[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2018
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________to__________
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Washington
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91-1691604
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(State or other jurisdiction of incorporation
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(I.R.S. Employer
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or organization)
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Identification Number)
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Common Stock, par value $.01 per share
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The NASDAQ Stock Market LLC
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(Title of Each Class)
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(Name of Each Exchange on Which Registered)
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Large accelerated filer
X
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Accelerated filer
___
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Non-accelerated filer _____
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Smaller reporting company ____
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Emerging growth company ____
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PART I
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Page
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Item 1.
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Business
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General
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Recent Developments and significant events
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Lending Activities
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Asset Quality
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Investment Activities
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Deposit Activities and Other Sources of Funds
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Personnel
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Taxation
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Competition
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Regulation
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Management Personnel
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Corporate Information
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Executive Overview
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Comparison of Financial Condition at December 31, 2018 and 2017
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Comparison of Results of Operations
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Years ended December 31, 2018 and 2017
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Years ended December 31, 2017 and 2016
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Market Risk and Asset/Liability Management
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Liquidity and Capital Resources
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Capital Requirements
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Effect of Inflation and Changing Prices
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Contractual Obligations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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Signatures
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Item 1 – Business
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General
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|
•
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Total reported loans for construction, land development and other land
represent 100% or more of the bank's total regulatory capital; or
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•
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Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank's total regulatory capital or the outstanding balance of the bank's commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
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Name
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Age
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Position with Banner Corporation
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Position with Banner Bank
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Mark J. Grescovich
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54
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President, Chief Executive Officer,
Director
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President, Chief Executive Officer, Director
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Richard B. Barton
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75
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Executive Vice President,
Chief Credit Officer
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Peter J. Conner
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53
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Executive Vice President
Chief Financial Officer
Treasurer
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Executive Vice President,
Chief Financial Officer
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James P. Garcia
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59
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Executive Vice President,
Chief Audit Executive
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Kenneth W. Johnson
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56
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Executive Vice President
Operations
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Kayleen R. Kohler
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46
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Executive Vice President
Human Resources
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Kenneth A. Larsen
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49
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Executive Vice President,
Mortgage Banking
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James P. G. McLean
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54
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Executive Vice President,
Commercial Real Estate Lending Division
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Craig Miller
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67
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Executive Vice President
General Counsel
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Executive Vice President
General Counsel
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Cynthia D. Purcell
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61
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Executive Vice President,
Retail Banking and Administration
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M. Kirk Quillin
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56
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|
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Executive Vice President,
Commercial Executive
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James T. Reed, Jr.
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56
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Executive Vice President,
Commercial Banking West
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Steven W. Rust
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71
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Executive Vice President,
Chief Information Officer
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Judith A. Steiner
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56
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Executive Vice President
Chief Risk Officer
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Gary W. Wagers
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58
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|
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Executive Vice President,
Retail Products and Services
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Keith A. Western
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63
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|
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Executive Vice President,
Commercial Banking South
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•
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demand for our products and services may decline;
|
•
|
loan delinquencies, problem assets and foreclosures may increase;
|
•
|
we may increase our allowance for loan losses;
|
•
|
collateral for loans, especially real estate, may decline in value, in turn reducing customers’ borrowing power, reducing the value of assets and collateral associated with existing loans;
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•
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the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and
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•
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the amount of our low-cost or non-interest-bearing deposits may decrease.
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•
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Construction and Land Loans.
At
December 31, 2018
, construction and land loans were
$1.11 billion
, or
13%
of our total loan portfolio. This type of lending is subject to the inherent difficulties in estimating both a property’s value at completion of a project and the estimated cost (including interest) of the project. Because of the uncertainties inherent in estimating construction costs, as well as the market value of a completed project and the effects of governmental regulation on real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the completed project's loan-to-value ratio. If the estimate of construction cost proves to be inaccurate, we may be required to advance funds beyond the amount originally committed to ensure completion of the project. If our appraisal of the value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. Disagreements between borrowers and builders and the failure of builders to pay subcontractors may also jeopardize projects. This type of lending also typically involves
|
•
|
Commercial and Multifamily Real Estate Loans
. At
December 31, 2018
, commercial and multifamily real estate loans were
$3.93 billion
, or
45%
of our total loan portfolio. These loans typically involve higher principal amounts than other types of loans and some of our commercial borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan. Repayment of these loans is dependent upon income being generated from the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions. In addition, many of our commercial and multifamily real estate loans are not fully amortizing and contain large balloon payments upon maturity. Such balloon payments may require the borrower to either sell or refinance the underlying property in order to make the payment, which may increase the risk of default or non-payment. If we foreclose on a commercial or multifamily real estate loan, our holding period for the collateral typically is longer than for one-to-four family residential loans because there are fewer potential purchasers of the collateral. At
December 31, 2018
, commercial and multifamily real estate loans that were non-performing were
$4.1 million
, or
26%
of our total non-performing loans.
|
•
|
Commercial Business Loans.
At
December 31, 2018
, commercial business loans were
$1.48 billion
, or
17%
of our total loan portfolio. Our commercial business loans are primarily made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. A borrower's cash flow may prove to be unpredictable, and collateral securing these loans may fluctuate in value. Most often, this collateral includes accounts receivable, inventory, equipment or real estate. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Other collateral securing loans may depreciate over time, may be difficult to appraise, may be illiquid and may fluctuate in value based on the success of the business. At
December 31, 2018
, commercial business loans that were non-performing were
$2.9 million
, or
19%
of our total non-performing loans.
|
•
|
Agricultural Loans
. At
December 31, 2018
, agricultural loans were
$404.9 million
, or
5%
of our total loan portfolio. Agricultural lending involves a greater degree of risk and typically involves higher principal amounts than other types of loans. Repayment is dependent upon the successful operation of the business, which is greatly dependent on many things outside the control of either us or the borrowers. These factors include adverse weather conditions that prevent the planting of a crops or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations). In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower's ability to repay the loan may be impaired. Consequently, agricultural loans may involve a greater degree of risk than other types of loans, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets such as farm equipment (some of which is highly specialized with a limited or no market for resale), or assets such as livestock or crops. In such cases, any repossessed collateral for a defaulted
|
•
|
Consumer Loans
. At
December 31, 2018
, consumer loans were
$785.0 million
, or
9%
of our total loan portfolio. Our consumer loans often entail greater risk than first-lien residential mortgage loans. Home equity lines of credit generally entail greater risk than do one- to four-family residential mortgage loans where we are in the first lien position. For those home equity lines secured by a second mortgage, it is less likely that we will be successful in recovering all of our loan proceeds in the event of default. Our foreclosure on these loans requires that the value of the property be sufficient to cover the repayment of the first mortgage loan, as well as the costs associated with foreclosure. In the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The remaining deficiency often does not warrant further substantial collection efforts against the borrower. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on these consumer loans. Loans that we purchased, or indirectly originated, may also give rise to claims and defenses by a consumer loan borrower against an assignee of such loans such as us, and a borrower may be able to assert against the assignee claims and defenses that it has against the seller of the underlying collateral. At
December 31, 2018
, consumer loans that were non-performing were
$1.5 million
, or
10%
of our total non-performing loans.
|
•
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cash flow of the borrower and/or the project being financed;
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•
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in the case of a collateralized loan, the changes and uncertainties as to the future value of the collateral;
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•
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the duration of the loan;
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•
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the character and creditworthiness of a particular borrower;
|
•
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changes in economic and industry conditions; and
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•
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the duration of the loan.
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•
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our general reserve, based on our historical default and loss experience, certain macroeconomic factors, regulatory requirements and management’s expectations of future events;
|
•
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our specific reserve, based on our evaluation of non-performing loans and their underlying collateral; and
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•
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an unallocated reserve to provide for other credit losses inherent in our portfolio that may not have been contemplated in the other loss factors.
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•
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We may be exposed to potential asset quality issues or unknown or contingent liabilities of the banks, businesses, assets, and liabilities we acquire. If these issues or liabilities exceed our estimates, our results of operations and financial condition may be materially negatively affected;
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•
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Higher than expected deposit attrition;
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•
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Potential diversion of our management's time and attention;
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•
|
Prices at which acquisitions can be made fluctuate with market conditions. We have experienced times during which acquisitions could not be made in specific markets at prices we considered acceptable and expect that we will experience this situation in the future;
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•
|
The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity into our company to make the transaction economically successful. This integration process is complicated and time consuming and can also be disruptive to the customers of the acquired business. If the integration process is not conducted successfully and with minimal adverse effect on the acquired business and its customers, we may not realize the anticipated economic benefits of particular acquisitions within the expected time frame, and we may lose customers or employees of the acquired business. We may also experience greater than anticipated customer losses even if the integration process is successful;
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•
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To finance an acquisition, we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders;
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•
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We have completed various acquisitions in the past few years that enhanced our rate of growth. We may not be able to continue to sustain our past rate of growth or to grow at all in the future; and
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•
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To the extent our costs of an acquisition exceed the fair value of the net assets acquired, the acquisition will generate goodwill. As discussed below under “-If the goodwill we have recorded in connection with acquisitions become impaired, our earnings and capital could be reduced,” we are required to assess our goodwill for impairment at least annually, and any goodwill impairment charge could have a material adverse effect on our results of operations and financial condition.
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Period
|
Total Number of Common Shares Purchased
|
Average Price Paid per Common Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plan
|
Maximum Number of Remaining Shares that May be Purchased at Period End under the Board Authorization
|
|||||
|
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|
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|
|||||
October 1, 2018 - October 31, 2018
|
2,833
|
|
$
|
62.37
|
|
—
|
|
1,621,549
|
|
November 1, 2018 - November 30, 2018
|
137,975
|
|
59.86
|
|
137,975
|
|
1,483,574
|
|
|
December 1, 2018 - December 31, 2018
|
187,046
|
|
57.62
|
|
187,025
|
|
1,296,549
|
|
|
Total for quarter
|
327,854
|
|
58.60
|
|
325,000
|
|
1,296,549
|
|
|
|
(A)
|
|
(B)
|
|
(C)
|
||
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options or vesting of outstanding restricted stock and unit grants
|
|
Weighted average exercise price of outstanding options and rights
|
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Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (A)
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||
Equity compensation plans approved by security holders
|
|
|
|
|
|
|
||
2012 Restricted Stock and Incentive Bonus Plan
|
|
8,014
|
|
|
n/a
|
|
30,137
|
|
2014 Omnibus Incentive Plan
|
|
307,287
|
|
|
n/a
|
|
376,260
|
|
2018 Omnibus Incentive Plan
|
|
—
|
|
|
|
|
—
|
|
|
|
315,301
|
|
|
|
|
406,397
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
|
|
—
|
|
Total
|
|
315,301
|
|
|
|
|
406,397
|
|
|
|
Year Ended
|
||||||||||||||||
Index
|
|
12/31/13
|
|
|
12/31/14
|
|
|
12/31/15
|
|
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12/31/16
|
|
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12/31/17
|
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12/31/18
|
|
Banner Corporation
|
|
100.00
|
|
|
97.70
|
|
|
105.76
|
|
|
130.72
|
|
|
133.67
|
|
|
133.73
|
|
NASDAQ Composite
|
|
100.00
|
|
|
114.75
|
|
|
122.74
|
|
|
133.62
|
|
|
173.22
|
|
|
168.30
|
|
SNL Bank $5B-$10B
|
|
100.00
|
|
|
103.01
|
|
|
117.34
|
|
|
168.11
|
|
|
167.48
|
|
|
151.57
|
|
SNL Bank NASDAQ
|
|
100.00
|
|
|
103.57
|
|
|
111.80
|
|
|
155.02
|
|
|
163.20
|
|
|
137.56
|
|
PER COMMON SHARE DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
At or For the Years Ended December 31
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Net income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
4.16
|
|
|
$
|
1.85
|
|
|
$
|
2.52
|
|
|
$
|
1.90
|
|
|
$
|
2.79
|
|
Diluted
|
4.15
|
|
|
1.84
|
|
|
2.52
|
|
|
1.89
|
|
|
2.79
|
|
|||||
Common shareholders’ equity per share
(2)
|
42.03
|
|
|
38.89
|
|
|
39.34
|
|
|
37.97
|
|
|
29.78
|
|
|||||
Common shareholders’ tangible equity per share
(2)(9)
|
31.45
|
|
|
30.78
|
|
|
31.06
|
|
|
29.64
|
|
|
29.64
|
|
|||||
Cash dividends
|
1.96
|
|
|
2.00
|
|
|
0.88
|
|
|
0.72
|
|
|
0.72
|
|
|||||
Dividend payout ratio (basic)
|
47.12
|
%
|
|
108.11
|
%
|
|
34.92
|
%
|
|
37.89
|
%
|
|
25.78
|
%
|
|||||
Dividend payout ratio (diluted)
|
47.23
|
%
|
|
108.70
|
%
|
|
34.92
|
%
|
|
38.10
|
%
|
|
25.84
|
%
|
OTHER DATA:
|
|
|
|
|
|
|
|
|
|
|||||
|
As of December 31
|
|||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||
Full time equivalent employees
|
2,187
|
|
|
2,078
|
|
|
2,078
|
|
|
2,063
|
|
|
1,150
|
|
Number of branches
|
182
|
|
|
178
|
|
|
190
|
|
|
202
|
|
|
93
|
|
KEY FINANCIAL RATIOS:
|
|
|
|
|
|
|
|
|
|
|||||
|
At or For the Years Ended December 31
|
|||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||
Performance Ratios:
|
|
|
|
|
|
|
|
|
|
|||||
Return on average assets
(3)
|
1.29
|
%
|
|
0.60
|
%
|
|
0.87
|
%
|
|
0.72
|
%
|
|
1.17
|
%
|
Return on average common equity
(4)
|
10.45
|
|
|
4.57
|
|
|
6.41
|
|
|
5.56
|
|
|
9.59
|
|
Average common equity to average assets
|
12.37
|
|
|
13.09
|
|
|
13.54
|
|
|
12.87
|
|
|
12.20
|
|
Interest rate spread
(5)
|
4.40
|
|
|
4.23
|
|
|
4.19
|
|
|
4.09
|
|
|
4.04
|
|
Net interest margin
(6)
|
4.43
|
|
|
4.24
|
|
|
4.20
|
|
|
4.10
|
|
|
4.07
|
|
Non-interest income to average assets
|
0.80
|
|
|
0.84
|
|
|
0.78
|
|
|
0.88
|
|
|
1.08
|
|
Non-interest expense to average assets
|
3.23
|
|
|
3.14
|
|
|
3.21
|
|
|
3.64
|
|
|
3.22
|
|
Efficiency ratio
(7)
|
66.29
|
|
|
66.70
|
|
|
69.94
|
|
|
77.17
|
|
|
64.72
|
|
Average interest-earning assets to funding liabilities
|
106.09
|
|
|
105.69
|
|
|
105.84
|
|
|
107.59
|
|
|
108.78
|
|
Selected Financial Ratios:
|
|
|
|
|
|
|
|
|
|
|||||
Allowance for loan losses as a percent of total loans at end of period
|
1.11
|
|
|
1.17
|
|
|
1.15
|
|
|
1.07
|
|
|
1.98
|
|
Net (charge-offs) recoveries as a percent of average outstanding loans during the period
|
(0.01
|
)
|
|
(0.07
|
)
|
|
0.03
|
|
|
0.04
|
|
|
0.05
|
|
Non-performing assets as a percent of total assets
|
0.16
|
|
|
0.28
|
|
|
0.35
|
|
|
0.28
|
|
|
0.43
|
|
Allowance for loan losses as a percent of non-performing loans
(8)
|
616.36
|
|
|
329.38
|
|
|
380.87
|
|
|
512.47
|
|
|
453.56
|
|
Common shareholders’ tangible equity to tangible assets
(9)
|
9.62
|
|
|
10.61
|
|
|
10.83
|
|
|
10.68
|
|
|
12.29
|
|
Consolidated Capital Ratios:
|
|
|
|
|
|
|
|
|
|
|||||
Total capital to risk-weighted assets
|
13.12
|
|
|
13.81
|
|
|
13.40
|
|
|
13.63
|
|
|
16.80
|
|
Tier 1 capital to risk-weighted assets
|
12.12
|
|
|
12.77
|
|
|
12.41
|
|
|
12.65
|
|
|
15.54
|
|
Tier 1 capital to average leverage assets
|
10.98
|
|
|
11.34
|
|
|
11.83
|
|
|
11.06
|
|
|
13.41
|
|
Common equity tier I capital to risk-weighted assets
|
10.75
|
|
|
11.30
|
|
|
11.19
|
|
|
12.13
|
|
|
na
|
|
(1)
|
Includes securities available-for-sale and held-to-maturity.
|
(2)
|
Calculated using shares outstanding, excluding unearned restricted shares held in ESOP.
|
(3)
|
Net income divided by average assets.
|
(4)
|
Net income divided by average common equity.
|
(5)
|
Difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
|
(6)
|
Net interest income before provision for loan losses as a percent of average interest-earning assets.
|
(7)
|
Non-interest expenses divided by the total of net interest income before loan losses and non-interest income.
|
(8)
|
Non-performing loans consist of nonaccrual and 90 days past due loans still accruing interest.
|
(9)
|
Common shareholders’ tangible equity per share and the ratio of tangible common shareholders’ equity to tangible assets are non-GAAP financial measures. We calculate tangible common equity by excluding the balance of goodwill and other intangible assets from shareholders’ equity. We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets. We believe that this is consistent with the treatment by our bank regulatory agencies, which exclude goodwill and other intangible assets from the calculation of risk-based capital ratios. Management believes that these non-GAAP financial measures provide information to investors that is useful in understanding the basis of our capital position. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non–GAAP measures, see Item 7 of this report, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview."
|
|
For the Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
REVENUE FROM CORE OPERATIONS:
|
|
|
|
|
|
||||||
Net interest income before provision for loan losses (GAAP)
|
$
|
430,973
|
|
|
$
|
393,034
|
|
|
$
|
375,069
|
|
Total non-interest income
|
84,008
|
|
|
85,200
|
|
|
76,225
|
|
|||
Total GAAP revenue
|
514,981
|
|
|
478,234
|
|
|
451,294
|
|
|||
Exclude net loss (gain) on sale of securities
|
837
|
|
|
2,080
|
|
|
(843
|
)
|
|||
Exclude change in valuation of financial instruments carried at fair value
|
(3,775
|
)
|
|
2,844
|
|
|
2,620
|
|
|||
Exclude gain on sale of branches, including related loans and deposits
|
—
|
|
|
(12,189
|
)
|
|
—
|
|
|||
Revenue from core operations (non-GAAP)
|
$
|
512,043
|
|
|
$
|
470,969
|
|
|
$
|
453,071
|
|
EARNINGS FROM CORE OPERATIONS:
|
|
|
|
|
|
||||||
Net income (GAAP)
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
Exclude net loss (gain) on sale of securities
|
837
|
|
|
2,080
|
|
|
(843
|
)
|
|||
Exclude change in valuation of financial instruments carried at fair value
|
(3,775
|
)
|
|
2,844
|
|
|
2,620
|
|
|||
Exclude gain on sale of branches, including related loans and deposits
|
—
|
|
|
(12,189
|
)
|
|
—
|
|
|||
Exclude acquisition related costs
|
5,607
|
|
|
—
|
|
|
11,733
|
|
|||
Exclude related tax (benefit) expense
|
(426
|
)
|
|
2,615
|
|
|
(4,857
|
)
|
|||
Exclude tax adjustments related to tax reform and valuation reserves
|
(4,207
|
)
|
|
42,630
|
|
|
—
|
|
|||
Total earnings from core operations (non-GAAP)
|
$
|
134,551
|
|
|
$
|
98,756
|
|
|
$
|
94,038
|
|
Diluted earnings per share (GAAP)
|
$
|
4.15
|
|
|
$
|
1.84
|
|
|
$
|
2.52
|
|
Diluted core earnings per share (non-GAAP)
|
$
|
4.09
|
|
|
$
|
2.99
|
|
|
$
|
2.78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
||||||||||
ADJUSTED EFFICIENCY RATIO:
|
2018
|
|
2017
|
|
2016
|
||||||
Non-interest expense (GAAP)
|
$
|
341,371
|
|
|
$
|
318,970
|
|
|
$
|
315,624
|
|
Exclude acquisition-related costs
|
(5,607
|
)
|
|
—
|
|
|
(11,733
|
)
|
|||
Exclude CDI amortization
|
(6,047
|
)
|
|
(6,246
|
)
|
|
(7,061
|
)
|
|||
Exclude state/municipal tax expense
|
(3,284
|
)
|
|
(2,594
|
)
|
|
(3,516
|
)
|
|||
Exclude REO (loss) gain
|
(804
|
)
|
|
2,030
|
|
|
(175
|
)
|
|||
Adjusted non-interest expense (non-GAAP)
|
$
|
325,629
|
|
|
$
|
312,160
|
|
|
$
|
293,139
|
|
|
|
|
|
|
|
||||||
Net interest income before provision for loan losses (GAAP)
|
$
|
430,973
|
|
|
$
|
393,034
|
|
|
$
|
375,069
|
|
Non-interest income (GAAP)
|
84,008
|
|
|
85,200
|
|
|
76,225
|
|
|||
Total revenue
|
514,981
|
|
|
478,234
|
|
|
451,294
|
|
|||
Exclude net loss (gain) on sale of securities
|
837
|
|
|
2,080
|
|
|
(843
|
)
|
|||
Exclude net change in valuation of financial instruments carried at fair value
|
(3,775
|
)
|
|
2,844
|
|
|
2,620
|
|
|||
Exclude gain on sale of branches, including related loans and deposits
|
—
|
|
|
(12,189
|
)
|
|
—
|
|
|||
Adjusted revenue (non-GAAP)
|
$
|
512,043
|
|
|
$
|
470,969
|
|
|
$
|
453,071
|
|
|
|
|
|
|
|
||||||
Efficiency ratio (GAAP)
|
66.29
|
%
|
|
66.70
|
%
|
|
69.94
|
%
|
|||
Adjusted efficiency ratio (non-GAAP)
|
63.59
|
%
|
|
66.28
|
%
|
|
64.70
|
%
|
|
December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Shareholders’ equity (GAAP)
|
$
|
1,478,595
|
|
|
$
|
1,272,626
|
|
|
$
|
1,305,710
|
|
Exclude goodwill and other intangible assets, net
|
372,078
|
|
|
265,314
|
|
|
274,745
|
|
|||
Common shareholders’ tangible equity (non-GAAP)
|
$
|
1,106,517
|
|
|
$
|
1,007,312
|
|
|
$
|
1,030,965
|
|
Total assets (GAAP)
|
$
|
11,871,317
|
|
|
$
|
9,763,209
|
|
|
$
|
9,793,668
|
|
Exclude goodwill and other intangible assets, net
|
372,078
|
|
|
265,314
|
|
|
274,745
|
|
|||
Total tangible assets (non-GAAP)
|
$
|
11,499,239
|
|
|
$
|
9,497,895
|
|
|
$
|
9,518,923
|
|
Common shareholders' equity to total assets (GAAP)
|
12.46
|
%
|
|
13.03
|
%
|
|
13.33
|
%
|
|||
Common shareholders’ tangible equity to tangible assets (non-GAAP)
|
9.62
|
%
|
|
10.61
|
%
|
|
10.83
|
%
|
|||
Common shares outstanding
|
35,182,772
|
|
|
32,726,485
|
|
|
33,193,387
|
|
|||
Common shareholders' equity per share (GAAP)
|
$
|
42.03
|
|
|
$
|
38.89
|
|
|
$
|
39.34
|
|
Common shareholders' tangible equity per share (non-GAAP)
|
$
|
31.45
|
|
|
$
|
30.78
|
|
|
$
|
31.06
|
|
|
December 31
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Carrying
Value
|
|
Percent of
Total
|
|
Carrying
Value
|
|
Percent of
Total
|
|
Carrying
Value
|
|
Percent of
Total
|
|||||||||
Trading
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government and agency obligations
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,326
|
|
|
5.4
|
%
|
Municipal bonds
|
—
|
|
|
—
|
|
|
100
|
|
|
0.5
|
|
|
335
|
|
|
1.4
|
|
|||
Corporate bonds
|
25,896
|
|
|
100.0
|
|
|
22,058
|
|
|
98.8
|
|
|
21,143
|
|
|
86.0
|
|
|||
Mortgage-backed or related securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,641
|
|
|
6.7
|
|
|||
Equity securities
|
—
|
|
|
—
|
|
|
160
|
|
|
0.7
|
|
|
123
|
|
|
0.5
|
|
|||
Total securities—trading
|
$
|
25,896
|
|
|
100.0
|
%
|
|
$
|
22,318
|
|
|
100.0
|
%
|
|
$
|
24,568
|
|
|
100.0
|
%
|
Available-for-Sale
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government and agency obligations
|
$
|
149,112
|
|
|
9.1
|
%
|
|
$
|
72,466
|
|
|
7.9
|
%
|
|
$
|
56,978
|
|
|
7.1
|
%
|
Municipal bonds
|
117,822
|
|
|
7.2
|
|
|
68,733
|
|
|
7.5
|
|
|
109,853
|
|
|
13.6
|
|
|||
Corporate bonds
|
3,495
|
|
|
0.2
|
|
|
5,393
|
|
|
0.6
|
|
|
10,283
|
|
|
1.3
|
|
|||
Mortgage-backed or related securities
|
1,343,861
|
|
|
82.1
|
|
|
739,557
|
|
|
80.4
|
|
|
594,712
|
|
|
73.7
|
|
|||
Asset-backed securities
|
21,933
|
|
|
1.4
|
|
|
27,758
|
|
|
3.0
|
|
|
28,993
|
|
|
3.6
|
|
|||
Equity securities
|
—
|
|
|
—
|
|
|
5,578
|
|
|
0.6
|
|
|
5,609
|
|
|
0.7
|
|
|||
Total securities—available-for-sale
|
$
|
1,636,223
|
|
|
100.0
|
%
|
|
$
|
919,485
|
|
|
100.0
|
%
|
|
$
|
806,428
|
|
|
100.0
|
%
|
Held-to-Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. Government and agency obligations
|
$
|
1,006
|
|
|
0.4
|
%
|
|
$
|
1,024
|
|
|
0.4
|
%
|
|
$
|
1,065
|
|
|
0.4
|
%
|
Municipal bonds
|
176,663
|
|
|
75.5
|
|
|
189,860
|
|
|
73.0
|
|
|
196,989
|
|
|
73.5
|
|
|||
Corporate bonds
|
3,736
|
|
|
1.6
|
|
|
3,978
|
|
|
1.5
|
|
|
3,876
|
|
|
1.5
|
|
|||
Mortgage-backed or related securities
|
52,815
|
|
|
22.5
|
|
|
65,409
|
|
|
25.1
|
|
|
65,943
|
|
|
24.6
|
|
|||
Total securities—held-to-maturity
|
$
|
234,220
|
|
|
100.0
|
%
|
|
$
|
260,271
|
|
|
100.0
|
%
|
|
$
|
267,873
|
|
|
100.0
|
%
|
Estimated market value
|
$
|
232,537
|
|
|
|
|
|
$
|
262,188
|
|
|
|
|
|
$
|
270,528
|
|
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||
|
One Year or Less
|
|
After One to Five Years
|
|
After Five to Ten Years
|
|
After Ten to Twenty
Years
|
|
After Twenty Years
|
|
Total
|
||||||||||||||||||||||||||||||
|
Carrying Value
|
|
Weighted Average Yield
|
|
Carrying
Value
|
|
Weighted Average Yield
|
|
Carrying
Value
|
|
Weighted Average Yield
|
|
Carrying
Value
|
|
Weighted Average Yield
|
|
Carrying Value
|
|
Weighted Average Yield
|
|
Carrying Value
|
|
Weighted Average Yield
|
||||||||||||||||||
U.S. Government and agency
obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed-rate
|
$
|
4,097
|
|
|
2.48
|
%
|
|
$
|
7,126
|
|
|
2.21
|
%
|
|
$
|
19,568
|
|
|
2.64
|
%
|
|
$
|
18,621
|
|
|
2.67
|
%
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
49,412
|
|
|
2.58
|
%
|
Adjustable-rate
|
100,706
|
|
|
3.18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,706
|
|
|
3.18
|
|
||||||
|
104,803
|
|
|
3.15
|
|
|
7,126
|
|
|
2.21
|
|
|
19,568
|
|
|
2.64
|
|
|
18,621
|
|
|
2.67
|
|
|
—
|
|
|
—
|
|
|
150,118
|
|
|
2.98
|
|
||||||
Municipal bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed-rate taxable
|
662
|
|
|
0.02
|
|
|
27,760
|
|
|
1.93
|
|
|
20,819
|
|
|
3.15
|
|
|
4,187
|
|
|
3.74
|
|
|
—
|
|
|
—
|
|
|
53,428
|
|
|
2.53
|
|
||||||
Fixed-rate tax exempt
|
8,016
|
|
|
1.42
|
|
|
27,382
|
|
|
1.80
|
|
|
57,766
|
|
|
2.69
|
|
|
114,330
|
|
|
2.91
|
|
|
32,270
|
|
|
2.72
|
|
|
239,764
|
|
|
2.65
|
|
||||||
Adjustable-rate taxable
|
490
|
|
|
0.03
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|
0.03
|
|
||||||
Adjustable-rate tax exempt
|
—
|
|
|
—
|
|
|
803
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
803
|
|
|
0.04
|
|
||||||
|
9,168
|
|
|
1.25
|
|
|
55,945
|
|
|
1.84
|
|
|
78,585
|
|
|
2.81
|
|
|
118,517
|
|
|
2.94
|
|
|
32,270
|
|
|
2.72
|
|
|
294,485
|
|
|
2.62
|
|
||||||
Corporate bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed-rate
|
748
|
|
|
1.19
|
|
|
1,834
|
|
|
2.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,936
|
|
|
—
|
|
|
4,518
|
|
|
1.02
|
|
||||||
Adjustable-rate
|
28,609
|
|
|
5.38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,609
|
|
|
5.38
|
|
||||||
|
29,357
|
|
|
5.28
|
|
|
1,834
|
|
|
2.02
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,936
|
|
|
—
|
|
|
33,127
|
|
|
4.81
|
|
||||||
Mortgage-backed or related
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed-rate
|
—
|
|
|
—
|
|
|
46,759
|
|
|
2.61
|
|
|
291,268
|
|
|
3.08
|
|
|
77,278
|
|
|
3.02
|
|
|
837,219
|
|
|
2.89
|
|
|
1,252,524
|
|
|
2.93
|
|
||||||
Adjustable-rate
|
49,314
|
|
|
2.97
|
|
|
45,913
|
|
|
3.03
|
|
|
48,925
|
|
|
3.60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,152
|
|
|
3.20
|
|
||||||
|
49,314
|
|
|
2.97
|
|
|
92,672
|
|
|
2.82
|
|
|
340,193
|
|
|
3.15
|
|
|
77,278
|
|
|
3.02
|
|
|
837,219
|
|
|
2.89
|
|
|
1,396,676
|
|
|
2.96
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Fixed-rate
|
—
|
|
|
—
|
|
|
9,912
|
|
|
1.65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,912
|
|
|
1.65
|
|
||||||
Adjustable-rate
|
12,021
|
|
|
3.23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,021
|
|
|
3.23
|
|
||||||
|
12,021
|
|
|
3.23
|
|
|
9,912
|
|
|
1.65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,933
|
|
|
2.51
|
|
||||||
Equity securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total securities—carrying value
|
$
|
204,663
|
|
|
3.34
|
|
|
$
|
167,489
|
|
|
2.39
|
|
|
$
|
438,346
|
|
|
3.07
|
|
|
$
|
214,416
|
|
|
2.94
|
|
|
$
|
871,425
|
|
|
2.88
|
|
|
$
|
1,896,339
|
|
|
2.94
|
|
Total securities—estimated market value
|
$
|
204,640
|
|
|
|
|
$
|
166,940
|
|
|
|
|
$
|
438,769
|
|
|
|
|
$
|
214,844
|
|
|
|
|
$
|
869,815
|
|
|
|
|
$
|
1,895,008
|
|
|
|
|
Years Ended
|
||||||
|
Dec 31, 2018
|
|
Dec 31, 2017
|
||||
Commercial real estate
|
$
|
536,784
|
|
|
$
|
537,825
|
|
Multifamily real estate
|
25,771
|
|
|
77,409
|
|
||
Construction and land
|
1,460,536
|
|
|
1,216,227
|
|
||
Commercial business
|
839,290
|
|
|
647,079
|
|
||
Agricultural business
|
123,702
|
|
|
117,186
|
|
||
One-to four- family residential
|
177,332
|
|
|
249,558
|
|
||
Consumer
|
331,661
|
|
|
344,407
|
|
||
Total loan originations (excluding loans held for sale)
|
$
|
3,495,076
|
|
|
$
|
3,189,691
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Washington
|
$
|
4,324,588
|
|
|
49.8
|
%
|
|
$
|
3,508,542
|
|
|
46.2
|
%
|
|
$
|
3,433,617
|
|
|
46.1
|
%
|
Oregon
|
1,636,152
|
|
|
18.8
|
|
|
1,590,233
|
|
|
20.9
|
|
|
1,505,369
|
|
|
20.2
|
|
|||
California
|
1,596,604
|
|
|
18.4
|
|
|
1,415,076
|
|
|
18.6
|
|
|
1,239,989
|
|
|
16.6
|
|
|||
Idaho
|
521,026
|
|
|
6.0
|
|
|
492,603
|
|
|
6.5
|
|
|
495,992
|
|
|
6.7
|
|
|||
Utah
|
57,318
|
|
|
0.7
|
|
|
73,382
|
|
|
1.0
|
|
|
283,890
|
|
|
3.8
|
|
|||
Other
|
548,907
|
|
|
6.3
|
|
|
519,048
|
|
|
6.8
|
|
|
492,291
|
|
|
6.6
|
|
|||
Total
|
$
|
8,684,595
|
|
|
100.0
|
%
|
|
$
|
7,598,884
|
|
|
100.0
|
%
|
|
$
|
7,451,148
|
|
|
100.0
|
%
|
|
Maturing in One Year or Less
|
|
Maturing After One to Three Years
|
|
Maturing After Three to Five Years
|
|
Maturing After Five to Ten Years
|
|
Maturing After Ten Years
|
|
Total
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
$
|
58,823
|
|
|
$
|
91,268
|
|
|
$
|
207,181
|
|
|
$
|
767,751
|
|
|
$
|
305,074
|
|
|
$
|
1,430,097
|
|
Investment properties
|
82,465
|
|
|
119,179
|
|
|
319,643
|
|
|
1,046,254
|
|
|
563,518
|
|
|
2,131,059
|
|
||||||
Multifamily real estate
|
7,443
|
|
|
20,748
|
|
|
41,068
|
|
|
148,263
|
|
|
151,314
|
|
|
368,836
|
|
||||||
Commercial construction
|
90,292
|
|
|
37,601
|
|
|
662
|
|
|
37,167
|
|
|
6,688
|
|
|
172,410
|
|
||||||
Multifamily construction
|
121,403
|
|
|
59,487
|
|
|
—
|
|
|
—
|
|
|
3,740
|
|
|
184,630
|
|
||||||
One- to four-family construction
|
498,576
|
|
|
30,853
|
|
|
216
|
|
|
161
|
|
|
4,872
|
|
|
534,678
|
|
||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
119,097
|
|
|
61,909
|
|
|
3,113
|
|
|
4,389
|
|
|
—
|
|
|
188,508
|
|
||||||
Commercial
|
10,734
|
|
|
9,542
|
|
|
2,056
|
|
|
4,223
|
|
|
723
|
|
|
27,278
|
|
||||||
Commercial business
|
531,846
|
|
|
254,643
|
|
|
288,488
|
|
|
228,566
|
|
|
180,071
|
|
|
1,483,614
|
|
||||||
Agricultural business, including secured by farmland
|
145,557
|
|
|
43,265
|
|
|
49,112
|
|
|
142,776
|
|
|
24,163
|
|
|
404,873
|
|
||||||
One- to four-family real estate
|
12,316
|
|
|
7,654
|
|
|
13,379
|
|
|
68,997
|
|
|
871,270
|
|
|
973,616
|
|
||||||
Consumer secured by one- to four-family real estate
|
5,723
|
|
|
5,974
|
|
|
14,444
|
|
|
32,032
|
|
|
510,806
|
|
|
568,979
|
|
||||||
Consumer—other
|
37,785
|
|
|
21,288
|
|
|
38,117
|
|
|
42,421
|
|
|
76,406
|
|
|
216,017
|
|
||||||
Total loans
|
$
|
1,722,060
|
|
|
$
|
763,411
|
|
|
$
|
977,479
|
|
|
$
|
2,523,000
|
|
|
$
|
2,698,645
|
|
|
$
|
8,684,595
|
|
|
Fixed Rates
|
|
Floating or Adjustable Rates
|
|
Total
|
||||||
Commercial real estate:
|
|
|
|
|
|
||||||
Owner-occupied
|
$
|
324,835
|
|
|
$
|
1,046,439
|
|
|
$
|
1,371,274
|
|
Investment properties
|
486,729
|
|
|
1,561,865
|
|
|
2,048,594
|
|
|||
Multifamily real estate
|
160,073
|
|
|
201,320
|
|
|
361,393
|
|
|||
Commercial construction
|
18,755
|
|
|
63,363
|
|
|
82,118
|
|
|||
Multifamily construction
|
50,674
|
|
|
12,553
|
|
|
63,227
|
|
|||
One- to four-family construction
|
6,025
|
|
|
30,077
|
|
|
36,102
|
|
|||
Land and land development:
|
|
|
|
|
|
|
|
|
|||
Residential
|
5,538
|
|
|
63,873
|
|
|
69,411
|
|
|||
Commercial
|
5,191
|
|
|
11,353
|
|
|
16,544
|
|
|||
Commercial business
|
568,671
|
|
|
383,097
|
|
|
951,768
|
|
|||
Agricultural business, including secured by farmland
|
87,555
|
|
|
171,761
|
|
|
259,316
|
|
|||
One- to four-family real estate
|
672,728
|
|
|
288,572
|
|
|
961,300
|
|
|||
Consumer secured by one- to four-family real estate
|
17,318
|
|
|
545,938
|
|
|
563,256
|
|
|||
Consumer—other
|
124,203
|
|
|
54,029
|
|
|
178,232
|
|
|||
Total loans maturing after one year
|
$
|
2,528,295
|
|
|
$
|
4,434,240
|
|
|
$
|
6,962,535
|
|
|
December 31
|
|||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||||
|
Amount
|
|
Percent of Total
|
|
Increase (Decrease)
|
|
Amount
|
|
Percent of Total
|
|
Increase (Decrease)
|
|
Amount
|
|
Percent of Total
|
|||||||||||||
Non-interest-bearing checking
|
$
|
3,657,817
|
|
|
38.6
|
%
|
|
$
|
392,273
|
|
|
$
|
3,265,544
|
|
|
39.9
|
%
|
|
$
|
125,093
|
|
|
$
|
3,140,451
|
|
|
38.6
|
%
|
Interest-bearing checking
|
1,191,016
|
|
|
12.6
|
|
|
219,879
|
|
|
971,137
|
|
|
11.9
|
|
|
56,653
|
|
|
914,484
|
|
|
11.3
|
|
|||||
Regular savings
|
1,842,581
|
|
|
19.4
|
|
|
285,081
|
|
|
1,557,500
|
|
|
19.0
|
|
|
34,109
|
|
|
1,523,391
|
|
|
18.8
|
|
|||||
Money market
|
1,465,369
|
|
|
15.5
|
|
|
43,056
|
|
|
1,422,313
|
|
|
17.4
|
|
|
(75,442
|
)
|
|
1,497,755
|
|
|
18.4
|
|
|||||
Total interest-bearing transaction and savings accounts
|
4,498,966
|
|
|
47.5
|
|
|
548,016
|
|
|
3,950,950
|
|
|
48.3
|
|
|
15,320
|
|
|
3,935,630
|
|
|
48.5
|
|
|||||
Certificates maturing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Within one year
|
1,001,206
|
|
|
10.6
|
|
|
315,614
|
|
|
685,592
|
|
|
8.4
|
|
|
(79,814
|
)
|
|
765,406
|
|
|
9.4
|
|
|||||
After one year, but within two years
|
201,919
|
|
|
2.1
|
|
|
103,662
|
|
|
98,257
|
|
|
1.2
|
|
|
(61,179
|
)
|
|
159,436
|
|
|
2.0
|
|
|||||
After two years, but within five years
|
114,893
|
|
|
1.2
|
|
|
(65,993
|
)
|
|
180,886
|
|
|
2.2
|
|
|
63,804
|
|
|
117,082
|
|
|
1.4
|
|
|||||
After five years
|
2,247
|
|
|
—
|
|
|
45
|
|
|
2,202
|
|
|
—
|
|
|
(1,207
|
)
|
|
3,409
|
|
|
—
|
|
|||||
Total certificate accounts
|
1,320,265
|
|
|
13.9
|
|
|
353,328
|
|
|
966,937
|
|
|
11.8
|
|
|
(78,396
|
)
|
|
1,045,333
|
|
|
12.9
|
|
|||||
Total Deposits
|
$
|
9,477,048
|
|
|
100.0
|
%
|
|
$
|
1,293,617
|
|
|
$
|
8,183,431
|
|
|
100.0
|
%
|
|
$
|
62,017
|
|
|
$
|
8,121,414
|
|
|
100.0
|
%
|
Included in Total Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Public transaction accounts
|
$
|
217,401
|
|
|
2.3
|
%
|
|
$
|
18,682
|
|
|
$
|
198,719
|
|
|
2.5
|
%
|
|
$
|
(23,046
|
)
|
|
$
|
221,765
|
|
|
2.7
|
%
|
Public interest-bearing certificates
|
30,089
|
|
|
0.3
|
|
|
6,404
|
|
|
23,685
|
|
|
0.3
|
|
|
(1,965
|
)
|
|
25,650
|
|
|
0.3
|
|
|||||
Total public deposits
|
$
|
247,490
|
|
|
2.6
|
%
|
|
$
|
25,086
|
|
|
$
|
222,404
|
|
|
2.8
|
%
|
|
$
|
(25,011
|
)
|
|
$
|
247,415
|
|
|
3.0
|
%
|
Total brokered deposits
|
$
|
377,347
|
|
|
4.0
|
%
|
|
$
|
320,119
|
|
|
$
|
57,228
|
|
|
0.7
|
%
|
|
$
|
23,154
|
|
|
$
|
34,074
|
|
|
0.4
|
%
|
|
Certificates of
Deposit $100,000
or Greater
|
||
Maturing in three months or less
|
$
|
123,775
|
|
Maturing after three months through six months
|
60,326
|
|
|
Maturing after six months through twelve months
|
101,430
|
|
|
Maturing after twelve months
|
152,388
|
|
|
Total
|
$
|
437,919
|
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||
Washington
|
$
|
5,674,328
|
|
|
59.9
|
%
|
|
$
|
4,506,249
|
|
|
55.0
|
%
|
|
$
|
4,347,644
|
|
|
53.6
|
%
|
Oregon
|
1,891,145
|
|
|
20.0
|
|
|
1,797,147
|
|
|
22.0
|
|
|
1,708,973
|
|
|
21.0
|
|
|||
California
|
1,434,033
|
|
|
15.1
|
|
|
1,432,819
|
|
|
17.5
|
|
|
1,469,748
|
|
|
18.1
|
|
|||
Idaho
|
477,542
|
|
|
5.0
|
|
|
447,216
|
|
|
5.5
|
|
|
447,019
|
|
|
5.5
|
|
|||
Utah
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,030
|
|
|
1.8
|
|
|||
Total deposits
|
$
|
9,477,048
|
|
|
100.0
|
%
|
|
$
|
8,183,431
|
|
|
100.0
|
%
|
|
$
|
8,121,414
|
|
|
100.0
|
%
|
|
December 31
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
Amount
|
|
Weighted Average Rate
|
|
Amount
|
|
Weighted Average Rate
|
||||||
Maturing in one year or less
|
$
|
540,000
|
|
|
2.64
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Maturing after one year through three years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Maturing after three years through five years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Maturing after five years
|
189
|
|
|
5.94
|
|
|
202
|
|
|
5.94
|
|
||
Total FHLB advances
|
$
|
540,189
|
|
|
2.64
|
%
|
|
$
|
202
|
|
|
5.94
|
%
|
|
December 31
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Nonaccrual loans:
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Secured by real estate:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
$
|
4,088
|
|
|
$
|
10,646
|
|
|
$
|
8,237
|
|
|
$
|
3,751
|
|
|
$
|
1,132
|
|
Construction/land
|
3,188
|
|
|
798
|
|
|
1,748
|
|
|
2,260
|
|
|
1,275
|
|
|||||
One- to four-family
|
1,544
|
|
|
3,264
|
|
|
2,263
|
|
|
4,700
|
|
|
8,834
|
|
|||||
Commercial business
|
2,936
|
|
|
3,406
|
|
|
3,074
|
|
|
2,159
|
|
|
537
|
|
|||||
Agricultural business, including secured by farmland
|
1,751
|
|
|
6,132
|
|
|
3,229
|
|
|
697
|
|
|
1,597
|
|
|||||
Consumer
|
1,241
|
|
|
1,297
|
|
|
1,875
|
|
|
703
|
|
|
1,187
|
|
|||||
|
14,748
|
|
|
25,543
|
|
|
20,426
|
|
|
14,270
|
|
|
14,562
|
|
|||||
Loans more than 90 days delinquent, still on accrual:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Secured by real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial
|
—
|
|
|
—
|
|
|
701
|
|
|
—
|
|
|
—
|
|
|||||
Multifamily
|
—
|
|
|
—
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|||||
Construction/land
|
—
|
|
|
298
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
One- to four-family
|
658
|
|
|
1,085
|
|
|
1,233
|
|
|
899
|
|
|
2,095
|
|
|||||
Commercial business
|
1
|
|
|
18
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|||||
Agricultural business, including secured by farmland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Consumer
|
247
|
|
|
85
|
|
|
72
|
|
|
45
|
|
|
79
|
|
|||||
|
906
|
|
|
1,486
|
|
|
2,153
|
|
|
952
|
|
|
2,174
|
|
|||||
Total non-performing loans
|
15,654
|
|
|
27,029
|
|
|
22,579
|
|
|
15,222
|
|
|
16,736
|
|
|||||
REO assets held for sale, net
(2)
|
2,611
|
|
|
360
|
|
|
11,081
|
|
|
11,627
|
|
|
3,352
|
|
|||||
Other repossessed assets held for sale, net
|
592
|
|
|
107
|
|
|
166
|
|
|
268
|
|
|
76
|
|
|||||
Total non-performing assets
|
$
|
18,857
|
|
|
$
|
27,496
|
|
|
$
|
33,826
|
|
|
$
|
27,117
|
|
|
$
|
20,164
|
|
Total non-performing loans to net loans before allowance for loan losses
|
0.18
|
%
|
|
0.36
|
%
|
|
0.30
|
%
|
|
0.21
|
%
|
|
0.44
|
%
|
|||||
Total non-performing loans to total assets
|
0.13
|
%
|
|
0.28
|
%
|
|
0.23
|
%
|
|
0.16
|
%
|
|
0.35
|
%
|
|||||
Total non-performing assets to total assets
|
0.16
|
%
|
|
0.28
|
%
|
|
0.35
|
%
|
|
0.28
|
%
|
|
0.43
|
%
|
|||||
Restructured loans
(3)
|
$
|
13,422
|
|
|
$
|
16,115
|
|
|
$
|
18,907
|
|
|
$
|
21,777
|
|
|
$
|
29,154
|
|
Loans 30-89 days past due and on accrual
|
$
|
25,108
|
|
|
$
|
29,278
|
|
|
$
|
11,571
|
|
|
$
|
18,834
|
|
|
$
|
8,387
|
|
(1)
|
Includes
$317,000
of nonaccrual restructured loans as of December 31,
2018
.
|
(2)
|
Real estate acquired by us as a result of foreclosure or by deed-in-lieu of foreclosure is classified as real estate held for sale until it is sold. When property is acquired, it is recorded at the lower of the estimated fair value of the property, less expected selling costs, or the carrying value of the defaulted loan. Subsequent to foreclosure, the property is carried at the lower of the foreclosed amount or net realizable value. Upon receipt of a new appraisal and market analysis, the carrying value is written down through the establishment of a specific reserve to the anticipated sales price, less selling and holding costs.
|
(3)
|
These loans were performing under their restructured terms.
|
|
For the years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of the period
|
$
|
360
|
|
|
$
|
11,081
|
|
|
$
|
11,627
|
|
Additions from loan foreclosures
|
641
|
|
|
46
|
|
|
8,909
|
|
|||
Additions from acquisitions
|
2,593
|
|
|
—
|
|
|
400
|
|
|||
Additions from capitalized costs
|
—
|
|
|
54
|
|
|
—
|
|
|||
Proceeds from dispositions of REO
|
(838
|
)
|
|
(13,474
|
)
|
|
(10,812
|
)
|
|||
Gain on sale of REO
|
242
|
|
|
2,909
|
|
|
1,833
|
|
|||
Valuation adjustments in period
|
(387
|
)
|
|
(256
|
)
|
|
(876
|
)
|
|||
Balance, end of period
|
$
|
2,611
|
|
|
$
|
360
|
|
|
$
|
11,081
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||
|
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
|
$
|
81,873
|
|
|
$
|
3,926
|
|
|
4.80
|
%
|
|
$
|
128,480
|
|
|
$
|
5,245
|
|
|
4.08
|
%
|
|
$
|
107,018
|
|
|
$
|
3,984
|
|
|
3.72
|
%
|
Mortgage loans
|
6,188,279
|
|
|
320,264
|
|
|
5.18
|
|
|
5,932,300
|
|
|
290,132
|
|
|
4.89
|
|
|
5,700,379
|
|
|
278,435
|
|
|
4.88
|
|
||||||
Commercial/agricultural loans
|
1,519,871
|
|
|
79,605
|
|
|
5.24
|
|
|
1,485,985
|
|
|
70,266
|
|
|
4.73
|
|
|
1,485,390
|
|
|
68,405
|
|
|
4.61
|
|
||||||
Consumer and other loans
|
149,184
|
|
|
9,575
|
|
|
6.42
|
|
|
140,500
|
|
|
8,806
|
|
|
6.27
|
|
|
141,460
|
|
|
8,788
|
|
|
6.21
|
|
||||||
Total loans
(1)
|
7,939,207
|
|
|
413,370
|
|
|
5.21
|
|
|
7,687,265
|
|
|
374,449
|
|
|
4.87
|
|
|
7,434,247
|
|
|
359,612
|
|
|
4.84
|
|
||||||
Mortgage-backed securities
|
1,247,758
|
|
|
35,076
|
|
|
2.81
|
|
|
1,043,599
|
|
|
24,535
|
|
|
2.35
|
|
|
931,111
|
|
|
19,328
|
|
|
2.08
|
|
||||||
Other securities
|
468,416
|
|
|
13,332
|
|
|
2.85
|
|
|
464,680
|
|
|
12,448
|
|
|
2.68
|
|
|
454,977
|
|
|
11,814
|
|
|
2.60
|
|
||||||
Interest-bearing deposits with banks
|
59,031
|
|
|
1,080
|
|
|
1.83
|
|
|
49,573
|
|
|
583
|
|
|
1.18
|
|
|
94,456
|
|
|
395
|
|
|
0.42
|
|
||||||
FHLB stock
|
20,496
|
|
|
774
|
|
|
3.78
|
|
|
16,379
|
|
|
269
|
|
|
1.64
|
|
|
16,119
|
|
|
328
|
|
|
2.03
|
|
||||||
Total investment securities
|
1,795,701
|
|
|
50,262
|
|
|
2.80
|
|
|
1,574,231
|
|
|
37,835
|
|
|
2.40
|
|
|
1,496,663
|
|
|
31,865
|
|
|
2.13
|
|
||||||
Total interest-earning assets
|
9,734,908
|
|
|
463,632
|
|
|
4.76
|
|
|
9,261,496
|
|
|
412,284
|
|
|
4.45
|
|
|
8,930,910
|
|
|
391,477
|
|
|
4.38
|
|
||||||
Non-interest-earning assets
|
828,184
|
|
|
|
|
|
|
892,052
|
|
|
|
|
|
|
904,181
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
10,563,092
|
|
|
|
|
|
|
$
|
10,153,548
|
|
|
|
|
|
|
$
|
9,835,091
|
|
|
|
|
|
|||||||||
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing checking accounts
|
$
|
1,048,327
|
|
|
$
|
1,200
|
|
|
0.11
|
|
|
$
|
933,978
|
|
|
$
|
850
|
|
|
0.09
|
|
|
$
|
859,621
|
|
|
$
|
767
|
|
|
0.09
|
|
Savings accounts
|
1,665,608
|
|
|
3,944
|
|
|
0.24
|
|
|
1,559,042
|
|
|
2,138
|
|
|
0.14
|
|
|
1,370,014
|
|
|
1,796
|
|
|
0.13
|
|
||||||
Money market accounts
|
1,421,161
|
|
|
4,107
|
|
|
0.29
|
|
|
1,515,854
|
|
|
2,638
|
|
|
0.17
|
|
|
1,575,877
|
|
|
3,098
|
|
|
0.20
|
|
||||||
Certificates of deposit
|
1,127,612
|
|
|
11,391
|
|
|
1.01
|
|
|
1,116,304
|
|
|
6,647
|
|
|
0.60
|
|
|
1,208,702
|
|
|
5,444
|
|
|
0.45
|
|
||||||
Total interest-bearing deposits
|
5,262,708
|
|
|
20,642
|
|
|
0.39
|
|
|
5,125,178
|
|
|
12,273
|
|
|
0.24
|
|
|
5,014,214
|
|
|
11,105
|
|
|
0.22
|
|
||||||
Non-interest-bearing deposits
|
3,411,010
|
|
|
—
|
|
|
—
|
|
|
3,233,889
|
|
|
—
|
|
|
—
|
|
|
3,033,604
|
|
|
—
|
|
|
—
|
|
||||||
Total deposits
|
8,673,718
|
|
|
20,642
|
|
|
0.24
|
|
|
8,359,067
|
|
|
12,273
|
|
|
0.15
|
|
|
8,047,818
|
|
|
11,105
|
|
|
0.14
|
|
||||||
Other interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
FHLB advances
|
253,661
|
|
|
5,636
|
|
|
2.22
|
|
|
151,295
|
|
|
1,908
|
|
|
1.26
|
|
|
141,885
|
|
|
953
|
|
|
0.67
|
|
||||||
Other borrowings
|
108,730
|
|
|
245
|
|
|
0.23
|
|
|
111,903
|
|
|
317
|
|
|
0.28
|
|
|
108,427
|
|
|
310
|
|
|
0.29
|
|
||||||
Junior subordinated debentures
|
140,212
|
|
|
6,136
|
|
|
4.38
|
|
|
140,212
|
|
|
4,752
|
|
|
3.39
|
|
|
140,212
|
|
|
4,040
|
|
|
2.88
|
|
||||||
Total borrowings
|
502,603
|
|
|
12,017
|
|
|
2.39
|
|
|
403,410
|
|
|
6,977
|
|
|
1.73
|
|
|
390,524
|
|
|
5,303
|
|
|
1.36
|
|
||||||
Total funding liabilities
|
9,176,321
|
|
|
32,659
|
|
|
0.36
|
|
|
8,762,477
|
|
|
19,250
|
|
|
0.22
|
|
|
8,438,342
|
|
|
16,408
|
|
|
0.19
|
|
||||||
Other non-interest-bearing liabilities
(2)
|
79,901
|
|
|
|
|
|
|
61,592
|
|
|
|
|
|
|
65,508
|
|
|
|
|
|
||||||||||||
Total liabilities
|
9,256,222
|
|
|
|
|
|
|
8,824,069
|
|
|
|
|
|
|
8,503,850
|
|
|
|
|
|
||||||||||||
Shareholders’ equity
|
1,306,870
|
|
|
|
|
|
|
1,329,479
|
|
|
|
|
|
|
1,331,241
|
|
|
|
|
|
||||||||||||
Total liabilities and shareholders’ equity
|
$
|
10,563,092
|
|
|
|
|
|
|
$
|
10,153,548
|
|
|
|
|
|
|
$
|
9,835,091
|
|
|
|
|
|
|||||||||
Net interest income/rate spread
|
|
|
$
|
430,973
|
|
|
4.40
|
%
|
|
|
|
$
|
393,034
|
|
|
4.23
|
%
|
|
|
|
$
|
375,069
|
|
|
4.19
|
%
|
||||||
Net interest margin
|
|
|
|
|
4.43
|
%
|
|
|
|
|
|
4.24
|
%
|
|
|
|
|
|
4.20
|
%
|
||||||||||||
Average interest-earning assets / average interest-bearing liabilities
|
|
|
|
|
168.85
|
%
|
|
|
|
|
|
167.52
|
%
|
|
|
|
|
|
165.24
|
%
|
||||||||||||
Average interest-earning assets / average funding liabilities
|
|
|
|
|
106.09
|
%
|
|
|
|
|
|
105.69
|
%
|
|
|
|
|
|
105.84
|
%
|
(1)
|
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
|
(2)
|
Average other non-interest-bearing liabilities include fair value adjustments related to FHLB advances and junior subordinated debentures.
|
(3)
|
Yields and costs have not been adjusted for the effect of tax-exempt interest.
|
|
Year Ended
December 31, 2018
Compared to Year Ended
December 31, 2017
Increase (Decrease) in
Income/Expense Due to
|
|
Year Ended December 31, 2017
Compared to Year Ended
December 31, 2016
Increase (Decrease) in
Income/Expense Due to
|
||||||||||||||||||||
|
Rate
|
|
Volume
|
|
Net
|
|
Rate
|
|
Volume
|
|
Net
|
||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans
|
$
|
18,384
|
|
|
$
|
10,429
|
|
|
$
|
28,813
|
|
|
$
|
610
|
|
|
$
|
12,348
|
|
|
$
|
12,958
|
|
Commercial/agricultural loans
|
7,707
|
|
|
1,632
|
|
|
9,339
|
|
|
1,834
|
|
|
27
|
|
|
1,861
|
|
||||||
Consumer and other loans
|
215
|
|
|
554
|
|
|
769
|
|
|
78
|
|
|
(60
|
)
|
|
18
|
|
||||||
Total loans
(1)
|
26,306
|
|
|
12,615
|
|
|
38,921
|
|
|
2,522
|
|
|
12,315
|
|
|
14,837
|
|
||||||
Mortgage-backed securities
|
5,271
|
|
|
5,270
|
|
|
10,541
|
|
|
2,725
|
|
|
2,483
|
|
|
5,208
|
|
||||||
Other securities
|
784
|
|
|
100
|
|
|
884
|
|
|
379
|
|
|
254
|
|
|
633
|
|
||||||
Interest-bearing deposits with banks
|
370
|
|
|
127
|
|
|
497
|
|
|
447
|
|
|
(259
|
)
|
|
188
|
|
||||||
FHLB stock
|
350
|
|
|
155
|
|
|
505
|
|
|
(63
|
)
|
|
4
|
|
|
(59
|
)
|
||||||
Total investment securities
|
6,775
|
|
|
5,652
|
|
|
12,427
|
|
|
3,488
|
|
|
2,482
|
|
|
5,970
|
|
||||||
Total net change in interest income on interest-earning assets
|
33,081
|
|
|
18,267
|
|
|
51,348
|
|
|
6,010
|
|
|
14,797
|
|
|
20,807
|
|
||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits
(2)
|
8,259
|
|
|
110
|
|
|
8,369
|
|
|
1,412
|
|
|
(244
|
)
|
|
1,168
|
|
||||||
FHLB advances
|
1,974
|
|
|
1,754
|
|
|
3,728
|
|
|
888
|
|
|
67
|
|
|
955
|
|
||||||
Other borrowings
|
(63
|
)
|
|
(9
|
)
|
|
(72
|
)
|
|
(3
|
)
|
|
10
|
|
|
7
|
|
||||||
Junior subordinated debentures
|
1,384
|
|
|
—
|
|
|
1,384
|
|
|
712
|
|
|
—
|
|
|
712
|
|
||||||
Total borrowings
|
3,295
|
|
|
1,745
|
|
|
5,040
|
|
|
1,597
|
|
|
77
|
|
|
1,674
|
|
||||||
Total net change in interest expense on interest-bearing liabilities
|
11,554
|
|
|
1,855
|
|
|
13,409
|
|
|
3,009
|
|
|
(167
|
)
|
|
2,842
|
|
||||||
Net change in net interest income
|
$
|
21,527
|
|
|
$
|
16,412
|
|
|
$
|
37,939
|
|
|
$
|
3,001
|
|
|
$
|
14,964
|
|
|
$
|
17,965
|
|
(1)
|
Includes 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)
|
Includes non-interest-bearing deposits.
|
|
Years Ended December 31
|
||||||||||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|||||
Balance, beginning of period
|
$
|
89,028
|
|
|
$
|
85,997
|
|
|
$
|
78,008
|
|
|
$
|
75,907
|
|
|
$
|
74,258
|
|
Provision
|
8,500
|
|
|
8,000
|
|
|
6,030
|
|
|
—
|
|
|
—
|
|
|||||
Recoveries of loans previously charged off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate
|
1,646
|
|
|
372
|
|
|
582
|
|
|
819
|
|
|
1,507
|
|
|||||
Multifamily real estate
|
—
|
|
|
11
|
|
|
—
|
|
|
113
|
|
|
—
|
|
|||||
Construction and land
|
213
|
|
|
1,237
|
|
|
2,171
|
|
|
1,811
|
|
|
1,776
|
|
|||||
Commercial business
|
1,049
|
|
|
1,226
|
|
|
1,993
|
|
|
772
|
|
|
988
|
|
|||||
Agricultural business, including secured by farmland
|
64
|
|
|
134
|
|
|
59
|
|
|
948
|
|
|
1,576
|
|
|||||
One- to four-family real estate
|
750
|
|
|
270
|
|
|
1,283
|
|
|
1,927
|
|
|
618
|
|
|||||
Consumer
|
366
|
|
|
481
|
|
|
610
|
|
|
570
|
|
|
528
|
|
|||||
|
4,088
|
|
|
3,731
|
|
|
6,698
|
|
|
6,960
|
|
|
6,993
|
|
|||||
Loans charged off:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial real estate
|
(401
|
)
|
|
(1,180
|
)
|
|
(746
|
)
|
|
(64
|
)
|
|
(1,239
|
)
|
|||||
Multifamily real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||||
Construction and land
|
(479
|
)
|
|
—
|
|
|
(616
|
)
|
|
(891
|
)
|
|
(207
|
)
|
|||||
Commercial business
|
(2,051
|
)
|
|
(3,803
|
)
|
|
(948
|
)
|
|
(419
|
)
|
|
(1,344
|
)
|
|||||
Agricultural business, including secured by farmland
|
(756
|
)
|
|
(2,374
|
)
|
|
(567
|
)
|
|
(746
|
)
|
|
(179
|
)
|
|||||
One- to four-family real estate
|
(43
|
)
|
|
(38
|
)
|
|
(375
|
)
|
|
(1,225
|
)
|
|
(885
|
)
|
|||||
Consumer
|
(1,401
|
)
|
|
(1,305
|
)
|
|
(1,487
|
)
|
|
(1,514
|
)
|
|
(1,470
|
)
|
|||||
|
(5,131
|
)
|
|
(8,700
|
)
|
|
(4,739
|
)
|
|
(4,859
|
)
|
|
(5,344
|
)
|
|||||
Net (charge-offs) recoveries
|
(1,043
|
)
|
|
(4,969
|
)
|
|
1,959
|
|
|
2,101
|
|
|
1,649
|
|
|||||
Balance, end of period
|
$
|
96,485
|
|
|
$
|
89,028
|
|
|
$
|
85,997
|
|
|
$
|
78,008
|
|
|
$
|
75,907
|
|
Allowance for loan losses as a percent of total loans
|
1.11
|
%
|
|
1.17
|
%
|
|
1.15
|
%
|
|
1.07
|
%
|
|
1.98
|
%
|
|||||
Net loan (charge-offs) recoveries as a percent of average outstanding loans during the period
|
(0.01
|
)%
|
|
(0.06
|
)%
|
|
0.03
|
%
|
|
0.04
|
%
|
|
0.04
|
%
|
|||||
Allowance for loan losses as a percent of non-performing loans
|
616
|
%
|
|
329
|
%
|
|
381
|
%
|
|
512
|
%
|
|
454
|
%
|
|
December 31
|
|||||||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||||||||||||
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|
Amount
|
|
Percent
of Loans
in Each
Category
to Total
Loans
|
|||||||||||||||
Specific or allocated loss allowances
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Commercial real estate
|
$
|
27,132
|
|
|
41.0
|
%
|
|
$
|
22,824
|
|
|
42.4
|
%
|
|
$
|
20,993
|
|
|
44.9
|
%
|
|
$
|
20,716
|
|
|
42.3
|
%
|
|
$
|
18,784
|
|
|
36.6
|
%
|
Multifamily real estate
|
3,818
|
|
|
4.2
|
|
|
1,633
|
|
|
4.1
|
|
|
1,360
|
|
|
3.3
|
|
|
4,195
|
|
|
6.5
|
|
|
4,562
|
|
|
4.4
|
|
|||||
Construction and land
|
24,442
|
|
|
12.8
|
|
|
27,568
|
|
|
12.0
|
|
|
34,252
|
|
|
11.0
|
|
|
27,131
|
|
|
7.9
|
|
|
23,545
|
|
|
10.8
|
|
|||||
Commercial business
|
19,438
|
|
|
17.1
|
|
|
18,311
|
|
|
16.8
|
|
|
16,533
|
|
|
16.2
|
|
|
13,856
|
|
|
16.5
|
|
|
2,821
|
|
|
18.9
|
|
|||||
Agricultural business, including secured by farmland
|
3,778
|
|
|
4.7
|
|
|
4,053
|
|
|
4.4
|
|
|
2,967
|
|
|
5.0
|
|
|
3,645
|
|
|
5.1
|
|
|
8,447
|
|
|
6.2
|
|
|||||
One-to-four-family real estate
|
4,714
|
|
|
11.2
|
|
|
2,055
|
|
|
11.2
|
|
|
2,238
|
|
|
10.9
|
|
|
4,732
|
|
|
13.0
|
|
|
12,043
|
|
|
14.0
|
|
|||||
Consumer
|
7,972
|
|
|
9.0
|
|
|
3,866
|
|
|
9.1
|
|
|
4,104
|
|
|
8.7
|
|
|
902
|
|
|
8.7
|
|
|
483
|
|
|
9.1
|
|
|||||
Total allocated
|
91,294
|
|
|
|
|
80,310
|
|
|
|
|
82,447
|
|
|
|
|
75,177
|
|
|
|
|
70,685
|
|
|
|
||||||||||
Unallocated
(1)
|
5,191
|
|
|
n/a
|
|
|
8,718
|
|
|
n/a
|
|
|
3,550
|
|
|
n/a
|
|
|
2,831
|
|
|
n/a
|
|
|
5,222
|
|
|
n/a
|
|
|||||
Total allowance for loan losses
|
$
|
96,485
|
|
|
100.0
|
%
|
|
$
|
89,028
|
|
|
100.0
|
%
|
|
$
|
85,997
|
|
|
100.0
|
%
|
|
$
|
78,008
|
|
|
100.0
|
%
|
|
$
|
75,907
|
|
|
100.0
|
%
|
(1)
|
We establish specific loss allowances when individual loans are identified that present a possibility of loss (i.e., that full collectability is not reasonably assured). The remainder of the allocated and unallocated allowance for loan losses is established for the purpose of providing for estimated losses which are inherent in the loan portfolio.
|
|
2018 compared to 2017
|
|
2017 compared to 2016
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change Amount
|
|
Change Percent
|
|
2017
|
|
2016
|
|
Change Amount
|
|
Change Percent
|
||||||||||||||
Deposit fees and other service charges
|
$
|
48,074
|
|
|
$
|
43,452
|
|
|
$
|
4,622
|
|
|
10.6
|
%
|
|
$
|
43,452
|
|
|
$
|
41,911
|
|
|
$
|
1,541
|
|
|
3.7
|
%
|
Mortgage banking operations
|
21,343
|
|
|
20,880
|
|
|
463
|
|
|
2.2
|
%
|
|
20,880
|
|
|
25,552
|
|
|
(4,672
|
)
|
|
(18.3
|
)%
|
||||||
Bank owned life insurance
|
4,505
|
|
|
4,618
|
|
|
(113
|
)
|
|
(2.4
|
)%
|
|
4,618
|
|
|
4,538
|
|
|
80
|
|
|
1.8
|
%
|
||||||
Miscellaneous
|
7,148
|
|
|
8,985
|
|
|
(1,837
|
)
|
|
(20.4
|
)%
|
|
8,985
|
|
|
6,001
|
|
|
2,984
|
|
|
49.7
|
%
|
||||||
|
81,070
|
|
|
77,935
|
|
|
3,135
|
|
|
4.0
|
%
|
|
77,935
|
|
|
78,002
|
|
|
(67
|
)
|
|
(0.1
|
)%
|
||||||
Net (loss) gain on sale of securities
|
(837
|
)
|
|
(2,080
|
)
|
|
1,243
|
|
|
(59.8
|
)%
|
|
(2,080
|
)
|
|
843
|
|
|
(2,923
|
)
|
|
(346.7
|
)%
|
||||||
Net change in valuation of financial instruments carried at fair value
|
3,775
|
|
|
(2,844
|
)
|
|
6,619
|
|
|
(232.7
|
)%
|
|
(2,844
|
)
|
|
(2,620
|
)
|
|
(224
|
)
|
|
8.5
|
%
|
||||||
Gain on sale of branches, including related loans and deposits
|
—
|
|
|
12,189
|
|
|
(12,189
|
)
|
|
(100.0
|
)%
|
|
12,189
|
|
|
—
|
|
|
12,189
|
|
|
—
|
%
|
||||||
Total non-interest income
|
$
|
84,008
|
|
|
$
|
85,200
|
|
|
$
|
(1,192
|
)
|
|
(1.4
|
)%
|
|
$
|
85,200
|
|
|
$
|
76,225
|
|
|
$
|
8,975
|
|
|
11.8
|
%
|
|
2018 compared to 2017
|
|
2017 compared to 2016
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
Change Amount
|
|
Change Percent
|
|
2017
|
|
2016
|
|
Change Amount
|
|
Change Percent
|
||||||||||||||
Salary and employee benefits
|
$
|
202,613
|
|
|
$
|
192,096
|
|
|
$
|
10,517
|
|
|
5.5
|
%
|
|
$
|
192,096
|
|
|
$
|
180,883
|
|
|
$
|
11,213
|
|
|
6.2
|
%
|
Less capitalized loan origination costs
|
(17,925
|
)
|
|
(17,379
|
)
|
|
(546
|
)
|
|
3.1
|
%
|
|
(17,379
|
)
|
|
(18,895
|
)
|
|
1,516
|
|
|
(8.0
|
)%
|
||||||
Occupancy and equipment
|
49,215
|
|
|
47,866
|
|
|
1,349
|
|
|
2.8
|
%
|
|
47,866
|
|
|
45,000
|
|
|
2,866
|
|
|
6.4
|
%
|
||||||
Information/computer data services
|
18,823
|
|
|
17,245
|
|
|
1,578
|
|
|
9.2
|
%
|
|
17,245
|
|
|
19,281
|
|
|
(2,036
|
)
|
|
(10.6
|
)%
|
||||||
Payment and card processing expenses
|
15,412
|
|
|
14,330
|
|
|
1,082
|
|
|
7.6
|
%
|
|
14,330
|
|
|
14,359
|
|
|
(29
|
)
|
|
(0.2
|
)%
|
||||||
Professional and legal expenses
|
17,945
|
|
|
17,534
|
|
|
411
|
|
|
2.3
|
%
|
|
17,534
|
|
|
8,120
|
|
|
9,414
|
|
|
115.9
|
%
|
||||||
Advertising and marketing
|
8,346
|
|
|
8,637
|
|
|
(291
|
)
|
|
(3.4
|
)%
|
|
8,637
|
|
|
9,709
|
|
|
(1,072
|
)
|
|
(11.0
|
)%
|
||||||
Deposit insurance
|
4,446
|
|
|
4,689
|
|
|
(243
|
)
|
|
(5.2
|
)%
|
|
4,689
|
|
|
4,551
|
|
|
138
|
|
|
3.0
|
%
|
||||||
State/Municipal business and use taxes
|
3,284
|
|
|
2,594
|
|
|
690
|
|
|
26.6
|
%
|
|
2,594
|
|
|
3,516
|
|
|
(922
|
)
|
|
(26.2
|
)%
|
||||||
REO operations
|
804
|
|
|
(2,030
|
)
|
|
2,834
|
|
|
(139.6
|
)%
|
|
(2,030
|
)
|
|
175
|
|
|
(2,205
|
)
|
|
(1,260.0
|
)%
|
||||||
Amortization of core deposit intangibles
|
6,047
|
|
|
6,246
|
|
|
(199
|
)
|
|
(3.2
|
)%
|
|
6,246
|
|
|
7,061
|
|
|
(815
|
)
|
|
(11.5
|
)%
|
||||||
Miscellaneous
|
26,754
|
|
|
27,142
|
|
|
(388
|
)
|
|
(1.4
|
)%
|
|
27,142
|
|
|
30,131
|
|
|
(2,989
|
)
|
|
(9.9
|
)%
|
||||||
|
$
|
335,764
|
|
|
$
|
318,970
|
|
|
$
|
16,794
|
|
|
5.3
|
%
|
|
$
|
318,970
|
|
|
$
|
303,891
|
|
|
$
|
15,079
|
|
|
5.0
|
%
|
Acquisition-related costs
|
$
|
5,607
|
|
|
$
|
—
|
|
|
$
|
5,607
|
|
|
nm
|
|
|
$
|
—
|
|
|
$
|
11,733
|
|
|
$
|
(11,733
|
)
|
|
(100.0
|
)%
|
Total non-interest expense
|
$
|
341,371
|
|
|
$
|
318,970
|
|
|
$
|
22,401
|
|
|
7.0
|
%
|
|
$
|
318,970
|
|
|
$
|
315,624
|
|
|
$
|
3,346
|
|
|
1.1
|
%
|
|
|
December 31, 2018
|
|||||||||||||||||||
|
|
Estimated Increase (Decrease) in
|
|||||||||||||||||||
Change (in Basis Points) in Interest Rates
(1)
|
|
Net Interest Income
Next 12 Months
|
|
Net Interest Income
Next 24 Months
|
|
Economic Value of Equity
|
|||||||||||||||
+400
|
|
$
|
(13,958
|
)
|
|
(2.9
|
)%
|
|
$
|
(6,832
|
)
|
|
(0.7
|
)%
|
|
$
|
(223,963
|
)
|
|
(8.4
|
)%
|
+300
|
|
(3,203
|
)
|
|
(0.7
|
)
|
|
11,754
|
|
|
1.2
|
|
|
(141,721
|
)
|
|
(5.3
|
)
|
|||
+200
|
|
1,876
|
|
|
0.4
|
|
|
17,892
|
|
|
1.9
|
|
|
(56,625
|
)
|
|
(2.1
|
)
|
|||
+100
|
|
3,100
|
|
|
0.7
|
|
|
14,748
|
|
|
1.5
|
|
|
(715
|
)
|
|
—
|
|
|||
0
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
-50
|
|
(7,824
|
)
|
|
(1.7
|
)
|
|
(22,434
|
)
|
|
(2.3
|
)
|
|
(59,399
|
)
|
|
(2.2
|
)
|
|||
-100
|
|
(16,634
|
)
|
|
(3.5
|
)
|
|
(47,491
|
)
|
|
(5.0
|
)
|
|
(113,625
|
)
|
|
(4.2
|
)
|
(1)
|
Assumes an instantaneous and sustained uniform change in market interest rates at all maturities; however, no rates are allowed to go below zero. The current targeted federal funds rate is between 2.25% and 2.50%.
|
|
December 31, 2018
|
||||||||||||||||||||||||||
|
Within
6 Months
|
|
After 6
Months
Within 1 Year
|
|
After 1 Year
Within 3 Years
|
|
After 3 Years
Within 5
Years
|
|
After 5 Years
Within 10 Years
|
|
Over
10 Years
|
|
Total
|
||||||||||||||
Interest-earning assets:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Construction loans
|
$
|
664,994
|
|
|
$
|
83,786
|
|
|
$
|
121,660
|
|
|
$
|
14,180
|
|
|
$
|
4,768
|
|
|
$
|
589
|
|
|
$
|
889,977
|
|
Fixed-rate mortgage loans
|
323,795
|
|
|
163,282
|
|
|
501,327
|
|
|
416,279
|
|
|
521,821
|
|
|
48,342
|
|
|
1,974,846
|
|
|||||||
Adjustable-rate mortgage loans
|
1,027,644
|
|
|
353,938
|
|
|
1,139,661
|
|
|
794,057
|
|
|
255,670
|
|
|
955
|
|
|
3,571,925
|
|
|||||||
Fixed-rate mortgage-backed securities
|
65,600
|
|
|
77,600
|
|
|
260,626
|
|
|
233,986
|
|
|
519,370
|
|
|
119,869
|
|
|
1,277,051
|
|
|||||||
Adjustable-rate mortgage-backed securities
|
163,446
|
|
|
5,156
|
|
|
22,381
|
|
|
39,059
|
|
|
21,645
|
|
|
—
|
|
|
251,687
|
|
|||||||
Fixed-rate commercial/agricultural loans
|
121,434
|
|
|
106,689
|
|
|
239,659
|
|
|
74,524
|
|
|
57,617
|
|
|
28,962
|
|
|
628,885
|
|
|||||||
Adjustable-rate commercial/agricultural loans
|
910,466
|
|
|
36,215
|
|
|
70,903
|
|
|
38,296
|
|
|
18,311
|
|
|
—
|
|
|
1,074,191
|
|
|||||||
Consumer and other loans
|
483,573
|
|
|
58,625
|
|
|
95,389
|
|
|
31,528
|
|
|
17,075
|
|
|
41,251
|
|
|
727,441
|
|
|||||||
Investment securities and interest-earning deposits
|
110,177
|
|
|
16,850
|
|
|
56,851
|
|
|
63,506
|
|
|
98,394
|
|
|
70,226
|
|
|
416,004
|
|
|||||||
Total rate sensitive assets
|
3,871,129
|
|
|
902,141
|
|
|
2,508,457
|
|
|
1,705,415
|
|
|
1,514,671
|
|
|
310,194
|
|
|
10,812,007
|
|
|||||||
Interest-bearing liabilities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest-bearing checking accounts
|
156,751
|
|
|
72,360
|
|
|
227,701
|
|
|
162,676
|
|
|
246,309
|
|
|
325,218
|
|
|
1,191,015
|
|
|||||||
Regular savings
|
227,143
|
|
|
122,183
|
|
|
378,874
|
|
|
262,339
|
|
|
381,877
|
|
|
470,166
|
|
|
1,842,582
|
|
|||||||
Money market deposit accounts
|
164,492
|
|
|
108,770
|
|
|
342,832
|
|
|
237,077
|
|
|
328,063
|
|
|
284,135
|
|
|
1,465,369
|
|
|||||||
Certificates of deposit
|
687,701
|
|
|
316,778
|
|
|
289,582
|
|
|
24,666
|
|
|
2,100
|
|
|
—
|
|
|
1,320,827
|
|
|||||||
FHLB advances
|
540,006
|
|
|
6
|
|
|
26
|
|
|
30
|
|
|
91
|
|
|
30
|
|
|
540,189
|
|
|||||||
Other borrowings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Trust preferred securities
|
140,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
140,212
|
|
|||||||
Retail repurchase agreements
|
116,588
|
|
|
2,407
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118,995
|
|
|||||||
Total rate sensitive liabilities
|
2,032,893
|
|
|
622,504
|
|
|
1,239,015
|
|
|
686,788
|
|
|
958,440
|
|
|
1,079,549
|
|
|
6,619,189
|
|
|||||||
Excess (deficiency) of interest-sensitive assets over interest-sensitive liabilities
|
$
|
1,838,236
|
|
|
$
|
279,637
|
|
|
$
|
1,269,442
|
|
|
$
|
1,018,627
|
|
|
$
|
556,231
|
|
|
$
|
(769,355
|
)
|
|
$
|
4,192,818
|
|
Cumulative excess of interest-sensitive assets
|
$
|
1,838,236
|
|
|
$
|
2,117,873
|
|
|
$
|
3,387,315
|
|
|
$
|
4,405,942
|
|
|
$
|
4,962,173
|
|
|
$
|
4,192,818
|
|
|
$
|
4,192,818
|
|
Cumulative ratio of interest-earning assets to interest-bearing liabilities
|
190.42
|
%
|
|
179.76
|
%
|
|
186.98
|
%
|
|
196.17
|
%
|
|
189.58
|
%
|
|
163.34
|
%
|
|
163.34
|
%
|
|||||||
Interest sensitivity gap to total assets
|
15.48
|
%
|
|
2.36
|
%
|
|
10.69
|
%
|
|
8.58
|
%
|
|
4.69
|
%
|
|
(6.48
|
)%
|
|
35.32
|
%
|
|||||||
Ratio of cumulative gap to total assets
|
15.48
|
%
|
|
17.84
|
%
|
|
28.53
|
%
|
|
37.11
|
%
|
|
41.80
|
%
|
|
35.32
|
%
|
|
35.32
|
%
|
(1)
|
Adjustable-rate assets are included in the period in which interest rates are next scheduled to adjust rather than in the period in which they are due to mature, and fixed-rate assets are included in the period in which they are scheduled to be repaid based upon scheduled amortization, in each case adjusted to take into account estimated prepayments. Mortgage loans and other loans are not reduced for allowances for loan losses and non-performing loans. Mortgage loans, mortgage-backed securities, other loans and investment securities are not adjusted for deferred fees and unamortized acquisition premiums and discounts.
|
(2)
|
Adjustable-rate liabilities are included in the period in which interest rates are next scheduled to adjust rather than in the period they are due to mature. Although regular savings, demand, interest-bearing checking, and money market deposit accounts are subject to immediate withdrawal, based on historical experience management considers a substantial amount of such accounts to be core deposits having significantly longer maturities. For the purpose of the gap analysis, these accounts have been assigned decay rates to reflect their longer effective maturities. If all of these accounts had been assumed to be short-term, the one-year cumulative gap of interest-sensitive assets would have been $(1.53) billion, or (12.89%) of total assets at
December 31, 2018
. Interest-bearing liabilities for this table exclude certain non-interest-bearing deposits that are included in the average balance calculations reflected in Table 17,
Analysis
of Net Interest Spread
.
|
Capital Ratios
|
|
Banner Corporation
|
|
Banner Bank
|
|
Islanders Bank
|
|
|||
Total capital to risk-weighted assets
|
|
13.12
|
%
|
|
12.50
|
%
|
|
18.26
|
%
|
|
Tier 1 capital to risk-weighted assets
|
|
12.12
|
|
|
11.51
|
|
|
17.01
|
|
|
Tier 1 capital to average leverage assets
|
|
10.98
|
|
|
10.50
|
|
|
11.16
|
|
|
Tier 1 common equity to risk-weighted assets
|
|
10.75
|
|
|
11.51
|
|
|
17.01
|
|
|
|
One Year or Less
|
|
After One to Three Years
|
|
After Three to Five Years
|
|
After Five Years
|
|
Total
|
||||||||||
Advances from Federal Home Loan Bank
|
$
|
540,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
189
|
|
|
$
|
540,189
|
|
Junior subordinated debentures
|
—
|
|
|
—
|
|
|
—
|
|
|
140,212
|
|
|
140,212
|
|
|||||
Repurchase agreements
|
118,995
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118,995
|
|
|||||
Certificates of Deposit
|
1,001,206
|
|
|
292,166
|
|
|
24,646
|
|
|
2,247
|
|
|
1,320,265
|
|
|||||
Operating lease obligations
|
10,876
|
|
|
19,935
|
|
|
10,964
|
|
|
11,225
|
|
|
53,000
|
|
|||||
Purchase obligation
|
20,760
|
|
|
33,731
|
|
|
8,651
|
|
|
610
|
|
|
63,752
|
|
|||||
Total
|
$
|
1,691,837
|
|
|
$
|
345,832
|
|
|
$
|
44,261
|
|
|
$
|
154,483
|
|
|
$
|
2,236,413
|
|
(a)
|
|
(1)
|
|
Financial Statements
|
|
|
|
|
See Index to Consolidated Financial Statements on page
83
.
|
|
|
(2)
|
|
Financial Statement Schedules
|
|
|
|
|
All financial statement schedules are omitted because they are not applicable or not required, or because the required information is included in the Consolidated Financial Statements or the Notes thereto or in Part 1, Item 1.
|
|
|
(3)
|
|
Exhibits
|
|
|
|
|
See Index of Exhibits on page
148
.
|
(b)
|
|
|
|
Exhibits
|
|
|
|
|
See Index of Exhibits on page
148
.
|
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
||
|
|
|
|
|
Banner Corporation
|
|
|
|
Date: February 25, 2019
|
|
/s/ Mark J. Grescovich
|
|
|
Mark J. Grescovich
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
||
|
|
|
/s/ Mark J. Grescovich
|
|
/s/ Peter J. Conner
|
Mark J. Grescovich
|
|
Peter J. Conner
|
President and Chief Executive Officer; Director
|
|
Executive Vice President and Chief Financial Officer
|
(Principal Executive Officer)
|
|
(Principal Financial and Accounting Officer)
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ John R. Layman
|
|
/s/ Robert D. Adams
|
John R. Layman
|
|
Robert D. Adams
|
Director
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Connie R. Collingsworth
|
|
/s/ David I. Matson
|
Connie R. Collingsworth
|
|
David I. Matson
|
Director
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Gary Sirmon
|
|
/s/ Merline Saintil
|
Gary Sirmon
|
|
Merline Saintil
|
Chairman of the Board
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Brent A. Orrico
|
|
/s/ Gordon E. Budke
|
Brent A. Orrico
|
|
Gordon E. Budke
|
Director
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Cheryl R. Bishop
|
|
/s/ David A. Klaue
|
Cheryl R. Bishop
|
|
David A. Klaue
|
Director
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Roberto R. Herencia
|
|
/s/ Kevin F. Riordan
|
Roberto R. Herencia
|
|
Kevin F. Riordan
|
Director
|
|
Director
|
Date: February 25, 2019
|
|
Date: February 25, 2019
|
|
|
|
/s/ Terry Schwakopf
|
|
|
Terry Schwakopf
|
|
|
Director
|
|
|
Date: February 25, 2019
|
|
|
Page
|
|
Report of Management
|
|
Management Report on Internal Control Over Financial Reporting
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Statements of Financial Condition as of December 31, 2018 and 2017
|
|
Consolidated Statements of Operations for the Years Ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018, 2017 and 2016
|
|
Notes to the Consolidated Financial Statements
|
ASSETS
|
2018
|
|
2017
|
||||
Cash and due from banks
|
$
|
231,029
|
|
|
$
|
199,624
|
|
Interest bearing deposits
|
41,167
|
|
|
61,576
|
|
||
Total cash and cash equivalents
|
272,196
|
|
|
261,200
|
|
||
Securities—trading, amortized cost $27,203 and $27,246, respectively
|
25,896
|
|
|
22,318
|
|
||
Securities—available-for-sale, amortized cost $1,648,421 and $926,112, respectively
|
1,636,223
|
|
|
919,485
|
|
||
Securities—held-to-maturity, fair value $232,537 and $262,188, respectively
|
234,220
|
|
|
260,271
|
|
||
Federal Home Loan Bank (FHLB) stock
|
31,955
|
|
|
10,334
|
|
||
Loans held for sale (includes $164.8 million and $32.4 million, respectively, at fair value)
|
171,031
|
|
|
40,725
|
|
||
Loans receivable
|
8,684,595
|
|
|
7,598,884
|
|
||
Allowance for loan losses
|
(96,485
|
)
|
|
(89,028
|
)
|
||
Net loans
|
8,588,110
|
|
|
7,509,856
|
|
||
Accrued interest receivable
|
38,593
|
|
|
31,259
|
|
||
Real estate owned (REO), held for sale, net
|
2,611
|
|
|
360
|
|
||
Property and equipment, net
|
171,809
|
|
|
154,815
|
|
||
Goodwill
|
339,154
|
|
|
242,659
|
|
||
Other intangible assets, net
|
32,924
|
|
|
22,655
|
|
||
Bank-owned life insurance (BOLI)
|
177,467
|
|
|
162,668
|
|
||
Deferred tax assets, net
|
75,020
|
|
|
71,427
|
|
||
Other assets
|
74,108
|
|
|
53,177
|
|
||
Total assets
|
$
|
11,871,317
|
|
|
$
|
9,763,209
|
|
LIABILITIES
|
|
|
|
||||
Deposits:
|
|
|
|
||||
Non-interest-bearing
|
$
|
3,657,817
|
|
|
$
|
3,265,544
|
|
Interest-bearing transaction and savings accounts
|
4,498,966
|
|
|
3,950,950
|
|
||
Interest-bearing certificates
|
1,320,265
|
|
|
966,937
|
|
||
Total deposits
|
9,477,048
|
|
|
8,183,431
|
|
||
Advances from FHLB
|
540,189
|
|
|
202
|
|
||
Other borrowings
|
118,995
|
|
|
95,860
|
|
||
Junior subordinated debentures at fair value (issued in connection with Trust Preferred Securities)
|
114,091
|
|
|
98,707
|
|
||
Accrued expenses and other liabilities
|
102,061
|
|
|
71,344
|
|
||
Deferred compensation
|
40,338
|
|
|
41,039
|
|
||
Total liabilities
|
10,392,722
|
|
|
8,490,583
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 23)
|
|
|
|
||||
SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock - $0.01 par value per share, 500,000 shares authorized; no shares issued and outstanding at December 31, 2018 and December 31, 2017
|
—
|
|
|
—
|
|
||
Common stock and paid in capital - $0.01 par value per share, 50,000,000 shares authorized, 35,107,839 shares issued and outstanding at December 31, 2018; 32,626,456 shares issued and outstanding at December 31, 2017
|
1,336,030
|
|
|
1,185,919
|
|
||
Common stock (non-voting) and paid in capital - $0.01 par value per share, 5,000,000 shares authorized; 74,933 shares issued and outstanding at December 31, 2018; 100,029 shares issued and outstanding at December 31, 2017
|
1,406
|
|
|
1,208
|
|
||
Retained earnings
|
134,055
|
|
|
90,535
|
|
||
Accumulated other comprehensive income (loss)
|
7,104
|
|
|
(5,036
|
)
|
||
Carrying value of shares held in trust for stock related compensation plans
|
(7,289
|
)
|
|
(7,351
|
)
|
||
Liability for common stock issued for stock related compensation plans
|
7,289
|
|
|
7,351
|
|
||
Total shareholders' equity
|
1,478,595
|
|
|
1,272,626
|
|
||
Total liabilities and shareholders' equity
|
$
|
11,871,317
|
|
|
$
|
9,763,209
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
INTEREST INCOME:
|
|
|
|
|
|
||||||
Loans receivable
|
$
|
413,370
|
|
|
$
|
374,449
|
|
|
$
|
359,612
|
|
Mortgage-backed securities
|
35,076
|
|
|
24,535
|
|
|
19,328
|
|
|||
Securities and cash equivalents
|
15,186
|
|
|
13,300
|
|
|
12,537
|
|
|||
Total interest income
|
463,632
|
|
|
412,284
|
|
|
391,477
|
|
|||
INTEREST EXPENSE:
|
|
|
|
|
|
||||||
Deposits
|
20,642
|
|
|
12,273
|
|
|
11,105
|
|
|||
FHLB advances
|
5,636
|
|
|
1,908
|
|
|
953
|
|
|||
Other borrowings
|
245
|
|
|
317
|
|
|
310
|
|
|||
Junior subordinated debentures
|
6,136
|
|
|
4,752
|
|
|
4,040
|
|
|||
Total interest expense
|
32,659
|
|
|
19,250
|
|
|
16,408
|
|
|||
Net interest income before provision for loan losses
|
430,973
|
|
|
393,034
|
|
|
375,069
|
|
|||
PROVISION FOR LOAN LOSSES
|
8,500
|
|
|
8,000
|
|
|
6,030
|
|
|||
Net interest income
|
422,473
|
|
|
385,034
|
|
|
369,039
|
|
|||
NON-INTEREST INCOME
|
|
|
|
|
|
||||||
Deposit fees and other service charges
|
48,074
|
|
|
43,452
|
|
|
41,911
|
|
|||
Mortgage banking operations
|
21,343
|
|
|
20,880
|
|
|
25,552
|
|
|||
BOLI
|
4,505
|
|
|
4,618
|
|
|
4,538
|
|
|||
Miscellaneous
|
7,148
|
|
|
8,985
|
|
|
6,001
|
|
|||
|
81,070
|
|
|
77,935
|
|
|
78,002
|
|
|||
Net (loss) gain on sale of securities
|
(837
|
)
|
|
(2,080
|
)
|
|
843
|
|
|||
Net change in valuation of financial instruments carried at fair value
|
3,775
|
|
|
(2,844
|
)
|
|
(2,620
|
)
|
|||
Gain on sale of branches, including related loans and deposits
|
—
|
|
|
12,189
|
|
|
—
|
|
|||
Total non-interest income
|
84,008
|
|
|
85,200
|
|
|
76,225
|
|
|||
NON-INTEREST EXPENSE:
|
|
|
|
|
|
||||||
Salary and employee benefits
|
202,613
|
|
|
192,096
|
|
|
180,883
|
|
|||
Less capitalized loan origination costs
|
(17,925
|
)
|
|
(17,379
|
)
|
|
(18,895
|
)
|
|||
Occupancy and equipment
|
49,215
|
|
|
47,866
|
|
|
45,000
|
|
|||
Information/computer data services
|
18,823
|
|
|
17,245
|
|
|
19,281
|
|
|||
Payment and card processing expenses
|
15,412
|
|
|
14,330
|
|
|
14,359
|
|
|||
Professional and legal expenses
|
17,945
|
|
|
17,534
|
|
|
8,120
|
|
|||
Advertising and marketing
|
8,346
|
|
|
8,637
|
|
|
9,709
|
|
|||
Deposit insurance
|
4,446
|
|
|
4,689
|
|
|
4,551
|
|
|||
State/municipal business and use taxes
|
3,284
|
|
|
2,594
|
|
|
3,516
|
|
|||
REO operations
|
804
|
|
|
(2,030
|
)
|
|
175
|
|
|||
Amortization of core deposit intangibles
|
6,047
|
|
|
6,246
|
|
|
7,061
|
|
|||
Miscellaneous
|
26,754
|
|
|
27,142
|
|
|
30,131
|
|
|||
|
335,764
|
|
|
318,970
|
|
|
303,891
|
|
|||
Acquisition related costs
|
5,607
|
|
|
—
|
|
|
11,733
|
|
|||
Total non-interest expense
|
341,371
|
|
|
318,970
|
|
|
315,624
|
|
|||
Income before provision for income taxes
|
165,110
|
|
|
151,264
|
|
|
129,640
|
|
|||
PROVISION FOR INCOME TAXES
|
28,595
|
|
|
90,488
|
|
|
44,255
|
|
|||
NET INCOME
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
|
|
|
|
|
|
||||||
Earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
4.16
|
|
|
$
|
1.85
|
|
|
$
|
2.52
|
|
Diluted
|
$
|
4.15
|
|
|
$
|
1.84
|
|
|
$
|
2.52
|
|
Cumulative dividends declared per common share
|
$
|
1.96
|
|
|
$
|
2.00
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
||||||
Weighted average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
32,784,724
|
|
|
32,888,007
|
|
|
33,820,148
|
|
|||
Diluted
|
32,894,425
|
|
|
32,986,707
|
|
|
33,853,511
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
NET INCOME
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
OTHER COMPREHENSIVE LOSS, NET OF INCOME TAXES:
|
|
|
|
|
|
||||||
Unrealized holding loss on securities—available-for-sale arising during the period
|
(6,547
|
)
|
|
(3,318
|
)
|
|
(3,940
|
)
|
|||
Reclassification for net losses (gains) on securities—available-for-sale realized in earnings
|
839
|
|
|
2,109
|
|
|
(311
|
)
|
|||
Changes in fair value of junior subordinated debentures related to instrument specific credit risk
|
(15,384
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax related to other comprehensive income (loss)
|
5,028
|
|
|
423
|
|
|
1,526
|
|
|||
Other comprehensive loss
|
(16,064
|
)
|
|
(786
|
)
|
|
(2,725
|
)
|
|||
COMPREHENSIVE INCOME
|
$
|
120,451
|
|
|
$
|
59,990
|
|
|
$
|
82,660
|
|
|
|
Common Stock
and Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Loss |
|
Shareholders' Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance, January 1, 2016
|
|
34,242,255
|
|
|
$
|
1,261,174
|
|
|
$
|
39,615
|
|
|
$
|
(730
|
)
|
|
$
|
1,300,059
|
|
Net income
|
|
|
|
|
|
85,385
|
|
|
|
|
85,385
|
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(2,725
|
)
|
|
(2,725
|
)
|
|||||||
Accrual of dividends on common stock ($0.88/share-cumulative)
|
|
|
|
|
|
(29,672
|
)
|
|
|
|
(29,672
|
)
|
|||||||
Repurchase of common stock
|
|
(1,145,250
|
)
|
|
(50,772
|
)
|
|
|
|
|
|
(50,772
|
)
|
||||||
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered
|
|
96,382
|
|
|
3,401
|
|
|
|
|
|
|
3,401
|
|
||||||
Excess tax benefits on stock-based compensation
|
|
|
|
34
|
|
|
|
|
|
|
34
|
|
|||||||
Balance, December 31, 2016
|
|
33,193,387
|
|
|
$
|
1,213,837
|
|
|
$
|
95,328
|
|
|
$
|
(3,455
|
)
|
|
$
|
1,305,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, January 1, 2017
|
|
33,193,387
|
|
|
$
|
1,213,837
|
|
|
$
|
95,328
|
|
|
$
|
(3,455
|
)
|
|
$
|
1,305,710
|
|
Net income
|
|
|
|
|
|
60,776
|
|
|
|
|
60,776
|
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(786
|
)
|
|
(786
|
)
|
|||||||
Reclassification of stranded tax effects from accumulated other comprehensive loss to retained earnings
|
|
|
|
|
|
795
|
|
|
(795
|
)
|
|
—
|
|
||||||
Accrual of dividends on common stock ($2.00/share-cumulative)
|
|
|
|
|
|
(66,364
|
)
|
|
|
|
(66,364
|
)
|
|||||||
Repurchase of common stock
|
|
(545,166
|
)
|
|
(31,045
|
)
|
|
|
|
|
|
(31,045
|
)
|
||||||
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered
|
|
78,264
|
|
|
4,335
|
|
|
|
|
|
|
4,335
|
|
||||||
Balance, December 31, 2017
|
|
32,726,485
|
|
|
$
|
1,187,127
|
|
|
$
|
90,535
|
|
|
$
|
(5,036
|
)
|
|
$
|
1,272,626
|
|
|
|
Common Stock
and Paid in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive
Income (Loss) |
|
Shareholders' Equity
|
|||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance, January 1, 2018
|
|
32,726,485
|
|
|
$
|
1,187,127
|
|
|
$
|
90,535
|
|
|
$
|
(5,036
|
)
|
|
$
|
1,272,626
|
|
Cumulative effect of reclassification of the instrument-specific credit risk portion of junior subordinated debentures fair value adjustments and reclassification of equity securities from available-for-sale
|
|
|
|
|
|
(28,204
|
)
|
|
28,204
|
|
|
—
|
|
||||||
Net income
|
|
|
|
|
|
136,515
|
|
|
|
|
136,515
|
|
|||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
(16,064
|
)
|
|
(16,064
|
)
|
|||||||
Accrual of dividends on common stock ($1.96/share-cumulative)
|
|
|
|
|
|
(64,791
|
)
|
|
|
|
(64,791
|
)
|
|||||||
Repurchase of common stock
|
|
(594,711
|
)
|
|
(34,401
|
)
|
|
|
|
|
|
(34,401
|
)
|
||||||
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered
|
|
(57,073
|
)
|
|
5,001
|
|
|
|
|
|
|
5,001
|
|
||||||
Issuance of shares for acquisition
|
|
3,108,071
|
|
|
179,709
|
|
|
|
|
|
|
179,709
|
|
||||||
Balance, December 31, 2018
|
|
35,182,772
|
|
|
$
|
1,337,436
|
|
|
$
|
134,055
|
|
|
$
|
7,104
|
|
|
$
|
1,478,595
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
Adjustments to reconcile net income to net cash provided from (used by) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation
|
15,232
|
|
|
14,701
|
|
|
13,464
|
|
|||
Deferred income and expense, net of amortization
|
(6,571
|
)
|
|
1,972
|
|
|
(1,323
|
)
|
|||
Amortization of core deposit intangibles
|
6,047
|
|
|
6,246
|
|
|
7,061
|
|
|||
Loss (gain) on sale of securities, net
|
837
|
|
|
2,080
|
|
|
(843
|
)
|
|||
Net change in valuation of financial instruments carried at fair value
|
(3,775
|
)
|
|
2,844
|
|
|
2,620
|
|
|||
Purchases of securities—trading
|
—
|
|
|
—
|
|
|
(1,725
|
)
|
|||
Proceeds from sales of securities—trading
|
—
|
|
|
1,258
|
|
|
7,839
|
|
|||
Principal repayments and maturities of securities—trading
|
100
|
|
|
1,849
|
|
|
3,746
|
|
|||
Gain on sale of branches, including related loans and deposits
|
—
|
|
|
(12,189
|
)
|
|
—
|
|
|||
(Increase) decrease in deferred taxes
|
(3,498
|
)
|
|
56,267
|
|
|
7,883
|
|
|||
Increase (decrease) in current taxes payable
|
3,938
|
|
|
(2,965
|
)
|
|
(2,184
|
)
|
|||
Equity-based compensation
|
6,554
|
|
|
5,965
|
|
|
4,305
|
|
|||
Increase in cash surrender value of BOLI
|
(4,471
|
)
|
|
(4,057
|
)
|
|
(4,507
|
)
|
|||
Gain on sale of loans, net of capitalized servicing rights
|
(15,066
|
)
|
|
(15,225
|
)
|
|
(17,713
|
)
|
|||
Gain on disposal of real estate held for sale and property and equipment
|
(833
|
)
|
|
(4,295
|
)
|
|
(1,389
|
)
|
|||
Provision for loan loss
|
8,500
|
|
|
8,000
|
|
|
6,030
|
|
|||
Provision for real estate held for sale
|
387
|
|
|
256
|
|
|
876
|
|
|||
Origination of loans held for sale
|
(896,461
|
)
|
|
(807,137
|
)
|
|
(1,063,328
|
)
|
|||
Proceeds from sales of loans held for sale
|
781,879
|
|
|
1,027,989
|
|
|
880,890
|
|
|||
Net change in:
|
|
|
|
|
|
|
|
|
|||
Other assets
|
(15,861
|
)
|
|
2,546
|
|
|
3,759
|
|
|||
Other liabilities
|
17,322
|
|
|
(179
|
)
|
|
(6,664
|
)
|
|||
Net cash provided from (used by) operating activities
|
30,775
|
|
|
346,702
|
|
|
(75,818
|
)
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
Purchases of securities—available-for-sale
|
(913,951
|
)
|
|
(838,247
|
)
|
|
(243,115
|
)
|
|||
Principal repayments and maturities of securities—available-for-sale
|
173,454
|
|
|
187,080
|
|
|
191,534
|
|
|||
Proceeds from sales of securities
—
available-for-sale
|
214,609
|
|
|
522,564
|
|
|
369,755
|
|
|||
Purchases of securities
—
held-to-maturity
|
(9,612
|
)
|
|
(6,490
|
)
|
|
(60,344
|
)
|
|||
Principal repayments and maturities of securities
—
held-to-maturity
|
33,152
|
|
|
11,817
|
|
|
11,009
|
|
|||
Loan originations, net of repayments
|
(416,218
|
)
|
|
(288,951
|
)
|
|
(75,922
|
)
|
|||
Purchases of loans and participating interest in loans
|
(33,680
|
)
|
|
(126,508
|
)
|
|
(235,527
|
)
|
|||
Proceeds from sales of other loans
|
9,853
|
|
|
21,923
|
|
|
184,525
|
|
|||
Net cash (paid) received from acquisitions and branch divestitures
|
(1,574
|
)
|
|
113,222
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(23,094
|
)
|
|
(12,244
|
)
|
|
(16,239
|
)
|
|||
Proceeds from sale of real estate held for sale and sale of other property
|
7,768
|
|
|
20,121
|
|
|
14,513
|
|
|||
Proceeds from FHLB stock repurchase program
|
143,175
|
|
|
118,304
|
|
|
80,681
|
|
|||
Purchase of FHLB stock
|
(163,683
|
)
|
|
(116,132
|
)
|
|
(77,130
|
)
|
|||
Other
|
3,583
|
|
|
254
|
|
|
2,707
|
|
|||
Net cash (used by) provided from investing activities
|
(976,218
|
)
|
|
(393,287
|
)
|
|
146,447
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Increase in deposits, net
|
503,814
|
|
|
222,334
|
|
|
66,346
|
|
|||
Repayment of long term FHLB borrowing
|
(10
|
)
|
|
(9
|
)
|
|
(95,009
|
)
|
|||
Advances, net of (repayments) of overnight and short-term FHLB borrowings
|
540,000
|
|
|
(54,000
|
)
|
|
16,400
|
|
|||
Increase (decrease) in other borrowings, net
|
7,870
|
|
|
(9,825
|
)
|
|
7,360
|
|
|||
Cash dividends paid
|
(59,280
|
)
|
|
(65,759
|
)
|
|
(28,282
|
)
|
|||
Cash paid for repurchase of common stock
|
(34,401
|
)
|
|
(31,045
|
)
|
|
(50,772
|
)
|
|||
Taxes paid related to net share settlement for equity awards
|
(1,554
|
)
|
|
(1,630
|
)
|
|
(870
|
)
|
|||
Net cash provided from (used by) financing activities
|
956,439
|
|
|
60,066
|
|
|
(84,827
|
)
|
|||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
10,996
|
|
|
13,481
|
|
|
(14,198
|
)
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
261,200
|
|
|
247,719
|
|
|
261,917
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$
|
272,196
|
|
|
$
|
261,200
|
|
|
$
|
247,719
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Interest paid in cash
|
$
|
28,098
|
|
|
$
|
18,875
|
|
|
$
|
16,722
|
|
Taxes paid in cash
|
21,664
|
|
|
35,500
|
|
|
36,153
|
|
|||
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
|
|
|
|
|
|
|
|
|
|||
Loans, net of discounts, specific loss allowances and unearned income, transferred to real estate owned and other repossessed assets
|
1,645
|
|
|
10
|
|
|
9,146
|
|
|||
Dividends accrued but not paid until after period end
|
13,778
|
|
|
8,226
|
|
|
7,662
|
|
|||
ACQUISITIONS (DISPOSITIONS):
|
|
|
|
|
|
||||||
Assets acquired (disposed)
|
915,821
|
|
|
(259,398
|
)
|
|
—
|
|
|||
Liabilities assumed (transferred)
|
832,278
|
|
|
(160,465
|
)
|
|
—
|
|
Buildings and leased improvements
|
10–39 years
|
Furniture and equipment
|
3
–
10 years
|
1.
|
Identify the contract with a customer;
|
2.
|
Identify the performance obligations in the contract;
|
3.
|
Determine the transaction price;
|
4.
|
Allocate the transaction price to performance obligations in the contract, and
|
5.
|
Recognize revenue when or as the Company satisfies the performance obligation.
|
|
For the year ended
December 31, 2018
|
|
For the year ended
December 31, 2017
|
|
For the year ended
December 31, 2016
|
||||||||||||||||||||||||||||||
|
As Reported
|
|
Balance without Adoption of ASC 606
|
|
Effect of Change
|
|
As Reported
|
|
Balance without Adoption of ASC 606
|
|
Effect of Change
|
|
As Reported
|
|
Balance without Adoption of ASC 606
|
|
Effect of Change
|
||||||||||||||||||
Non-interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Deposit fees and other service charges
|
$
|
48,074
|
|
|
$
|
55,841
|
|
|
$
|
(7,767
|
)
|
|
$
|
43,452
|
|
|
$
|
51,787
|
|
|
$
|
(8,335
|
)
|
|
$
|
41,911
|
|
|
$
|
49,156
|
|
|
$
|
(7,245
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Non-interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Payment and card processing expenses
|
$
|
15,412
|
|
|
$
|
23,179
|
|
|
$
|
(7,767
|
)
|
|
$
|
14,330
|
|
|
$
|
22,665
|
|
|
$
|
(8,335
|
)
|
|
$
|
14,359
|
|
|
$
|
21,604
|
|
|
$
|
(7,245
|
)
|
|
Skagit
|
|||||
|
November 1, 2018
|
|||||
Consideration to Skagit equity holders:
|
|
|
||||
Cash paid
|
|
$
|
329
|
|
||
Fair value of common shares issued
|
|
179,709
|
|
|||
Total consideration
|
|
180,038
|
|
|||
|
|
|
||||
Fair value of assets acquired:
|
|
|
||||
Cash and cash equivalents
|
$
|
19,167
|
|
|
||
Securities
|
210,326
|
|
|
|||
Loans receivable (contractual amount of $645.6 million)
|
632,374
|
|
|
|||
Real estate owned held for sale
|
2,593
|
|
|
|||
Property and equipment
|
15,788
|
|
|
|||
Core deposit intangible
|
16,368
|
|
|
|||
Deferred tax asset
|
95
|
|
|
|||
Other assets
|
19,110
|
|
|
|||
Total assets acquired
|
915,821
|
|
|
|||
|
|
|
||||
Fair value of liabilities assumed:
|
|
|
||||
Deposits
|
810,209
|
|
|
|||
Other liabilities
|
22,069
|
|
|
|||
Total liabilities assumed
|
832,278
|
|
|
|||
|
|
|
||||
Net assets acquired
|
|
83,543
|
|
|||
Goodwill
|
|
$
|
96,495
|
|
|
Skagit
|
||
|
November 1, 2018
|
||
Acquired PCI loans:
|
|
||
Contractually required principal and interest payments
|
$
|
9,897
|
|
Nonaccretable difference
|
(1,915
|
)
|
|
Cash flows expected to be collected
|
7,982
|
|
|
Accretable yield
|
(995
|
)
|
|
Fair value of PCI loans
|
$
|
6,987
|
|
|
December 31, 2018
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Trading:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
$
|
27,203
|
|
|
|
|
|
|
$
|
25,896
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
$
|
151,012
|
|
|
$
|
149
|
|
|
$
|
(2,049
|
)
|
|
$
|
149,112
|
|
Municipal bonds
|
116,548
|
|
|
1,806
|
|
|
(532
|
)
|
|
117,822
|
|
||||
Corporate bonds
|
3,556
|
|
|
—
|
|
|
(61
|
)
|
|
3,495
|
|
||||
Mortgage-backed or related securities
|
1,355,258
|
|
|
5,210
|
|
|
(16,607
|
)
|
|
1,343,861
|
|
||||
Asset-backed securities
|
22,047
|
|
|
6
|
|
|
(120
|
)
|
|
21,933
|
|
||||
|
$
|
1,648,421
|
|
|
$
|
7,171
|
|
|
$
|
(19,369
|
)
|
|
$
|
1,636,223
|
|
Held-to-Maturity:
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
$
|
1,006
|
|
|
$
|
14
|
|
|
$
|
(1
|
)
|
|
$
|
1,019
|
|
Municipal bonds:
|
176,663
|
|
|
1,727
|
|
|
(2,578
|
)
|
|
175,812
|
|
||||
Corporate bonds
|
3,736
|
|
|
—
|
|
|
(13
|
)
|
|
3,723
|
|
||||
Mortgage-backed or related securities
|
52,815
|
|
|
66
|
|
|
(898
|
)
|
|
51,983
|
|
||||
|
$
|
234,220
|
|
|
$
|
1,807
|
|
|
$
|
(3,490
|
)
|
|
$
|
232,537
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Trading:
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
$
|
100
|
|
|
|
|
|
|
$
|
100
|
|
||||
Corporate bonds
|
27,132
|
|
|
|
|
|
|
22,058
|
|
||||||
Equity securities
|
14
|
|
|
|
|
|
|
160
|
|
||||||
|
$
|
27,246
|
|
|
|
|
|
|
$
|
22,318
|
|
||||
Available-for-Sale:
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
$
|
72,829
|
|
|
$
|
68
|
|
|
$
|
(431
|
)
|
|
$
|
72,466
|
|
Municipal bonds
|
68,513
|
|
|
665
|
|
|
(445
|
)
|
|
68,733
|
|
||||
Corporate bonds
|
5,431
|
|
|
6
|
|
|
(44
|
)
|
|
5,393
|
|
||||
Mortgage-backed or related securities
|
745,956
|
|
|
1,003
|
|
|
(7,402
|
)
|
|
739,557
|
|
||||
Asset-backed securities
|
27,667
|
|
|
184
|
|
|
(93
|
)
|
|
27,758
|
|
||||
Equity securities
|
5,716
|
|
|
10
|
|
|
(148
|
)
|
|
5,578
|
|
||||
|
$
|
926,112
|
|
|
$
|
1,936
|
|
|
$
|
(8,563
|
)
|
|
$
|
919,485
|
|
Held-to-Maturity:
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency obligations
|
$
|
1,024
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
1,053
|
|
Municipal bonds:
|
189,860
|
|
|
3,385
|
|
|
(1,252
|
)
|
|
191,993
|
|
||||
Corporate bonds
|
3,978
|
|
|
7
|
|
|
—
|
|
|
3,985
|
|
||||
Mortgage-backed or related securities
|
65,409
|
|
|
266
|
|
|
(518
|
)
|
|
65,157
|
|
||||
|
$
|
260,271
|
|
|
$
|
3,687
|
|
|
$
|
(1,770
|
)
|
|
$
|
262,188
|
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and agency obligations
|
$
|
75,885
|
|
|
$
|
(1,240
|
)
|
|
$
|
50,508
|
|
|
$
|
(809
|
)
|
|
$
|
126,393
|
|
|
$
|
(2,049
|
)
|
Municipal bonds
|
6,422
|
|
|
(54
|
)
|
|
27,231
|
|
|
(478
|
)
|
|
33,653
|
|
|
(532
|
)
|
||||||
Corporate bonds
|
3,199
|
|
|
(56
|
)
|
|
295
|
|
|
(5
|
)
|
|
3,494
|
|
|
(61
|
)
|
||||||
Mortgage-backed or related securities
|
316,074
|
|
|
(2,939
|
)
|
|
571,989
|
|
|
(13,668
|
)
|
|
888,063
|
|
|
(16,607
|
)
|
||||||
Asset-backed securities
|
10,582
|
|
|
(24
|
)
|
|
9,913
|
|
|
(96
|
)
|
|
20,495
|
|
|
(120
|
)
|
||||||
|
$
|
412,162
|
|
|
$
|
(4,313
|
)
|
|
$
|
659,936
|
|
|
$
|
(15,056
|
)
|
|
$
|
1,072,098
|
|
|
$
|
(19,369
|
)
|
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and agency obligations
|
$
|
145
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
145
|
|
|
$
|
(1
|
)
|
Municipal bonds
|
29,898
|
|
|
(274
|
)
|
|
44,637
|
|
|
(2,304
|
)
|
|
74,535
|
|
|
(2,578
|
)
|
||||||
Corporate bonds
|
—
|
|
|
—
|
|
|
487
|
|
|
(13
|
)
|
|
487
|
|
|
(13
|
)
|
||||||
Mortgage-backed or related securities
|
10,761
|
|
|
(220
|
)
|
|
30,035
|
|
|
(678
|
)
|
|
40,796
|
|
|
(898
|
)
|
||||||
|
$
|
40,804
|
|
|
$
|
(495
|
)
|
|
$
|
75,159
|
|
|
$
|
(2,995
|
)
|
|
$
|
115,963
|
|
|
$
|
(3,490
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
Available-for-Sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government and agency obligations
|
$
|
31,276
|
|
|
$
|
(211
|
)
|
|
$
|
23,341
|
|
|
$
|
(220
|
)
|
|
$
|
54,617
|
|
|
$
|
(431
|
)
|
Municipal bonds
|
20,879
|
|
|
(185
|
)
|
|
13,360
|
|
|
(260
|
)
|
|
34,239
|
|
|
(445
|
)
|
||||||
Corporate bonds
|
296
|
|
|
(4
|
)
|
|
4,682
|
|
|
(40
|
)
|
|
4,978
|
|
|
(44
|
)
|
||||||
Mortgage-backed or related securities
|
559,916
|
|
|
(5,138
|
)
|
|
100,662
|
|
|
(2,264
|
)
|
|
660,578
|
|
|
(7,402
|
)
|
||||||
Asset-backed securities
|
—
|
|
|
—
|
|
|
9,926
|
|
|
(93
|
)
|
|
9,926
|
|
|
(93
|
)
|
||||||
Equity securities
|
5,480
|
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
5,480
|
|
|
(148
|
)
|
||||||
|
$
|
617,847
|
|
|
$
|
(5,686
|
)
|
|
$
|
151,971
|
|
|
$
|
(2,877
|
)
|
|
$
|
769,818
|
|
|
$
|
(8,563
|
)
|
Held-to-Maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Municipal bonds
|
$
|
21,839
|
|
|
$
|
(171
|
)
|
|
$
|
34,314
|
|
|
$
|
(1,081
|
)
|
|
$
|
56,153
|
|
|
$
|
(1,252
|
)
|
Mortgage-backed or related securities
|
38,023
|
|
|
(378
|
)
|
|
4,434
|
|
|
(140
|
)
|
|
42,457
|
|
|
(518
|
)
|
||||||
|
$
|
59,862
|
|
|
$
|
(549
|
)
|
|
$
|
38,748
|
|
|
$
|
(1,221
|
)
|
|
$
|
98,610
|
|
|
$
|
(1,770
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
Trading
|
|
Available-for-Sale
|
|
Held-to-Maturity
|
||||||||||||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||||||||
Maturing in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,680
|
|
|
$
|
10,661
|
|
|
$
|
2,885
|
|
|
$
|
2,875
|
|
Maturing after one year through five years
|
—
|
|
|
—
|
|
|
84,333
|
|
|
84,140
|
|
|
60,124
|
|
|
59,591
|
|
||||||
Maturing after five years through ten years
|
—
|
|
|
—
|
|
|
383,987
|
|
|
381,628
|
|
|
62,942
|
|
|
63,352
|
|
||||||
Maturing after ten years through twenty years
|
27,203
|
|
|
25,896
|
|
|
210,917
|
|
|
210,883
|
|
|
70,968
|
|
|
71,378
|
|
||||||
Maturing after twenty years
|
—
|
|
|
—
|
|
|
958,504
|
|
|
948,911
|
|
|
37,301
|
|
|
35,341
|
|
||||||
|
$
|
27,203
|
|
|
$
|
25,896
|
|
|
$
|
1,648,421
|
|
|
$
|
1,636,223
|
|
|
$
|
234,220
|
|
|
$
|
232,537
|
|
|
Carrying Value
|
|
Amortized Cost
|
|
Fair Value
|
||||||
Purpose or beneficiary:
|
|
|
|
|
|
||||||
State and local governments public deposits
|
$
|
143,336
|
|
|
$
|
143,505
|
|
|
$
|
143,887
|
|
Interest rate swap counterparties
|
11,356
|
|
|
11,576
|
|
|
11,344
|
|
|||
Repurchase transaction accounts
|
154,042
|
|
|
155,014
|
|
|
154,042
|
|
|||
Other
|
3,827
|
|
|
3,827
|
|
|
3,719
|
|
|||
Total pledged securities
|
$
|
312,561
|
|
|
$
|
313,922
|
|
|
$
|
312,992
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
|
Amount
|
|
Percent of Total
|
|
Amount
|
|
Percent of Total
|
||||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||
Owner-occupied
|
$
|
1,430,097
|
|
|
16.4
|
%
|
|
$
|
1,284,363
|
|
|
16.9
|
%
|
Investment properties
|
2,131,059
|
|
|
24.5
|
|
|
1,937,423
|
|
|
25.5
|
|
||
Multifamily real estate
|
368,836
|
|
|
4.2
|
|
|
314,188
|
|
|
4.1
|
|
||
Commercial construction
|
172,410
|
|
|
2.0
|
|
|
148,435
|
|
|
2.0
|
|
||
Multifamily construction
|
184,630
|
|
|
2.1
|
|
|
154,662
|
|
|
2.0
|
|
||
One- to four-family construction
|
534,678
|
|
|
6.2
|
|
|
415,327
|
|
|
5.5
|
|
||
Land and land development:
|
|
|
|
|
|
|
|
||||||
Residential
|
188,508
|
|
|
2.2
|
|
|
164,516
|
|
|
2.2
|
|
||
Commercial
|
27,278
|
|
|
0.3
|
|
|
24,583
|
|
|
0.3
|
|
||
Commercial business
|
1,483,614
|
|
|
17.1
|
|
|
1,279,894
|
|
|
16.8
|
|
||
Agricultural business, including secured by farmland
|
404,873
|
|
|
4.7
|
|
|
338,388
|
|
|
4.4
|
|
||
One- to four-family residential
|
973,616
|
|
|
11.2
|
|
|
848,289
|
|
|
11.2
|
|
||
Consumer:
|
|
|
|
|
|
|
|
||||||
Consumer secured by one- to four-family
|
568,979
|
|
|
6.6
|
|
|
522,931
|
|
|
6.9
|
|
||
Consumer—other
|
216,017
|
|
|
2.5
|
|
|
165,885
|
|
|
2.2
|
|
||
Total loans outstanding
|
8,684,595
|
|
|
100.0
|
%
|
|
7,598,884
|
|
|
100.0
|
%
|
||
Less allowance for loan losses
|
(96,485
|
)
|
|
|
|
(89,028
|
)
|
|
|
||||
Net loans
|
$
|
8,588,110
|
|
|
|
|
$
|
7,509,856
|
|
|
|
|
Years Ended December 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Balance, beginning of period
|
$
|
6,520
|
|
|
$
|
8,717
|
|
Additions
|
995
|
|
|
—
|
|
||
Accretion to interest income
|
(7,509
|
)
|
|
(5,929
|
)
|
||
Disposals and other
|
58
|
|
|
(564
|
)
|
||
Reclassifications from non-accretable difference
|
5,152
|
|
|
4,296
|
|
||
Balance, end of period
|
$
|
5,216
|
|
|
$
|
6,520
|
|
|
December 31, 2018
|
||||||||||||||
|
Unpaid Principal Balance
|
|
Recorded Investment
|
|
Related Allowance
|
||||||||||
|
|
Without Allowance
(1)
|
|
With Allowance
(2)
|
|
||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Owner-occupied
|
$
|
3,193
|
|
|
$
|
2,768
|
|
|
$
|
200
|
|
|
$
|
19
|
|
Investment properties
|
7,287
|
|
|
1,320
|
|
|
5,606
|
|
|
226
|
|
||||
Multifamily construction
|
1,901
|
|
|
1,427
|
|
|
—
|
|
|
—
|
|
||||
One- to four-family construction
|
919
|
|
|
919
|
|
|
—
|
|
|
—
|
|
||||
Land and land development:
|
|
|
|
|
|
|
|
||||||||
Residential
|
1,134
|
|
|
798
|
|
|
—
|
|
|
—
|
|
||||
Commercial
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
||||
Commercial business
|
4,014
|
|
|
2,937
|
|
|
391
|
|
|
16
|
|
||||
Agricultural business/farmland
|
4,863
|
|
|
1,751
|
|
|
2,561
|
|
|
96
|
|
||||
One- to four-family residential
|
6,724
|
|
|
4,314
|
|
|
2,358
|
|
|
51
|
|
||||
Consumer:
|
|
|
|
|
|
|
|
||||||||
Consumer secured by one- to four-family
|
1,622
|
|
|
1,438
|
|
|
133
|
|
|
6
|
|
||||
Consumer—other
|
112
|
|
|
49
|
|
|
62
|
|
|
2
|
|
||||
|
$
|
31,813
|
|
|
$
|
17,765
|
|
|
$
|
11,311
|
|
|
$
|
416
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2017
|
||||||||||||||
|
Unpaid Principal Balance
|
|
Recorded Investment
|
|
Related Allowance
|
||||||||||
|
|
Without Allowance
(1)
|
|
With Allowance
(2)
|
|
||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
||||||||
Owner-occupied
|
$
|
7,807
|
|
|
$
|
6,447
|
|
|
$
|
199
|
|
|
$
|
18
|
|
Investment properties
|
11,296
|
|
|
4,200
|
|
|
6,884
|
|
|
263
|
|
||||
One- to four-family construction
|
298
|
|
|
298
|
|
|
—
|
|
|
—
|
|
||||
Land and land development:
|
|
|
|
|
|
|
|
||||||||
Residential
|
1,134
|
|
|
798
|
|
|
—
|
|
|
—
|
|
||||
Commercial business
|
4,441
|
|
|
3,424
|
|
|
555
|
|
|
50
|
|
||||
Agricultural business/farmland
|
9,388
|
|
|
6,230
|
|
|
3,031
|
|
|
264
|
|
||||
One- to four-family residential
|
9,547
|
|
|
3,709
|
|
|
5,775
|
|
|
178
|
|
||||
Consumer:
|
|
|
|
|
|
|
|
||||||||
Consumer secured by one- to four-family
|
1,498
|
|
|
1,324
|
|
|
139
|
|
|
7
|
|
||||
Consumer—other
|
134
|
|
|
58
|
|
|
73
|
|
|
2
|
|
||||
|
$
|
45,543
|
|
|
$
|
26,488
|
|
|
$
|
16,656
|
|
|
$
|
782
|
|
(1)
|
Includes loans without an allowance reserve that have been individually evaluated for impairment and that evaluation concluded that no reserve was needed, and
$9.0 million
and
$10.6 million
of homogenous and small balance loans as of
December 31, 2018
and
December 31, 2017
, respectively, that are collectively evaluated for impairment for which a general reserve has been established.
|
(2)
|
Loans with a specific allowance reserve have been individually evaluated for impairment using either a discounted cash flow analysis or, for collateral dependent loans, current appraisals less costs to sell to establish realizable value.
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
|
Average Recorded Investment
|
|
Interest Income Recognized
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
$
|
3,806
|
|
|
$
|
11
|
|
|
$
|
3,697
|
|
|
$
|
11
|
|
|
$
|
2,721
|
|
|
$
|
2
|
|
Investment properties
|
7,822
|
|
|
314
|
|
|
9,136
|
|
|
195
|
|
|
18,529
|
|
|
242
|
|
||||||
Multifamily real estate
|
—
|
|
|
—
|
|
|
251
|
|
|
10
|
|
|
513
|
|
|
21
|
|
||||||
Commercial construction
|
115
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
One- to four-family construction
|
778
|
|
|
6
|
|
|
418
|
|
|
27
|
|
|
1,158
|
|
|
75
|
|
||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
994
|
|
|
10
|
|
|
1,396
|
|
|
42
|
|
|
1,948
|
|
|
85
|
|
||||||
Commercial
|
4
|
|
|
—
|
|
|
867
|
|
|
—
|
|
|
1,003
|
|
|
—
|
|
||||||
Commercial business
|
3,443
|
|
|
21
|
|
|
5,996
|
|
|
68
|
|
|
4,290
|
|
|
37
|
|
||||||
Agricultural business/farmland
|
5,501
|
|
|
102
|
|
|
6,184
|
|
|
207
|
|
|
5,004
|
|
|
119
|
|
||||||
One- to four-family residential
|
7,845
|
|
|
302
|
|
|
9,499
|
|
|
322
|
|
|
11,976
|
|
|
441
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer secured by one- to four-family
|
1,583
|
|
|
17
|
|
|
1,635
|
|
|
9
|
|
|
1,778
|
|
|
17
|
|
||||||
Consumer—other
|
142
|
|
|
4
|
|
|
184
|
|
|
7
|
|
|
615
|
|
|
17
|
|
||||||
|
$
|
32,033
|
|
|
$
|
787
|
|
|
$
|
39,263
|
|
|
$
|
898
|
|
|
$
|
49,535
|
|
|
$
|
1,056
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Accrual
Status
|
|
Nonaccrual
Status
|
|
Total
TDRs
|
|
Accrual
Status |
|
Nonaccrual
Status |
|
Total
TDRs |
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
$
|
200
|
|
|
$
|
78
|
|
|
$
|
278
|
|
|
$
|
199
|
|
|
$
|
87
|
|
|
$
|
286
|
|
Investment properties
|
5,606
|
|
|
—
|
|
|
5,606
|
|
|
6,884
|
|
|
—
|
|
|
6,884
|
|
||||||
Commercial business
|
391
|
|
|
—
|
|
|
391
|
|
|
555
|
|
|
—
|
|
|
555
|
|
||||||
Agricultural business/farmland
|
2,561
|
|
|
—
|
|
|
2,561
|
|
|
3,129
|
|
|
29
|
|
|
3,158
|
|
||||||
One- to four-family residential
|
4,469
|
|
|
239
|
|
|
4,708
|
|
|
5,136
|
|
|
801
|
|
|
5,937
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer secured by one- to four-family
|
133
|
|
|
—
|
|
|
133
|
|
|
139
|
|
|
—
|
|
|
139
|
|
||||||
Consumer—other
|
62
|
|
|
—
|
|
|
62
|
|
|
73
|
|
|
—
|
|
|
73
|
|
||||||
|
$
|
13,422
|
|
|
$
|
317
|
|
|
$
|
13,739
|
|
|
$
|
16,115
|
|
|
$
|
917
|
|
|
$
|
17,032
|
|
|
Number of
Contracts
|
|
Pre-modification Outstanding Recorded Investment
|
|
Post-modification Outstanding Recorded Investment
|
|||||
Year Ended December 31, 2017
|
|
|
|
|
|
|||||
Recorded Investment
(1) (2)
|
|
|
|
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|||||
Investment properties
|
1
|
|
|
$
|
3,714
|
|
|
$
|
3,714
|
|
Total
|
1
|
|
|
$
|
3,714
|
|
|
$
|
3,714
|
|
|
|
|
|
|
|
|||||
Year Ended December 31, 2016
|
|
|
|
|
|
|||||
Recorded Investment
(1) (2)
|
|
|
|
|
|
|||||
Commercial real estate:
|
|
|
|
|
|
|||||
Owner-occupied
|
1
|
|
|
$
|
194
|
|
|
$
|
194
|
|
One- to four-family residential
|
1
|
|
|
$
|
78
|
|
|
$
|
78
|
|
Total
|
2
|
|
|
$
|
272
|
|
|
$
|
272
|
|
(1)
|
Since most loans were already considered classified and/or on non-accrual status prior to restructuring, the modifications did not have a material effect on the Company’s determination of the allowance for loan losses.
|
(2)
|
Generally, these modifications do not fit into one separate type, such as rate, term, amount, interest-only or payment, but instead are a combination of multiple types of modifications; therefore, they are disclosed in aggregate.
|
|
|
|
|
|
December 31, 2018
|
||||||||||||||||||||||
By class:
|
Pass (Risk Ratings 1-5)
(1)
|
|
Special Mention
|
|
Substandard
|
|
Doubtful
|
|
Loss
|
|
Total Loans
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
$
|
1,396,721
|
|
|
$
|
6,963
|
|
|
$
|
26,413
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,430,097
|
|
Investment properties
|
2,122,621
|
|
|
—
|
|
|
8,438
|
|
|
—
|
|
|
—
|
|
|
2,131,059
|
|
||||||
Multifamily real estate
|
368,262
|
|
|
—
|
|
|
574
|
|
|
—
|
|
|
—
|
|
|
368,836
|
|
||||||
Commercial construction
|
159,167
|
|
|
11,816
|
|
|
1,427
|
|
|
—
|
|
|
—
|
|
|
172,410
|
|
||||||
Multifamily construction
|
184,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184,630
|
|
||||||
One- to four-family construction
|
533,759
|
|
|
—
|
|
|
919
|
|
|
—
|
|
|
—
|
|
|
534,678
|
|
||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
187,710
|
|
|
—
|
|
|
798
|
|
|
—
|
|
|
—
|
|
|
188,508
|
|
||||||
Commercial
|
27,200
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
—
|
|
|
27,278
|
|
||||||
Commercial business
|
1,436,733
|
|
|
7,661
|
|
|
39,133
|
|
|
87
|
|
|
—
|
|
|
1,483,614
|
|
||||||
Agricultural business, including secured by farmland
|
392,318
|
|
|
4,214
|
|
|
8,341
|
|
|
—
|
|
|
—
|
|
|
404,873
|
|
||||||
One- to four-family residential
|
969,011
|
|
|
499
|
|
|
4,106
|
|
|
—
|
|
|
—
|
|
|
973,616
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer secured by one- to four-family
|
564,001
|
|
|
—
|
|
|
4,978
|
|
|
—
|
|
|
—
|
|
|
568,979
|
|
||||||
Consumer—other
|
215,706
|
|
|
9
|
|
|
302
|
|
|
—
|
|
|
—
|
|
|
216,017
|
|
||||||
Total
|
$
|
8,557,839
|
|
|
$
|
31,162
|
|
|
$
|
95,507
|
|
|
$
|
87
|
|
|
$
|
—
|
|
|
$
|
8,684,595
|
|
|
December 31, 2017
|
||||||||||||||||||||||
By class:
|
Pass (Risk Ratings 1-5)
(1)
|
|
Special Mention
|
|
Substandard
|
|
Doubtful
|
|
Loss
|
|
Total Loans
|
||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Owner-occupied
|
$
|
1,246,125
|
|
|
$
|
12,227
|
|
|
$
|
26,011
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,284,363
|
|
Investment properties
|
1,918,940
|
|
|
9,118
|
|
|
9,365
|
|
|
—
|
|
|
—
|
|
|
1,937,423
|
|
||||||
Multifamily real estate
|
313,432
|
|
|
—
|
|
|
756
|
|
|
—
|
|
|
—
|
|
|
314,188
|
|
||||||
Commercial construction
|
148,435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,435
|
|
||||||
Multifamily construction
|
154,662
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
154,662
|
|
||||||
One- to four-family construction
|
411,802
|
|
|
—
|
|
|
3,525
|
|
|
—
|
|
|
—
|
|
|
415,327
|
|
||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential
|
153,073
|
|
|
10,554
|
|
|
889
|
|
|
—
|
|
|
—
|
|
|
164,516
|
|
||||||
Commercial
|
21,665
|
|
|
—
|
|
|
2,918
|
|
|
—
|
|
|
—
|
|
|
24,583
|
|
||||||
Commercial business
|
1,213,365
|
|
|
12,135
|
|
|
54,282
|
|
|
112
|
|
|
—
|
|
|
1,279,894
|
|
||||||
Agricultural business, including secured by farmland
|
321,110
|
|
|
3,852
|
|
|
13,426
|
|
|
—
|
|
|
—
|
|
|
338,388
|
|
||||||
One- to four-family residential
|
842,304
|
|
|
569
|
|
|
5,416
|
|
|
—
|
|
|
—
|
|
|
848,289
|
|
||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer secured by one- to four-family
|
520,675
|
|
|
—
|
|
|
2,256
|
|
|
—
|
|
|
—
|
|
|
522,931
|
|
||||||
Consumer—other
|
165,594
|
|
|
13
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
165,885
|
|
||||||
Total
|
$
|
7,431,182
|
|
|
$
|
48,468
|
|
|
$
|
119,122
|
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
7,598,884
|
|
(1)
|
The Pass category includes some performing loans that are part of homogenous pools which are not individually risk-rated. This includes all consumer loans, all one- to four-family residential loans and, as of
December 31, 2018
and
2017
, in the commercial business category,
$590.9 million
and
$296.8 million
, respectively, of credit-scored small business loans. As loans in these homogeneous pools become non-accrual, they are individually risk-rated.
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||
|
30
–
59 Days Past Due
|
|
60
–
89 Days Past Due
|
|
90 Days or More Past Due
|
|
Total Past Due
|
|
Purchased Credit-Impaired
|
|
Current
|
|
Total Loans
|
|
Loans 90 Days or More Past Due and Accruing
|
|
Non-accrual
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Owner-occupied
|
$
|
785
|
|
|
$
|
519
|
|
|
$
|
2,223
|
|
|
$
|
3,527
|
|
|
$
|
8,531
|
|
|
$
|
1,418,039
|
|
|
$
|
1,430,097
|
|
|
$
|
—
|
|
|
$
|
2,768
|
|
Investment properties
|
91
|
|
|
498
|
|
|
934
|
|
|
1,523
|
|
|
3,462
|
|
|
2,126,074
|
|
|
2,131,059
|
|
|
—
|
|
|
1,320
|
|
|||||||||
Multifamily real estate
|
317
|
|
|
—
|
|
|
—
|
|
|
317
|
|
|
138
|
|
|
368,381
|
|
|
368,836
|
|
|
—
|
|
|
—
|
|
|||||||||
Commercial construction
|
—
|
|
|
—
|
|
|
1,427
|
|
|
1,427
|
|
|
—
|
|
|
170,983
|
|
|
172,410
|
|
|
—
|
|
|
1,427
|
|
|||||||||
Multifamily construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184,630
|
|
|
184,630
|
|
|
—
|
|
|
—
|
|
|||||||||
One- to four-family construction
|
4,781
|
|
|
1,078
|
|
|
919
|
|
|
6,778
|
|
|
137
|
|
|
527,763
|
|
|
534,678
|
|
|
—
|
|
|
919
|
|
|||||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Residential
|
450
|
|
|
—
|
|
|
798
|
|
|
1,248
|
|
|
—
|
|
|
187,260
|
|
|
188,508
|
|
|
—
|
|
|
798
|
|
|||||||||
Commercial
|
34
|
|
|
—
|
|
|
44
|
|
|
78
|
|
|
—
|
|
|
27,200
|
|
|
27,278
|
|
|
—
|
|
|
44
|
|
|||||||||
Commercial business
|
3,982
|
|
|
1,305
|
|
|
1,756
|
|
|
7,043
|
|
|
1,028
|
|
|
1,475,543
|
|
|
1,483,614
|
|
|
1
|
|
|
2,936
|
|
|||||||||
Agricultural business/farmland
|
343
|
|
|
1,518
|
|
|
1,601
|
|
|
3,462
|
|
|
493
|
|
|
400,918
|
|
|
404,873
|
|
|
—
|
|
|
1,751
|
|
|||||||||
One- to four-family residential
|
5,440
|
|
|
1,790
|
|
|
1,657
|
|
|
8,887
|
|
|
101
|
|
|
964,628
|
|
|
973,616
|
|
|
658
|
|
|
1,544
|
|
|||||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Consumer secured by one- to four-family
|
1,136
|
|
|
765
|
|
|
706
|
|
|
2,607
|
|
|
432
|
|
|
565,940
|
|
|
568,979
|
|
|
238
|
|
|
1,201
|
|
|||||||||
Consumer—other
|
911
|
|
|
385
|
|
|
9
|
|
|
1,305
|
|
|
91
|
|
|
214,621
|
|
|
216,017
|
|
|
9
|
|
|
40
|
|
|||||||||
Total
|
$
|
18,270
|
|
|
$
|
7,858
|
|
|
$
|
12,074
|
|
|
$
|
38,202
|
|
|
$
|
14,413
|
|
|
$
|
8,631,980
|
|
|
$
|
8,684,595
|
|
|
$
|
906
|
|
|
$
|
14,748
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
30–59 Days Past Due
|
|
60–89 Days Past Due
|
|
90 Days or More Past Due
|
|
Total Past Due
|
|
Purchased Credit-Impaired
|
|
Current
|
|
Total Loans
|
|
Loans 90 Days or More Past Due and Accruing
|
|
Non-accrual
|
||||||||||||||||||
Commercial real estate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Owner-occupied
|
$
|
5,323
|
|
|
$
|
76
|
|
|
$
|
5,490
|
|
|
$
|
10,889
|
|
|
$
|
7,682
|
|
|
$
|
1,265,792
|
|
|
$
|
1,284,363
|
|
|
$
|
—
|
|
|
$
|
6,447
|
|
Investment properties
|
1,737
|
|
|
—
|
|
|
4,096
|
|
|
5,833
|
|
|
7,166
|
|
|
1,924,424
|
|
|
1,937,423
|
|
|
—
|
|
|
4,199
|
|
|||||||||
Multifamily real estate
|
105
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
169
|
|
|
313,914
|
|
|
314,188
|
|
|
—
|
|
|
—
|
|
|||||||||
Commercial construction
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
148,435
|
|
|
148,435
|
|
|
—
|
|
|
—
|
|
|||||||||
Multifamily construction
|
3,416
|
|
|
—
|
|
|
—
|
|
|
3,416
|
|
|
—
|
|
|
151,246
|
|
|
154,662
|
|
|
—
|
|
|
—
|
|
|||||||||
One- to four-family construction
|
4,892
|
|
|
725
|
|
|
298
|
|
|
5,915
|
|
|
446
|
|
|
408,966
|
|
|
415,327
|
|
|
298
|
|
|
—
|
|
|||||||||
Land and land development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Residential
|
—
|
|
|
—
|
|
|
798
|
|
|
798
|
|
|
—
|
|
|
163,718
|
|
|
164,516
|
|
|
—
|
|
|
798
|
|
|||||||||
Commercial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,919
|
|
|
21,664
|
|
|
24,583
|
|
|
—
|
|
|
—
|
|
|||||||||
Commercial business
|
1,574
|
|
|
404
|
|
|
2,577
|
|
|
4,555
|
|
|
2,159
|
|
|
1,273,180
|
|
|
1,279,894
|
|
|
18
|
|
|
3,406
|
|
|||||||||
Agricultural business/farmland
|
598
|
|
|
533
|
|
|
2,017
|
|
|
3,148
|
|
|
565
|
|
|
334,675
|
|
|
338,388
|
|
|
—
|
|
|
6,132
|
|
|||||||||
One- to four-family residential
|
4,475
|
|
|
1,241
|
|
|
2,715
|
|
|
8,431
|
|
|
136
|
|
|
839,722
|
|
|
848,289
|
|
|
1,085
|
|
|
3,264
|
|
|||||||||
Consumer:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Consumer secured by one- to four-family
|
1,355
|
|
|
62
|
|
|
713
|
|
|
2,130
|
|
|
—
|
|
|
520,801
|
|
|
522,931
|
|
|
85
|
|
|
1,239
|
|
|||||||||
Consumer—other
|
609
|
|
|
136
|
|
|
15
|
|
|
760
|
|
|
68
|
|
|
165,057
|
|
|
165,885
|
|
|
—
|
|
|
58
|
|
|||||||||
Total
|
$
|
24,084
|
|
|
$
|
3,177
|
|
|
$
|
18,719
|
|
|
$
|
45,980
|
|
|
$
|
21,310
|
|
|
$
|
7,531,594
|
|
|
$
|
7,598,884
|
|
|
$
|
1,486
|
|
|
$
|
25,543
|
|
|
For the Year Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate
|
|
Construction and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Beginning balance
|
$
|
22,824
|
|
|
$
|
1,633
|
|
|
$
|
27,568
|
|
|
$
|
18,311
|
|
|
$
|
4,053
|
|
|
$
|
2,055
|
|
|
$
|
3,866
|
|
|
$
|
8,718
|
|
|
$
|
89,028
|
|
Provision for loan losses
|
3,063
|
|
|
2,185
|
|
|
(2,860
|
)
|
|
2,129
|
|
|
417
|
|
|
1,952
|
|
|
5,141
|
|
|
(3,527
|
)
|
|
8,500
|
|
|||||||||
Recoveries
|
1,646
|
|
|
—
|
|
|
213
|
|
|
1,049
|
|
|
64
|
|
|
750
|
|
|
366
|
|
|
—
|
|
|
4,088
|
|
|||||||||
Charge-offs
|
(401
|
)
|
|
—
|
|
|
(479
|
)
|
|
(2,051
|
)
|
|
(756
|
)
|
|
(43
|
)
|
|
(1,401
|
)
|
|
—
|
|
|
(5,131
|
)
|
|||||||||
Ending balance
|
$
|
27,132
|
|
|
$
|
3,818
|
|
|
$
|
24,442
|
|
|
$
|
19,438
|
|
|
$
|
3,778
|
|
|
$
|
4,714
|
|
|
$
|
7,972
|
|
|
$
|
5,191
|
|
|
$
|
96,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Allowance individually evaluated for impairment
|
$
|
246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
96
|
|
|
$
|
51
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
416
|
|
Allowance collectively evaluated for impairment
|
26,886
|
|
|
3,818
|
|
|
24,442
|
|
|
19,399
|
|
|
3,622
|
|
|
4,663
|
|
|
7,965
|
|
|
5,191
|
|
|
95,986
|
|
|||||||||
Allowance for purchased credit-impaired loans
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||||||
Total allowance for loan losses
|
$
|
27,132
|
|
|
$
|
3,818
|
|
|
$
|
24,442
|
|
|
$
|
19,438
|
|
|
$
|
3,778
|
|
|
$
|
4,714
|
|
|
$
|
7,972
|
|
|
$
|
5,191
|
|
|
$
|
96,485
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction
and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Loan balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
8,625
|
|
|
$
|
—
|
|
|
$
|
3,096
|
|
|
$
|
391
|
|
|
$
|
3,298
|
|
|
$
|
4,469
|
|
|
$
|
196
|
|
|
$
|
—
|
|
|
$
|
20,075
|
|
Loans collectively evaluated for impairment
|
3,540,538
|
|
|
368,698
|
|
|
1,104,271
|
|
|
1,482,195
|
|
|
401,082
|
|
|
969,046
|
|
|
784,277
|
|
|
—
|
|
|
8,650,107
|
|
|||||||||
Purchased credit-impaired loans
|
11,993
|
|
|
138
|
|
|
137
|
|
|
1,028
|
|
|
493
|
|
|
101
|
|
|
523
|
|
|
—
|
|
|
14,413
|
|
|||||||||
Total loans
|
$
|
3,561,156
|
|
|
$
|
368,836
|
|
|
$
|
1,107,504
|
|
|
$
|
1,483,614
|
|
|
$
|
404,873
|
|
|
$
|
973,616
|
|
|
$
|
784,996
|
|
|
$
|
—
|
|
|
$
|
8,684,595
|
|
|
For the Year Ended December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction
and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Beginning balance
|
$
|
20,993
|
|
|
$
|
1,360
|
|
|
$
|
34,252
|
|
|
$
|
16,533
|
|
|
$
|
2,967
|
|
|
$
|
2,238
|
|
|
$
|
4,104
|
|
|
$
|
3,550
|
|
|
$
|
85,997
|
|
Provision for loan losses
|
2,639
|
|
|
262
|
|
|
(7,921
|
)
|
|
4,355
|
|
|
3,326
|
|
|
(415
|
)
|
|
586
|
|
|
5,168
|
|
|
8,000
|
|
|||||||||
Recoveries
|
372
|
|
|
11
|
|
|
1,237
|
|
|
1,226
|
|
|
134
|
|
|
270
|
|
|
481
|
|
|
—
|
|
|
3,731
|
|
|||||||||
Charge-offs
|
(1,180
|
)
|
|
—
|
|
|
—
|
|
|
(3,803
|
)
|
|
(2,374
|
)
|
|
(38
|
)
|
|
(1,305
|
)
|
|
—
|
|
|
(8,700
|
)
|
|||||||||
Ending balance
|
$
|
22,824
|
|
|
$
|
1,633
|
|
|
$
|
27,568
|
|
|
$
|
18,311
|
|
|
$
|
4,053
|
|
|
$
|
2,055
|
|
|
$
|
3,866
|
|
|
$
|
8,718
|
|
|
$
|
89,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction
and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Allowance individually evaluated for impairment
|
$
|
281
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
264
|
|
|
$
|
178
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
782
|
|
Allowance collectively evaluated for impairment
|
22,543
|
|
|
1,633
|
|
|
27,567
|
|
|
18,214
|
|
|
3,676
|
|
|
1,877
|
|
|
3,857
|
|
|
8,718
|
|
|
88,085
|
|
|||||||||
Allowance for purchased credit-impaired loans
|
—
|
|
|
—
|
|
|
1
|
|
|
47
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
161
|
|
|||||||||
Total allowance for loan losses
|
$
|
22,824
|
|
|
$
|
1,633
|
|
|
$
|
27,568
|
|
|
$
|
18,311
|
|
|
$
|
4,053
|
|
|
$
|
2,055
|
|
|
$
|
3,866
|
|
|
$
|
8,718
|
|
|
$
|
89,028
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction
and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Loan balances:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
16,017
|
|
|
$
|
—
|
|
|
$
|
750
|
|
|
$
|
1,812
|
|
|
$
|
8,585
|
|
|
$
|
5,136
|
|
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
32,512
|
|
Loans collectively evaluated for impairment
|
3,190,921
|
|
|
314,019
|
|
|
903,408
|
|
|
1,275,923
|
|
|
329,238
|
|
|
843,017
|
|
|
688,536
|
|
|
—
|
|
|
7,545,062
|
|
|||||||||
Purchased credit-impaired loans
|
14,848
|
|
|
169
|
|
|
3,365
|
|
|
2,159
|
|
|
565
|
|
|
136
|
|
|
68
|
|
|
—
|
|
|
21,310
|
|
|||||||||
Total loans
|
$
|
3,221,786
|
|
|
$
|
314,188
|
|
|
$
|
907,523
|
|
|
$
|
1,279,894
|
|
|
$
|
338,388
|
|
|
$
|
848,289
|
|
|
$
|
688,816
|
|
|
$
|
—
|
|
|
$
|
7,598,884
|
|
|
For the Year Ended December 31, 2016
|
||||||||||||||||||||||||||||||||||
|
Commercial
Real Estate
|
|
Multifamily
Real Estate |
|
Construction
and Land
|
|
Commercial Business
|
|
Agricultural Business
|
|
One- to Four-Family Residential
|
|
Consumer
|
|
Unallocated
|
|
Total
|
||||||||||||||||||
Allowance for loan losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Beginning balance
|
$
|
20,716
|
|
|
$
|
4,195
|
|
|
$
|
27,131
|
|
|
$
|
13,856
|
|
|
$
|
3,645
|
|
|
$
|
4,732
|
|
|
$
|
902
|
|
|
$
|
2,831
|
|
|
$
|
78,008
|
|
Provision for loan losses
|
441
|
|
|
(2,835
|
)
|
|
5,566
|
|
|
1,632
|
|
|
(170
|
)
|
|
(3,402
|
)
|
|
4,079
|
|
|
719
|
|
|
6,030
|
|
|||||||||
Recoveries
|
582
|
|
|
—
|
|
|
2,171
|
|
|
1,993
|
|
|
59
|
|
|
1,283
|
|
|
610
|
|
|
—
|
|
|
6,698
|
|
|||||||||
Charge-offs
|
(746
|
)
|
|
—
|
|
|
(616
|
)
|
|
(948
|
)
|
|
(567
|
)
|
|
(375
|
)
|
|
(1,487
|
)
|
|
—
|
|
|
(4,739
|
)
|
|||||||||
Ending balance
|
$
|
20,993
|
|
|
$
|
1,360
|
|
|
$
|
34,252
|
|
|
$
|
16,533
|
|
|
$
|
2,967
|
|
|
$
|
2,238
|
|
|
$
|
4,104
|
|
|
$
|
3,550
|
|
|
$
|
85,997
|
|
|
Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of period
|
$
|
360
|
|
|
$
|
11,081
|
|
|
$
|
11,627
|
|
Additions from loan foreclosures
|
641
|
|
|
46
|
|
|
8,909
|
|
|||
Additions from capitalized costs
|
—
|
|
|
54
|
|
|
—
|
|
|||
Additions from acquisitions
|
2,593
|
|
|
—
|
|
|
400
|
|
|||
Proceeds from dispositions of REO
|
(838
|
)
|
|
(13,474
|
)
|
|
(10,812
|
)
|
|||
Gain on sale of REO
|
242
|
|
|
2,909
|
|
|
1,833
|
|
|||
Valuation adjustments in the period
|
(387
|
)
|
|
(256
|
)
|
|
(876
|
)
|
|||
Balance, end of period
|
$
|
2,611
|
|
|
$
|
360
|
|
|
$
|
11,081
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
Land
(1)
|
$
|
37,835
|
|
|
$
|
35,080
|
|
Buildings and leasehold improvements
(1)
|
163,813
|
|
|
154,374
|
|
||
Furniture and equipment
|
122,614
|
|
|
105,643
|
|
||
|
324,262
|
|
|
295,097
|
|
||
Less accumulated depreciation
|
(152,453
|
)
|
|
(140,282
|
)
|
||
Property and equipment, net
|
$
|
171,809
|
|
|
$
|
154,815
|
|
Year
|
|
Amount
|
|
|
2019
|
|
$
|
10,876
|
|
2020
|
|
10,450
|
|
|
2021
|
|
9,485
|
|
|
2022
|
|
6,716
|
|
|
2023
|
|
4,248
|
|
|
Thereafter
|
|
11,225
|
|
|
Total
|
|
$
|
53,000
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
Non-interest-bearing checking
|
$
|
3,657,817
|
|
|
$
|
3,265,544
|
|
Interest-bearing checking
|
1,191,016
|
|
|
971,137
|
|
||
Regular savings accounts
|
1,842,581
|
|
|
1,557,500
|
|
||
Money market accounts
|
1,465,369
|
|
|
1,422,313
|
|
||
Total interest-bearing transaction and savings accounts
|
4,498,966
|
|
|
3,950,950
|
|
||
Certificates of deposit:
|
|
|
|
||||
Certificates of deposit less than or equal to $250,000
|
1,143,303
|
|
|
813,997
|
|
||
Certificates of deposit greater than $250,000
|
176,962
|
|
|
152,940
|
|
||
Total certificates of deposit
(1)
|
1,320,265
|
|
|
966,937
|
|
||
Total deposits
|
$
|
9,477,048
|
|
|
$
|
8,183,431
|
|
Included in total deposits:
|
|
|
|
||||
Public fund transaction accounts
|
$
|
217,401
|
|
|
$
|
198,719
|
|
Public fund interest-bearing certificates
|
30,089
|
|
|
23,685
|
|
||
Total public deposits
|
$
|
247,490
|
|
|
$
|
222,404
|
|
Total brokered deposits
|
$
|
377,347
|
|
|
$
|
57,228
|
|
|
December 31, 2018
|
|||||
|
Amount
|
|
Weighted
Average Rate
|
|||
Maturing in one year or less
|
$
|
1,001,206
|
|
|
1.15
|
%
|
Maturing after one year through two years
|
201,919
|
|
|
1.09
|
|
|
Maturing after two years through three years
|
90,247
|
|
|
1.57
|
|
|
Maturing after three years through four years
|
13,364
|
|
|
1.22
|
|
|
Maturing after four years through five years
|
11,282
|
|
|
1.75
|
|
|
Maturing after five years
|
2,247
|
|
|
1.07
|
|
|
Total certificates of deposit
|
$
|
1,320,265
|
|
|
1.17
|
%
|
|
At or for the Years Ended December 31
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
Amount
|
|
Weighted Average Rate
|
|
Amount
|
|
Weighted Average Rate
|
||||||
Maturing in one year or less
|
$
|
540,000
|
|
|
2.64
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Maturing after one year through three years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Maturing after three years through five years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Maturing after five years
|
189
|
|
|
5.94
|
|
|
202
|
|
|
5.94
|
|
||
Total FHLB advances
|
$
|
540,189
|
|
|
2.64
|
%
|
|
$
|
202
|
|
|
5.94
|
%
|
|
At or for the Years Ended December 31
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
Amount
|
|
Weighted
Average Rate
|
|
Amount
|
|
Weighted
Average Rate
|
||||||
Repurchase agreements:
|
|
|
|
|
|
|
|
||||||
Maturing in one year or less
|
$
|
118,995
|
|
|
0.21
|
%
|
|
$
|
95,860
|
|
|
0.29
|
%
|
Maturing after one year through two years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Maturing after two years
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total year-end outstanding
|
$
|
118,995
|
|
|
0.21
|
%
|
|
$
|
95,860
|
|
|
0.29
|
%
|
Average outstanding
|
$
|
108,065
|
|
|
0.21
|
%
|
|
$
|
111,872
|
|
|
0.28
|
%
|
Maximum outstanding at any month-end
|
$
|
121,766
|
|
|
n/a
|
|
|
$
|
120,245
|
|
|
n/a
|
|
Name of Trust
|
|
Aggregate Liquidation Amount of Trust Preferred Securities
|
|
Aggregate Liquidation Amount of Common Capital Securities
|
|
Aggregate Principal Amount of Junior Subordinated Debentures
|
|
Stated
Maturity
(1)
|
|
Current Interest Rate
|
|
Reset Period
|
|
Interest Rate Spread
|
|||||||
Banner Capital Trust II
|
|
$
|
15,000
|
|
|
$
|
464
|
|
|
$
|
15,464
|
|
|
2033
|
|
5.79
|
%
|
|
Quarterly
|
|
Three-month LIBOR + 3.35%
|
Banner Capital Trust III
|
|
15,000
|
|
|
465
|
|
|
15,465
|
|
|
2033
|
|
5.34
|
|
|
Quarterly
|
|
Three-month LIBOR + 2.90%
|
|||
Banner Capital Trust IV
|
|
15,000
|
|
|
465
|
|
|
15,465
|
|
|
2034
|
|
5.29
|
|
|
Quarterly
|
|
Three-month LIBOR + 2.85%
|
|||
Banner Capital Trust V
|
|
25,000
|
|
|
774
|
|
|
25,774
|
|
|
2035
|
|
4.22
|
|
|
Quarterly
|
|
Three-month LIBOR + 1.57%
|
|||
Banner Capital Trust VI
|
|
25,000
|
|
|
774
|
|
|
25,774
|
|
|
2037
|
|
4.36
|
|
|
Quarterly
|
|
Three-month LIBOR + 1.62%
|
|||
Banner Capital Trust VII
|
|
25,000
|
|
|
774
|
|
|
25,774
|
|
|
2037
|
|
3.78
|
|
|
Quarterly
|
|
Three-month LIBOR + 1.38%
|
|||
Siuslaw Statutory Trust I
|
|
8,000
|
|
|
248
|
|
|
8,248
|
|
|
2034
|
|
5.49
|
|
|
Quarterly
|
|
Three-month LIBOR + 2.70%
|
|||
Greater Sacramento Bancorp Statutory Trust I
|
|
4,000
|
|
|
124
|
|
|
4,124
|
|
|
2033
|
|
5.79
|
|
|
Quarterly
|
|
Three-month LIBOR + 3.35%
|
|||
Greater Sacramento Bancorp Statutory Trust II
|
|
4,000
|
|
|
124
|
|
|
4,124
|
|
|
2035
|
|
4.47
|
|
|
Quarterly
|
|
Three-month LIBOR + 1.68%
|
|||
Total TPS liability at par
|
|
$
|
136,000
|
|
|
$
|
4,212
|
|
|
140,212
|
|
|
|
|
4.71
|
%
|
|
|
|
|
|
Fair value adjustment
(2)
|
|
|
|
|
|
(26,121
|
)
|
|
|
|
|
|
|
|
|
||||||
Total TPS liability at fair value
(2)
|
|
|
|
|
|
$
|
114,091
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31
|
||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
21,869
|
|
|
$
|
30,961
|
|
|
$
|
29,787
|
|
State
|
4,130
|
|
|
3,085
|
|
|
2,477
|
|
|||
Total Current
|
25,999
|
|
|
34,046
|
|
|
32,264
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
||||||
Federal
|
2,021
|
|
|
58,646
|
|
|
9,908
|
|
|||
State
|
575
|
|
|
(2,204
|
)
|
|
2,083
|
|
|||
Total Deferred
|
2,596
|
|
|
56,442
|
|
|
11,991
|
|
|||
|
|
|
|
|
|
||||||
Provision for income taxes
|
$
|
28,595
|
|
|
$
|
90,488
|
|
|
$
|
44,255
|
|
|
Years Ended December 31
|
|||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
Federal income tax statutory rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) in tax rate due to:
|
|
|
|
|
|
|||
Tax-exempt interest
|
(2.0
|
)
|
|
(2.6
|
)
|
|
(2.6
|
)
|
Investment in life insurance
|
(0.6
|
)
|
|
(1.1
|
)
|
|
(1.2
|
)
|
State income taxes, net of federal tax offset
|
2.3
|
|
|
2.0
|
|
|
2.2
|
|
Tax credits
|
(0.8
|
)
|
|
(0.6
|
)
|
|
(0.8
|
)
|
Merger and acquisition costs
|
0.1
|
|
|
—
|
|
|
—
|
|
Valuation reserve release
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
Federal law change
|
—
|
|
|
28.2
|
|
|
—
|
|
Other
|
(0.2
|
)
|
|
(1.1
|
)
|
|
1.5
|
|
Effective income tax rate
|
17.3
|
%
|
|
59.8
|
%
|
|
34.1
|
%
|
|
December 31
|
||||||
|
2018
|
|
|
2017
|
|
||
Deferred tax assets:
|
|
|
|
||||
Loan loss and REO
|
$
|
24,156
|
|
|
$
|
22,294
|
|
Deferred compensation
|
15,991
|
|
|
13,045
|
|
||
Net operating loss carryforward
|
37,828
|
|
|
43,721
|
|
||
Federal and state tax credits
|
7,614
|
|
|
7,614
|
|
||
State net operating losses
|
6,105
|
|
|
6,706
|
|
||
Loan discount
|
5,756
|
|
|
4,736
|
|
||
Other
|
983
|
|
|
4,326
|
|
||
Total deferred tax assets
|
98,433
|
|
|
102,442
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation
|
(3,771
|
)
|
|
(1,343
|
)
|
||
Deferred loan fees, servicing rights and loan origination costs
|
(10,196
|
)
|
|
(9,564
|
)
|
||
Intangibles
|
(8,428
|
)
|
|
(5,690
|
)
|
||
Financial instruments accounted for under fair value accounting
|
(833
|
)
|
|
(9,702
|
)
|
||
Other
|
—
|
|
|
(325
|
)
|
||
Total deferred tax liabilities
|
(23,228
|
)
|
|
(26,624
|
)
|
||
Deferred income tax asset
|
75,205
|
|
|
75,818
|
|
||
Valuation allowance
|
(184
|
)
|
|
(4,391
|
)
|
||
Deferred tax asset, net
|
$
|
75,021
|
|
|
$
|
71,427
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Tax credit investments
|
$
|
17,360
|
|
|
$
|
7,311
|
|
Unfunded commitments—tax credit investments
|
12,726
|
|
|
4,417
|
|
|
For the years ended December 31,
|
||||||||||
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Tax credits and other tax benefits recognized
|
$
|
1,456
|
|
|
$
|
1,140
|
|
|
$
|
1,136
|
|
Tax credit amortization expense included in provision for income taxes
|
1,151
|
|
|
1,144
|
|
|
672
|
|
•
|
2012 Restricted Stock and Incentive Bonus Plan (2012 Restricted Stock Plan).
|
•
|
2014 Omnibus Incentive Plan (the 2014 Plan).
|
•
|
2018 Omnibus Incentive Plan (the 2018 Plan).
|
|
Shares/Units
|
|
Weighted Average
Grant-Date
Fair Value
|
|||
Unvested at January 1, 2016
|
231,562
|
|
|
$
|
42.33
|
|
Granted (38,934 non-voting)
|
177,775
|
|
|
47.74
|
|
|
Vested
|
(104,297
|
)
|
|
41.47
|
|
|
Forfeited
|
(14,321
|
)
|
|
42.54
|
|
|
Unvested at December 31, 2016
|
290,719
|
|
|
42.26
|
|
|
Granted (41,318 non-voting)
|
153,777
|
|
|
55.86
|
|
|
Vested
|
(103,259
|
)
|
|
43.81
|
|
|
Forfeited
|
(39,160
|
)
|
|
39.83
|
|
|
Unvested at December 31, 2017
|
302,077
|
|
|
48.97
|
|
|
Granted (159,541 non-voting)
|
161,598
|
|
|
55.04
|
|
|
Vested
|
(103,363
|
)
|
|
48.60
|
|
|
Forfeited
|
(42,215
|
)
|
|
47.05
|
|
|
Unvested at
December 31, 2018
|
318,097
|
|
|
52.43
|
|
|
Actual
|
|
Minimum for Capital Adequacy Purposes
|
|
Minimum to be Categorized as “Well-Capitalized” Under Prompt Corrective Action Provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
|||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Company—consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk-weighted assets
|
$
|
1,302,239
|
|
|
13.12
|
%
|
|
$
|
794,072
|
|
|
8.00
|
%
|
|
$
|
992,590
|
|
|
10.00
|
%
|
Tier 1 capital to risk-weighted assets
|
1,203,155
|
|
|
12.12
|
|
|
595,554
|
|
|
6.00
|
|
|
595,554
|
|
|
6.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
1,067,155
|
|
|
10.75
|
|
|
446,665
|
|
|
4.50
|
|
|
n/a
|
|
|
n/a
|
|
|||
Tier 1 capital to average leverage assets
|
1,203,155
|
|
|
10.98
|
|
|
438,379
|
|
|
4.00
|
|
|
n/a
|
|
|
n/a
|
|
|||
Banner Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk- weighted assets
|
1,217,173
|
|
|
12.50
|
|
|
778,766
|
|
|
8.00
|
|
|
973,457
|
|
|
10.00
|
|
|||
Tier 1 capital to risk- weighted assets
|
1,120,523
|
|
|
11.51
|
|
|
584,074
|
|
|
6.00
|
|
|
778,766
|
|
|
8.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
1,120,523
|
|
|
11.51
|
|
|
438,056
|
|
|
4.50
|
|
|
632,747
|
|
|
6.50
|
|
|||
Tier 1 capital to average leverage assets
|
1,120,523
|
|
|
10.50
|
|
|
426,799
|
|
|
4.00
|
|
|
533,498
|
|
|
5.00
|
|
|||
Islanders Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk- weighted assets
|
34,567
|
|
|
18.26
|
|
|
15,142
|
|
|
8.00
|
|
|
18,928
|
|
|
10.00
|
|
|||
Tier 1 capital to risk- weighted assets
|
32,200
|
|
|
17.01
|
|
|
11,357
|
|
|
6.00
|
|
|
15,142
|
|
|
8.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
32,200
|
|
|
17.01
|
|
|
8,518
|
|
|
4.50
|
|
|
12,303
|
|
|
6.50
|
|
|||
Tier 1 capital to average leverage assets
|
32,200
|
|
|
11.16
|
|
|
11,543
|
|
|
4.00
|
|
|
14,428
|
|
|
5.00
|
|
|||
December 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Company—consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk-weighted assets
|
$
|
1,214,631
|
|
|
13.81
|
%
|
|
$
|
703,508
|
|
|
8.00
|
%
|
|
$
|
879,385
|
|
|
10.00
|
%
|
Tier 1 capital to risk-weighted assets
|
1,123,154
|
|
|
12.77
|
|
|
527,631
|
|
|
6.00
|
|
|
527,631
|
|
|
6.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
994,080
|
|
|
11.30
|
|
|
395,723
|
|
|
4.50
|
|
|
n/a
|
|
|
n/a
|
|
|||
Tier 1 capital to average leverage assets
|
1,123,154
|
|
|
11.34
|
|
|
396,313
|
|
|
4.00
|
|
|
n/a
|
|
|
n/a
|
|
|||
Banner Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk- weighted assets
|
1,102,195
|
|
|
12.83
|
|
|
687,266
|
|
|
8.00
|
|
|
859,083
|
|
|
10.00
|
|
|||
Tier 1 capital to risk- weighted assets
|
1,013,079
|
|
|
11.79
|
|
|
515,450
|
|
|
6.00
|
|
|
687,266
|
|
|
8.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
1,013,079
|
|
|
11.79
|
|
|
386,587
|
|
|
4.50
|
|
|
558,404
|
|
|
6.50
|
|
|||
Tier 1 capital to average leverage assets
|
1,013,079
|
|
|
10.53
|
|
|
384,920
|
|
|
4.00
|
|
|
481,150
|
|
|
5.00
|
|
|||
Islanders Bank:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total capital to risk- weighted assets
|
32,122
|
|
|
16.39
|
|
|
15,681
|
|
|
8.00
|
|
|
19,602
|
|
|
10.00
|
|
|||
Tier 1 capital to risk- weighted assets
|
29,761
|
|
|
15.18
|
|
|
11,761
|
|
|
6.00
|
|
|
15,681
|
|
|
8.00
|
|
|||
Tier 1 common equity to risk-weighted assets
|
29,761
|
|
|
15.18
|
|
|
8,821
|
|
|
4.50
|
|
|
12,741
|
|
|
6.50
|
|
|||
Tier 1 capital to average leverage assets
|
29,761
|
|
|
10.65
|
|
|
11,183
|
|
|
4.00
|
|
|
13,979
|
|
|
5.00
|
|
|
Goodwill
|
|
CDI
|
|
LHI
|
|
Total
|
||||||||
Balance, January 1, 2016
|
$
|
247,738
|
|
|
$
|
36,762
|
|
|
$
|
710
|
|
|
$
|
285,210
|
|
Amortization
|
—
|
|
|
(7,061
|
)
|
|
(249
|
)
|
|
(7,310
|
)
|
||||
Other changes
(1)
|
(3,155
|
)
|
|
—
|
|
|
—
|
|
|
(3,155
|
)
|
||||
Balance, December 31, 2016
|
244,583
|
|
|
29,701
|
|
|
461
|
|
|
274,745
|
|
||||
Amortization
|
—
|
|
|
(6,247
|
)
|
|
(184
|
)
|
|
(6,431
|
)
|
||||
Adjustments to goodwill
(2)
|
(1,924
|
)
|
|
(1,076
|
)
|
|
—
|
|
|
(3,000
|
)
|
||||
Balance, December 31, 2017
|
242,659
|
|
|
22,378
|
|
|
277
|
|
|
265,314
|
|
||||
Additions through acquisition
(3)
|
96,495
|
|
|
16,368
|
|
|
—
|
|
|
112,863
|
|
||||
Amortization
|
—
|
|
|
(6,047
|
)
|
|
(52
|
)
|
|
(6,099
|
)
|
||||
Balance, December 31, 2018
|
$
|
339,154
|
|
|
$
|
32,699
|
|
|
$
|
225
|
|
|
$
|
372,078
|
|
(1)
|
The adjustments to goodwill in 2016 related to changes in the preliminary goodwill recorded for the Starbuck Bancshares, Inc. acquisition including adjustments to loan discount, deferred taxes and REO valuations.
|
(2)
|
Acquired Goodwill and CDI were adjusted for the sale of the Utah branches in 2017.
|
(3)
|
The additions to goodwill and CDI in 2018 relate to the acquisition of Skagit.
|
Year ended:
|
Estimated Amortization
|
||
2019
|
$
|
7,957
|
|
2020
|
6,888
|
|
|
2021
|
5,816
|
|
|
2022
|
4,651
|
|
|
Thereafter
|
7,387
|
|
|
Net carrying amount
|
$
|
32,699
|
|
|
Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance, beginning of the year
|
$
|
14,738
|
|
|
$
|
15,249
|
|
|
$
|
13,295
|
|
Amounts capitalized
|
3,623
|
|
|
3,361
|
|
|
5,965
|
|
|||
Additions through purchase
|
166
|
|
|
94
|
|
|
—
|
|
|||
Amortization
(1)
|
(3,889
|
)
|
|
(3,966
|
)
|
|
(4,011
|
)
|
|||
Balance, end of the year
(2)
|
$
|
14,638
|
|
|
$
|
14,738
|
|
|
$
|
15,249
|
|
(1)
|
Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income and any unamortized balance is fully written off if the loan repays in full.
|
(2)
|
There was
no
valuation allowance as of
December 31, 2018
and
2017
.
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Level
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
1
|
|
$
|
272,196
|
|
|
$
|
272,196
|
|
|
$
|
261,200
|
|
|
$
|
261,200
|
|
Securities—trading
|
2,3
|
|
25,896
|
|
|
25,896
|
|
|
22,318
|
|
|
22,318
|
|
||||
Securities—available-for-sale
|
2
|
|
1,636,223
|
|
|
1,636,223
|
|
|
919,485
|
|
|
919,485
|
|
||||
Securities—held-to-maturity
|
2
|
|
230,984
|
|
|
229,301
|
|
|
256,793
|
|
|
258,710
|
|
||||
Securities—held-to-maturity
|
3
|
|
3,236
|
|
|
3,236
|
|
|
3,478
|
|
|
3,478
|
|
||||
Loans receivable held for sale
|
2
|
|
171,031
|
|
|
171,157
|
|
|
40,725
|
|
|
40,923
|
|
||||
Loans receivable
|
3
|
|
8,684,595
|
|
|
8,629,450
|
|
|
7,598,884
|
|
|
7,445,990
|
|
||||
FHLB stock
|
3
|
|
31,955
|
|
|
31,955
|
|
|
10,334
|
|
|
10,334
|
|
||||
Bank-owned life insurance
|
1
|
|
177,467
|
|
|
177,467
|
|
|
162,668
|
|
|
162,668
|
|
||||
Mortgage servicing rights
|
3
|
|
14,638
|
|
|
25,813
|
|
|
14,738
|
|
|
19,835
|
|
||||
Equity securities
|
1
|
|
352
|
|
|
352
|
|
|
—
|
|
|
—
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
2
|
|
3,138
|
|
|
3,138
|
|
|
5,083
|
|
|
5,083
|
|
||||
Interest rate lock and forward sales commitments
|
2
|
|
471
|
|
|
471
|
|
|
523
|
|
|
523
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Demand, interest-bearing checking and money market
|
2
|
|
6,314,202
|
|
|
6,314,202
|
|
|
5,658,994
|
|
|
5,658,994
|
|
||||
Regular savings
|
2
|
|
1,842,581
|
|
|
1,842,581
|
|
|
1,557,500
|
|
|
1,557,500
|
|
||||
Certificates of deposit
|
2
|
|
1,320,265
|
|
|
1,298,238
|
|
|
966,937
|
|
|
947,517
|
|
||||
Advances from FHLB
|
2
|
|
540,189
|
|
|
540,189
|
|
|
202
|
|
|
202
|
|
||||
Junior subordinated debentures at fair value
|
3
|
|
114,091
|
|
|
114,091
|
|
|
98,707
|
|
|
98,707
|
|
||||
Other borrowings
|
2
|
|
118,995
|
|
|
118,995
|
|
|
95,860
|
|
|
95,860
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
2
|
|
3,138
|
|
|
3,138
|
|
|
5,083
|
|
|
5,083
|
|
||||
Interest rate lock and forward sales commitments
|
2
|
|
1,654
|
|
|
1,654
|
|
|
201
|
|
|
201
|
|
•
|
Level 1
– Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.
|
•
|
Level 2
– Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data.
|
•
|
Level 3
– Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs from non-binding single dealer quotes not corroborated by observable market data. In developing Level 3 measurements, management incorporates whatever market data might be available and uses discounted cash flow models where appropriate. These calculations include projections of future cash flows, including appropriate default and loss assumptions, and market based discount rates.
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Securities—trading
|
|
|
|
|
|
|
|
||||||||
Corporate Bonds (TPS securities)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,896
|
|
|
$
|
25,896
|
|
|
—
|
|
|
—
|
|
|
25,896
|
|
|
25,896
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Securities—available-for-sale
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency
|
—
|
|
|
149,112
|
|
|
—
|
|
|
149,112
|
|
||||
Municipal bonds
|
—
|
|
|
117,822
|
|
|
—
|
|
|
117,822
|
|
||||
Corporate bonds
|
—
|
|
|
3,495
|
|
|
—
|
|
|
3,495
|
|
||||
Mortgage-backed securities
|
—
|
|
|
1,343,861
|
|
|
—
|
|
|
1,343,861
|
|
||||
Asset-backed securities
|
—
|
|
|
21,933
|
|
|
—
|
|
|
21,933
|
|
||||
|
—
|
|
|
1,636,223
|
|
|
—
|
|
|
1,636,223
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loans held for sale
|
—
|
|
|
164,767
|
|
|
—
|
|
|
164,767
|
|
||||
Equity securities
|
—
|
|
|
352
|
|
|
—
|
|
|
352
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
—
|
|
|
3,138
|
|
|
—
|
|
|
3,138
|
|
||||
Interest rate lock and forward sales commitments
|
—
|
|
|
471
|
|
|
—
|
|
|
471
|
|
||||
|
$
|
—
|
|
|
$
|
1,804,951
|
|
|
$
|
25,896
|
|
|
$
|
1,830,847
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Junior subordinated debentures at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114,091
|
|
|
$
|
114,091
|
|
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
—
|
|
|
3,138
|
|
|
—
|
|
|
3,138
|
|
||||
Interest rate lock and forward sales commitments
|
—
|
|
|
1,654
|
|
|
—
|
|
|
1,654
|
|
||||
|
$
|
—
|
|
|
$
|
4,792
|
|
|
$
|
114,091
|
|
|
$
|
118,883
|
|
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Securities—trading
|
|
|
|
|
|
|
|
||||||||
Municipal bonds
|
$
|
—
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
100
|
|
Corporate Bonds (TPS securities)
|
—
|
|
|
—
|
|
|
22,058
|
|
|
22,058
|
|
||||
Equity securities
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
||||
|
—
|
|
|
260
|
|
|
22,058
|
|
|
22,318
|
|
||||
Securities—available-for-sale
|
|
|
|
|
|
|
|
||||||||
U.S. Government and agency
|
—
|
|
|
72,466
|
|
|
—
|
|
|
72,466
|
|
||||
Municipal bonds
|
—
|
|
|
68,733
|
|
|
—
|
|
|
68,733
|
|
||||
Corporate bonds
|
—
|
|
|
5,393
|
|
|
—
|
|
|
5,393
|
|
||||
Mortgage-backed securities
|
—
|
|
|
739,557
|
|
|
—
|
|
|
739,557
|
|
||||
Asset-backed securities
|
—
|
|
|
27,758
|
|
|
—
|
|
|
27,758
|
|
||||
Equity securities
|
—
|
|
|
5,578
|
|
|
—
|
|
|
5,578
|
|
||||
|
—
|
|
|
919,485
|
|
|
—
|
|
|
919,485
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loans held for sale
|
—
|
|
|
32,392
|
|
|
—
|
|
|
32,392
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
—
|
|
|
5,083
|
|
|
—
|
|
|
5,083
|
|
||||
Interest rate lock and forward sales commitments
|
—
|
|
|
523
|
|
|
—
|
|
|
523
|
|
||||
|
$
|
—
|
|
|
$
|
957,743
|
|
|
$
|
22,058
|
|
|
$
|
979,801
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Junior subordinated debentures at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98,707
|
|
|
$
|
98,707
|
|
Derivatives
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swaps
|
—
|
|
|
5,083
|
|
|
—
|
|
|
5,083
|
|
||||
Interest rate lock and forward sales commitments
|
—
|
|
|
201
|
|
|
—
|
|
|
201
|
|
||||
|
$
|
—
|
|
|
$
|
5,284
|
|
|
$
|
98,707
|
|
|
$
|
103,991
|
|
|
|
|
|
|
|
December 31
|
||||
|
|
|
|
|
|
2018
|
|
2017
|
||
Financial Instruments
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Weighted Average Rate
|
|
Weighted Average Rate
|
||
Corporate bonds (TPS securities)
|
|
Discounted cash flows
|
|
Discount rate
|
|
6.81
|
%
|
|
6.69
|
%
|
Junior subordinated debentures
|
|
Discounted cash flows
|
|
Discount rate
|
|
6.81
|
%
|
|
6.69
|
%
|
Impaired loans
|
|
Collateral Valuations
|
|
Discount to appraised value
|
|
0.0% to 8.5%
|
|
|
8.5% to 20.0%
|
|
REO
|
|
Appraisals
|
|
Discount to appraised value
|
|
69.2
|
%
|
|
42.0
|
%
|
|
Level 3 Fair Value Inputs
|
||||||
|
TPS Securities
|
|
Borrowings—
Junior Subordinated
Debentures
|
||||
Balance at January 1, 2017
|
$
|
21,143
|
|
|
$
|
95,200
|
|
Total gains or losses recognized
|
|
|
|
|
|
||
Assets gains
|
915
|
|
|
—
|
|
||
Liabilities losses
|
—
|
|
|
3,507
|
|
||
Balance at December 31, 2017
|
22,058
|
|
|
98,707
|
|
||
Total gains or losses recognized
|
|
|
|
||||
Assets gains
|
3,838
|
|
|
—
|
|
||
Liabilities losses
|
—
|
|
|
15,384
|
|
||
Balance at December 31, 2018
|
$
|
25,896
|
|
|
$
|
114,091
|
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Impaired loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,915
|
|
|
$
|
2,915
|
|
REO
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,611
|
|
|
$
|
2,611
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Impaired loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,535
|
|
|
$
|
6,535
|
|
REO
|
—
|
|
|
—
|
|
|
360
|
|
|
360
|
|
|
For the years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Impaired loans
|
$
|
(910
|
)
|
|
$
|
(2,852
|
)
|
|
$
|
(182
|
)
|
REO
|
(387
|
)
|
|
(256
|
)
|
|
(876
|
)
|
|||
Total loss from nonrecurring measurements
|
$
|
(1,297
|
)
|
|
$
|
(3,108
|
)
|
|
$
|
(1,058
|
)
|
Statements of Financial Condition
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Cash
|
$
|
38,029
|
|
|
$
|
44,887
|
|
Investment in trust equities
|
4,212
|
|
|
4,212
|
|
||
Investment in subsidiaries
|
1,540,251
|
|
|
1,329,165
|
|
||
Other assets
|
25,267
|
|
|
3,072
|
|
||
Total assets
|
$
|
1,607,759
|
|
|
$
|
1,381,336
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Miscellaneous liabilities
|
$
|
15,073
|
|
|
$
|
9,607
|
|
Deferred tax liability
|
—
|
|
|
396
|
|
||
Junior subordinated debentures at fair value
|
114,091
|
|
|
98,707
|
|
||
Shareholders’ equity
|
1,478,595
|
|
|
1,272,626
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,607,759
|
|
|
$
|
1,381,336
|
|
Statements of Operations
|
Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
INTEREST INCOME:
|
|
|
|
|
|
||||||
Interest-bearing deposits
|
$
|
49
|
|
|
$
|
62
|
|
|
$
|
127
|
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
||||||
Dividend income from subsidiaries
|
72,604
|
|
|
40,570
|
|
|
50,971
|
|
|||
Equity in undistributed income of subsidiaries
|
72,419
|
|
|
27,477
|
|
|
40,852
|
|
|||
Other income
|
56
|
|
|
53
|
|
|
60
|
|
|||
Net change in valuation of financial instruments carried at fair value
|
—
|
|
|
(3,507
|
)
|
|
(2,720
|
)
|
|||
Interest on other borrowings
|
(6,136
|
)
|
|
(4,752
|
)
|
|
(4,040
|
)
|
|||
Other expenses
|
(4,761
|
)
|
|
(3,291
|
)
|
|
(3,450
|
)
|
|||
Net income before taxes
|
134,231
|
|
|
56,612
|
|
|
81,800
|
|
|||
BENEFIT FROM INCOME TAXES
|
(2,284
|
)
|
|
(4,164
|
)
|
|
(3,585
|
)
|
|||
NET INCOME
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
Statements of Cash Flows
|
Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in undistributed income of subsidiaries
|
(72,419
|
)
|
|
(27,477
|
)
|
|
(40,852
|
)
|
|||
Decrease (increase) in deferred taxes
|
150
|
|
|
(1,442
|
)
|
|
(702
|
)
|
|||
Net change in valuation of financial instruments carried at fair value
|
—
|
|
|
3,507
|
|
|
2,720
|
|
|||
Share-based compensation
|
6,554
|
|
|
5,965
|
|
|
4,305
|
|
|||
(Increase) decrease in other assets
|
(19,268
|
)
|
|
10,684
|
|
|
7,332
|
|
|||
Increase (decrease) in other liabilities
|
201
|
|
|
69
|
|
|
(202
|
)
|
|||
Net cash provided from operating activities
|
51,733
|
|
|
52,082
|
|
|
57,986
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Funds transferred to deferred compensation trust
|
(27
|
)
|
|
(29
|
)
|
|
(26
|
)
|
|||
Reduction in investment in subsidiaries
|
37,000
|
|
|
5,000
|
|
|
50,000
|
|
|||
Acquisitions
|
(329
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided from investing activities
|
36,644
|
|
|
4,971
|
|
|
49,974
|
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Withholding taxes paid on share-based compensation
|
(1,554
|
)
|
|
(1,630
|
)
|
|
(870
|
)
|
|||
Repurchase of common stock
|
(34,401
|
)
|
|
(31,045
|
)
|
|
(50,772
|
)
|
|||
Cash dividends paid
|
(59,280
|
)
|
|
(65,759
|
)
|
|
(28,282
|
)
|
|||
Net cash used by financing activities
|
(95,235
|
)
|
|
(98,434
|
)
|
|
(79,924
|
)
|
|||
NET CHANGE IN CASH
|
(6,858
|
)
|
|
(41,381
|
)
|
|
28,036
|
|
|||
CASH, BEGINNING OF PERIOD
|
44,887
|
|
|
86,268
|
|
|
58,232
|
|
|||
CASH, END OF PERIOD
|
$
|
38,029
|
|
|
$
|
44,887
|
|
|
$
|
86,268
|
|
|
Years Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
136,515
|
|
|
$
|
60,776
|
|
|
$
|
85,385
|
|
Weighted average number of common shares outstanding
|
|
|
|
|
|
||||||
Basic
|
32,784,724
|
|
|
32,888,007
|
|
|
33,820,148
|
|
|||
Diluted
|
32,894,425
|
|
|
32,986,707
|
|
|
33,853,511
|
|
|||
Earnings per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
4.16
|
|
|
$
|
1.85
|
|
|
$
|
2.52
|
|
Diluted
|
$
|
4.15
|
|
|
$
|
1.84
|
|
|
$
|
2.52
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Interest income
|
$
|
104,820
|
|
|
$
|
112,423
|
|
|
$
|
117,648
|
|
|
$
|
128,741
|
|
Interest expense
|
5,447
|
|
|
7,360
|
|
|
8,570
|
|
|
11,282
|
|
||||
Net interest income before provision for loan losses
|
99,373
|
|
|
105,063
|
|
|
109,078
|
|
|
117,459
|
|
||||
Provision for loan losses
|
2,000
|
|
|
2,000
|
|
|
2,000
|
|
|
2,500
|
|
||||
Net interest income
|
97,373
|
|
|
103,063
|
|
|
107,078
|
|
|
114,959
|
|
||||
Non-interest income
|
21,362
|
|
|
21,217
|
|
|
20,411
|
|
|
21,018
|
|
||||
Non-interest expense
|
81,706
|
|
|
82,637
|
|
|
81,632
|
|
|
95,396
|
|
||||
Income before provision for income taxes
|
37,029
|
|
|
41,643
|
|
|
45,857
|
|
|
40,581
|
|
||||
Provision for income taxes
|
8,239
|
|
|
9,219
|
|
|
8,084
|
|
|
3,053
|
|
||||
Net income
|
$
|
28,790
|
|
|
$
|
32,424
|
|
|
$
|
37,773
|
|
|
$
|
37,528
|
|
Basic earnings per share
|
$
|
0.89
|
|
|
$
|
1.01
|
|
|
$
|
1.17
|
|
|
$
|
1.10
|
|
Diluted earnings per share
|
0.89
|
|
|
1.00
|
|
|
1.17
|
|
|
1.09
|
|
||||
Dividends declared
|
0.35
|
|
|
0.85
|
|
|
0.38
|
|
|
0.38
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Interest income
|
$
|
99,096
|
|
|
$
|
104,436
|
|
|
$
|
105,278
|
|
|
$
|
103,475
|
|
Interest expense
|
4,242
|
|
|
4,730
|
|
|
5,068
|
|
|
5,211
|
|
||||
Net interest income before provision for loan losses
|
94,854
|
|
|
99,706
|
|
|
100,210
|
|
|
98,264
|
|
||||
Provision for loan losses
|
2,000
|
|
|
2,000
|
|
|
2,000
|
|
|
2,000
|
|
||||
Net interest income
|
92,854
|
|
|
97,706
|
|
|
98,210
|
|
|
96,264
|
|
||||
Non-interest income
|
19,048
|
|
|
20,396
|
|
|
18,081
|
|
|
27,675
|
|
||||
Non-interest expense
|
76,281
|
|
|
79,857
|
|
|
80,331
|
|
|
82,501
|
|
||||
Income before provision for income taxes
|
35,621
|
|
|
38,245
|
|
|
35,960
|
|
|
41,438
|
|
||||
Provision for income taxes
|
11,828
|
|
|
12,791
|
|
|
10,883
|
|
|
54,986
|
|
||||
Net income (loss)
|
$
|
23,793
|
|
|
$
|
25,454
|
|
|
$
|
25,077
|
|
|
$
|
(13,548
|
)
|
Basic earnings (loss) per share
|
$
|
0.72
|
|
|
$
|
0.77
|
|
|
$
|
0.76
|
|
|
$
|
(0.41
|
)
|
Diluted earnings (loss) per share
|
0.72
|
|
|
0.77
|
|
|
0.76
|
|
|
(0.41
|
)
|
||||
Dividends declared
|
0.25
|
|
|
1.25
|
|
|
0.25
|
|
|
0.25
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Interest income
|
$
|
95,301
|
|
|
$
|
97,321
|
|
|
$
|
97,849
|
|
|
$
|
101,007
|
|
Interest expense
|
4,258
|
|
|
4,173
|
|
|
4,141
|
|
|
3,836
|
|
||||
Net interest income before provision for loan losses
|
91,043
|
|
|
93,148
|
|
|
93,708
|
|
|
97,171
|
|
||||
Provision for loan losses
|
—
|
|
|
2,000
|
|
|
2,000
|
|
|
2,030
|
|
||||
Net interest income
|
91,043
|
|
|
91,148
|
|
|
91,708
|
|
|
95,141
|
|
||||
Non-interest income
|
19,959
|
|
|
20,537
|
|
|
23,512
|
|
|
19,463
|
|
||||
Non-interest expense
|
84,034
|
|
|
79,887
|
|
|
79,092
|
|
|
79,857
|
|
||||
Income before provision for income taxes
|
26,968
|
|
|
31,798
|
|
|
36,128
|
|
|
34,747
|
|
||||
Provision for income taxes
|
9,194
|
|
|
10,841
|
|
|
12,277
|
|
|
11,943
|
|
||||
Net income
|
$
|
17,774
|
|
|
$
|
20,957
|
|
|
$
|
23,851
|
|
|
$
|
22,804
|
|
Basic earnings per share
|
$
|
0.52
|
|
|
$
|
0.62
|
|
|
$
|
0.70
|
|
|
$
|
0.69
|
|
Diluted earnings per share
|
0.52
|
|
|
0.61
|
|
|
0.70
|
|
|
0.69
|
|
||||
Dividends declared
|
0.21
|
|
|
0.21
|
|
|
0.23
|
|
|
0.23
|
|
|
Contract or Notional Amount
|
||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||
Commitments to extend credit
|
$
|
2,837,981
|
|
|
$
|
2,300,593
|
|
Standby letters of credit and financial guarantees
|
17,784
|
|
|
14,579
|
|
||
Commitments to originate loans
|
32,145
|
|
|
56,030
|
|
||
Risk participation agreement
|
24,091
|
|
|
11,451
|
|
||
|
|
|
|
||||
Derivatives also included in Note 24:
|
|
|
|
||||
Commitments to originate loans held for sale
|
31,728
|
|
|
48,091
|
|
||
Commitments to sell loans secured by one- to four-family residential properties
|
18,328
|
|
|
22,097
|
|
||
Commitments to sell securities related to mortgage banking activities
|
144,250
|
|
|
57,000
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
Notional/
Contract Amount
|
|
Fair
Value
(1)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(1)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(2)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(2)
|
||||||||||||||||
Interest rate swaps
|
$
|
3,973
|
|
|
$
|
270
|
|
|
$
|
4,350
|
|
|
$
|
447
|
|
|
$
|
3,973
|
|
|
$
|
270
|
|
|
$
|
4,350
|
|
|
$
|
447
|
|
(1)
|
Included in Loans Receivable on the Consolidated Statements of Financial Condition.
|
(2)
|
Included in Other Liabilities on the Consolidated Statements of Financial Condition.
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
Notional/
Contract Amount
|
|
Fair
Value
(1)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(1)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(2)
|
|
Notional/
Contract Amount
|
|
Fair
Value
(2)
|
||||||||||||||||
Interest rate swaps
|
$
|
272,374
|
|
|
$
|
2,868
|
|
|
$
|
285,047
|
|
|
$
|
4,636
|
|
|
$
|
272,374
|
|
|
$
|
2,868
|
|
|
$
|
285,047
|
|
|
$
|
4,636
|
|
Mortgage loan commitments
|
20,229
|
|
|
273
|
|
|
29,739
|
|
|
225
|
|
|
17,763
|
|
|
187
|
|
|
13,763
|
|
|
153
|
|
||||||||
Forward sales contracts
|
18,328
|
|
|
198
|
|
|
43,069
|
|
|
298
|
|
|
144,250
|
|
|
1,467
|
|
|
47,000
|
|
|
48
|
|
||||||||
|
$
|
310,931
|
|
|
$
|
3,339
|
|
|
$
|
357,855
|
|
|
$
|
5,159
|
|
|
$
|
434,387
|
|
|
$
|
4,522
|
|
|
$
|
345,810
|
|
|
$
|
4,837
|
|
(1)
|
Included in Other Assets on the Consolidated Statements of Financial Condition, with the exception of those interest rate swaps from prior to 2009 that were not designated in hedge relationships (with a fair value of
$270,000
at
December 31, 2018
and
$499,000
at
December 31, 2017
), which are included in Loans Receivable.
|
(2)
|
Included in Other Liabilities on the Consolidated Statements of Financial Condition.
|
|
|
|
For the Years Ended December 31
|
||||||||||
|
Location on Income Statement
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|||
Mortgage loan commitments
|
Mortgage banking operations
|
|
$
|
47
|
|
|
$
|
195
|
|
|
$
|
(348
|
)
|
Forward sales contracts
|
Mortgage banking operations
|
|
(775
|
)
|
|
(491
|
)
|
|
296
|
|
|||
|
|
|
$
|
(728
|
)
|
|
$
|
(296
|
)
|
|
$
|
(52
|
)
|
|
December 31, 2018
|
||||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amounts of Financial Instruments Not Offset in the Statement of Financial Condition
|
|
|
||||||||||||||
|
Gross Amounts Recognized
|
|
Amounts offset in the Statement
of Financial Condition
|
|
Net Amounts
in the Statement
of Financial Condition
|
|
Derivative Amount
|
|
Fair Value
of Financial Collateral
in the Statement
of Financial Condition
|
|
Net Amount
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
5,038
|
|
|
$
|
(1,900
|
)
|
|
$
|
3,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,138
|
|
|
$
|
5,038
|
|
|
$
|
(1,900
|
)
|
|
$
|
3,138
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
5,038
|
|
|
$
|
(1,900
|
)
|
|
$
|
3,138
|
|
|
$
|
—
|
|
|
$
|
(1,320
|
)
|
|
$
|
1,818
|
|
|
$
|
5,038
|
|
|
$
|
(1,900
|
)
|
|
$
|
3,138
|
|
|
$
|
—
|
|
|
$
|
(1,320
|
)
|
|
$
|
1,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
December 31, 2017
|
||||||||||||||||||||||
|
|
|
|
|
|
|
Gross Amounts of Financial Instruments Not Offset in the Statement of Financial Condition
|
|
|
||||||||||||||
|
Gross Amounts Recognized
|
|
Amounts offset in the Statement
of Financial Condition
|
|
Net Amounts
in the Statement
of Financial Condition
|
|
Derivative Amount
|
|
Fair Value
of Financial Collateral
in the Statement
of Financial Condition
|
|
Net Amount
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
5,083
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
(656
|
)
|
|
$
|
—
|
|
|
$
|
4,427
|
|
|
$
|
5,083
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
(656
|
)
|
|
$
|
—
|
|
|
$
|
4,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
$
|
5,083
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
(656
|
)
|
|
$
|
(3,467
|
)
|
|
$
|
960
|
|
|
$
|
5,083
|
|
|
$
|
—
|
|
|
$
|
5,083
|
|
|
$
|
(656
|
)
|
|
$
|
(3,467
|
)
|
|
$
|
960
|
|
|
Years Ended
December 31
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Deposit service charges
|
18,089
|
|
|
16,725
|
|
|
16,863
|
|
Debit and credit interchange fees
|
31,713
|
|
|
28,358
|
|
|
22,578
|
|
Debit and credit card expense
|
(8,511
|
)
|
|
(7,390
|
)
|
|
(3,078
|
)
|
Merchant services income
|
10,226
|
|
|
10,159
|
|
|
9,052
|
|
Merchant services expenses
|
(7,767
|
)
|
|
(8,335
|
)
|
|
(7,245
|
)
|
Other service charges
|
4,324
|
|
|
3,935
|
|
|
3,741
|
|
Total deposit fees and other service charges
|
48,074
|
|
|
43,452
|
|
|
41,911
|
|
Exhibit
|
Index of Exhibits
|
2 {a}
|
|
|
|
3{a}
|
|
|
|
3{b}
|
|
|
|
3{c}
|
|
|
|
10{a}
|
|
|
|
10{b}
|
|
|
|
10{c}
|
|
|
|
10{d}
|
|
|
|
10{e}
|
|
|
|
10{f}
|
|
|
|
10{g}
|
|
|
|
10{h}
|
|
|
|
10{i}
|
|
|
|
10{j}
|
|
|
|
10{k}
|
|
|
|
10{l}
|
|
|
|
10{m}
|
|
|
|
10{n}
|
|
|
|
14
|
|
|
|
21
|
|
|
|
23.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101
|
The following materials from Banner Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in Extensible Business Reporting Language (XBRL): (a) Consolidated Statements of Financial Condition; (b) Consolidated Statements of Operations; (c) Consolidated Statements of Comprehensive Income; (d) Consolidated Statements of Shareholders' Equity; (e) Consolidated Statements of Cash Flows; and (f) Notes to Consolidated Financial Statements.
|
Parent
|
|
|
|
|
|
Banner Corporation
|
|
|
|
|
|
|
|
Percentage of
|
|
Jurisdiction of State of
|
|
Subsidiaries
|
|
Ownership
|
|
Incorporation
|
|
Banner Bank
(1)
|
|
100
|
%
|
|
Washington
|
Islanders Bank
(1)
|
|
100
|
%
|
|
Washington
|
Banner Capital Trusts II, III, IV, V, VI, and VII
(1)
|
|
100
|
%
|
|
Washington
|
Springer Development LLC
(2)
|
|
100
|
%
|
|
Washington
|
Community Financial Corporation
(2)
|
|
100
|
%
|
|
Oregon
|
Northwest Financial Corporation
(2)
|
|
100
|
%
|
|
Washington
|
Banner Investment Advisors, LLC
(2)
|
|
100
|
%
|
|
Washington
|
Siuslaw Statutory Trust I
(1)
|
|
100
|
%
|
|
Connecticut
|
Greater Sacramento Bancorp Statutory Trust I
(1)
|
|
100
|
%
|
|
Delaware
|
Greater Sacramento Bancorp Statutory Trust II
(1)
|
|
100
|
%
|
|
Delaware
|
Skagit Bank
(1)
|
|
100
|
%
|
|
Washington
|
(1)
|
Wholly-owned by Banner Corporation.
|
(2)
|
Wholly-owned by Banner Bank.
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Banner Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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February 25, 2019
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/s/Mark J. Grescovich
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Mark J. Grescovich
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Chief Executive Officer
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1.
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I have reviewed this
Annual
Report on Form
10-K
of Banner Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal
quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
February 25, 2019
|
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/s/ Peter J. Conner
|
|
Peter J. Conner
|
|
|
Chief Financial Officer
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•
|
the report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, and
|
•
|
the information contained in the report fairly presents, in all material respects, the Company’s financial condition and results of operations as of the dates and for the periods presented in the financial statements included in such report.
|
February 25, 2019
|
|
/s/ Mark J. Grescovich
|
|
|
Mark J. Grescovich
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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February 25, 2019
|
|
/s/ Peter J. Conner
|
|
|
Peter J. Conner
|
|
|
Chief Financial Officer
|