WALLA WALLA, Wash., Oct. 21, 2015 (GLOBE NEWSWIRE) -- Banner Corporation (NASDAQ GSM:BANR), the parent company of Banner Bank and Islanders Bank, today reported net income in the third quarter of 2015 of $12.9 million, or $0.62 per diluted share, compared to $13.2 million, or $0.64 per diluted share, in the preceding quarter and $14.8 million, or $0.76 per diluted share, in the third quarter a year ago. The current quarter results were impacted by $2.2 million of acquisition-related expenses which, net of taxes, reduced net income by $0.07 per diluted share, and the preceding quarter results were impacted by $3.9 million of acquisition-related expenses which, net of taxes, reduced net income by $0.13 per diluted share.
In the nine months ended September 30, 2015, net income was $38.3 million, or $1.87 per diluted share, compared to $42.4 million, or $2.18 per diluted share, in the first nine months of 2014. Results for the first nine months of 2014 included a $9.1 million bargain purchase gain related to the acquisition of six branches in southwest Oregon, which net of related acquisition expenses contributed $0.23 to diluted net income per share. Acquisition-related expenses were $7.7 million, or $0.27 per diluted share, for the first nine months of 2015 compared to $1.5 million, or $0.05 per diluted share, for the first nine months of 2014.
"For the third quarter, Banner again generated strong revenue growth driven by balance sheet expansion, additional client acquisition, increased activity-based deposit fees and service charges and continued robust mortgage banking operations," said Mark J. Grescovich, President and Chief Executive Officer. "In addition to solid organic growth, compared to a year ago our successful acquisition of Siuslaw Financial Group, Inc. ("Siuslaw") in March 2015 and purchase of six branches from Umpqua Bank in June 2014 have meaningfully contributed to our increased revenues. Further, we are confident that our recently completed merger of AmericanWest Bank into Banner Bank will provide tremendous opportunities to continue to generate strong revenue growth going forward. We are focused on integrating the two banks and expect this merger, like our earlier acquisitions, will result in significant benefits to our expanding group of clients, communities, employees and shareholders."
Following completion of the merger with AmericanWest Bank, which closed on October 1, 2015, Banner Corporation will have approximately $9.9 billion in assets, $7.2 billion in loans and $8.0 billion in deposits, and Banner Bank will deploy its super community bank business model across five western states. In addition to the states of Washington, Oregon and Idaho, its expanded market area now also includes the states of California and Utah. The combined bank will benefit from a diversified geography with significant growth opportunities, including nine of the top twenty largest western cities by population.
Third Quarter 2015 Highlights
- Net income was $12.9 million, or $0.62 per diluted share.
- Annualized return on average assets was 0.97%.
- Annualized return on average equity was 7.67%.
- Revenues from core operations* increased 14% to $67.4 million, compared to $59.1 million in the third quarter a year ago.
- Net interest margin was 4.14% for the current quarter, compared to 4.19% in the second quarter of 2015 and 4.07% a year ago.
- Deposit fees and other service charges were $9.7 million, an increase of 2% compared to the preceding quarter and 18% year-over-year.
- Revenues from mortgage banking operations were $4.4 million, a slight decrease compared to the preceding quarter but a 56% increase year-over-year.
- Net loans increased by $126 million, or 3%, during the quarter, and increased 15% year-over-year.
- Total deposits increased 10% to $4.39 billion compared to a year ago.
- Core deposits increased by $126 million, or 4%, during the quarter, and increased 17% year-over-year.
- Core deposits represented 83% of total deposits at September 30, 2015.
- Common stockholders' tangible equity per share* increased to $30.75 at September 30, 2015, compared to $30.22 at the preceding quarter end and $29.12 a year ago.
- The ratio of tangible common stockholders' equity to tangible assets* remained strong at 12.20% at September 30, 2015.
*Revenues from core operations and other operating income from core operations (both of which exclude fair value adjustments and gains and losses on the sale of securities and acquisition bargain purchase gain), other operating expense from core operations (which excludes acquisition-related costs) and references to tangible common stockholders' equity per share and the ratio of tangible common equity to tangible assets (both of which exclude goodwill and other intangible assets) represent non-GAAP (Generally Accepted Accounting Principles) financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner's core operations reflected in the current quarter's results and facilitate the comparison of our performance with the performance of our peers. Where applicable, comparable earnings information using GAAP financial measures is also presented. See also Non-GAAP Financial Measures reconciliation tables on the last page of this press release.
Income Statement Review
Banner's third quarter net interest income, before the provision for loan losses, increased slightly to $52.2 million, compared to $51.5 million in the preceding quarter and increased 11% compared to $47.1 million in the third quarter a year ago, largely reflecting strong client acquisition and significant organic loan and deposit growth, as well as the branch purchase and Siuslaw acquisition. In the first nine months of 2015, Banner's net interest income increased 13% to $150.2 million compared to $133.2 million in the first nine months of 2014.
"While we expected some margin compression from the immediately preceding quarter, we maintained a solid net interest margin in the third quarter," said Grescovich. "In the preceding quarter, the net interest margin was aided by a substantial credit recovery, which contributed $471,000 to net interest income and added four basis points to the margin. Both the second and third quarters of 2015 were impacted by the accretion of purchase accounting discounts from the Siuslaw acquisition which contributed approximately three basis points to the margin in each period." Banner's net interest margin was 4.14% for the third quarter of 2015, compared to 4.19% in the preceding quarter and 4.07% in the third quarter a year ago. In the first nine months of the year, Banner's net interest margin was 4.14% compared to 4.07% in the first nine months of 2014.
Earning asset yields decreased seven basis points compared to the preceding quarter but increased three basis points from the third quarter a year ago. Loan yields decreased 14 basis points compared to the preceding quarter that included the large credit recovery which added five basis points to loan yields, and were five basis points lower than the third quarter a year ago. Deposit costs remained unchanged compared to the preceding quarter and decreased by three basis points compared to the third quarter a year ago. The total cost of funds declined one basis point in the third quarter compared to the preceding quarter and declined three basis points compared to the third quarter a year ago.
"Our revenues from mortgage banking operations were again strong in the third quarter of 2015, reflecting Banner's increased market presence and our investment in this business line, coupled with strong home purchase activity in our markets," said Grescovich. Mortgage banking operations contributed $4.4 million to third quarter revenues compared to $4.7 million in the preceding quarter and $2.8 million in the third quarter of 2014. In the first nine months of 2015, mortgage banking operations contributed $13.2 million to revenues compared to $7.3 million in the same period a year earlier. Home purchase activity accounted for 71% of third quarter mortgage banking originations and 64% of mortgage originations in the first nine months of 2015.
Deposit fees and other service charges increased 2% to $9.7 million in the third quarter of 2015, compared to $9.6 million in the preceding quarter and increased 18% compared to $8.3 million in the third quarter a year ago. In the first nine months of 2015, deposit fees and other service charges increased 23% to $27.4 million compared to $22.2 million in the first nine months of 2014. The year-over-year increase reflects strong organic growth, as well as the branch purchase and Siuslaw acquisition, resulting in growth in the number of deposit accounts and increased transaction activity.
Revenues from core operations* (revenues excluding gains and losses on the sale of securities, net change in valuation of financial instruments and the bargain purchase gain) increased to $67.4 million in the third quarter ended September 30, 2015, compared to $66.8 million in the preceding quarter and increased 14% compared to $59.1 million in the third quarter of 2014. In the first nine months of 2015, revenues from core operations* increased 17% to $193.9 million, compared to $165.3 million in the first nine months of 2014. Total revenues were $66.3 million for the quarter ended September 30, 2015, compared to $67.6 million in the preceding quarter and $60.6 million in the third quarter a year ago. In the first nine months of 2015, total revenues were $194.1 million, compared to $176.1 million in the same period a year ago.
Banner's third quarter 2015 results included a $1.1 million net loss for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value. In the preceding quarter, results included a $797,000 net gain for fair value adjustments, which was partially offset by $28,000 in net loss on the sale of securities. In the third quarter of 2014, results included a $1.5 million net gain for fair value adjustments on financial instruments carried at fair value as well as a $6,000 gain on the sale of securities.
Banner's total other operating income, which includes the changes in the valuation of financial instruments and gains and losses on the sale of securities, was $14.1 million in the third quarter of 2015, compared to $16.1 million in the second quarter of 2015 and $13.5 million in the third quarter a year ago. In the first nine months of 2015, total other operating income was $43.9 million compared to $42.9 million in the first nine months of 2014 which also included the bargain purchase gain. Other operating income from core operations,* which excludes gains and losses on sale of securities and net changes in the valuation of financial instruments, was $15.2 million for the third quarter of 2015, compared to $15.4 million for the preceding quarter and $12.1 million for the third quarter a year ago. Year-to-date, other operating income from core operations* increased 36% to $43.7 million, compared to $32.1 million in the same period a year ago.
Total other operating expenses (non-interest expenses) were $46.7 million in the third quarter of 2015, compared to $47.7 million in the preceding quarter and $38.5 million in the third quarter of 2014. The year-over-year increase in operating expenses was largely attributable to acquisition-related costs and incremental costs associated with operating the 16 branches acquired in June 2014 and March 2015, as well as generally increased compensation, occupancy and payment and card processing services reflecting increased transaction volume. Acquisition-related expenses were $2.2 million in the current quarter compared to $3.9 million in the preceding quarter and a $494,000 expense recovery in the third quarter one year ago. Year-to-date, total other operating expenses were $136.3 million, compared to $112.5 million in the same period one year ago, with acquisition-related expenses of $7.7 million, compared to $1.5 million in the comparable period one year ago. Acquisition-related expenses in the nine months ended September 30, 2015 included $5.9 million related to the acquisition of AmericanWest Bank which closed on October 1, 2015.
For the third quarter of 2015, Banner recorded $6.6 million in state and federal income tax expense for an effective tax rate of 33.9%, which reflects normal marginal tax rates increased by the effect of certain non-deductible merger expenses and reduced by the effect of tax-exempt income and certain tax credits.
Credit Quality
"Banner's third quarter credit quality metrics continue to reflect our moderate risk profile and our reserve levels remain adequate," said Grescovich. "As a result, similar to the same periods a year ago, no provision for loan losses was required during the quarter or nine months ended September 30, 2015 despite continued organic loan growth."
The allowance for loan losses was $77.3 million at September 30, 2015, or 1.77% of total loans outstanding and 329% of non-performing loans. Banner had net charge-offs of $9,000 in the third quarter compared to net recoveries of $2.0 million in the second quarter of 2015 and net recoveries of $21,000 in the third quarter a year ago. Non-performing loans were $23.5 million at September 30, 2015, compared to $23.3 million at June 30, 2015, and $19.8 million a year ago. Real estate owned and other repossessed assets totaled $6.4 million at September 30, 2015, compared to $6.1 million at June 30, 2015 and $4.0 million a year ago.
Banner's non-performing assets were 0.56% of total assets at September 30, 2015, compared to 0.57% at June 30, 2015 and 0.50% a year ago. Non-performing assets were $29.9 million at September 30, 2015, compared to $29.4 million at June 30, 2015 and $23.8 million a year ago.
Balance Sheet Review
Total assets increased by 2% to $5.31 billion at September 30, 2015, compared to $5.19 billion at June 30, 2015, and increased 12% compared to $4.76 billion a year ago, largely as a result of the Siuslaw acquisition but also reflecting continued strong organic growth. The total of securities and interest-bearing deposits held at other banks was $648.5 million at September 30, 2015, compared to $650.9 million at June 30, 2015 and $700.6 million a year ago. The average effective duration of Banner's securities portfolio was approximately 3.0 years at September 30, 2015.
"Net loans increased by $126 million, or 3%, during the quarter and increased 15% year-over-year due to strong organic growth, as well as the branch purchase and Siuslaw acquisition. Loan production remained solid, as did the regional economy, and we continue to see significant potential for growth in our loan origination pipelines," said Grescovich.
Net loans were $4.30 billion at September 30, 2015, compared to $4.17 billion at June 30, 2015, and $3.73 billion a year ago. The branch purchase and Siuslaw acquisition accounted for $88 million and $236 million, respectively, of the quarter-end loan portfolio. Commercial real estate and multifamily real estate loans increased 4% to $1.90 billion at September 30, 2015, compared to $1.82 billion at June 30, 2015, and increased 20% compared to $1.58 billion a year ago. Commercial business loans increased modestly to $812.1 million at September 30, 2015, compared to $811.6 million three months earlier and increased 12% compared to $728.1 million a year ago. Agricultural business loans increased 5% to $242.6 million at September 30, 2015, compared to $231.0 million three months earlier and increased slightly compared to $240.0 million a year ago. Total construction, land and land development loans increased 8% to $493.8 million at September 30, 2015, compared to $457.3 million at June 30, 2015, and increased 29% compared to $381.5 million a year earlier.
Banner's total deposits increased 2% to $4.39 billion at September 30, 2015, compared to $4.30 billion at June 30, 2015 and increased 10% compared to $3.99 billion a year ago. The branch purchase and Siuslaw acquisition accounted for $215 million and $336 million, respectively, of the deposit portfolio at September 30, 2015. Non-interest-bearing account balances increased 5% to $1.56 billion at September 30, 2015, compared to $1.48 billion three months earlier and increased 20% compared to $1.30 billion a year ago. Interest-bearing transaction and savings accounts increased 2% to $2.10 billion at September 30, 2015, compared to $2.05 billion three months earlier and increased 15% compared to $1.83 billion a year ago. Certificates of deposit decreased to $730.7 million at September 30, 2015, compared to $765.8 million at June 30, 2015, and decreased 14% compared to $853.0 million a year earlier. Brokered deposits totaled $10.1 million at September 30, 2015, compared to $9.6 million at June 30, 2015 and $41.2 million a year ago.
Banner's core deposits represented 83% of total deposits at September 30, 2015, compared to 79% of total deposits a year earlier. The cost of deposits was 0.16% for the quarter ended September 30, 2015, unchanged compared to the preceding quarter, and declined three basis points from 0.19% for the quarter ended September 30, 2014.
At September 30, 2015, total common stockholders' equity was $671.2 million, or $32.02 per share, compared to $660.7 million at June 30, 2015 and $573.4 million a year ago. Banner had 21.0 million shares of common stock outstanding at September 30, 2015, compared to 19.4 million shares one year earlier. On March 6, 2015, Banner issued 1.3 million shares in connection with the Siuslaw acquisition, which were valued at $44.02 per share and added $58.1 million to stockholders' equity. At September 30, 2015, tangible common stockholders' equity*, which excludes goodwill and other intangible assets, was $644.6 million, or 12.20% of tangible assets*, compared to $633.8 million, or 12.26% of tangible assets, at June 30, 2015, and $570.0 million, or 11.99% of tangible assets, a year ago. Banner's tangible book value per share* increased by 6% to $30.75 at September 30, 2015, compared to $29.12 per share a year ago. In conjunction with the AmericanWest Bank acquisition closing, Banner issued 13.23 million shares of common stock and non-voting common stock and $130 million in cash on October 1, 2015.
Banner Corporation and its subsidiary banks continue to maintain capital levels in excess of the requirements to be categorized as "well-capitalized" under the newly implemented Basel III and Dodd Frank regulatory standards. At September 30, 2015, Banner Corporation's common equity Tier 1 capital ratio was 12.82%, its Tier 1 leverage capital to average assets ratio was 13.85% and its total capital to risk-weighted assets ratio was 15.68%.
Conference Call
Banner will host a conference call on Thursday, October 22, 2015, at 8:00 a.m. PDT, to discuss its third 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 10072069, or at www.bannerbank.com.
About the Company
On October 1, 2015, Banner Corporation completed the acquisition of AmericanWest Bank which was merged into Banner Bank, a transformational merger bringing together two financially strong, well-respected institutions and creating a leading Western bank. Banner Corporation is now a $9.9 billion bank holding company operating two commercial banks in five 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 "believe," "will," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," 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. 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. Statements about the expected timing, completion and effects of the proposed merger and all other statements in this release other than historical facts constitute forward-looking statements.
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 merger of Banner Bank and Siuslaw Bank and the merger of Banner Bank and AmericanWest Bank 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; (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, Utah and California in particular; (12) the costs, effects and outcomes of litigation; (13) new legislation or regulatory changes, including but not limited to the Dodd-Frank Act and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act and 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; and (16) future goodwill impairment due to changes in Banner's business, changes in market conditions, or other factors.
Banner does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statement is made except where expressly required by law.
| RESULTS OF OPERATIONS | Quarters Ended | Nine Months Ended | ||||
| (in thousands except shares and per share data) | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 | |
| INTEREST INCOME: | ||||||
| Loans receivable | $51,749 | $51,078 | $46,496 | $149,192 | $131,439 | |
| Mortgage-backed securities | 1,307 | 1,275 | 1,459 | 3,609 | 4,376 | |
| Securities and cash equivalents | 1,737 | 1,723 | 1,809 | 5,138 | 5,595 | |
| 54,793 | 54,076 | 49,764 | 157,939 | 141,410 | ||
| INTEREST EXPENSE: | ||||||
| Deposits | 1,738 | 1,768 | 1,903 | 5,240 | 5,776 | |
| Federal Home Loan Bank advances | 4 | 3 | 20 | 24 | 110 | |
| Other borrowings | 47 | 48 | 43 | 137 | 133 | |
| Junior subordinated debentures | 816 | 800 | 734 | 2,357 | 2,180 | |
| 2,605 | 2,619 | 2,700 | 7,758 | 8,199 | ||
| Net interest income before provision for loan losses | 52,188 | 51,457 | 47,064 | 150,181 | 133,211 | |
| PROVISION FOR LOAN LOSSES | — | — | — | — | — | |
| Net interest income | 52,188 | 51,457 | 47,064 | 150,181 | 133,211 | |
| OTHER OPERATING INCOME: | ||||||
| Deposit fees and other service charges | 9,746 | 9,563 | 8,289 | 27,435 | 22,237 | |
| Mortgage banking operations | 4,426 | 4,703 | 2,842 | 13,238 | 7,282 | |
| Miscellaneous | 1,039 | 1,106 | 946 | 3,064 | 2,577 | |
| 15,211 | 15,372 | 12,077 | 43,737 | 32,096 | ||
| Net gain (loss) on sale of securities | — | (28) | 6 | (537) | 41 | |
| Net change in valuation of financial instruments carried at fair value | (1,113) | 797 | 1,452 | 735 | 1,662 | |
| Acquisition bargain purchase gain | — | — | — | — | 9,079 | |
| Total other operating income | 14,098 | 16,141 | 13,535 | 43,935 | 42,878 | |
| OTHER OPERATING EXPENSE: | ||||||
| Salary and employee benefits | 27,026 | 26,744 | 22,971 | 78,057 | 66,457 | |
| Less capitalized loan origination costs | (3,747) | (3,787) | (3,204) | (10,372) | (8,680) | |
| Occupancy and equipment | 6,470 | 6,357 | 5,819 | 18,833 | 17,055 | |
| Information / computer data services | 2,219 | 2,273 | 2,131 | 6,744 | 5,984 | |
| Payment and card processing services | 4,168 | 3,742 | 3,201 | 10,926 | 8,462 | |
| Professional services | 951 | 721 | 784 | 2,489 | 2,900 | |
| Advertising and marketing | 1,959 | 2,198 | 2,454 | 5,767 | 4,878 | |
| Deposit insurance | 713 | 625 | 607 | 1,905 | 1,820 | |
| State/municipal business and use taxes | 475 | 455 | 475 | 1,383 | 1,022 | |
| Real estate operations | (2) | 167 | (190) | 190 | (260) | |
| Amortization of core deposit intangibles | 286 | 367 | 531 | 1,268 | 1,460 | |
| Miscellaneous | 3,972 | 3,987 | 3,410 | 11,416 | 9,884 | |
| 44,490 | 43,849 | 38,989 | 128,606 | 110,982 | ||
| Acquisition related costs (expense recovery) | 2,207 | 3,885 | (494) | 7,741 | 1,530 | |
| Total other operating expense | 46,697 | 47,734 | 38,495 | 136,347 | 112,512 | |
| Income before provision for income taxes | 19,589 | 19,864 | 22,104 | 57,769 | 63,577 | |
| PROVISION FOR INCOME TAXES | 6,642 | 6,615 | 7,285 | 19,440 | 21,221 | |
| NET INCOME | $12,947 | $13,249 | $14,819 | $38,329 | $42,356 | |
| Earnings per share available to common shareholders: | ||||||
| Basic | $0.62 | $0.64 | $0.76 | $1.88 | $2.19 | |
| Diluted | $0.62 | $0.64 | $0.76 | $1.87 | $2.18 | |
| Cumulative dividends declared per common share | $0.18 | $0.18 | $0.18 | $0.54 | $0.54 | |
| Weighted average common shares outstanding: | ||||||
| Basic | 20,755,394 | 20,725,833 | 19,372,740 | 20,417,601 | 19,352,575 | |
| Diluted | 20,821,377 | 20,789,533 | 19,419,344 | 20,467,609 | 19,385,933 | |
| Increase (decrease) in common shares outstanding | (8,381) | (5,960) | 2,801 | 1,390,752 | 27,736 | |
| FINANCIAL CONDITION | ||||
| (in thousands except shares and per share data) | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 |
| ASSETS | ||||
| Cash and due from banks | $74,695 | $85,598 | $69,023 | $71,077 |
| Federal funds and interest-bearing deposits | 60,544 | 98,376 | 82,702 | 54,995 |
| Securities - trading | 37,515 | 32,404 | 51,076 | 40,258 |
| Securities - available for sale | 418,254 | 387,876 | 433,745 | 411,021 |
| Securities - held to maturity | 132,150 | 132,197 | 133,069 | 131,258 |
| Federal Home Loan Bank stock | 6,767 | 6,120 | 29,106 | 27,036 |
| Loans receivable: | ||||
| Held for sale | 3,136 | 1,154 | 6,949 | 2,786 |
| Held for portfolio | 4,369,458 | 4,245,322 | 3,799,746 | 3,831,034 |
| Allowance for loan losses | (77,320) | (77,329) | (74,331) | (75,907) |
| 4,295,274 | 4,169,147 | 3,732,364 | 3,757,913 | |
| Accrued interest receivable | 17,966 | 16,792 | 17,062 | 15,279 |
| Real estate owned held for sale, net | 6,363 | 6,105 | 3,928 | 3,352 |
| Property and equipment, net | 102,881 | 101,141 | 91,291 | 91,185 |
| Goodwill and other intangibles, net | 26,605 | 26,891 | 3,362 | 2,831 |
| Bank-owned life insurance | 71,842 | 71,744 | 63,293 | 63,759 |
| Other assets | 61,454 | 59,867 | 48,662 | 53,199 |
| $5,312,310 | $5,194,258 | $4,758,683 | $4,723,163 | |
| LIABILITIES | ||||
| Deposits: | ||||
| Non-interest-bearing | $1,561,516 | $1,484,315 | $1,304,720 | $1,298,866 |
| Interest-bearing transaction and savings accounts | 2,095,476 | 2,047,050 | 1,833,404 | 1,829,568 |
| Interest-bearing certificates | 730,661 | 765,780 | 852,994 | 770,516 |
| 4,387,653 | 4,297,145 | 3,991,118 | 3,898,950 | |
| Advances from Federal Home Loan Bank at fair value | 16,435 | 236 | 250 | 32,250 |
| Customer repurchase agreements | 88,083 | 94,523 | 67,605 | 77,185 |
| Junior subordinated debentures at fair value | 85,183 | 84,694 | 77,624 | 78,001 |
| Accrued expenses and other liabilities | 42,844 | 36,131 | 32,375 | 37,082 |
| Deferred compensation | 20,910 | 20,879 | 16,359 | 16,807 |
| 4,641,108 | 4,533,608 | 4,185,331 | 4,140,275 | |
| STOCKHOLDERS' EQUITY | ||||
| Common stock | 628,958 | 628,327 | 568,255 | 568,882 |
| Retained earnings | 41,269 | 32,096 | 6,074 | 14,264 |
| Other components of stockholders' equity | 975 | 227 | (977) | (258) |
| 671,202 | 660,650 | 573,352 | 582,888 | |
| $5,312,310 | $5,194,258 | $4,758,683 | $4,723,163 | |
| Common Shares Issued: | ||||
| Shares outstanding at end of period | 20,962,300 | 20,970,681 | 19,571,505 | 19,571,548 |
| Common stockholders' equity per share (1) | $32.02 | $31.50 | $29.30 | $29.78 |
| Common stockholders' tangible equity per share (1) (2) | $30.75 | $30.22 | $29.12 | $29.64 |
| Common stockholders' tangible equity to tangible assets (2) | 12.20% | 12.26% | 11.99% | 12.29% |
| Consolidated Tier 1 leverage capital ratio | 13.85% | 13.89% | 13.14% | 13.41% |
| (1) Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding. | ||||
| (2) Common stockholders' 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 page of the press release tables. | ||||
| ADDITIONAL FINANCIAL INFORMATION | |||||
| (dollars in thousands) | |||||
| Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 | ||
| LOANS (including loans held for sale): | |||||
| Commercial real estate: | |||||
| Owner occupied | $635,146 | $616,324 | $546,333 | $546,783 | |
| Investment properties | 1,062,418 | 996,714 | 854,284 | 856,942 | |
| Multifamily real estate | 198,874 | 205,276 | 183,944 | 167,524 | |
| Commercial construction | 47,490 | 45,137 | 18,606 | 17,337 | |
| Multifamily construction | 72,987 | 60,075 | 48,606 | 60,193 | |
| One- to four-family construction | 246,715 | 230,554 | 214,141 | 219,889 | |
| Land and land development: | |||||
| Residential | 111,091 | 105,146 | 89,649 | 102,435 | |
| Commercial | 15,517 | 16,419 | 10,505 | 11,152 | |
| Commercial business | 812,070 | 811,623 | 728,088 | 723,964 | |
| Agricultural business including secured by farmland | 242,556 | 230,964 | 240,048 | 238,499 | |
| One- to four-family real estate | 536,325 | 542,961 | 527,271 | 539,894 | |
| Consumer: | |||||
| Consumer secured by one- to four-family real estate | 250,029 | 244,216 | 215,385 | 222,205 | |
| Consumer-other | 141,376 | 141,067 | 129,835 | 127,003 | |
| Total loans outstanding | $4,372,594 | $4,246,476 | $3,806,695 | $3,833,820 | |
| Restructured loans performing under their restructured terms | $23,981 | $26,114 | $30,387 | $29,154 | |
| Loans 30 - 89 days past due and on accrual | $4,152 | $4,185 | $6,925 | $8,387 | |
| Total delinquent loans (including loans on non-accrual) | $27,682 | $27,476 | $26,703 | $25,124 | |
| Total delinquent loans / Total loans outstanding | 0.63% | 0.65% | 0.70% | 0.66% | |
| GEOGRAPHIC CONCENTRATION | |||||
| OF LOANS AT SEPTEMBER 30, 2015 | Washington | Oregon | Idaho | Other | Total |
| Commercial real estate: | |||||
| Owner occupied | $387,403 | $161,233 | $66,418 | $20,092 | $635,146 |
| Investment properties | 535,080 | 201,709 | 58,019 | 267,610 | 1,062,418 |
| Multifamily real estate | 115,568 | 68,586 | 14,720 | — | 198,874 |
| Commercial construction | 40,546 | 1,876 | 5,068 | — | 47,490 |
| Multifamily construction | 51,254 | 15,029 | 6,147 | 557 | 72,987 |
| One- to four-family construction | 128,816 | 109,202 | 6,009 | 2,688 | 246,715 |
| Land and land development: | |||||
| Residential | 55,824 | 53,023 | 2,080 | 164 | 111,091 |
| Commercial | 5,541 | 7,590 | 2,386 | — | 15,517 |
| Commercial business | 451,590 | 144,122 | 103,170 | 113,188 | 812,070 |
| Agricultural business including secured by farmland | 116,166 | 73,931 | 51,858 | 601 | 242,556 |
| One- to four-family real estate | 322,370 | 186,885 | 26,365 | 705 | 536,325 |
| Consumer: | |||||
| Consumer secured by one- to four-family real estate | 156,001 | 76,590 | 16,472 | 966 | 250,029 |
| Consumer-other | 84,613 | 49,789 | 6,589 | 385 | 141,376 |
| Total loans outstanding | $2,450,772 | $1,149,565 | $365,301 | $406,956 | $4,372,594 |
| Percent of total loans | 56.0% | 26.3% | 8.4% | 9.3% | 100.0% |
| ADDITIONAL FINANCIAL INFORMATION | |||||
| (dollars in thousands) | |||||
| Quarters Ended | Nine Months Ended | ||||
| CHANGE IN THE | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 |
| ALLOWANCE FOR LOAN LOSSES | |||||
| Balance, beginning of period | $77,329 | $75,365 | $74,310 | $75,907 | $74,258 |
| Provision | — | — | — | — | — |
| Recoveries of loans previously charged off: | |||||
| Commercial real estate | 375 | 197 | 94 | 587 | 664 |
| Multifamily real estate | — | 113 | — | 113 | — |
| Construction and land | 282 | 843 | 84 | 1,234 | 788 |
| One- to four-family real estate | 42 | 93 | 143 | 141 | 535 |
| Commercial business | 128 | 499 | 256 | 803 | 835 |
| Agricultural business, including secured by farmland | 146 | 1,225 | 587 | 1,666 | 1,248 |
| Consumer | 91 | 236 | 53 | 369 | 393 |
| 1,064 | 3,206 | 1,217 | 4,913 | 4,463 | |
| Loans charged off: | |||||
| Commercial real estate | — | (64) | — | (64) | (1,239) |
| Multifamily real estate | — | — | (20) | — | (20) |
| Construction and land | (352) | (2) | — | (352) | (207) |
| One- to four-family real estate | (12) | (40) | (239) | (127) | (632) |
| Commercial business | (312) | (327) | (83) | (745) | (1,081) |
| Agricultural business, including secured by farmland | — | (246) | (125) | (1,064) | (125) |
| Consumer | (397) | (563) | (729) | (1,148) | (1,086) |
| (1,073) | (1,242) | (1,196) | (3,500) | (4,390) | |
| Net (charge-offs) recoveries | (9) | 1,964 | 21 | 1,413 | 73 |
| Balance, end of period | $77,320 | $77,329 | $74,331 | $77,320 | $74,331 |
| Net (charge-offs) recoveries / Average loans outstanding | —% | 0.047% | 0.001% | 0.034% | 0.002% |
| ALLOCATION OF | ||||
| ALLOWANCE FOR LOAN LOSSES | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 |
| Specific or allocated loss allowance: | ||||
| Commercial real estate | $19,640 | $18,948 | $19,505 | $18,784 |
| Multifamily real estate | 4,363 | 4,273 | 4,892 | 4,562 |
| Construction and land | 27,274 | 25,415 | 20,779 | 23,545 |
| One- to four-family real estate | 7,937 | 8,542 | 9,136 | 8,447 |
| Commercial business | 12,765 | 13,184 | 12,677 | 12,043 |
| Agricultural business, including secured by farmland | 2,533 | 2,679 | 2,947 | 2,821 |
| Consumer | 804 | 780 | 675 | 483 |
| Total allocated | 75,316 | 73,821 | 70,611 | 70,685 |
| Unallocated | 2,004 | 3,508 | 3,720 | 5,222 |
| Total allowance for loan losses | $77,320 | $77,329 | $74,331 | $75,907 |
| Allowance for loan losses / Total loans outstanding | 1.77% | 1.82% | 1.95% | 1.98% |
| Allowance for loan losses / Non-performing loans | 329% | 332% | 376% | 454% |
| ADDITIONAL FINANCIAL INFORMATION | ||||
| (dollars in thousands) | ||||
| Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 | |
| NON-PERFORMING ASSETS | ||||
| Loans on non-accrual status: | ||||
| Secured by real estate: | ||||
| Commercial | $3,899 | $1,072 | $2,701 | $1,132 |
| Multifamily | — | — | 397 | — |
| Construction and land | 2,793 | 3,153 | 1,285 | 1,275 |
| One- to four-family | 4,934 | 5,662 | 8,615 | 8,834 |
| Commercial business | 980 | 179 | 1,037 | 537 |
| Agricultural business, including secured by farmland | 228 | 1,560 | 229 | 1,597 |
| Consumer | 789 | 861 | 1,138 | 1,187 |
| 13,623 | 12,487 | 15,402 | 14,562 | |
| Loans more than 90 days delinquent, still on accrual: | ||||
| Secured by real estate: | ||||
| Commercial | 1,808 | 1,835 | 993 | — |
| Multifamily | 556 | 570 | — | — |
| Construction and land | 5,792 | 5,951 | — | — |
| One- to four-family | 1,285 | 1,976 | 2,777 | 2,095 |
| Commercial business | 5 | — | 301 | — |
| Consumer | 461 | 472 | 306 | 79 |
| 9,907 | 10,804 | 4,377 | 2,174 | |
| Total non-performing loans | 23,530 | 23,291 | 19,779 | 16,736 |
| Real estate owned (REO) | 6,363 | 6,105 | 3,928 | 3,352 |
| Other repossessed assets | — | — | 69 | 76 |
| Total non-performing assets | $29,893 | $29,396 | $23,776 | $20,164 |
| Total non-performing assets / Total assets | 0.56% | 0.57% | 0.50% | 0.43% |
| DETAIL & GEOGRAPHIC CONCENTRATION OF | ||||
| NON-PERFORMING ASSETS AT SEPTEMBER 30, 2015 | Washington | Oregon | Idaho | Total |
| Secured by real estate: | ||||
| Commercial | $1,374 | $4,307 | $26 | $5,707 |
| Multifamily | — | 556 | — | 556 |
| Construction and land: | ||||
| One- to four-family construction | — | 1,175 | — | 1,175 |
| Residential land acquisition & development | — | 750 | — | 750 |
| Residential land improved lots | — | 493 | — | 493 |
| Commercial land improved | — | 4,618 | — | 4,618 |
| Commercial land unimproved | — | 1,549 | — | 1,549 |
| Total construction and land | — | 8,585 | — | 8,585 |
| One- to four-family | 5,356 | 480 | 383 | 6,219 |
| Commercial business | 133 | 784 | 68 | 985 |
| Agricultural business, including secured by farmland | 90 | 138 | — | 228 |
| Consumer | 686 | 489 | 75 | 1,250 |
| Total non-performing loans | 7,639 | 15,339 | 552 | 23,530 |
| Real estate owned (REO) | 2,176 | 4,187 | — | 6,363 |
| Other repossessed assets | — | — | — | — |
| Total non-performing assets | $9,815 | $19,526 | $552 | $29,893 |
| ADDITIONAL FINANCIAL INFORMATION | ||||
| (dollars in thousands) | ||||
| Quarters Ended | Nine Months Ended | |||
| REAL ESTATE OWNED | Sep 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 |
| Balance, beginning of period | $6,105 | $4,388 | $3,352 | $4,044 |
| Additions from loan foreclosures | 1,085 | 135 | 3,226 | 2,837 |
| Additions from acquisitions | — | — | 2,525 | — |
| Additions from capitalized costs | — | — | 298 | 37 |
| Proceeds from dispositions of REO | (906) | (860) | (3,155) | (3,633) |
| Gain on sale of REO | 113 | 265 | 333 | 680 |
| Valuation adjustments in the period | (34) | — | (216) | (37) |
| Balance, end of period | $6,363 | $3,928 | $6,363 | $3,928 |
| DEPOSIT COMPOSITION | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 |
| Non-interest-bearing | $1,561,516 | $1,484,315 | $1,304,720 | $1,298,866 |
| Interest-bearing checking | 482,530 | 477,492 | 429,876 | 439,480 |
| Regular savings accounts | 1,030,177 | 1,003,189 | 899,868 | 901,142 |
| Money market accounts | 582,769 | 566,369 | 503,660 | 488,946 |
| Interest-bearing transaction & savings accounts | 2,095,476 | 2,047,050 | 1,833,404 | 1,829,568 |
| Interest-bearing certificates | 730,661 | 765,780 | 852,994 | 770,516 |
| Total deposits | $4,387,653 | $4,297,145 | $3,991,118 | $3,898,950 |
| GEOGRAPHIC CONCENTRATION | ||||
| OF DEPOSITS AT SEPTEMBER 30, 2015 | Washington | Oregon | Idaho | Total |
| Total deposits | $2,911,674 | $1,224,132 | $251,847 | $4,387,653 |
| Percent of total deposits | 66.4% | 27.9% | 5.7% | 100.0% |
| INCLUDED IN TOTAL DEPOSITS | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 | |
| Public non-interest-bearing accounts | $48,814 | $50,894 | $34,535 | $39,381 | |
| Public interest-bearing transaction & savings accounts | 74,446 | 65,136 | 64,984 | 63,473 | |
| Public interest-bearing certificates | 27,791 | 33,577 | 48,508 | 35,346 | |
| Total public deposits | $151,051 | $149,607 | $148,027 | $138,200 | |
| Total brokered deposits | $10,095 | $9,646 | $41,249 | $4,799 | |
| OTHER BORROWINGS | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 |
| Customer repurchase agreements / "Sweep accounts" | $88,083 | $94,523 | $67,605 | $77,185 |
| ADDITIONAL FINANCIAL INFORMATION | ||
| (in thousands) | ||
| ACQUISITION OF SIX OREGON BRANCHES | June 20, 2014 | |
| Total consideration | $— | |
| Fair value of assets acquired: | ||
| Cash | $127,557 | |
| Loans receivable | 87,923 | |
| Property and equipment | 3,079 | |
| Intangible assets | 2,372 | |
| Other assets | 275 | |
| Total assets acquired | 221,206 | |
| Fair value of liabilities assumed: | ||
| Deposits | 212,085 | |
| Other liabilities | 42 | |
| Total liabilities assumed | 212,127 | |
| Net assets acquired | 9,079 | |
| Acquisition bargain purchase gain | $(9,079) | |
| ACQUISITION OF SIUSLAW FINANCIAL GROUP* | March 6, 2015 | |
| Cash paid | $5,800 | |
| Fair value of common shares issued | 58,106 | |
| Total consideration | 63,906 | |
| Fair value of assets acquired: | ||
| Cash | $84,405 | |
| Securities - available for sale | 12,865 | |
| Loans receivable | 247,098 | |
| Real estate owned held for sale | 2,525 | |
| Property and equipment | 8,127 | |
| Intangible assets | 3,895 | |
| Other assets | 11,391 | |
| Total assets acquired | 370,306 | |
| Fair value of liabilities assumed: | ||
| Deposits | 316,406 | |
| Junior subordinated debentures | 5,959 | |
| Other liabilities | 5,183 | |
| Total liabilities assumed | 327,548 | |
| Net assets acquired | 42,758 | |
| Goodwill | $21,148 | |
|
* Amounts recorded in this table are preliminary estimates of fair value. Additional adjustments to the purchase price allocation may be required. |
||
| 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 SEPTEMBER 30, 2015 | Amount | Ratio | Amount | Ratio | Amount | Ratio |
| Banner Corporation-consolidated: | ||||||
| Total capital to risk-weighted assets | $791,763 | 15.68% | $403,932 | 8.00% | $504,915 | 10.00% |
| Tier 1 capital to risk-weighted assets | 728,459 | 14.43% | 302,949 | 6.00% | 403,932 | 8.00% |
| Tier 1 leverage capital to average assets | 728,459 | 13.85% | 210,376 | 4.00% | 262,970 | 5.00% |
| Common equity tier 1 capital to risk-weighted assets | 647,505 | 12.82% | 227,212 | 4.50% | 328,195 | 6.50% |
| Banner Bank: | ||||||
| Total capital to risk-weighted assets | 693,968 | 14.24% | 389,903 | 8.00% | 487,379 | 10.00% |
| Tier 1 capital to risk-weighted assets | 632,854 | 12.98% | 292,427 | 6.00% | 389,903 | 8.00% |
| Tier 1 leverage capital to average assets | 632,854 | 12.67% | 199,804 | 4.00% | 249,754 | 5.00% |
| Common equity tier 1 capital to risk-weighted assets | 632,854 | 12.98% | 219,320 | 4.50% | 316,796 | 6.50% |
| Islanders Bank: | ||||||
| Total capital to risk-weighted assets | 38,031 | 19.94% | 15,260 | 8.00% | 19,075 | 10.00% |
| Tier 1 capital to risk-weighted assets | 35,754 | 18.74% | 11,445 | 6.00% | 15,260 | 8.00% |
| Tier 1 leverage capital to average assets | 35,754 | 13.20% | 10,833 | 4.00% | 13,541 | 5.00% |
| Common equity tier 1 capital to risk-weighted assets | 35,754 | 18.74% | 8,584 | 4.50% | 12,399 | 6.50% |
| ADDITIONAL FINANCIAL INFORMATION | |||||
| (dollars in thousands) | |||||
| (rates / ratios annualized) | |||||
| Quarters Ended | Nine Months Ended | ||||
| OPERATING PERFORMANCE | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 |
| Average loans | $4,313,839 | $4,181,548 | $3,834,007 | $4,139,989 | $3,633,990 |
| Average securities | 582,701 | 582,681 | 666,362 | 588,662 | 681,059 |
| Average interest earning cash | 109,445 | 159,191 | 85,090 | 120,013 | 66,208 |
| Average non-interest-earning assets | 276,761 | 272,486 | 213,045 | 259,641 | 203,432 |
| Total average assets | $5,282,746 | $5,195,906 | $4,798,504 | $5,108,305 | $4,584,689 |
| Average deposits | $4,379,887 | $4,304,753 | $3,995,451 | $4,228,867 | $3,773,206 |
| Average borrowings | 226,174 | 228,387 | 228,724 | 228,880 | 256,666 |
| Average non-interest-bearing other liabilities (1) | 6,731 | 2,966 | 2,026 | 4,275 | (3,040) |
| Total average liabilities | 4,612,792 | 4,536,106 | 4,226,201 | 4,462,022 | 4,026,832 |
| Total average stockholders' equity | 669,954 | 659,800 | 572,303 | 646,283 | 557,857 |
| Total average liabilities and equity | $5,282,746 | $5,195,906 | $4,798,504 | $5,108,305 | $4,584,689 |
| Interest rate yield on loans | 4.76% | 4.90% | 4.81% | 4.82% | 4.84% |
| Interest rate yield on securities | 2.01% | 1.99% | 1.91% | 1.93% | 1.93% |
| Interest rate yield on cash | 0.35% | 0.27% | 0.28% | 0.29% | 0.30% |
| Interest rate yield on interest-earning assets | 4.34% | 4.41% | 4.31% | 4.36% | 4.32% |
| Interest rate expense on deposits | 0.16% | 0.16% | 0.19% | 0.17% | 0.20% |
| Interest rate expense on borrowings | 1.52% | 1.49% | 1.38% | 1.47% | 1.26% |
| Interest rate expense on interest-bearing liabilities | 0.22% | 0.23% | 0.25% | 0.23% | 0.27% |
| Interest rate spread | 4.12% | 4.18% | 4.06% | 4.13% | 4.05% |
| Net interest margin | 4.14% | 4.19% | 4.07% | 4.14% | 4.07% |
| Other operating income / Average assets | 1.06% | 1.25% | 1.12% | 1.15% | 1.25% |
| Core other operating income / Average assets (2) | 1.14% | 1.19% | 1.00% | 1.14% | 0.94% |
| Other operating expense / Average assets | 3.51% | 3.68% | 3.18% | 3.57% | 3.28% |
| Core other operating expense / Average assets (2) | 3.34% | 3.38% | 3.22% | 3.37% | 3.24% |
| Efficiency ratio (other operating expense / revenue) | 70.45% | 70.61% | 63.52% | 70.24% | 63.89% |
| Efficiency ratio (core other operating expense / core operating revenue)(2) | 66.01% | 65.61% | 65.93% | 66.32% | 67.14% |
| Return on average assets | 0.97% | 1.02% | 1.23% | 1.00% | 1.24% |
| Return on average equity | 7.67% | 8.05% | 10.27% | 7.93% | 10.15% |
| Return on average tangible equity (3) | 7.99% | 8.40% | 10.34% | 8.20% | 10.20% |
| Average equity / Average assets | 12.68% | 12.70% | 11.93% | 12.65% | 12.17% |
| (1) Average non-interest-bearing liabilities include fair value adjustments related to FHLB advances and Junior Subordinated Debentures. | |||||
| (2) Core other operating income excludes net gain (loss) on sale of securities, fair value adjustments and acquisition bargain purchase gain. Core other operating expense excludes acquisition related costs. These represent non-GAAP financial measures. See also Non-GAAP Financial Measures reconciliation tables on the final page of these press release tables. | |||||
| (3) Average tangible equity excludes goodwill and other intangible assets and represents a non-GAAP financial measure. See also Non-GAAP Financial Measures reconciliation tables on the last page of this press release. | |||||
| ADDITIONAL FINANCIAL INFORMATION | |||||
| (dollars in thousands except shares and per share data) | |||||
| * Non-GAAP Financial Measures (unaudited) | |||||
| 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. Where applicable, comparable earnings information using GAAP financial measures is also presented. | |||||
| REVENUE FROM CORE OPERATIONS | Quarters Ended | Nine Months Ended | |||
| Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 | |
| Net interest income before provision for loan losses | $52,188 | $51,457 | $47,064 | $150,181 | $133,211 |
| Total other operating income | 14,098 | 16,141 | 13,535 | 43,935 | 42,878 |
| Total GAAP revenue | 66,286 | 67,598 | 60,599 | 194,116 | 176,089 |
| Exclude net (gain) loss on sale of securities | — | 28 | (6) | 537 | (41) |
| Exclude change in valuation of financial instruments carried at fair value | 1,113 | (797) | (1,452) | (735) | (1,662) |
| Exclude acquisition bargain purchase gain | — | — | — | — | (9,079) |
| Revenue from core operations (non-GAAP) | $67,399 | $66,829 | $59,141 | $193,918 | $165,307 |
| OTHER OPERATING INCOME/EXPENSE FROM CORE OPERATIONS | Quarters Ended | Nine Months Ended | |||
| Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Sep 30, 2015 | Sep 30, 2014 | |
| Total other operating income (GAAP) | $14,098 | $16,141 | $13,535 | $43,935 | $42,878 |
| Exclude net (gain) loss on sale of securities | — | 28 | (6) | 537 | (41) |
| Exclude change in valuation of financial instruments carried at fair value | 1,113 | (797) | (1,452) | (735) | (1,662) |
| Exclude acquisition bargain purchase gain | — | — | — | — | (9,079) |
| Other operating income from core operations (non-GAAP) | $15,211 | $15,372 | $12,077 | $43,737 | $32,096 |
| Total other operating expense (GAAP) | $46,697 | $47,734 | $38,495 | $136,347 | $112,512 |
| Exclude acquisition related costs | (2,207) | (3,885) | 494 | (7,741) | (1,530) |
| Other operating expense from core operations (non-GAAP) | $44,490 | $43,849 | $38,989 | $128,606 | $110,982 |
| TANGIBLE COMMON STOCKHOLDERS' EQUITY TO TANGIBLE ASSETS | Sep 30, 2015 | Jun 30, 2015 | Sep 30, 2014 | Dec 31, 2014 | |
| Stockholders' equity (GAAP) | $671,202 | $660,650 | $573,352 | $582,888 | |
| Exclude goodwill and other intangible assets, net | 26,605 | 26,891 | 3,362 | 2,831 | |
| Tangible common stockholders' equity (non-GAAP) | $644,597 | $633,759 | $569,990 | $580,057 | |
| Total assets (GAAP) | $5,312,310 | $5,194,258 | $4,758,683 | $4,723,163 | |
| Exclude goodwill and other intangible assets, net | 26,605 | 26,891 | 3,362 | 2,831 | |
| Total tangible assets (non-GAAP) | $5,285,705 | $5,167,367 | $4,755,321 | $4,720,332 | |
| Tangible common stockholders' equity to tangible assets (non-GAAP) | 12.20% | 12.26% | 11.99% | 12.29% | |
| TANGIBLE COMMON STOCKHOLDERS' EQUITY PER SHARE | |||||
| Tangible common stockholders' equity | $644,597 | $633,759 | $569,990 | $580,057 | |
| Common shares outstanding at end of period | 20,962,300 | 20,970,681 | 19,571,505 | 19,571,548 | |
| Common stockholders' equity (book value) per share (GAAP) | $32.02 | $29.82 | $27.97 | $27.63 | |
| Tangible common stockholders' equity (tangible book value) per share (non-GAAP) | $30.75 | $30.22 | $29.12 | $29.64 | |