wouldn't or done variable not that the

Operator

And [Operator KBW. Motta question Kelly next comes Instructions] from from the

Kelly Motta

gotten you funding kind of the years here. a called some of couple buried some out the I growth, deposit had guess where in seasonality. trends side, think just and back the trends of I deposit release to incredible It's have been overall circling normal seasonal

color of thinking normal about normalized better see a a get the something now. if that to you more now go-forward if hoping prominently to on that's liquidity just I'm how So we be a sense is more should seasonality basis. And and levels, returning better

Robert Butterfield

Kelly, Rob. it's Yes,

come would because in, yes, their tax deposit -- ag QX, saw lines. and to on would payments using even say So a operations down tax much saw to of this there year, normally to related to I from I refunds standpoint. than their seasonality seasonality draw seasonality. seen in think that fund side normal for and we so have a of of mean, here deposits we of stronger to starting more overall, some outflow their core obviously they -- return started before increase We deposits initial QX QX. clients we the see and very strong I us, was

or And returning normal feel does plus those we're like of so kind flows, minus it really seasonal what to would expect. we

about we could a, QX that what to forward, of their as lines flat could the quarter. that clients there come quarter typical. occur them in think a I'd that payments operate as cash their in start some our the it, And October. fourth certainly property are see we see from is is then tax That's we us. see, more deposit Initially, if course, also for pay that down into call balances. states in we many look of crops characterized ag of more could had went too, in in We you QX, Of more of

some seasonal that. for outflow there's So

cause this was that always returned absent think So -- kind out feels somewhat to we we it and like at but overall, are one-off it of seasonality normal seasonality it but [indiscernible] that -- -- events think move balances I point. I a -- that feels there have there's expected, mean, I like to wasn't deposits

Kelly Motta

of last helpful, and one my have questions this That was for point. been Most it. Got answered me. Rob. asked at Maybe

quarters think, You that sub I a in potentially. $XXX debt redeemable is million about of couple of have,

how just around Just your look you potentially table your buyback have -- as we I that wondering, at M&A, know already but and the that be thoughts capital broadly, the that. capital looking also discussed on -- would stack, you you're more authorization, at

Robert Butterfield

Sure.

some of the mean, to debt the that rate is up point, It's determine pull So sub effective very rate, July about now, as capital to think to our or to if right treatment, start it a that and right we to sub that sub want And we're also would the at we debt and that strong, debt X, whether advantageous is well. because call we to evaluating which capital then lose of just variable I and goes position less we replace to specifically, now which obviously, going want back. if XXXX. us, move call really

debt point it I replace to this monitor the time. that, sense what and it call sub makes at market think like at whether So in to or just to that we're for point looks continuing that

core If have level of we share just course, is payout continued which stack place key a now, Board continues back reasonable in be We capital there, do into about dividend at dividend, core the think that year. our the put this to to our long-term July a repurchase overall our last very have there. is authorization priority, right -- late

in restart evaluate makes time, at And so we're it some continuing share to point sense to whether those repurchases.

would we in done special a we that, there's -- haven't done that dividends vehicle less, the those have we've the think say Beyond past. past. I are in I those but used

right So that's about of kind how thinking we're now. capital

Operator

Janney. Coffey at Tim The comes next question from

Timothy Coffey

about sense ask originations. is demand your of there loan -- coming that pent-up it for If Clearly, million talk Is down. and rates I up loan base? growth credit were customer about from the could year-over-year, are originations from $XXX your angle

Jill Rice

demand. in think think economy as administration to The do believe Yes. rates And demand. way loose. start is see some to of understanding answer there Tim. look Certainly, the is there I yes, that is, that get I that is whatever is, well, under we'll break as the for election and past and of some that what Thanks, waiting was we maybe I get but there like I would going the playing

Timothy Coffey

right. on new the All Great. question a was of Banking Officer And X-part role, my Okay. Chief kind question. second then

on the two, in insights greater And a reflect does position. refilling Sacramento loans of seat to putting California? on kind that that some emphasis strategy provide originating First, in

Robert Butterfield

Tim, a Thanks, years Yes. sure Look, part deal big And very we succession in Banner I commercial of for the succession and that making a question. you is over many finding planning leadership. is great recruiting has very significant the our having been as banking focused operation. talent, know, in talent -- space, on think

to for commercial He's Mark got has and fortunate in California have very, were CEO. to retail West our banking banking. Coast we the the and depth market, in So join depth very opportunity the He organization. as

scenario an the add to you for talent it's time great any to company. have organization, a I So the think opportunity

about, really efficiency. focused, At us the same think talk and we that heard time, you've I it's operating important have improving say to

And Operating how So or and great organization to going from XX now an combinations operations a opportunity lines Chief some Officer efficiency we've revenue She background add really standpoint Officer, the standpoint; Jim experience to isolated improve Banking operations operations in the Chief the integration. were all under this we and with strategy the can a Costa, from acquisitions. a we Cindy forward. -- has do streamlines years the integration, Purcell and if great the of with

on I focused a company. So of approach the think very behalf it's

Timothy Coffey

having does greater imply originating in And California? putting Sacramento, -- loans that then Okay. seat us on emphasis in the a

Mark J. Grescovich

for California think market is I a fantastic us. opportunity

I it So would that. just at leave

Operator

We no further have Instructions] [Operator questions.

hand concluding remarks. call to So Mark some the I back for

Mark J. Grescovich

third call. Thank your questions your for participation you for certainly our earnings quarter and today all in

stated, quarter. results the Banner and I As the we're very our team proud of for

been nice challenging, see the this evidenced great current performance our and it's operating but environment, making it's been we're by Given it's that progress, quarter. to

for you everyone, future. to in our again your look you in a wonderful call. to have reporting you, joining We Thank and forward day. interest company the the results and Thank our

Operator

very much concludes your today's This Thank call. attendance. for you

You may now lines. your disconnect

Banner (BANR) 17 Oct 242024 Q3 Earnings call transcript