Banner announced that its Board of Directors increased its regular quarterly cash dividend by 7% to
“Banner’s record 2021 operating results reflect the continued execution of our super community bank strategy including implementation of Banner Forward. We are generating new client relationships and adding to our core funding position by growing core deposits while maintaining a moderate risk profile,” said
“During the third quarter of 2021 we began implementing Banner Forward, a bank-wide initiative to drive revenue growth and reduce operating expense,” said Grescovich. “Full implementation is expected by 2023, with the goal of delivering sequential improvements in operating performance over the course of the next six quarters while staying true to our mission and value proposition of being connected, knowledgeable and responsive to our clients, communities and employees. Banner Forward is focused on accelerating growth in commercial banking, deepening relationships with retail clients, and advancing technology strategies to enhance our digital service channels, while streamlining underwriting and back office processes. During the fourth quarter of 2021, we incurred expenses of
At
Fourth Quarter 2021 Highlights
- Revenues decreased 6% to
$146.0 million , primarily due to a decline in SBA PPP loan forgiveness related interest income, compared to$155.5 million in the preceding quarter, and increased 1% when compared to$144.9 million in the fourth quarter a year ago. - Net interest income decreased to
$121.5 million in the fourth quarter of 2021, compared to$130.1 million in the preceding quarter and increased compared to$121.4 million in the fourth quarter a year ago. - Net interest margin on a tax equivalent basis was 3.17%, compared to 3.47% in the preceding quarter and 3.64% in the fourth quarter a year ago.
- Mortgage banking revenues decreased 41% to
$5.6 million , compared to$9.6 million in the preceding quarter, and decreased 47% compared to$10.6 million in the fourth quarter a year ago. - Return on average assets was 1.18%, compared to 1.20% in the preceding quarter and 1.04% in the fourth quarter a year ago.
- Net loans receivable decreased to
$8.95 billion atDecember 31, 2021 , compared to$9.08 billion atSeptember 30, 2021 , and decreased 8% compared to$9.70 billion atDecember 31, 2020 . - Non-performing assets decreased to
$23.7 million , or 0.14% of total assets, atDecember 31, 2021 , compared to$29.7 million , or 0.18% of total assets in the preceding quarter, and decreased from$36.5 million , or 0.24% of total assets, atDecember 31, 2020 . - The allowance for credit losses - loans was
$132.1 million , or 1.45% of total loans receivable, as ofDecember 31, 2021 , compared to$139.9 million , or 1.52% of total loans receivable as ofSeptember 30, 2021 and$167.3 million , or 1.69% of total loans receivable as ofDecember 31, 2020 . - Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 1% to
$13.49 billion atDecember 31, 2021 , compared to$13.31 billion atSeptember 30, 2021 , and increased 16% compared to$11.65 billion a year ago. Core deposits represented 94% of total deposits atDecember 31, 2021 . - Dividends to shareholders were
$0.41 per share in the quarter endedDecember 31, 2021 . - Common shareholders’ equity per share increased 1% to
$49.35 atDecember 31, 2021 , compared to$48.67 at the preceding quarter end, and increased 4% from$47.39 a year ago. - Tangible common shareholders’ equity per share* increased 2% to
$38.02 atDecember 31, 2021 , compared to$37.30 at the preceding quarter end, and increased 5% from$36.17 a year ago.
*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 adjusted revenue (which excludes fair value adjustments and net gain (loss) on the sale of securities from the total of net interest income and total non-interest income) and the adjusted efficiency ratio (which excludes merger and acquisition-related expenses, COVID-19 expenses, Banner Forward expenses, amortization of core deposit intangibles, real estate owned operations, loss on extinguishment of debt and state/municipal taxes from non-interest expense divided by adjusted revenue) 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.
Significant Recent Initiatives and Events
In
Income Statement Review
Net interest income was
Banner’s net interest margin on a tax equivalent basis was 3.17% for the fourth quarter of 2021, a 30 basis-point decrease compared to 3.47% in the preceding quarter and a 47 basis-point decrease compared to 3.64% in the fourth quarter a year ago.
“Lower interest income, primarily as a result of the decline in the acceleration of the recognition of deferred loan fee income due to loan repayments from SBA PPP loan forgiveness, adversely affected our net interest margin during the quarter. This impact was partially offset by a decrease in the cost of funding liabilities,” said Grescovich. Acquisition accounting adjustments added five basis points to the net interest margin in the current quarter, three basis points in the preceding quarter and five basis points in the fourth quarter a year ago. The total purchase discount for acquired loans was
Average yields on interest-earning assets decreased 33 basis points to 3.29% in the fourth quarter compared to 3.62% for the preceding quarter and decreased 58 basis points compared to 3.87% in the fourth quarter a year ago. These decreases in average yield between periods primarily reflects decreases in the average yield on investment securities and increases in the average balance of interest-bearing deposits, as excess liquidity was invested in low yielding short term investments. Average loan yields decreased 31 basis points to 4.57% compared to 4.88% in the preceding quarter and increased four basis points compared to 4.53% in the fourth quarter a year ago. The decrease in average loan yields during the current quarter compared to the preceding quarter was primarily the result of the decline in the acceleration of the recognition of deferred loan fee income due to loan repayments from SBA PPP loan forgiveness during the quarter. Loan discount accretion added eight basis points to average loan yields in the current quarter, five basis points in the preceding quarter and seven basis points in the fourth quarter a year ago. Deposit costs were 0.07% in the fourth quarter of 2021, a one basis-point decrease compared to the preceding quarter and a seven basis-point decrease compared to the fourth quarter a year ago. The year-over-year decrease in quarterly deposit costs was primarily the result of decreases in market interest rates during 2020. The total cost of funding liabilities was 0.13% during the fourth quarter of 2021, a three basis-point decrease compared to the preceding quarter and an 11 basis-point decrease compared to the fourth quarter a year ago.
Banner recorded a
Total non-interest income was
Banner’s fourth quarter 2021 results included a
Total revenue decreased 6% to
Total non-interest expense was
For the fourth quarter of 2021, Banner had
Balance Sheet Review
Total assets increased to
Total loans receivable decreased 1% to
Loans held for sale were
Total deposits increased 1% to
At
Banner and its subsidiary bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At
Credit Quality
The allowance for credit losses - loans was
Banner’s total substandard loans were
Banner’s total non-performing assets were
At
Conference Call
Banner will host a conference call on
About the Company
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the
The COVID-19 pandemic is adversely affecting us, our clients, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Deterioration in general business and economic conditions, including increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) 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 credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (2) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner’s activities; (3) competitive pressures among depository institutions; (4) interest rate movements and their impact on client behavior and net interest margin; (5) uncertainty regarding the future of the London Interbank Offered Rate (LIBOR), and the potential transition away from LIBOR toward new interest rate benchmarks; (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 clients’ needs and developments in the market place; (9) the ability to access cost-effective funding; (10) disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (11) changes in financial markets; (12) changes in economic conditions in general and in
RESULTS OF OPERATIONS | Quarters Ended | Twelve Months Ended | ||||||||||||||||||
(in thousands except shares and per share data) | ||||||||||||||||||||
INTEREST INCOME: | ||||||||||||||||||||
Loans receivable | $ | 104,929 | $ | 116,487 | $ | 115,545 | $ | 445,731 | $ | 466,360 | ||||||||||
Mortgage-backed securities | 13,220 | 11,695 | 7,438 | 45,723 | 31,792 | |||||||||||||||
Securities and cash equivalents | 8,397 | 7,686 | 6,170 | 29,046 | 20,994 | |||||||||||||||
126,546 | 135,868 | 129,153 | 520,500 | 519,146 | ||||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||
Deposits | 2,384 | 2,749 | 4,392 | 11,770 | 25,015 | |||||||||||||||
348 | 655 | 987 | 2,592 | 5,023 | ||||||||||||||||
Other borrowings | 109 | 125 | 121 | 467 | 603 | |||||||||||||||
Junior subordinated debentures and subordinated notes | 2,175 | 2,193 | 2,216 | 8,780 | 7,204 | |||||||||||||||
5,016 | 5,722 | 7,716 | 23,609 | 37,845 | ||||||||||||||||
Net interest income | 121,530 | 130,146 | 121,437 | 496,891 | 481,301 | |||||||||||||||
(RECAPTURE)/PROVISION FOR CREDIT LOSSES | (5,243 | ) | (8,638 | ) | 602 | (33,388 | ) | 67,875 | ||||||||||||
Net interest income after (recapture)/provision for credit losses | 126,773 | 138,784 | 120,835 | 530,279 | 413,426 | |||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||||
Deposit fees and other service charges | 10,341 | 10,457 | 8,293 | 39,495 | 34,384 | |||||||||||||||
Mortgage banking operations | 5,643 | 9,613 | 10,586 | 33,948 | 51,083 | |||||||||||||||
Bank-owned life insurance | 1,203 | 1,245 | 1,319 | 5,000 | 5,972 | |||||||||||||||
Miscellaneous | 4,702 | 2,185 | 1,410 | 12,875 | 6,821 | |||||||||||||||
21,889 | 23,500 | 21,608 | 91,318 | 98,260 | ||||||||||||||||
Net (loss) gain on sale of securities | (136 | ) | 56 | 197 | 482 | 1,012 | ||||||||||||||
Net change in valuation of financial instruments carried at fair value | 2,721 | 1,778 | 1,704 | 4,616 | (656 | ) | ||||||||||||||
Total non-interest income | 24,474 | 25,334 | 23,509 | 96,416 | 98,616 | |||||||||||||||
NON-INTEREST EXPENSE: | ||||||||||||||||||||
Salary and employee benefits | 57,798 | 59,799 | 60,906 | 244,351 | 245,400 | |||||||||||||||
Less capitalized loan origination costs | (7,647 | ) | (8,290 | ) | (9,415 | ) | (34,401 | ) | (34,848 | ) | ||||||||||
Occupancy and equipment | 13,885 | 13,153 | 14,248 | 52,850 | 53,362 | |||||||||||||||
Information / computer data services | 6,441 | 6,110 | 6,402 | 24,356 | 24,386 | |||||||||||||||
Payment and card processing services | 5,062 | 6,181 | 3,960 | 20,544 | 16,095 | |||||||||||||||
Professional and legal expenses | 2,251 | 12,324 | 5,643 | 22,274 | 12,093 | |||||||||||||||
Advertising and marketing | 2,071 | 1,521 | 2,828 | 6,036 | 6,412 | |||||||||||||||
Deposit insurance expense | 1,340 | 1,469 | 1,548 | 5,583 | 6,516 | |||||||||||||||
State/municipal business and use taxes | 976 | 1,219 | 1,071 | 4,343 | 4,355 | |||||||||||||||
Real estate operations | 49 | 53 | (283 | ) | (22 | ) | (190 | ) | ||||||||||||
Amortization of core deposit intangibles | 1,574 | 1,575 | 1,865 | 6,571 | 7,732 | |||||||||||||||
Loss on extinguishment of debt | 2,284 | — | — | 2,284 | — | |||||||||||||||
Miscellaneous | 5,594 | 6,977 | 5,871 | 24,236 | 22,712 | |||||||||||||||
91,678 | 102,091 | 94,644 | 379,005 | 364,025 | ||||||||||||||||
COVID-19 expenses | 127 | 44 | 333 | 436 | 3,502 | |||||||||||||||
Merger and acquisition-related expenses | — | 10 | 579 | 660 | 2,062 | |||||||||||||||
Total non-interest expense | 91,805 | 102,145 | 95,556 | 380,101 | 369,589 | |||||||||||||||
Income before provision for income taxes | 59,442 | 61,973 | 48,788 | 246,594 | 142,453 | |||||||||||||||
PROVISION FOR INCOME TAXES | 9,515 | 12,089 | 9,831 | 45,546 | 26,525 | |||||||||||||||
NET INCOME | $ | 49,927 | $ | 49,884 | $ | 38,957 | $ | 201,048 | $ | 115,928 | ||||||||||
Earnings per share available to common shareholders: | ||||||||||||||||||||
Basic | $ | 1.46 | $ | 1.45 | $ | 1.11 | $ | 5.81 | $ | 3.29 | ||||||||||
Diluted | $ | 1.44 | $ | 1.44 | $ | 1.10 | $ | 5.76 | $ | 3.26 | ||||||||||
Cumulative dividends declared per common share | $ | 0.41 | $ | 0.41 | $ | 0.41 | $ | 1.64 | $ | 1.23 | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 34,292,967 | 34,446,510 | 35,200,769 | 34,610,056 | 35,264,252 | |||||||||||||||
Diluted | 34,575,607 | 34,669,492 | 35,425,810 | 34,919,188 | 35,528,848 | |||||||||||||||
Increase (decrease) in common shares outstanding | 641 | (298,897 | ) | 632 | (906,568 | ) | (592,376 | ) |
FINANCIAL CONDITION | Percentage Change | |||||||||||||||||
(in thousands except shares and per share data) | Prior Qtr | Prior Yr Qtr | ||||||||||||||||
ASSETS | ||||||||||||||||||
Cash and due from banks | $ | 358,461 | $ | 392,035 | $ | 311,899 | (8.6) | % | 14.9 | % | ||||||||
Interest-bearing deposits | 1,775,839 | 1,808,547 | 922,284 | (1.8) | % | 92.5 | % | |||||||||||
Total cash and cash equivalents | 2,134,300 | 2,200,582 | 1,234,183 | (3.0) | % | 72.9 | % | |||||||||||
Securities - trading | 26,981 | 26,875 | 24,980 | 0.4 | % | 8.0 | % | |||||||||||
Securities - available for sale | 3,638,993 | 3,446,575 | 2,322,593 | 5.6 | % | 56.7 | % | |||||||||||
Securities - held to maturity | 520,922 | 447,708 | 421,713 | 16.4 | % | 23.5 | % | |||||||||||
Total securities | 4,186,896 | 3,921,158 | 2,769,286 | 6.8 | % | 51.2 | % | |||||||||||
12,000 | 12,000 | 16,358 | — | % | (26.6) | % | ||||||||||||
Securities purchased under agreements to resell | 300,000 | 300,000 | — | — | % | nm | ||||||||||||
Loans held for sale | 96,487 | 63,678 | 243,795 | 51.5 | % | (60.4) | % | |||||||||||
Loans receivable | 9,084,763 | 9,218,384 | 9,870,982 | (1.4) | % | (8.0) | % | |||||||||||
Allowance for credit losses - loans | (132,099 | ) | (139,915 | ) | (167,279 | ) | (5.6) | % | (21.0) | % | ||||||||
Net loans receivable | 8,952,664 | 9,078,469 | 9,703,703 | (1.4) | % | (7.7) | % | |||||||||||
Accrued interest receivable | 42,916 | 43,644 | 46,617 | (1.7) | % | (7.9) | % | |||||||||||
Real estate owned (REO) held for sale, net | 852 | 852 | 816 | — | % | 4.4 | % | |||||||||||
Property and equipment, net | 148,759 | 151,503 | 164,556 | (1.8) | % | (9.6) | % | |||||||||||
373,121 | 373,121 | 373,121 | — | % | — | % | ||||||||||||
Other intangibles, net | 14,855 | 16,429 | 21,426 | (9.6) | % | (30.7) | % | |||||||||||
Bank-owned life insurance | 244,156 | 192,950 | 191,830 | 26.5 | % | 27.3 | % | |||||||||||
Operating lease right-of-use assets | 55,257 | 58,523 | 55,367 | (5.6) | % | (0.2) | % | |||||||||||
Other assets | 242,609 | 224,970 | 210,565 | 7.8 | % | 15.2 | % | |||||||||||
Total assets | $ | 16,804,872 | $ | 16,637,879 | $ | 15,031,623 | 1.0 | % | 11.8 | % | ||||||||
LIABILITIES | ||||||||||||||||||
Deposits: | ||||||||||||||||||
Non-interest-bearing | $ | 6,385,177 | $ | 6,400,864 | $ | 5,492,924 | (0.2) | % | 16.2 | % | ||||||||
Interest-bearing transaction and savings accounts | 7,103,125 | 6,912,759 | 6,159,052 | 2.8 | % | 15.3 | % | |||||||||||
Interest-bearing certificates | 838,631 | 851,054 | 915,320 | (1.5) | % | (8.4) | % | |||||||||||
Total deposits | 14,326,933 | 14,164,677 | 12,567,296 | 1.1 | % | 14.0 | % | |||||||||||
Advances from | 50,000 | 50,000 | 150,000 | — | % | (66.7) | % | |||||||||||
Customer repurchase agreements and other borrowings | 264,490 | 247,358 | 184,785 | 6.9 | % | 43.1 | % | |||||||||||
Subordinated notes, net | 98,564 | 98,472 | 98,201 | 0.1 | % | 0.4 | % | |||||||||||
Junior subordinated debentures at fair value | 119,815 | 124,853 | 116,974 | (4.0) | % | 2.4 | % | |||||||||||
Operating lease liabilities | 59,756 | 62,946 | 59,343 | (5.1) | % | 0.7 | % | |||||||||||
Accrued expenses and other liabilities | 148,303 | 175,960 | 143,300 | (15.7) | % | 3.5 | % | |||||||||||
Deferred compensation | 46,684 | 46,494 | 45,460 | 0.4 | % | 2.7 | % | |||||||||||
Total liabilities | 15,114,545 | 14,970,760 | 13,365,359 | 1.0 | % | 13.1 | % | |||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||||||||||
Common stock | 1,299,381 | 1,297,145 | 1,349,879 | 0.2 | % | (3.7) | % | |||||||||||
Retained earnings | 390,762 | 355,035 | 247,316 | 10.1 | % | 58.0 | % | |||||||||||
Other components of shareholders’ equity | 184 | 14,939 | 69,069 | (98.8) | % | (99.7) | % | |||||||||||
Total shareholders’ equity | 1,690,327 | 1,667,119 | 1,666,264 | 1.4 | % | 1.4 | % | |||||||||||
Total liabilities and shareholders’ equity | $ | 16,804,872 | $ | 16,637,879 | $ | 15,031,623 | 1.0 | % | 11.8 | % | ||||||||
Common Shares Issued: | ||||||||||||||||||
Shares outstanding at end of period | 34,252,632 | 34,251,991 | 35,159,200 | |||||||||||||||
Common shareholders’ equity per share (1) | $ | 49.35 | $ | 48.67 | $ | 47.39 | ||||||||||||
Common shareholders’ tangible equity per share (1) (2) | $ | 38.02 | $ | 37.30 | $ | 36.17 | ||||||||||||
Common shareholders’ tangible equity to tangible assets (2) | 7.93 | % | 7.86 | % | 8.69 | % | ||||||||||||
Consolidated Tier 1 leverage capital ratio | 8.76 | % | 8.79 | % | 9.50 | % |
(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 final two pages of the press release tables. |
ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||
Percentage Change | ||||||||||||||||||
LOANS | Prior Qtr | Prior Yr Qtr | ||||||||||||||||
Commercial real estate: | ||||||||||||||||||
Owner-occupied | $ | 1,131,828 | $ | 1,122,275 | $ | 1,076,467 | 0.9 | % | 5.1 | % | ||||||||
Investment properties | 1,990,461 | 1,980,284 | 1,955,684 | 0.5 | % | 1.8 | % | |||||||||||
Small balance CRE | 598,212 | 601,751 | 573,849 | (0.6) | % | 4.2 | % | |||||||||||
Multifamily real estate | 564,100 | 532,760 | 428,223 | 5.9 | % | 31.7 | % | |||||||||||
Construction, land and land development: | ||||||||||||||||||
Commercial construction | 169,530 | 170,205 | 228,937 | (0.4) | % | (25.9) | % | |||||||||||
Multifamily construction | 259,116 | 278,184 | 305,527 | (6.9) | % | (15.2) | % | |||||||||||
One- to four-family construction | 568,753 | 571,431 | 507,810 | (0.5) | % | 12.0 | % | |||||||||||
Land and land development | 313,454 | 308,164 | 248,915 | 1.7 | % | 25.9 | % | |||||||||||
Commercial business: | ||||||||||||||||||
Commercial business | 1,039,502 | 1,039,731 | 1,133,989 | — | % | (8.3) | % | |||||||||||
SBA PPP | 132,574 | 306,976 | 1,044,472 | (56.8) | % | (87.3) | % | |||||||||||
Small business scored | 792,310 | 775,554 | 743,451 | 2.2 | % | 6.6 | % | |||||||||||
Agricultural business, including secured by farmland: | ||||||||||||||||||
Agricultural business, including secured by farmland | 284,399 | 284,255 | 299,949 | 0.1 | % | (5.2) | % | |||||||||||
SBA PPP | 1,354 | 3,214 | — | (57.9) | % | nm | ||||||||||||
One- to four-family residential | 683,268 | 682,368 | 717,939 | 0.1 | % | (4.8) | % | |||||||||||
Consumer: | ||||||||||||||||||
Consumer—home equity revolving lines of credit | 458,533 | 462,819 | 491,812 | (0.9) | % | (6.8) | % | |||||||||||
Consumer—other | 97,369 | 98,413 | 113,958 | (1.1) | % | (14.6) | % | |||||||||||
Total loans receivable | $ | 9,084,763 | $ | 9,218,384 | $ | 9,870,982 | (1.4) | % | (8.0) | % | ||||||||
Restructured loans performing under their restructured terms | $ | 5,309 | $ | 5,273 | $ | 6,673 | ||||||||||||
Loans 30 - 89 days past due and on accrual | $ | 11,558 | $ | 6,911 | $ | 12,291 | ||||||||||||
Total delinquent loans (including loans on non-accrual), net | $ | 18,688 | $ | 18,619 | $ | 36,131 | ||||||||||||
Total delinquent loans / Total loans receivable | 0.21 | % | 0.20 | % | 0.37 | % |
LOANS BY GEOGRAPHIC LOCATION | Percentage Change | |||||||||||||||
2021 | 2020 | Prior Qtr | Prior Yr Qtr | |||||||||||||
Amount | Percentage | Amount | Amount | |||||||||||||
$ | 4,264,590 | 47.0% | $ | 4,319,008 | $ | 4,647,553 | (1.3)% | (8.2)% | ||||||||
2,138,340 | 23.5% | 2,160,280 | 2,279,749 | (1.0)% | (6.2)% | |||||||||||
1,652,364 | 18.2% | 1,679,452 | 1,792,156 | (1.6)% | (7.8)% | |||||||||||
525,141 | 5.8% | 536,128 | 537,996 | (2.0)% | (2.4)% | |||||||||||
74,913 | 0.8% | 89,620 | 80,704 | (16.4)% | (7.2)% | |||||||||||
Other | 429,415 | 4.7% | 433,896 | 532,824 | (1.0)% | (19.4)% | ||||||||||
Total loans receivable | $ | 9,084,763 | 100.0% | $ | 9,218,384 | $ | 9,870,982 | (1.4)% | (8.0)% |
ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||
(dollars in thousands) | ||||||||||||||
LOAN ORIGINATIONS | Quarters Ended | Twelve Months Ended | ||||||||||||
Commercial real estate | $ | 196,350 | $ | 174,827 | $ | 93,838 | $ | 565,809 | $ | 356,361 | ||||
Multifamily real estate | 25,933 | 26,155 | 7,900 | 110,640 | 27,119 | |||||||||
Construction and land | 522,081 | 496,386 | 515,280 | 1,975,664 | 1,588,311 | |||||||||
Commercial business: | ||||||||||||||
Commercial business | 203,549 | 229,859 | 133,112 | 731,315 | 628,981 | |||||||||
SBA PPP | — | 907 | — | 485,077 | 1,176,018 | |||||||||
Agricultural business | 13,061 | 9,223 | 11,552 | 61,997 | 76,096 | |||||||||
One-to four-family residential | 52,251 | 49,594 | 28,402 | 206,662 | 116,713 | |||||||||
Consumer | 101,365 | 145,102 | 97,416 | 465,213 | 423,526 | |||||||||
Total loan originations (excluding loans held for sale) | $ | 1,114,590 | $ | 1,132,053 | $ | 887,500 | $ | 4,602,377 | $ | 4,393,125 |
ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Quarters Ended | Twelve Months Ended | |||||||||||||||||||
CHANGE IN THE | ||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES - LOANS | ||||||||||||||||||||
Balance, beginning of period | $ | 139,915 | $ | 148,009 | $ | 167,965 | $ | 167,279 | $ | 100,559 | ||||||||||
Beginning balance adjustment for adoption of ASC 326 | — | — | — | — | 7,812 | |||||||||||||||
(Recapture)/provision for credit losses - loans | (8,127 | ) | (8,850 | ) | (593 | ) | (33,112 | ) | 64,285 | |||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Commercial real estate | 635 | 923 | 31 | 1,729 | 275 | |||||||||||||||
Construction and land | — | — | — | 100 | 105 | |||||||||||||||
One- to four-family real estate | 47 | 19 | 194 | 199 | 467 | |||||||||||||||
Commercial business | 267 | 230 | 2,444 | 1,797 | 3,265 | |||||||||||||||
Agricultural business, including secured by farmland | 5 | 17 | 51 | 30 | 1,823 | |||||||||||||||
Consumer | 140 | 227 | 90 | 760 | 328 | |||||||||||||||
1,094 | 1,416 | 2,810 | 4,615 | 6,263 | ||||||||||||||||
Loans charged off: | ||||||||||||||||||||
Commercial real estate | (1 | ) | — | (1,375 | ) | (3,767 | ) | (1,854 | ) | |||||||||||
Multifamily real estate | (59 | ) | — | — | (59 | ) | (66 | ) | ||||||||||||
Construction and land | — | — | — | — | (100 | ) | ||||||||||||||
One- to four-family real estate | — | — | — | — | (136 | ) | ||||||||||||||
Commercial business | (488 | ) | (362 | ) | (1,019 | ) | (1,762 | ) | (7,253 | ) | ||||||||||
Agricultural business, including secured by farmland | — | (179 | ) | (37 | ) | (181 | ) | (591 | ) | |||||||||||
Consumer | (235 | ) | (119 | ) | (472 | ) | (914 | ) | (1,640 | ) | ||||||||||
(783 | ) | (660 | ) | (2,903 | ) | (6,683 | ) | (11,640 | ) | |||||||||||
Net recoveries (charge-offs) | 311 | 756 | (93 | ) | (2,068 | ) | (5,377 | ) | ||||||||||||
Balance, end of period | $ | 132,099 | $ | 139,915 | $ | 167,279 | $ | 132,099 | $ | 167,279 | ||||||||||
Net recoveries (charge-offs) / Average loans receivable | 0.003 | % | 0.008 | % | (0.001 | )% | (0.021 | )% | (0.053 | )% |
ALLOCATION OF | ||||||||||||
ALLOWANCE FOR CREDIT LOSSES - LOANS | ||||||||||||
Specific or allocated credit loss allowance: | ||||||||||||
Commercial real estate | $ | 52,995 | $ | 57,215 | $ | 57,791 | ||||||
Multifamily real estate | 7,043 | 6,657 | 3,893 | |||||||||
Construction and land | 27,294 | 29,342 | 41,295 | |||||||||
One- to four-family real estate | 8,205 | 9,460 | 9,913 | |||||||||
Commercial business | 26,421 | 26,873 | 35,007 | |||||||||
Agricultural business, including secured by farmland | 3,190 | 3,177 | 4,914 | |||||||||
Consumer | 6,951 | 7,191 | 14,466 | |||||||||
Total allowance for credit losses - loans | $ | 132,099 | $ | 139,915 | $ | 167,279 | ||||||
Allowance for credit losses - loans / Total loans receivable | 1.45 | % | 1.52 | % | 1.69 | % | ||||||
Allowance for credit losses - loans / Non-performing loans | 578 | % | 485 | % | 470 | % |
Quarters Ended | Twelve Months Ended | |||||||||||||||
CHANGE IN THE | ||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS | ||||||||||||||||
Balance, beginning of period | $ | 10,127 | $ | 9,909 | $ | 12,094 | $ | 13,297 | $ | 2,716 | ||||||
Beginning balance adjustment for adoption of ASC 326 | — | — | — | — | 7,022 | |||||||||||
Provision/(recapture) for credit losses - unfunded loan commitments | 2,305 | 218 | 1,203 | (865 | ) | 3,559 | ||||||||||
Balance, end of period | $ | 12,432 | $ | 10,127 | $ | 13,297 | $ | 12,432 | $ | 13,297 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||
(dollars in thousands) | |||||||||||
NON-PERFORMING ASSETS | |||||||||||
Loans on non-accrual status: | |||||||||||
Secured by real estate: | |||||||||||
Commercial | $ | 14,159 | $ | 14,931 | $ | 18,199 | |||||
Construction and land | 479 | 354 | 936 | ||||||||
One- to four-family | 2,711 | 3,182 | 3,556 | ||||||||
Commercial business | 2,156 | 2,700 | 5,407 | ||||||||
Agricultural business, including secured by farmland | 1,022 | 1,022 | 1,743 | ||||||||
Consumer | 1,754 | 1,850 | 2,719 | ||||||||
22,281 | 24,039 | 32,560 | |||||||||
Loans more than 90 days delinquent, still on accrual: | |||||||||||
Secured by real estate: | |||||||||||
Commercial | — | 3,955 | — | ||||||||
One- to four-family | 436 | 772 | 1,899 | ||||||||
Commercial business | 2 | 61 | 1,025 | ||||||||
Consumer | 117 | 34 | 130 | ||||||||
555 | 4,822 | 3,054 | |||||||||
Total non-performing loans | 22,836 | 28,861 | 35,614 | ||||||||
REO | 852 | 852 | 816 | ||||||||
Other repossessed assets | 17 | 17 | 51 | ||||||||
Total non-performing assets | $ | 23,705 | $ | 29,730 | $ | 36,481 | |||||
Total non-performing assets to total assets | 0.14 | % | 0.18 | % | 0.24 | % |
LOANS BY CREDIT RISK RATING | ||||||||
Pass | $ | 8,874,468 | $ | 8,956,604 | $ | 9,494,147 | ||
Special Mention | 11,932 | 36,001 | 36,598 | |||||
Substandard | 198,363 | 225,779 | 340,237 | |||||
Total | $ | 9,084,763 | $ | 9,218,384 | $ | 9,870,982 |
Quarters Ended | Twelve Months Ended | ||||||||||||||||
REAL ESTATE OWNED | |||||||||||||||||
Balance, beginning of period | $ | 852 | $ | 763 | $ | 1,795 | $ | 816 | $ | 814 | |||||||
Additions from loan foreclosures | — | 89 | — | 512 | 1,588 | ||||||||||||
Proceeds from dispositions of REO | — | — | (1,555 | ) | (783 | ) | (2,360 | ) | |||||||||
Gain on sale of REO | — | — | 603 | 307 | 819 | ||||||||||||
Valuation adjustments in the period | — | — | (27 | ) | — | (45 | ) | ||||||||||
Balance, end of period | $ | 852 | $ | 852 | $ | 816 | $ | 852 | $ | 816 |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||
(dollars in thousands) | |||||||||||||||
DEPOSIT COMPOSITION | Percentage Change | ||||||||||||||
Prior Qtr | Prior Yr Qtr | ||||||||||||||
Non-interest-bearing | $ | 6,385,177 | $ | 6,400,864 | $ | 5,492,924 | (0.2) | % | 16.2 | % | |||||
Interest-bearing checking | 1,947,414 | 1,799,657 | 1,569,435 | 8.2 | % | 24.1 | % | ||||||||
Regular savings accounts | 2,784,716 | 2,773,995 | 2,398,482 | 0.4 | % | 16.1 | % | ||||||||
Money market accounts | 2,370,995 | 2,339,107 | 2,191,135 | 1.4 | % | 8.2 | % | ||||||||
Total interest-bearing transaction and savings accounts | 7,103,125 | 6,912,759 | 6,159,052 | 2.8 | % | 15.3 | % | ||||||||
Total core deposits | 13,488,302 | 13,313,623 | 11,651,976 | 1.3 | % | 15.8 | % | ||||||||
Interest-bearing certificates | 838,631 | 851,054 | 915,320 | (1.5) | % | (8.4) | % | ||||||||
Total deposits | $ | 14,326,933 | $ | 14,164,677 | $ | 12,567,296 | 1.1 | % | 14.0 | % |
GEOGRAPHIC CONCENTRATION OF DEPOSITS | ||||||||||||||||||
Percentage Change | ||||||||||||||||||
Amount | Percentage | Amount | Amount | Prior Qtr | Prior Yr Qtr | |||||||||||||
$ | 7,952,376 | 55.5 | % | $ | 7,877,919 | $ | 7,058,404 | 0.9 | % | 12.7 | % | |||||||
3,067,054 | 21.4 | % | 3,030,109 | 2,604,908 | 1.2 | % | 17.7 | % | ||||||||||
2,524,296 | 17.6 | % | 2,501,521 | 2,237,949 | 0.9 | % | 12.8 | % | ||||||||||
783,207 | 5.5 | % | 755,128 | 666,035 | 3.7 | % | 17.6 | % | ||||||||||
Total deposits | $ | 14,326,933 | 100.0 | % | $ | 14,164,677 | $ | 12,567,296 | 1.1 | % | 14.0 | % |
INCLUDED IN TOTAL DEPOSITS | |||||||||
Public non-interest-bearing accounts | $ | 193,917 | $ | 193,414 | $ | 175,352 | |||
Public interest-bearing transaction & savings accounts | 159,957 | 161,407 | 127,523 | ||||||
Public interest-bearing certificates | 39,961 | 40,851 | 59,127 | ||||||
Total public deposits | $ | 393,835 | $ | 395,672 | $ | 362,002 |
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 | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||
Total capital to risk-weighted assets | $ | 1,663,943 | 14.71 | % | $ | 904,633 | 8.00 | % | $ | 1,130,791 | 10.00 | % | ||||||
Tier 1 capital to risk-weighted assets | 1,440,694 | 12.74 | % | 678,474 | 6.00 | % | 678,474 | 6.00 | % | |||||||||
Tier 1 leverage capital to average assets | 1,440,694 | 8.76 | % | 658,091 | 4.00 | % | n/a | n/a | ||||||||||
Common equity tier 1 capital to risk-weighted assets | 1,305,194 | 11.54 | % | 508,856 | 4.50 | % | n/a | n/a | ||||||||||
Total capital to risk-weighted assets | 1,552,204 | 13.73 | % | 904,159 | 8.00 | % | 1,130,199 | 10.00 | % | |||||||||
Tier 1 capital to risk-weighted assets | 1,428,955 | 12.64 | % | 678,119 | 6.00 | % | 904,159 | 8.00 | % | |||||||||
Tier 1 leverage capital to average assets | 1,428,955 | 8.69 | % | 657,882 | 4.00 | % | 822,353 | 5.00 | % | |||||||||
Common equity tier 1 capital to risk-weighted assets | 1,428,955 | 12.64 | % | 508,589 | 4.50 | % | 734,629 | 6.50 | % |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||
(rates / ratios annualized) | |||||||||||||||||||||||||||||
ANALYSIS OF NET INTEREST SPREAD | Quarters Ended | ||||||||||||||||||||||||||||
Average Balance | Interest and Dividends | Yield / Cost(3) | Average Balance | Interest and Dividends | Yield / Cost(3) | Average Balance | Interest and Dividends | Yield / Cost(3) | |||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||
Held for sale loans | $ | 73,101 | $ | 601 | 3.26 | % | $ | 114,938 | $ | 996 | 3.44 | % | $ | 110,414 | $ | 976 | 3.52 | % | |||||||||||
Mortgage loans | 7,362,363 | 83,059 | 4.48 | % | 7,245,962 | 83,803 | 4.59 | % | 7,251,101 | 84,634 | 4.64 | % | |||||||||||||||||
Commercial/agricultural loans | 1,460,486 | 14,966 | 4.07 | % | 1,534,978 | 15,776 | 4.08 | % | 1,626,508 | 19,143 | 4.68 | % | |||||||||||||||||
SBA PPP loans | 209,776 | 5,845 | 11.05 | % | 566,515 | 15,421 | 10.80 | % | 1,125,844 | 10,002 | 3.53 | % | |||||||||||||||||
Consumer and other loans | 119,658 | 1,749 | 5.80 | % | 120,112 | 1,774 | 5.86 | % | 135,498 | 2,057 | 6.04 | % | |||||||||||||||||
Total loans(1)(3) | 9,225,384 | 106,220 | 4.57 | % | 9,582,505 | 117,770 | 4.88 | % | 10,249,365 | 116,812 | 4.53 | % | |||||||||||||||||
Mortgage-backed securities | 2,838,759 | 13,344 | 1.86 | % | 2,560,027 | 11,820 | 1.83 | % | 1,429,635 | 7,536 | 2.10 | % | |||||||||||||||||
Other securities | 1,550,383 | 8,466 | 2.17 | % | 1,491,035 | 7,873 | 2.09 | % | 975,166 | 6,634 | 2.71 | % | |||||||||||||||||
Equity securities | — | — | — | % | — | — | — | % | 234,822 | 64 | 0.11 | % | |||||||||||||||||
Interest-bearing deposits with banks | 1,901,165 | 731 | 0.15 | % | 1,486,839 | 586 | 0.16 | % | 611,234 | 219 | 0.14 | % | |||||||||||||||||
FHLB stock | 12,000 | 135 | 4.46 | % | 13,957 | 135 | 3.84 | % | 16,361 | 162 | 3.94 | % | |||||||||||||||||
Total investment securities (3) | 6,302,307 | 22,676 | 1.43 | % | 5,551,858 | 20,414 | 1.46 | % | 3,267,218 | 14,615 | 1.78 | % | |||||||||||||||||
Total interest-earning assets | 15,527,691 | 128,896 | 3.29 | % | 15,134,363 | 138,184 | 3.62 | % | 13,516,583 | 131,427 | 3.87 | % | |||||||||||||||||
Non-interest-earning assets | 1,306,437 | 1,301,383 | 1,349,055 | ||||||||||||||||||||||||||
Total assets | $ | 16,834,128 | $ | 16,435,746 | $ | 14,865,638 | |||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||
Interest-bearing checking accounts | $ | 1,875,097 | 289 | 0.06 | % | $ | 1,771,869 | 282 | 0.06 | % | $ | 1,483,183 | 315 | 0.08 | % | ||||||||||||||
Savings accounts | 2,773,597 | 400 | 0.06 | % | 2,721,028 | 458 | 0.07 | % | 2,375,015 | 691 | 0.12 | % | |||||||||||||||||
Money market accounts | 2,367,861 | 559 | 0.09 | % | 2,322,453 | 668 | 0.11 | % | 2,165,960 | 1,047 | 0.19 | % | |||||||||||||||||
Certificates of deposit | 840,920 | 1,136 | 0.54 | % | 863,971 | 1,341 | 0.62 | % | 916,286 | 2,339 | 1.02 | % | |||||||||||||||||
Total interest-bearing deposits | 7,857,475 | 2,384 | 0.12 | % | 7,679,321 | 2,749 | 0.14 | % | 6,940,444 | 4,392 | 0.25 | % | |||||||||||||||||
Non-interest-bearing deposits | 6,523,149 | — | — | % | 6,275,634 | — | — | % | 5,499,240 | — | — | % | |||||||||||||||||
Total deposits | 14,380,624 | 2,384 | 0.07 | % | 13,954,955 | 2,749 | 0.08 | % | 12,439,684 | 4,392 | 0.14 | % | |||||||||||||||||
Other interest-bearing liabilities: | |||||||||||||||||||||||||||||
FHLB advances | 50,000 | 348 | 2.76 | % | 98,370 | 655 | 2.64 | % | 150,000 | 987 | 2.62 | % | |||||||||||||||||
Other borrowings | 266,559 | 109 | 0.16 | % | 252,720 | 125 | 0.20 | % | 187,560 | 121 | 0.26 | % | |||||||||||||||||
Junior subordinated debentures and subordinated notes | 246,510 | 2,175 | 3.50 | % | 247,944 | 2,193 | 3.51 | % | 247,944 | 2,216 | 3.56 | % | |||||||||||||||||
Total borrowings | 563,069 | 2,632 | 1.85 | % | 599,034 | 2,973 | 1.97 | % | 585,504 | 3,324 | 2.26 | % | |||||||||||||||||
Total funding liabilities | 14,943,693 | 5,016 | 0.13 | % | 14,553,989 | 5,722 | 0.16 | % | 13,025,188 | 7,716 | 0.24 | % | |||||||||||||||||
Other non-interest-bearing liabilities(2) | 216,940 | 202,918 | 195,965 | ||||||||||||||||||||||||||
Total liabilities | 15,160,633 | 14,756,907 | 13,221,153 | ||||||||||||||||||||||||||
Shareholders’ equity | 1,673,495 | 1,678,839 | 1,644,485 | ||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,834,128 | $ | 16,435,746 | $ | 14,865,638 | |||||||||||||||||||||||
Net interest income/rate spread (tax equivalent) | $ | 123,880 | 3.16 | % | $ | 132,462 | 3.46 | % | $ | 123,711 | 3.63 | % | |||||||||||||||||
Net interest margin (tax equivalent) | 3.17 | % | 3.47 | % | 3.64 | % | |||||||||||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||
Adjustments for taxable equivalent basis | (2,350 | ) | (2,316 | ) | (2,274 | ) | |||||||||||||||||||||||
Net interest income and margin, as reported | $ | 121,530 | 3.11 | % | $ | 130,146 | 3.41 | % | $ | 121,437 | 3.57 | % | |||||||||||||||||
Additional Key Financial Ratios: | |||||||||||||||||||||||||||||
Return on average assets | 1.18 | % | 1.20 | % | 1.04 | % | |||||||||||||||||||||||
Return on average equity | 11.84 | % | 11.79 | % | 9.42 | % | |||||||||||||||||||||||
Average equity/average assets | 9.94 | % | 10.21 | % | 11.06 | % | |||||||||||||||||||||||
Average interest-earning assets/average interest-bearing liabilities | 184.40 | % | 182.82 | % | 179.60 | % | |||||||||||||||||||||||
Average interest-earning assets/average funding liabilities | 103.91 | % | 103.99 | % | 103.77 | % | |||||||||||||||||||||||
Non-interest income/average assets | 0.58 | % | 0.61 | % | 0.63 | % | |||||||||||||||||||||||
Non-interest expense/average assets | 2.16 | % | 2.47 | % | 2.56 | % | |||||||||||||||||||||||
Efficiency ratio(4) | 62.88 | % | 65.70 | % | 65.93 | % | |||||||||||||||||||||||
Adjusted efficiency ratio(5) | 59.71 | % | 59.65 | % | 64.31 | % |
(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 junior subordinated debentures. | |
(3) | Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was | |
(4) | Non-interest expense divided by the total of net interest income and non-interest income. | |
(5) | Adjusted non-interest expense divided by adjusted revenue. These represent non-GAAP financial measures. See the non-GAAP Financial Measures on the final two pages of the press release tables. |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||
(rates / ratios annualized) | |||||||||||||||||||
ANALYSIS OF NET INTEREST SPREAD | Twelve Months Ended | ||||||||||||||||||
Average Balance | Interest and Dividends | Yield/Cost(3) | Average Balance | Interest and Dividends | Yield/Cost(3) | ||||||||||||||
Interest-earning assets: | |||||||||||||||||||
Held for sale loans | $ | 94,252 | $ | 3,066 | 3.25 | % | $ | 144,220 | $ | 5,482 | 3.80 | % | |||||||
Mortgage loans | 7,225,860 | 328,115 | 4.54 | % | 7,303,584 | 352,878 | 4.83 | % | |||||||||||
Commercial/agricultural loans | 1,498,808 | 62,479 | 4.17 | % | 1,765,265 | 80,567 | 4.56 | % | |||||||||||
SBA PPP loans | 770,041 | 49,854 | 6.47 | % | 760,912 | 23,133 | 3.04 | % | |||||||||||
Consumer and other loans | 122,520 | 7,298 | 5.96 | % | 147,827 | 9,208 | 6.23 | % | |||||||||||
Total loans(1)(3) | 9,711,481 | 450,812 | 4.64 | % | 10,121,808 | 471,268 | 4.66 | % | |||||||||||
Mortgage-backed securities | 2,451,110 | 46,199 | 1.88 | % | 1,330,355 | 32,188 | 2.42 | % | |||||||||||
Other securities | 1,336,974 | 30,114 | 2.25 | % | 777,378 | 21,839 | 2.81 | % | |||||||||||
Equity securities | 429 | — | — | % | 182,846 | 373 | 0.20 | % | |||||||||||
Interest-bearing deposits with banks | 1,392,619 | 1,955 | 0.14 | % | 272,725 | 907 | 0.33 | % | |||||||||||
FHLB stock | 13,966 | 592 | 4.24 | % | 18,952 | 947 | 5.00 | % | |||||||||||
Total investment securities(3) | 5,195,098 | 78,860 | 1.52 | % | 2,582,256 | 56,254 | 2.18 | % | |||||||||||
Total interest-earning assets | 14,906,579 | 529,672 | 3.55 | % | 12,704,064 | 527,522 | 4.15 | % | |||||||||||
Non-interest-earning assets | 1,268,348 | 1,262,170 | |||||||||||||||||
Total assets | $ | 16,174,927 | $ | 13,966,234 | |||||||||||||||
Deposits: | |||||||||||||||||||
Interest-bearing checking accounts | $ | 1,755,293 | 1,188 | 0.07 | % | $ | 1,385,252 | 1,479 | 0.11 | % | |||||||||
Savings accounts | 2,652,018 | 1,833 | 0.07 | % | 2,194,418 | 4,257 | 0.19 | % | |||||||||||
Money market accounts | 2,305,814 | 2,670 | 0.12 | % | 1,996,870 | 6,275 | 0.31 | % | |||||||||||
Certificates of deposit | 876,509 | 6,079 | 0.69 | % | 1,030,722 | 13,004 | 1.26 | % | |||||||||||
Total interest-bearing deposits | 7,589,634 | 11,770 | 0.16 | % | 6,607,262 | 25,015 | 0.38 | % | |||||||||||
Non-interest-bearing deposits | 6,132,875 | — | — | % | 4,929,768 | — | — | % | |||||||||||
Total deposits | 13,722,509 | 11,770 | 0.09 | % | 11,537,030 | 25,015 | 0.22 | % | |||||||||||
Other interest-bearing liabilities: | |||||||||||||||||||
FHLB advances | 97,945 | 2,592 | 2.65 | % | 215,093 | 5,023 | 2.34 | % | |||||||||||
Other borrowings | 240,817 | 467 | 0.19 | % | 193,862 | 603 | 0.31 | % | |||||||||||
Junior subordinated debentures and subordinated notes | 247,583 | 8,780 | 3.55 | % | 198,490 | 7,204 | 3.63 | % | |||||||||||
Total borrowings | 586,345 | 11,839 | 2.02 | % | 607,445 | 12,830 | 2.11 | % | |||||||||||
Total funding liabilities | 14,308,854 | 23,609 | 0.16 | % | 12,144,475 | 37,845 | 0.31 | % | |||||||||||
Other non-interest-bearing liabilities(2) | 206,774 | 197,422 | |||||||||||||||||
Total liabilities | 14,515,628 | 12,341,897 | |||||||||||||||||
Shareholders’ equity | 1,659,299 | 1,624,337 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 16,174,927 | $ | 13,966,234 | |||||||||||||||
Net interest income/rate spread (tax equivalent) | $ | 506,063 | 3.39 | % | $ | 489,677 | 3.84 | % | |||||||||||
Net interest margin (tax equivalent) | 3.39 | % | 3.85 | % | |||||||||||||||
Reconciliation to reported net interest income: | |||||||||||||||||||
Adjustments for taxable equivalent basis | (9,172 | ) | (8,376 | ) | |||||||||||||||
Net interest income and margin, as reported | $ | 496,891 | 3.33 | % | $ | 481,301 | 3.79 | % | |||||||||||
Additional Key Financial Ratios: | |||||||||||||||||||
Return on average assets | 1.24 | % | 0.83 | % | |||||||||||||||
Return on average equity | 12.12 | % | 7.14 | % | |||||||||||||||
Average equity/average assets | 10.26 | % | 11.63 | % | |||||||||||||||
Average interest-earning assets/average interest-bearing liabilities | ` | 182.32 | % | 176.09 | % | ||||||||||||||
Average interest-earning assets/average funding liabilities | 104.18 | % | 104.61 | % | |||||||||||||||
Non-interest income/average assets | 0.60 | % | 0.71 | % | |||||||||||||||
Non-interest expense/average assets | 2.35 | % | 2.65 | % | |||||||||||||||
Efficiency ratio(4) | 64.06 | % | 63.73 | % | |||||||||||||||
Adjusted efficiency ratio(5) | 60.22 | % | 60.76 | % |
(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 junior subordinated debentures. | |
(3) | Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was | |
(4) | Non-interest expense divided by the total of net interest income and non-interest income. | |
(5) | Adjusted non-interest expense divided by adjusted revenue. These represent non-GAAP financial measures. See the non-GAAP Financial Measures on the final two pages of the press release tables. |
ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||
* Non-GAAP Financial Measures | |||||||||||||||||||
In addition to results presented in accordance with generally accepted accounting principles in | |||||||||||||||||||
ADJUSTED REVENUE | Quarters Ended | Twelve Months Ended | |||||||||||||||||
Net interest income | $ | 121,530 | $ | 130,146 | $ | 121,437 | $ | 496,891 | $ | 481,301 | |||||||||
Total non-interest income | 24,474 | 25,334 | 23,509 | 96,416 | 98,616 | ||||||||||||||
Total revenue (GAAP) | 146,004 | 155,480 | 144,946 | 593,307 | 579,917 | ||||||||||||||
Exclude net loss (gain) on sale of securities | 136 | (56 | ) | (197 | ) | (482 | ) | (1,012 | ) | ||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (2,721 | ) | (1,778 | ) | (1,704 | ) | (4,616 | ) | 656 | ||||||||||
Adjusted revenue (non-GAAP) | $ | 143,419 | $ | 153,646 | $ | 143,045 | $ | 588,209 | $ | 579,561 |
ADJUSTED EARNINGS | Quarters Ended | Twelve Months Ended | ||||||||||||||||||
Net income (GAAP) | $ | 49,927 | $ | 49,884 | $ | 38,957 | $ | 201,048 | $ | 115,928 | ||||||||||
Exclude net loss (gain) on sale of securities | 136 | (56 | ) | (197 | ) | (482 | ) | (1,012 | ) | |||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (2,721 | ) | (1,778 | ) | (1,704 | ) | (4,616 | ) | 656 | |||||||||||
Exclude merger and acquisition-related expenses | — | 10 | 579 | 660 | 2,062 | |||||||||||||||
Exclude COVID-19 expenses | 127 | 44 | 333 | 436 | 3,502 | |||||||||||||||
Exclude Banner Forward expenses | 1,157 | 7,592 | — | 11,604 | — | |||||||||||||||
Exclude loss on extinguishment of debt | 2,284 | — | — | 2,284 | — | |||||||||||||||
Exclude related net tax (benefit) expense | (236 | ) | (1,395 | ) | 237 | (2,373 | ) | (1,239 | ) | |||||||||||
Total adjusted earnings (non-GAAP) | $ | 50,674 | $ | 54,301 | $ | 38,205 | $ | 208,561 | $ | 119,897 | ||||||||||
Diluted earnings per share (GAAP) | $ | 1.44 | $ | 1.44 | $ | 1.10 | $ | 5.76 | $ | 3.26 | ||||||||||
Diluted adjusted earnings per share (non-GAAP) | $ | 1.47 | $ | 1.57 | $ | 1.08 | $ | 5.97 | $ | 3.37 |
ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
ADJUSTED EFFICIENCY RATIO | Quarters Ended | Twelve Months Ended | ||||||||||||||||||
Non-interest expense (GAAP) | $ | 91,805 | $ | 102,145 | $ | 95,556 | $ | 380,101 | $ | 369,589 | ||||||||||
Exclude merger and acquisition-related expenses | — | (10 | ) | (579 | ) | (660 | ) | (2,062 | ) | |||||||||||
Exclude COVID-19 expenses | (127 | ) | (44 | ) | (333 | ) | (436 | ) | (3,502 | ) | ||||||||||
Exclude Banner Forward expenses | (1,157 | ) | (7,592 | ) | — | (11,604 | ) | — | ||||||||||||
Exclude CDI amortization | (1,574 | ) | (1,575 | ) | (1,865 | ) | (6,571 | ) | (7,732 | ) | ||||||||||
Exclude state/municipal tax expense | (976 | ) | (1,219 | ) | (1,071 | ) | (4,343 | ) | (4,355 | ) | ||||||||||
Exclude REO operations | (49 | ) | (53 | ) | 283 | 22 | 190 | |||||||||||||
Exclude loss on extinguishment of debt | (2,284 | ) | — | — | (2,284 | ) | — | |||||||||||||
Adjusted non-interest expense (non-GAAP) | $ | 85,638 | $ | 91,652 | $ | 91,991 | $ | 354,225 | $ | 352,128 | ||||||||||
Net interest income (GAAP) | $ | 121,530 | $ | 130,146 | $ | 121,437 | $ | 496,891 | $ | 481,301 | ||||||||||
Non-interest income (GAAP) | 24,474 | 25,334 | 23,509 | 96,416 | 98,616 | |||||||||||||||
Total revenue | 146,004 | 155,480 | 144,946 | 593,307 | 579,917 | |||||||||||||||
Exclude net loss (gain) on sale of securities | 136 | (56 | ) | (197 | ) | (482 | ) | (1,012 | ) | |||||||||||
Exclude net change in valuation of financial instruments carried at fair value | (2,721 | ) | (1,778 | ) | (1,704 | ) | (4,616 | ) | 656 | |||||||||||
Adjusted revenue (non-GAAP) | $ | 143,419 | $ | 153,646 | $ | 143,045 | $ | 588,209 | $ | 579,561 | ||||||||||
Efficiency ratio (GAAP) | 62.88 | % | 65.70 | % | 65.93 | % | 64.06 | % | 63.73 | % | ||||||||||
Adjusted efficiency ratio (non-GAAP) | 59.71 | % | 59.65 | % | 64.31 | % | 60.22 | % | 60.76 | % |
TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS | ||||||||||||
Shareholders’ equity (GAAP) | $ | 1,690,327 | $ | 1,667,119 | $ | 1,666,264 | ||||||
Exclude goodwill and other intangible assets, net | 387,976 | 389,550 | 394,547 | |||||||||
Tangible common shareholders’ equity (non-GAAP) | $ | 1,302,351 | $ | 1,277,569 | $ | 1,271,717 | ||||||
Total assets (GAAP) | $ | 16,804,872 | $ | 16,637,879 | $ | 15,031,623 | ||||||
Exclude goodwill and other intangible assets, net | 387,976 | 389,550 | 394,547 | |||||||||
Total tangible assets (non-GAAP) | $ | 16,416,896 | $ | 16,248,329 | $ | 14,637,076 | ||||||
Common shareholders’ equity to total assets (GAAP) | 10.06 | % | 10.02 | % | 11.09 | % | ||||||
Tangible common shareholders’ equity to tangible assets (non-GAAP) | 7.93 | % | 7.86 | % | 8.69 | % | ||||||
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE | ||||||||||||
Tangible common shareholders’ equity (non-GAAP) | $ | 1,302,351 | $ | 1,277,569 | $ | 1,271,717 | ||||||
Common shares outstanding at end of period | 34,252,632 | 34,251,991 | 35,159,200 | |||||||||
Common shareholders’ equity (book value) per share (GAAP) | $ | 49.35 | $ | 48.67 | $ | 47.39 | ||||||
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) | $ | 38.02 | $ | 37.30 | $ | 36.17 |
CONTACT: | ||
PRESIDENT & CEO | ||
(509) 527-3636 |
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