Press Release

Banner Corporation Reports Net Income of $33.3 Million, or $0.95 Per Diluted Share, in First Quarter 2019; Revenue Grows by 11% from First Quarter of 2018; Completion of Skagit Bank Integration Complemented by Good Core Deposit Growth

Company Release - 4/24/2019 4:00 PM ET

WALLA WALLA, Wash., April 24, 2019 (GLOBE NEWSWIRE) -- Banner Corporation (NASDAQ GSM: BANR) ("Banner"), the parent company of Banner Bank and Islanders Bank, today reported net income in the first quarter of 2019 was $33.3 million, or $0.95 per diluted share, compared to $37.5 million, or $1.09 per diluted share, in the preceding quarter and $28.8 million, or $0.89 per diluted share, in the first quarter of 2018.  First quarter results include a $676,000 write-down on a former administration building as well as $2.1 million of acquisition related expenses, compared to $4.6 million of acquisition related expenses in the preceding quarter and no acquisition related expenses in the first quarter a year ago.  In addition, fourth quarter 2018 profits included a $5.5 million benefit from the revaluation of the Company’s deferred tax asset.

“Our first quarter operating performance continued to reflect the success of our super community bank strategy, which produced solid revenue and additional low-cost core deposit growth,” stated Mark J. Grescovich, President and Chief Executive Officer.  “During the quarter, we also benefited from the successful completion of the integration of the Skagit Bank acquisition, which further expands our presence in the growing communities of Northwest Washington.  The acquisition of Skagit Bank added $916 million in assets and, after consolidation, six banking locations along the I-5 corridor from Seattle to the Canadian border.”

At March 31, 2019, Banner Corporation had $11.73 billion in assets, $8.60 billion in net loans and $9.38 billion in deposits.  Banner operates 176 branch offices located in eight of the top 20 largest western Metropolitan Statistical Areas by population.

First Quarter 2019 Highlights

  • Revenues were $134.2 million during the quarter ended March 31, 2019, compared to $138.5 million during the preceding quarter and increased 11% compared to $120.7 million during the first quarter a year ago.
  • Net interest income, before the provision for loan losses, was $116.1 million, compared to $117.5 million in the preceding quarter and increased 17% from $99.4 million in the first quarter a year ago.
  • Net interest margin was 4.37% for the current quarter, compared to 4.47% in the preceding quarter and 4.35% in the first quarter a year ago.
  • Net loans receivable increased modestly to $8.60 billion at March 31, 2019, compared to $8.59 billion at December 31, 2018 and increased 15% when compared to $7.46 billion at March 31, 2018.
  • Provision for loan losses was $2.0 million for the quarter, increasing the allowance for loan losses to $97.3 million, or 1.12% of total loans, as of March 31, 2019.
  • Core deposits increased 1% to $8.21 billion compared to the preceding quarter and increased 9% compared to a year ago.  Core deposits represented 88% of total deposits at March 31, 2019.
  • Quarterly dividends to shareholders for the current quarter were $0.41 per share, an increase of 17% from the quarterly dividend for the first quarter a year ago.
  • Common shareholders’ equity per share increased to $42.99 at March 31, 2019, an increase of 2% from $42.03 at the preceding quarter end and an increase of 11% from $38.68 a year ago.
  • Tangible common shareholders' equity per share* increased to $32.47 at March 31, 2019, an increase of 3% from $31.45 at the preceding quarter end and an increase of 6% from $30.54 a year ago.
  • Non-performing assets increased to $22.0 million, or 0.19% of total assets, at March 31, 2019, compared to $18.9 million, or 0.16% of total assets three months earlier, but decreased when compared to $23.5 million, or 0.23% of total assets, at March 31, 2018.

*Tangible common shareholders' equity per share and the ratio of tangible common equity to tangible assets (both of which exclude goodwill and other intangible assets, net), and references to revenue from core operations (which excludes fair value adjustments and gain (loss) on the sale of securities from the total of net interest income before provision for loan losses and non-interest income) and the adjusted efficiency ratio (which excludes acquisition related expenses, amortization of core deposit intangibles, real estate owned gain (loss) and state/municipal taxes from non-interest expense divided by revenues from core operations) represent non-GAAP (Generally Accepted Accounting Principles) financial measures.  Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers.  Where applicable, comparable earnings information using GAAP financial measures is also presented.  See also Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.

Certain reclassifications have been made to the 2018 Consolidated Financial Statements and/or schedules to conform to the 2019 presentation.  These reclassifications have affected certain line items and ratios for the prior periods but have not changed net income or shareholders’ equity for those periods.  The effect of these reclassifications is considered immaterial.

Recent Events

On November 1, 2018, Banner completed its acquisition of Skagit Bancorp, Inc. ("Skagit") and its wholly-owned subsidiary, Skagit Bank, of Burlington, Washington.  As of the closing of the transaction, Skagit Bank had eleven retail branches along the I-5 corridor from Seattle to the Canadian border.  Pursuant to the previously announced terms of the acquisition, Skagit shareholders received 5.6664 shares of Banner common stock in exchange for each share of Skagit common stock, plus cash in lieu of any fractional shares and to cancel Skagit stock options for a total consideration paid of $180.0 million.

The Skagit merger was accounted for using the acquisition method of accounting.  Accordingly, the assets (including identifiable intangible assets) and the liabilities of Skagit were measured at their respective estimated fair values as of the merger date. The excess of the purchase price over the fair value of the net assets acquired was attributed to goodwill.  The fair value on the merger date represents management's best estimates based on available information and facts and circumstances in existence on the merger date.  The acquisition accounting is subject to adjustment within a measurement period of one year from the acquisition date.  The acquisition provided $915.8 million of assets, $632.4 million of loans, and $810.2 million of deposits to Banner.

Income Statement Review

“Our net interest margin increased slightly from a year ago and contracted during the quarter reflecting rising deposit costs and variability in the discount accretion on acquired loans,” said Grescovich.  Banner's net interest margin was 4.37% for the first quarter of 2019, a ten basis-point decrease compared to 4.47% in the preceding quarter and a two basis-point improvement compared to 4.35% in the first quarter a year ago.  Acquisition accounting adjustments added seven basis points to the net interest margin in the current quarter, compared to 12 basis points in the preceding quarter and eight basis points in the first quarter a year ago.  The total purchase discount for acquired loans was $24.2 million at March 31, 2019, compared to $25.7 million at December 31, 2018 and $19.4 million at March 31, 2018.

Average interest-earning asset yields decreased one basis point to 4.89% compared to 4.90% for the preceding quarter and increased 30 basis points compared to 4.59% in the first quarter a year ago.  Average loan yields decreased six basis points to 5.31% compared to 5.37% in the preceding quarter and increased 33 basis points compared to 4.98% in the first quarter a year ago.  Loan discount accretion added nine basis points to loan yields in the first quarter of 2019, compared to 16 basis points in the preceding quarter and ten basis points in the first quarter a year ago.  Deposit costs were 0.37% in the first quarter of 2019, a five basis-point increase compared to the preceding quarter and a 21 basis-point increase compared to the first quarter a year ago.  The total cost of funds was 0.56% during the first quarter of 2019, a ten basis-point increase compared to the preceding quarter and a 31 basis-point increase compared to the first quarter a year ago, largely reflecting an increase in the cost of deposits and in FHLB advances.

Primarily as a result of the origination of new loans, the renewal of acquired loans out of the discounted acquired loan portfolio and net charge-offs, Banner recorded a $2.0 million provision for loan losses in the current quarter, compared to $2.5 million recorded in the prior quarter and $2.0 million in the same quarter a year ago.

Deposit fees and other service charges were $12.6 million in the first quarter of 2019, compared to $12.5 million in the preceding quarter and $11.3 million in the first quarter a year ago.  Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, were $3.4 million in the first quarter, compared to $6.0 million in the preceding quarter and $4.9 million in the first quarter of 2018.  The lower fees reflected seasonal declines in multifamily and residential mortgage loan production combined with a compression in gain-on-sale spreads.  Home purchase activity accounted for 80% of one- to four-family mortgage loan originations in the first quarter of 2019, compared to 78% in the prior quarter and 72% in the first quarter of 2018.

Banner’s first quarter 2019 results included an $11,000 net gain for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of certain investment securities held for trading and a $1,000 net gain on the sale of securities.  In the preceding quarter, results included a $198,000 net gain for fair value adjustments and an $885,000 net loss on the sale of securities.  In the first quarter a year ago, results included a $3.3 million net gain for fair value adjustments and a $4,000 net gain on the partial calls of securities.

Total revenues declined 3% to $134.2 million for the first quarter of 2019, compared to $138.5 million in the preceding quarter and increased 11% compared to $120.7 million in the first quarter a year ago.  Revenues from core operations* (revenues excluding gains and losses on the sale of securities and the net change in valuation of financial instruments) were $134.2 million in the first quarter of 2019, compared to $139.2 million in the preceding quarter and $117.4 million in the first quarter of 2018.

Total non-interest income was $18.1 million in the first quarter of 2019, compared to $21.0 million in the fourth quarter of 2018 and $21.4 million in the first quarter a year ago. The decline in non-interest income was primarily attributed to lower mortgage banking revenues, specifically lower gains on multifamily loan sales, during the first quarter of 2019 compared to prior periods.  In addition, fourth quarter 2018 miscellaneous non-interest income included $834,000 of non-recurring use tax refunds.

Banner’s total non-interest expense was $90.0 million in the first quarter of 2019, compared to $95.4 million in the preceding quarter and $81.7 million in the first quarter of 2018.  Acquisition related expenses were $2.1 million for the first quarter of 2019, compared to $4.6 million for the preceding quarter and no acquisition related expenses for the year ago quarter.  Banner’s efficiency ratio improved to 67.06% for the current quarter, compared to 68.89% in the preceding quarter and 67.67% in the year ago quarter.  Banner’s adjusted efficiency ratio* was 63.32% for the current quarter, compared to 63.06% in the preceding quarter and 67.42% in the year ago quarter.

For the first quarter of 2019, Banner recorded $8.9 million in state and federal income tax expense for an effective tax rate of 21.0%, reflecting in part the benefits from tax exempt income sources.  Banner’s normal, expected statutory income tax rate is 23.7%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.  Fourth quarter 2018 income tax expense included a $5.5 million benefit from the revaluation of the company’s deferred tax asset.

Balance Sheet Review

Total assets were $11.73 billion at March 31, 2019, compared to $11.87 billion at December 31, 2018 and $10.32 billion at March 31, 2018.  The total of securities and interest-bearing deposits held at other banks was $1.89 billion at March 31, 2019, compared to $1.94 billion at December 31, 2018 and $1.75 billion at March 31, 2018.  The average effective duration of Banner's securities portfolio was approximately 3.0 years at March 31, 2019, compared to 3.9 years at March 31, 2018.

Net loans receivable increased modestly to $8.60 billion at March 31, 2019, compared to $8.59 billion at December 31, 2018 and increased 15% when compared to $7.46 billion at March 31, 2018.  The year-over-year increase in net loans included $631.7 million of portfolio loans acquired in the Skagit acquisition during the preceding quarter.  Commercial real estate and multifamily real estate loans increased modestly to $3.95 billion at March 31, 2019, compared to $3.93 billion at December 31, 2018, and increased 14% compared to $3.48 billion a year ago.  Commercial business loans increased 3% to $1.52 billion at March 31, 2019, compared to $1.48 billion at December 31, 2018, and increased 18% compared to $1.30 billion a year ago.  Agricultural business loans decreased by 8% to $373.3 million at March 31, 2019, compared to $404.9 million three months earlier and increased by 22% compared to $307.2 million a year ago.  Total construction, land and land development loans decreased slightly to $1.10 billion at March 31, 2019, compared to $1.11 billion at December 31, 2018 and increased 16% compared to $948.7 million a year earlier.  Consumer loans decreased slightly to $777.4 million at March 31, 2019, compared to $785.0 million at December 31, 2018 and increased 12% compared to $693.0 million a year ago.  One- to four-family loans were $967.6 million at March 31, 2019, compared to $973.6 million at December 31, 2018 and increased 16% compared to $833.6 million a year ago.

Loans held for sale decreased substantially to $45.9 million at March 31, 2019, compared to $171.0 million at December 31, 2018 and $141.8 million at March 31, 2018.  The volume of one- to four- family residential mortgage loans sold was $107.2 million in the current quarter, compared to $130.1 million in the preceding quarter and $124.5 million in the first quarter a year ago.  During the first quarter of 2019, Banner sold $149.9 million in multifamily loans, compared to $26.8 million in the preceding quarter and no sales of multifamily loans in the first quarter a year ago.

Total deposits decreased slightly to $9.38 billion at March 31, 2019, compared to $9.48 billion at December 31, 2018 and increased 10% when compared to $8.54 billion a year ago, as the addition of both deposits from the Skagit acquisition and brokered certificates of deposit was partially offset by continuing declines in retail, or non-brokered, certificates of deposit.  Non-interest-bearing account balances increased 1% to $3.68 billion at March 31, 2019, compared to $3.66 billion at December 31, 2018 and increased 9% compared to $3.38 billion a year ago.  Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 1% from the prior quarter and increased 9% compared to a year ago.  The core deposit balance at December 31, 2018 was positively impacted by $696.3 million of core deposits acquired in the Skagit acquisition.  Core deposits represented 88% of total deposits at March 31, 2019, compared to 86% of total deposits three months earlier and 88% of total deposits a year earlier.  Certificates of deposit decreased 12% to $1.16 billion at March 31, 2019, compared to $1.32 billion at December 31, 2018 and increased 14% compared to $1.02 billion a year earlier.  Brokered deposits decreased to $239.4 million at March 31, 2019, compared to $377.3 million at December 31, 2018 and increased 41% when compared to $169.5 million a year earlier.

On January 1, 2019, Banner adopted Accounting Standard Update (ASU) No. 2016-02, Leases (Topic 842).  In connection with the adoption of this ASU, Banner recorded a $51 million lease right of use asset and a $53 million lease liability.  These amounts are presented in the Statement of Financial Condition in other assets and other liabilities.

At March 31, 2019, total common shareholders' equity was $1.51 billion, or 12.88% of assets, compared to $1.48 billion or 12.46% of assets at December 31, 2018 and $1.25 billion or 12.16% of assets a year ago.  At March 31, 2018, tangible common shareholders' equity*, which excludes goodwill and other intangible assets, was $1.14 billion, or 10.05% of tangible assets*, compared to $1.11 billion, or 9.62% of tangible assets, at December 31, 2018 and $990.2 million, or 9.85% of tangible assets, a year ago.  Banner's tangible book value per share* increased to $32.47 at March 31, 2019, compared to $30.54 per share a year ago.

There were no repurchases of common stock during the first quarter of 2019.  During the fourth quarter of 2018, Banner repurchased 325,000 shares of its common stock and during the first quarter of 2018, Banner repurchased 269,711 shares of its common stock .  Banner and its subsidiary banks continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized” under the Basel III and Dodd Frank Act regulatory standards.  At March 31, 2019, Banner's common equity Tier 1 capital ratio was 12.53%, its Tier 1 leverage capital to average assets ratio was 10.73%, and its total capital to risk-weighted assets ratio was 13.55%.

Credit Quality

The allowance for loan losses was $97.3 million at March 31, 2019, or 1.12% of total loans outstanding and 504% of non-performing loans compared to $96.5 million at December 31, 2018, or 1.11% of total loans outstanding and 616% of non-performing loans, and $92.2 million at March 31, 2018, or 1.22% of total loans outstanding and 410% of non-performing loans.  Net loan charge-offs totaled $1.2 million in the first quarter, compared to net loan charge-offs of $1.3 million in the preceding quarter and net loan recoveries of $1.2 million in the first quarter a year ago.  Primarily as a result of the origination of new loans, the renewal of acquired loans out of the discounted acquired loan portfolio and net charge-offs, Banner recorded a $2.0 million provision for loan losses in the current quarter, compared to $2.5 million recorded in the prior quarter and $2.0 million in the year ago quarter.  Non-performing loans were $19.3 million at March 31, 2019, compared to $15.7 million at December 31, 2018 and $22.5 million a year ago.  Real estate owned and other repossessed assets were $2.7 million at March 31, 2019, compared to $3.2 million at December 31, 2018 and $1.0 million a year ago.  The increase compared to a year ago primarily reflects $2.6 million of real estate owned acquired in the Skagit acquisition.

In accordance with acquisition accounting, loans acquired from acquisitions were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts, a portion of which reflects a discount for possible credit losses.  Credit discounts are included in the determination of fair value, and as a result, no allowance for loan and lease losses is recorded for acquired loans at the acquisition date.  At March 31, 2019, the total purchase discount for acquired loans was $24.2 million.

Banner's non-performing assets were $22.0 million, or 0.19% of total assets, at March 31, 2019, compared to $18.9 million, or 0.16% of total assets, at December 31, 2018, and $23.5 million, or 0.23% of total assets, a year ago.  In addition to non-performing assets, purchased credit-impaired loans decreased to $13.3 million at March 31, 2019, when compared to $14.4 million at December 31, 2018, and $19.3 million at March 31, 2018.

Conference Call

Banner will host a conference call on Thursday, April 25, 2019, at 8:00 a.m. PDT, to discuss its first quarter results.  To listen to the call on-line, go to www.bannerbank.com.  Investment professionals are invited to dial (866) 235-9915 to participate in the call.  A replay will be available for one week at (877) 344-7529 using access code 10129817, or at www.bannerbank.com.

About the Company

Banner Corporation is an $11.73 billion bank holding company operating two commercial banks in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans.  Visit Banner Bank on the Web at www.bannerbank.com.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "may," “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” "potential," or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner.  Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.  These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information.  By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner's operating and stock price performance.

Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) expected revenues, cost savings, synergies and other benefits from the Skagit acquisition might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses, which could necessitate additional provisions for loan losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for loan losses or writing down of assets or impose restrictions or penalties with respect to Banner's activities; (4) competitive pressures among depository institutions; (5) interest rate movements and their impact on customer behavior and net interest margin; (6) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet customers' needs and developments in the market place; (9) the ability to access cost-effective funding; (10) changes in financial markets; (11) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (12) the costs, effects and outcomes of litigation; (13) legislation or regulatory changes, including but not limited to the impact of the Dodd-Frank Act and regulations adopted thereunder, changes in regulatory capital requirements pursuant to the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (14) changes in accounting principles, policies or guidelines; (15) future acquisitions by Banner of other depository institutions or lines of business; (16) future goodwill impairment due to changes in Banner's business, changes in market conditions, or other factors and (17) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed from time to time in our filings with the Securities and Exchange Commission including our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K.


       
RESULTS OF OPERATIONSQuarters Ended
(in thousands except shares and per share data) Mar 31, 2019 Dec 31, 2018 Mar 31, 2018
       
INTEREST INCOME:      
Loans receivable $115,455  $114,627  $94,022 
Mortgage-backed securities 10,507  9,931  7,331 
Securities and cash equivalents 4,034  4,183  3,467 
  129,996  128,741  104,820 
INTEREST EXPENSE:      
Deposits 8,643  7,503  3,358 
Federal Home Loan Bank advances 3,476  2,072  677 
Other borrowings 60  66  70 
Junior subordinated debentures 1,713  1,641  1,342 
  13,892  11,282  5,447 
Net interest income before provision for loan losses 116,104  117,459  99,373 
PROVISION FOR LOAN LOSSES 2,000  2,500  2,000 
Net interest income 114,104  114,959  97,373 
NON-INTEREST INCOME:      
Deposit fees and other service charges 12,618  12,539  11,296 
Mortgage banking operations 3,415  6,019  4,864 
Bank-owned life insurance 1,276  994  853 
Miscellaneous 804  2,153  1,037 
  18,113  21,705  18,050 
Net gain (loss) on sale of securities 1  (885) 4 
Net change in valuation of financial instruments carried at fair value 11  198  3,308 
Total non-interest income 18,125  21,018  21,362 
NON-INTEREST EXPENSE:      
Salary and employee benefits 54,640  52,122  50,067 
Less capitalized loan origination costs (4,849) (4,863) (4,011)
Occupancy and equipment 13,766  13,490  11,766 
Information / computer data services 5,326  5,112  4,381 
Payment and card processing services 3,984  4,233  3,700 
Professional and legal expenses 2,434  6,669  4,428 
Advertising and marketing 1,529  2,588  1,830 
Deposit insurance 1,418  1,093  1,341 
State/municipal business and use taxes 945  854  713 
Real estate operations (123) 251  439 
Amortization of core deposit intangibles 2,052  1,935  1,382 
Miscellaneous 6,744  7,310  5,670 
  87,866  90,794  81,706 
Acquisition related expenses 2,148  4,602   
Total non-interest expense 90,014  95,396  81,706 
Income before provision for income taxes 42,215  40,581  37,029 
PROVISION FOR INCOME TAXES 8,869  3,053  8,239 
NET INCOME $33,346  $37,528  $28,790 
       
Earnings per share available to common shareholders:      
Basic $0.95  $1.10  $0.89 
Diluted $0.95  $1.09  $0.89 
Cumulative dividends declared per common share $0.41  $0.38  $0.35 
             
Weighted average common shares outstanding:      
Basic 35,050,376  34,221,048  32,397,568 
Diluted 35,172,056  34,342,641  32,516,456 
          
(Decrease) increase in common shares outstanding (30,026) 2,780,015  (302,812)
          


         
FINANCIAL CONDITION       Percentage Change
(in thousands except shares and per share data) Mar 31, 2019 Dec 31, 2018 Mar 31, 2018 Prior Qtr Prior Yr Qtr
           
ASSETS          
Cash and due from banks $218,458  $231,029  $188,418  (5.4)% 15.9%
Interest-bearing deposits 43,080  41,167  53,630  4.6% (19.7)%
Total cash and cash equivalents 261,538  272,196  242,048  (3.9)% 8.1%
Securities - trading 25,838  25,896  25,574  (0.2)% 1.0%
Securities - available for sale 1,603,804  1,636,223  1,406,505  (2.0)% 14.0%
Securities - held to maturity 218,993  234,220  262,645  (6.5)% (16.6)%
Total securities 1,848,635  1,896,339  1,694,724  (2.5)% 9.1%
Federal Home Loan Bank stock 27,063  31,955  18,036  (15.3)% 50.0%
Loans held for sale 45,865  171,031  141,808  (73.2)% (67.7)%
Loans receivable 8,692,657  8,684,595  7,556,046  0.1% 15.0%
Allowance for loan losses (97,308) (96,485) (92,207) 0.9% 5.5%
Net loans receivable 8,595,349  8,588,110  7,463,839  0.1% 15.2%
Accrued interest receivable 41,220  38,593  32,824  6.8% 25.6%
Real estate owned held for sale, net 2,611  2,611  328  % 696.0%
Property and equipment, net 171,057  171,809  156,005  (0.4)% 9.6%
Goodwill 339,154  339,154  242,659  % 39.8%
Other intangibles, net 30,647  32,924  21,251  (6.9)% 44.2%
Bank-owned life insurance 178,202  177,467  163,519  0.4% 9.0%
Other assets 188,302  149,128  140,223  26.3% 34.3%
Total assets $11,729,643  $11,871,317  $10,317,264  (1.2)% 13.7%
LIABILITIES          
Deposits:          
Non-interest-bearing $3,676,984  $3,657,817  $3,383,439  0.5% 8.7%
Interest-bearing transaction and savings accounts 4,535,969  4,498,966  4,141,268  0.8% 9.5%
Interest-bearing certificates 1,163,276  1,320,265  1,018,355  (11.9)% 14.2%
Total deposits 9,376,229  9,477,048  8,543,062  (1.1)% 9.8%
Advances from Federal Home Loan Bank 418,000  540,189  192,195  (22.6)% 117.5%
Customer repurchase agreements and other borrowings 121,719  118,995  101,844  2.3% 19.5%
Junior subordinated debentures at fair value 113,917  114,091  112,516  (0.2)% 1.2%
Accrued expenses and other liabilities 148,027  102,061  72,497  45.0% 104.2%
Deferred compensation 40,560  40,338  41,027  0.6% (1.1)%
Total liabilities 10,218,452  10,392,722  9,063,141  (1.7)% 12.7%
SHAREHOLDERS' EQUITY          
Common stock 1,338,386  1,337,436  1,172,960  0.1% 14.1%
Retained earnings 152,911  134,055  79,773  14.1% 91.7%
Other components of shareholders' equity 19,894  7,104  1,390  180.0% nm
Total shareholders' equity 1,511,191  1,478,595  1,254,123  2.2% 20.5%
Total liabilities and shareholders' equity $11,729,643  $11,871,317  $10,317,264  (1.2)% 13.7%
Common Shares Issued:          
Shares outstanding at end of period 35,152,746  35,182,772  32,423,673     
Common shareholders' equity per share (1) $42.99  $42.03  $38.68     
Common shareholders' tangible equity per share (1) (2) $32.47  $31.45  $30.54     
Common shareholders' tangible equity to tangible assets (2) 10.05% 9.62% 9.85%    
Consolidated Tier 1 leverage capital ratio 10.73% 10.98% 11.09%    


(1) Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
(2) Common shareholders' tangible equity excludes goodwill and other intangible assets. Tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures.  See also Non-GAAP Financial Measures reconciliation tables on the last two pages of the press release tables.
  

 

           
ADDITIONAL FINANCIAL INFORMATION          
(dollars in thousands)          
        Percentage Change
LOANS Mar 31, 2019 Dec 31, 2018 Mar 31, 2018 Prior Qtr Prior Yr Qtr
           
Commercial real estate:          
Owner occupied $1,442,724  $1,430,097  $1,278,814  0.9% 12.8%
Investment properties 2,124,049  2,131,059  1,876,937  (0.3)% 13.2%
Multifamily real estate 387,142  368,836  321,039  5.0% 20.6%
Commercial construction 181,888  172,410  163,314  5.5% 11.4%
Multifamily construction 183,203  184,630  159,108  (0.8)% 15.1%
One- to four-family construction 514,468  534,678  434,204  (3.8)% 18.5%
Land and land development:          
Residential 187,660  188,508  167,783  (0.4)% 11.8%
Commercial 28,928  27,278  24,331  6.0% 18.9%
Commercial business 1,524,298  1,483,614  1,296,691  2.7% 17.6%
Agricultural business including secured by farmland 373,322  404,873  307,243  (7.8)% 21.5%
One- to four-family real estate 967,581  973,616  833,598  (0.6)% 16.1%
Consumer:          
Consumer secured by one- to four-family real estate 564,872  568,979  522,826  (0.7)% 8.0%
Consumer-other 212,522  216,017  170,158  (1.6)% 24.9%
Total loans receivable $8,692,657  $8,684,595  $7,556,046  0.1% 15.0%
Restructured loans performing under their restructured terms $13,036  $13,422  $14,264     
Loans 30 - 89 days past due and on accrual (1) $28,972  $25,108  $23,557     
Total delinquent loans (including loans on non-accrual), net (2) $46,616  $38,721  $42,186     
Total delinquent loans / Total loans receivable 0.54% 0.45% 0.56%    


(1)Includes no purchased credit-impaired loans at March 31, 2019 compared to $3,000 at December 31, 2018 and $1.5 million at March 31, 2018.
(2)Delinquent loans include $480,000 of delinquent purchased credit-impaired loans at March 31, 2019 compared to $519,000 at December 31, 2018 and $2.3 million at March 31, 2018.
  


           
LOANS BY GEOGRAPHIC LOCATION         Percentage Change
  Mar 31, 2019 Dec 31, 2018 Mar 31, 2018 Prior Qtr Prior Yr Qtr
  Amount Percentage Amount Amount    
             
Washington $4,329,759  49.8% $4,324,588  $3,490,646  0.1% 24.0%
Oregon 1,639,427  18.9% 1,636,152  1,580,278  0.2% 3.7%
California 1,581,654  18.2% 1,596,604  1,405,411  (0.9)% 12.5%
Idaho 524,705  6.0% 521,026  481,972  0.7% 8.9%
Utah 59,940  0.7% 57,318  83,637  4.6% (28.3)%
Other 557,172  6.4% 548,907  514,102  1.5% 8.4%
Total loans receivable $8,692,657  100.0% $8,684,595  $7,556,046  0.1% 15.0%
                      


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)

The following table shows loan originations (excluding loans held for sale) activity for the three months ending March 31, 2019, December 31, 2018, and March 31, 2018 (in thousands):

      
LOAN ORIGINATIONSThree Months Ended
 Mar 31, 2019 Dec 31, 2018 Mar 31, 2018
Commercial real estate$94,196 $172,885 $65,725
Multifamily real estate7,617 16,731 735
Construction and land233,494 397,702 330,923
Commercial business125,912 206,922 132,987
Agricultural business32,059 18,901 26,574
One-to four-family residential31,789 81,522 17,935
Consumer63,774 72,500 70,533
Total loan originations (excluding loans held for sale)$588,841 $967,163 $645,412
         


             
ADDITIONAL FINANCIAL INFORMATION
            
(dollars in thousands)            
             
  Quarters Ended
CHANGE IN THE  Mar 31, 2019   Dec 31, 2018   Mar 31, 2018 
ALLOWANCE FOR LOAN LOSSES            
Balance, beginning of period $96,485  $95,263  $89,028 
Provision for loan losses 2,000  2,500  2,000 
Recoveries of loans previously charged off:      
Commercial real estate 21  66  1,352 
Construction and land 22  23  174 
One- to four-family real estate 43  18  290 
Commercial business 23  193  170 
Agricultural business, including secured by farmland   23   
Consumer 110  102  112 
  219  425  2,098 
Loans charged off:      
Commercial real estate (431)    
One- to four-family real estate     (16)
Commercial business (590) (684) (519)
Agricultural business, including secured by farmland (4) (415) (7)
Consumer (371) (604) (377)
  (1,396) (1,703) (919)
Net (charge-offs) recoveries (1,177) (1,278) 1,179 
Balance, end of period $97,308  $96,485  $92,207 
Net (charge-offs) recoveries / Average loans receivable (0.013)% (0.015)% 0.015%
          


             
ALLOCATION OF            
ALLOWANCE FOR LOAN LOSSES  Mar 31, 2019   Dec 31, 2018   Mar 31, 2018 
Specific or allocated loss allowance:            
Commercial real estate $27,091  $27,132  $23,461 
Multifamily real estate 4,020  3,818  2,592 
Construction and land 23,713  24,442  28,766 
One- to four-family real estate 4,711  4,714  3,779 
Commercial business 18,662  19,438  19,885 
Agricultural business, including secured by farmland 3,596  3,778  2,999 
Consumer 7,980  7,972  5,514 
Total allocated 89,773  91,294  86,996 
Unallocated 7,535  5,191  5,211 
             
Total allowance for loan losses $97,308  $96,485  $92,207 
             
          
          
Allowance for loan losses / Total loans receivable 1.12% 1.11% 1.22%
          
Allowance for loan losses / Non-performing loans 504% 616% 410%
          


      
ADDITIONAL FINANCIAL INFORMATION     
(dollars in thousands)     
 Mar 31, 2019 Dec 31, 2018 Mar 31, 2018
NON-PERFORMING ASSETS     
Loans on non-accrual status:     
Secured by real estate:     
Commercial$5,734  $4,088  $6,877 
Construction and land3,036  3,188  984 
One- to four-family1,538  1,544  2,815 
Commercial business3,614  2,936  3,037 
Agricultural business, including secured by farmland2,507  1,751  6,120 
Consumer2,181  1,241  1,237 
 18,610  14,748  21,070 
Loans more than 90 days delinquent, still on accrual:     
Secured by real estate:     
One- to four-family640  658  591 
Commercial business1  1  1 
Agricultural business, including secured by farmland    820 
Consumer42  247  7 
 683  906  1,419 
Total non-performing loans19,293  15,654  22,489 
Real estate owned (REO)2,611  2,611  328 
Other repossessed assets50  592  694 
Total non-performing assets$21,954  $18,857  $23,511 
Total non-performing assets to total assets0.19% 0.16% 0.23%
Purchased credit-impaired loans, net$13,330  $14,413  $19,316 
            


  
 Quarters Ended
REAL ESTATE OWNEDMar 31, 2019  Dec 31, 2018  Mar 31, 2018 
Balance, beginning of period$2,611  $364    
Additions from loan foreclosures  139  128 
Additions from acquisitions  2,593   
Proceeds from dispositions of REO  (453)  
Gain on sale of REO  168   
Valuation adjustments in the period  (200) (160)
Balance, end of period$2,611  $2,611  $328 
            


           
ADDITIONAL FINANCIAL INFORMATION          
(dollars in thousands)          
           
DEPOSIT COMPOSITION       Percentage Change
  Mar 31, 2019 Dec 31, 2018 Mar 31, 2018 Prior Qtr Prior Yr Qtr
           
Non-interest-bearing $3,676,984 $3,657,817 $3,383,439 0.5% 8.7%
Interest-bearing checking 1,174,169 1,191,016 1,043,840 (1.4)% 12.5%
Regular savings accounts 1,865,852 1,842,581 1,637,814 1.3% 13.9%
Money market accounts 1,495,948 1,465,369 1,459,614 2.1% 2.5%
Total interest-bearing transaction and savings accounts 4,535,969 4,498,966 4,141,268 0.8% 9.5%
Total core deposits 8,212,953 8,156,783 7,524,707 0.7% 9.1%
Interest-bearing certificates 1,163,276 1,320,265 1,018,355 (11.9)% 14.2%
Total deposits $9,376,229 $9,477,048 $8,543,062 (1.1)% 9.8%
              


           
GEOGRAPHIC CONCENTRATION OF DEPOSITS         Percentage Change
  Mar 31, 2019 Dec 31, 2018 Mar 31, 2018 Prior Qtr Prior Yr Qtr
  Amount Percentage Amount Amount    
Washington $5,604,567  59.8% $5,674,328  $4,766,646  (1.2)% 17.6%
Oregon 1,906,132  20.3% 1,891,145  1,868,043  0.8% 2.0%
California 1,402,213  15.0% 1,434,033  1,454,421  (2.2)% (3.6)%
Idaho 463,317  4.9% 477,542  453,952  (3.0)% 2.1%
Total deposits $9,376,229  100.0% $9,477,048  $8,543,062  (1.1)% 9.8%
                    



     
INCLUDED IN TOTAL DEPOSITSMar 31, 2019 Dec 31, 2018 Mar 31, 2018
Public non-interest-bearing accounts$92,122 $96,009 $78,714
Public interest-bearing transaction & savings accounts118,033 121,392 111,597
Public interest-bearing certificates29,572 30,089 24,928
      
Total public deposits$239,727 $247,490 $215,239
      
Total brokered deposits$239,444 $377,347 $169,523
      


   
ADDITIONAL FINANCIAL INFORMATION  
(in thousands)  
   
   
ACQUISITION OF SKAGIT BANCORP, INC.  
The following table* provides the estimated fair value of the assets acquired and liabilities assumed in the Skagit acquisition at November 1, 2018 (in thousands):  
 November 1, 2018
   
Cash paid $329 
Fair value of common shares issued 179,709 
Total consideration 180,038 
   
Fair value of assets acquired:  
Cash and cash equivalents19,167 
Securities210,326 
Loans receivable632,374 
Real estate owned held for sale2,593 
Property and equipment15,788 
Core deposit intangible16,368 
Deferred tax asset95 
Other assets19,110 
Total assets acquired915,821 
   
Fair value of liabilities assumed:  
Deposits810,209 
Other liabilities22,069 
Total liabilities assumed832,278 
   
Net assets acquired 83,543 
   
Goodwill $96,495 
   
* Amounts recorded in this table are preliminary estimates of fair value.  Additional adjustments to the acquisition accounting may be required with a measurement period of one-year from the acquisition date.
 


             
ADDITIONAL FINANCIAL INFORMATION            
(dollars in thousands)            
             
  Actual Minimum to be categorized as
"Adequately Capitalized"
 Minimum to be categorized as 
"Well Capitalized"
REGULATORY CAPITAL RATIOS AS OF MARCH 31, 2019 Amount Ratio Amount Ratio Amount Ratio
             
Banner Corporation-consolidated:            
  Total capital to risk-weighted assets $1,323,711 13.55% $781,580 8.00% $976,975 10.00%
  Tier 1 capital to risk-weighted assets 1,223,804 12.53% 586,185 6.00% 586,185 6.00%
  Tier 1 leverage capital to average assets 1,223,804 10.73% 456,375 4.00% n/a n/a
  Common equity tier 1 capital to risk-weighted assets 1,087,804 11.13% 439,639 4.50% n/a n/a
Banner Bank:            
  Total capital to risk-weighted assets 1,236,021 12.91% 766,195 8.00% 957,744 10.00%
  Tier 1 capital to risk-weighted assets 1,138,596 11.89% 574,646 6.00% 766,195 8.00%
  Tier 1 leverage capital to average assets 1,138,596 10.23% 445,258 4.00% 556,572 5.00%
  Common equity tier 1 capital to risk-weighted assets 1,138,596 11.89% 430,985 4.50% 622,534 6.50%
Islanders Bank:            
  Total capital to risk-weighted assets 35,180 18.44% 15,262 8.00% 19,077 10.00%
  Tier 1 capital to risk-weighted assets 32,794 17.19% 11,446 6.00% 15,262 8.00%
  Tier 1 leverage capital to average assets 32,794 11.86% 11,065 4.00% 13,831 5.00%
  Common equity tier 1 capital to risk-weighted assets 32,794 17.19% 8,585 4.50% 12,400 6.50%
             


                   
ADDITIONAL FINANCIAL INFORMATION                  
(dollars in thousands)                  
(rates / ratios annualized)                  
ANALYSIS OF NET INTEREST SPREADQuarters Ended
 March 31, 2019 December 31, 2018 March 31, 2018
 Average BalanceInterest and DividendsYield / Cost(3) Average BalanceInterest and DividendsYield / Cost(3) Average BalanceInterest and DividendsYield / Cost(3)
Interest-earning assets:                  
Held for sale loans$98,005 $1,1214.64% $83,741$1,0565.00% $58,669$6814.71%
Mortgage loans6,833,933 88,6025.26% 6,573,27888,5605.35% 6,006,53073,6654.97%
Commercial/agricultural loans1,703,503 22,8125.43% 1,631,13322,2575.41% 1,456,30317,4234.85%
Consumer and other loans183,451 2,9206.46% 172,9342,7546.32% 140,6272,2536.50%
Total loans(1)8,818,892 115,4555.31% 8,461,086114,6275.37% 7,662,12994,0224.98%
Mortgage-backed securities1,392,118 10,5073.06% 1,400,5089,9312.81% 1,057,8787,3312.81%
Other securities484,134 3,4792.91% 474,6593,6333.04% 462,9473,0902.71%
Interest-bearing deposits with banks44,757 2892.62% 54,5773052.22% 64,5122311.45%
FHLB stock31,761 2663.40% 22,7912454.26% 16,5491463.58%
Total investment securities1,952,770 14,5413.02% 1,952,53514,1142.87% 1,601,88610,7982.73%
Total interest-earning assets10,771,662 129,9964.89% 10,413,621128,7414.90% 9,264,015104,8204.59%
Non-interest-earning assets1,031,591    903,165   805,503  
Total assets$11,803,253    $11,316,786   $10,069,518  
Deposits:           
Interest-bearing checking accounts$1,153,949 4750.17% $1,131,0304030.14% $1,003,9292460.10%
Savings accounts1,854,123 1,9200.42% 1,779,2881,5050.34% 1,601,6716270.16%
Money market accounts1,490,326 2,2510.61% 1,440,8891,6380.45% 1,442,6856660.19%
Certificates of deposit1,253,613 3,9971.29% 1,287,1143,9571.22% 998,7381,8190.74%
Total interest-bearing deposits5,752,011 8,6430.61% 5,638,3217,5030.53% 5,047,0233,3580.27%
Non-interest-bearing deposits3,605,922 —% 3,608,930—% 3,282,686—%
Total deposits9,357,933 8,6430.37% 9,247,2517,5030.32% 8,329,7093,3580.16%
Other interest-bearing liabilities:           
FHLB advances534,238 3,4762.64% 311,0462,0722.64% 155,5406771.77%
Other borrowings118,008 600.21% 117,724660.22% 101,111700.28%
Junior subordinated debentures140,212 1,7134.95% 140,2121,6414.64% 140,2121,3423.88%
Total borrowings792,458 5,2492.69% 568,9823,7792.64% 396,8632,0892.13%
Total funding liabilities10,150,391 13,8920.56% 9,816,23311,2820.46% 8,726,5725,4470.25%
Other non-interest-bearing liabilities(2)151,937    92,003   65,978  
Total liabilities10,302,328    9,908,236   8,792,550  
Shareholders' equity1,500,925    1,408,550   1,276,968  
Total liabilities and shareholders' equity$11,803,253    $11,316,786   $10,069,518  
Net interest income/rate spread $116,1044.33%  $117,4594.44%  $99,3734.34%
Net interest margin  4.37%   4.47%   4.35%
Additional Key Financial Ratios:           
Return on average assets  1.15%   1.32%   1.16%
Return on average equity  9.01%   10.57%   9.14%
Average equity/average assets  12.72%   12.45%   12.68%
Average interest-earning assets/average interest-bearing liabilities  164.59%   167.76%   170.17%
Average interest-earning assets/average funding liabilities  106.12%   106.09%   106.16%
Non-interest income/average assets  0.62%   0.74%   0.86%
Non-interest expense/average assets  3.09%   3.34%   3.29%
Efficiency ratio(4)  67.06%   68.89%   67.67%
Adjusted efficiency ratio(5)  63.32%   63.06%   67.42%


(1)Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due.  Amortization of net deferred loan fees/costs is included with interest on loans.
(2)Average other non-interest-bearing liabilities include fair value adjustments related to FHLB advances and junior subordinated debentures.
(3)Yields and costs have not been adjusted for the effect of tax-exempt interest.
(4)Non-interest expense divided by the total of net interest income (before provision for loan losses) and non-interest income.
(5)Adjusted non-interest expense divided by adjusted revenue.  Adjusted revenue excludes net gain (loss) on sale of securities and fair value adjustments.  Adjusted non-interest expense excludes acquisition related expense, amortization of core deposit intangibles (CDI), REO gain (loss), and state/municipal business and use taxes.  These represent non-GAAP financial measures.  See also Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.
   


      
ADDITIONAL FINANCIAL INFORMATION     
(dollars in thousands)     
      
* Non-GAAP Financial Measures     
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures.  Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers.  However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP.  Where applicable, comparable earnings information using GAAP financial measures is also presented.  Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:
         
REVENUE FROM CORE OPERATIONSQuarters Ended
 Mar 31, 2019 Dec 31, 2018 Mar 31, 2018
Net interest income before provision for loan losses$116,104  $117,459  $99,373 
Total non-interest income18,125  21,018  21,362 
Total GAAP revenue134,229  138,477  120,735 
Exclude net (gain) loss on sale of securities(1) 885  (4)
Exclude change in valuation of financial instruments carried at fair value(11) (198) (3,308)
Revenue from core operations (non-GAAP)$134,217  $139,164  $117,423 
            


          
EARNINGS FROM CORE OPERATIONS Quarters Ended
  Mar 31, 2019  Dec 31, 2018  Mar 31, 2018 
Net income (GAAP)
 $33,346  $37,528  $28,790 
Exclude net (gain) loss on sale of securities (1) 885  (4)
Exclude change in valuation of financial instruments carried at fair value (11) (198) (3,308)
Exclude acquisition related expenses 2,148  4,602   
Exclude related tax (benefit) expense (513) (1,159) 795 
Exclude tax adjustments related to tax reform and valuation reserves   (4,207)  
Total earnings from core operations (non-GAAP) $34,969  $37,451  $26,273 
       
Diluted earnings per share (GAAP) $0.95  $1.09  $0.89 
Diluted core earnings per share (non-GAAP) $0.99  $1.09  $0.81 
          


          
ADDITIONAL FINANCIAL INFORMATION         
(dollars in thousands)         
          
ADJUSTED EFFICIENCY RATIO Quarters Ended
  Mar 31, 2019  Dec 31, 2018  Mar 31, 2018  
Non-interest expense (GAAP) $90,014  $95,396  $81,706 
Exclude acquisition related expenses (2,148) (4,602)  
Exclude CDI amortization (2,052) (1,935) (1,382)
Exclude state/municipal tax expense (945) (854) (713)
Exclude REO gain (loss) 123  (251) (439)
Adjusted non-interest expense (non-GAAP) $84,992  $87,754  $79,172 
       
Net interest income before provision for loan losses (GAAP) $116,104  $117,459  $99,373 
Non-interest income (GAAP) 18,125  21,018  21,362 
Total revenue 134,229  138,477  120,735 
Exclude net (gain) loss on sale of securities (1) 885  (4)
Exclude net change in valuation of financial instruments carried at fair value (11) (198) (3,308)
Revenue from core operations (non-GAAP) $134,217  $139,164  $117,423 
       
Efficiency ratio (GAAP) 67.06% 68.89% 67.67%
Adjusted efficiency ratio (non-GAAP) 63.32% 63.06% 67.42%


          
TANGIBLE COMMON SHAREHOLDERS' EQUITY TO TANGIBLE ASSETS Mar 31, 2019 Dec 31, 2018 Mar 31, 2018
Shareholders' equity (GAAP)  1,511,191  1,478,595  1,254,123 
Exclude goodwill and other intangible assets, net 369,801  372,078  263,910 
Tangible common shareholders' equity (non-GAAP) $1,141,390  $1,106,517  $990,213 
       
Total assets (GAAP) $11,729,643  $11,871,317  $10,317,264 
Exclude goodwill and other intangible assets, net 369,801  372,078  263,910 
Total tangible assets (non-GAAP) $11,359,842  $11,499,239  $10,053,354 
Common shareholders' equity to total assets (GAAP) 12.88% 12.46% 12.16%
Tangible common shareholders' equity to tangible assets (non-GAAP) 10.05% 9.62% 9.85%
       
TANGIBLE COMMON SHAREHOLDERS' EQUITY PER SHARE      
Tangible common shareholders' equity $1,141,390  $1,106,517  $990,213 
Common shares outstanding at end of period 35,152,746  35,182,772  32,423,673 
Common shareholders' equity (book value) per share (GAAP) $42.99  $42.03  $38.68 
Tangible common shareholders' equity (tangible book value) per share (non-GAAP) $32.47  $31.45  $30.54 
             

CONTACT:
MARK J. GRESCOVICH,  
PRESIDENT & CEO  
PETER J. CONNER, CFO  
(509) 527-3636

Banner Corporation Logo

Source: Banner Corporation