Banner Corporation Completes Restructuring Transaction and Reports Fourth Quarter and Year-End Financial Results.WALLA WALLA Walla Walla (wŏl`ə wŏl`ə), city (1990 pop. 26,478), seat of Walla Walla co., SE Wash., at the junction of the Walla Walla River and Mill Creek, near the Oregon line; inc. 1862. , Wash. -- Banner Same as banner ad. 1. banner - The title page added to printouts by most print spoolers. Typically includes user or account ID information in very large character-graphics capitals. Corporation (Nasdaq:BANR BANR Board on Agriculture and Natural Resources ), the parent company of Banner Bank Banner Bank is a Washington financial institution based in Walla Walla. Originally known as First Federal Savings And Loan Of Walla Walla, it was the oldest Savings and Loan institution in the state of Washington. , today reported fourth quarter earnings from recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. operations (see footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." below), exclusive of the balance-sheet restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). transactions announced and completed in the fourth quarter of 2005, were $5.6 million, or $0.47 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. In the fourth quarter of 2004, earnings were $5.3 million, or $0.45 per diluted share. For the full year ended December December: see month. 31, 2005, earnings from recurring operations, exclusive of the restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , were $21.0 million, or $1.76 per diluted share, compared to earnings of $19.3 million, or $1.65 per diluted share for the prior year. Late in the fourth quarter of 2005, Banner completed a balance-sheet restructuring designed to pay down high interest rate FHLB FHLB Federal Home Loan Bank borrowings and reduce the size of the investment portfolio. To effect the restructuring, Banner sold $207 million of securities at a $7.3 million loss before tax and used a portion of the proceeds of the sale to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $142 million of high-cost, fixed-term Federal Home Loan Bank
(FHLB) borrowings, incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. of $6.1 million. The remainder of the proceeds were applied to repay other relatively high-cost short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings from the FHLB. The total cost of the transactions was $13.4 million, with a tax benefit of $4.8 million, resulting in an after tax cost of $8.6 million or $0.72 per diluted share, which was slightly more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than the previously announced estimated cost of $8.9 million, or $0.74 per diluted share. Including the effects of the restructuring charges, Banner reported a loss of $2.9 million, or $0.25 per diluted share, for the fourth quarter of 2005 and earnings of $12.4 million, or $1.04 per diluted share, for the year ended December 31, 2005. "For the past several years, we have focused on expanding our franchise in key market areas in order to build a resilient See resiliency. retail deposit base and decrease our reliance on high-cost borrowed funds," said D. Michael Jones Mike or Michael Jones may refer to: In sports:
Burlington was officially incorporated on June 16, 1902. , Beaverton, Oregon Beaverton is a city in Washington County, Oregon, United States, seven miles west of Portland in the Tualatin River Valley. As of May 2006, its population is estimated to be 84,270,[1] 9.1% more than the 2000 census figure of 76,129. and Twin Falls, Idaho
drag out last, endure - persist for a specified period of time; "The bad weather lasted for three days" 2. earnings in recent periods. In addition to lowering our cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , we anticipate future benefits will include an expanded net interest margin, an improved interest rate risk position, stronger performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. , increased profitability, and enhanced shareholder value. Although the restructuring transactions were not completed until mid December, we were encouraged by the margin expansion that did occur in the quarter just ended." 2005 Highlights (compared to 2004) --Completed balance-sheet restructuring transactions in the fourth quarter of 2005. --Net interest margin improved 8 basis points to 3.79% for the year, and improved 16 basis points to 3.93% for the fourth quarter of 2005, compared to 3.77% for the third quarter of 2005. --Net interest income before provision for loan losses grew 13% to $108.8 million. --Non-performing assets declined by 37% for the year (and 21% since September September: see month. 30, 2005). --Loans increased 17% to $2.41 billion. --Non-interest bearing deposits increased 40% and total deposits increased 21% to $2.32 billion. *Earnings information excluding the restructuring charges represent non-GAAP (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide more useful and comparative information to assess trends in the Company's core operations reflected in the current quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results. Where applicable, the Company has also presented comparable earnings information using GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures. Income Statement Review For the fourth quarter of 2005, net interest income before the provision for loan losses increased 15% to $28.8 million, compared to $25.1 million in the same quarter a year ago. Excluding the net loss on the sale of securities relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the balance-sheet restructuring, revenues (net interest income before the provision for loan losses plus other operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ) were $33.0 million in the fourth quarter, a 12% improvement over revenues of $29.4 million in the fourth quarter of 2004. Excluding the net loss on the sale of securities relating to the balance-sheet restructuring, total other operating income for the fourth quarter was unchanged at $4.3 million compared to the same quarter last year. Income from deposit fees and other service charges increased 21% to $2.5 million in the fourth quarter, reflecting the strong growth in customer relationships and deposit balances. However, income from mortgage banking operations declined by 34% from the third quarter of 2005 and 23% from the fourth quarter of 2004, reflecting the seasonality of the business and the effect of rising interest rates and a moderating housing market. For the year ended December 31, 2005, net interest income before the provision for loan losses increased 13% to $108.8 million, compared to $96.3 million a year ago. Excluding the net loss on the sale of securities, revenues were $126.6 million for the year, compared to $113.3 million a year ago, and total other operating income was $17.9 million in 2005, compared to $17.0 million in 2004. Excluding the FHLB prepayment penalties relating to the balance-sheet restructuring, other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased to $23.8 million in the fourth quarter of 2005, compared to $23.6 million in the third quarter of 2005 and $20.4 million in the fourth quarter of 2004. For the year 2005, other operating expenses were $91.5 million exclusive of the FHLB prepayment penalties, compared to $79.7 million in the prior year. The ratio of other operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. (expense ratio) to average assets was 3.05% for the fourth quarter of 2005 exclusive of the FHLB prepayment penalties, compared to 2.98% for the third quarter of 2005 and 2.85% for the fourth quarter a year ago. Again, excluding the FHLB prepayment penalties, the ratio of other operating expense to average assets was 3.00% for the year ended December 31, 2005, compared to 2.90% for the year ended December 31, 2004. "In 2005 we opened eleven new branches in Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . We also relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. three branches in Washington and made significant progress on the construction of three other southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. Idaho branch offices, which we expect to open in 2006. All of this growth is expensive and we will continue to see higher operating expenses as a result of our expansion, but we believe over time these new branches should help improve our profitability by providing low cost deposits and proportionately pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. reducing our borrowings from the Federal Home Loan Bank," said Jones. As a result of the sale of securities in the fourth quarter, combined with Banner's enhanced deposit gathering ability, the Company has reduced its dependence on borrowings from the FHLB by 55% to $265 million at December 31, 2005, from $584 million just a year earlier. Banner's net interest margin was 3.93% for the fourth quarter of 2005, a 16 basis point improvement from 3.77% in the quarter ended September 30, 2005, and a 21 basis point improvement from 3.72% for the fourth quarter of 2004. For the full year, the net interest margin was 3.79%, an eight basis point improvement from 3.71% in 2004. "We enjoyed an expansion of our net interest margin in part as a result of the restructuring transactions even though the benefit did not occur until late in the fourth quarter. The margin was also positively affected by the strong loan and deposit growth we experienced throughout the year. We expect our net interest margin to continue to expand as a result of the restructuring and as we continue to improve the liability side of our balance sheet," said Jones. Funding costs were up 13 basis points compared to the previous quarter and up 66 basis points from the fourth quarter a year earlier. However, asset yields were also higher, increasing by 28 and 87 basis points, respectively, compared to the quarters ended September 30, 2005 and December 31, 2004. In contrast with last year, in 2005 Banner Bank did not record any dividend income on its investment in stock of the FHLB. For the quarter and year ended December 31, 2004, Banner Bank recorded $175,000 and $1.2 million, respectively, of dividend income on its FHLB stock, which contributed three and four basis points to the margin calculations for the respective periods. Balance Sheet Review Total deposits increased 21%, to $2.32 billion at December 31, 2005, compared to $1.93 billion at December 31, 2004. Non-interest bearing deposits increased 40% at December 31, 2005 compared to a year earlier. "Deposit growth over the past year has been very strong, growing nearly $400 million for the year," said Jones. Non-interest bearing deposits and transaction accounts continued to grow, with transaction and savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: increasing 25% during the twelve months ending December 31, 2005, while certificates of deposit increased 14%. Assets were $3.04 billion at December 31, 2005, a 5% increase from $2.90 billion a year earlier. Net loans increased 17%, to $2.41 billion at December 31, 2005, from $2.06 billion at December 31, 2004. "The loan portfolio has grown significantly over the past year and our credit quality indicators have also improved," said Jones. "Our loan business is strong and the financial health of our borrowing customers appears to be good, which makes us optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about future performance." Book value per share was $18.81 at December 31, 2005, an improvement from $18.74 a year earlier, and tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. book value per share was $15.73 at December 31, 2005, compared to $15.58 a year ago. Credit Quality Non-performing assets decreased 37% to $11.0 million, or 0.36% of total assets, at December 31, 2005, compared to $17.4 million, or 0.60% of total assets, a year ago, reflecting significant progress in reducing credit risk. Non-performing assets decreased 21% compared to the previous quarter. "Our credit quality has continued to improve dramatically, resulting in a lower loss provision in the fourth quarter," said Jones. The provision for loan losses for the fourth quarter was $1.1 million, compared to $1.3 million in the fourth quarter of 2004. Net loan charge-offs in the fourth quarter of 2005 were $763,000, or 0.03% of average loans outstanding, compared to $1.1 million, or 0.05% of average loans outstanding in the fourth quarter of 2004. At December 31, 2005, the allowance for loan losses totaled $30.9 million, representing 1.27% of total loans outstanding. Conference Call The Company will host a conference call today, Thursday Thursday: see week. , January January: see month. 26, 2006, at 8:00 a.m. PST PST Paroxysmal supraventricular tachycardia, see there , to discuss fourth quarter results. The conference call can be accessed live by telephone at 303-262-2142. To listen to the call online, go to the Company's website at www.bannerbank.com or to www.fulldisclosure.com. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. may access the call via the subscriber-only site, www.streetevents.com. An archived recording of the call can be accessed by dialing 303-590-3000, passcode 11049572# until Thursday, February February: see month. 2, 2006, or via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.fulldisclosure.com. About the Company Banner Corporation is the parent company of Banner Bank, a commercial bank that operates a total of 57 branch offices and 11 loan offices in 24 counties in Washington This is a list of counties in Washington. There are thirty-nine counties in the U.S. state of Washington. Certain residents of Snohomish County consider themselves to be part of Freedom County. , Oregon and Idaho. Banner Bank serves the Pacific Northwest region
The Northwest Region with a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com. Statements concerning future performance, developments or events, expectations for earnings, growth and market forecasts, and any other guidance on future periods, constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which are subject to a number of risks and uncertainties that are beyond Banner's control and might cause actual results to differ materially from the expectations and stated objectives. Factors which could cause actual results to differ materially include, but are not limited to, regional and general economic conditions, management's ability to generate continued improvement in asset quality and profitability, changes in interest rates, deposit flows, demand for mortgages and other loans, real estate values, competition, loan delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates, the successful operation of the newly-opened branches and loan offices, changes in accounting principles, practices, policies or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , changes in legislation or regulation, other economic, competitive, governmental, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and technological factors affecting operations, pricing, products and services and Banner's ability to successfully resolve outstanding credit issues and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. recover check kiting The unlawful practice of drawing checks against a bank account containing insufficient funds to cover them, with the expectation that the necessary funds will be deposited before such checks are presented for payment. losses and other risks detailed in Banner's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 31, 2004. Accordingly, these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. Banner undertakes no responsibility to update or revise any forward-looking statements.
RESULTS OF OPERATIONS Quarters Ended
--------------------- ------------------------------------
(In thousands except share and Dec 31, Sep 30, Dec 31,
per share data) 2005 2005 2004
----------- ----------- -----------
INTEREST INCOME:
Loans receivable $ 45,773 $ 43,646 $ 34,624
Mortgage-backed securities 2,747 3,330 3,806
Securities and cash equivalents 2,644 2,990 2,941
----------- ----------- -----------
51,164 49,966 41,371
INTEREST EXPENSE:
Deposits 15,607 14,086 9,725
Federal Home Loan Bank advances 4,442 5,920 5,191
Other borrowings 569 472 334
Junior subordinated debentures 1,788 1,405 1,015
----------- ----------- -----------
22,406 21,883 16,265
----------- ----------- -----------
Net interest income before
provision for loan losses 28,758 28,083 25,106
PROVISION FOR LOAN LOSSES 1,100 1,300 1,300
----------- ----------- -----------
Net interest income 27,658 26,783 23,806
OTHER OPERATING INCOME:
Deposit fees and other service
charges 2,516 2,555 2,084
Mortgage banking operations 1,099 1,672 1,435
Loan servicing fees 315 466 417
Gain (loss) on sale of
securities (7,310) -- 1
Miscellaneous 321 288 340
----------- ----------- -----------
Total other operating income
(loss) (3,059) 4,981 4,277
OTHER OPERATING EXPENSE:
Salary and employee benefits 15,337 15,758 13,485
Less capitalized loan
origination costs (2,342) (2,677) (1,824)
Occupancy and equipment 3,623 3,550 3,177
Information / computer data
services 1,214 1,258 1,063
Professional services 633 760 807
Marketing and advertising 1,839 1,801 1,348
FHLB prepayment penalties 6,077 -- --
Miscellaneous 3,503 3,111 2,372
----------- ----------- -----------
Total other operating expense 29,884 23,561 20,428
----------- ----------- -----------
Income (loss) before provision
for income taxes (5,285) 8,203 7,655
PROVISION (BENEFIT) FOR INCOME
TAXES (2,340) 2,537 2,388
----------- ----------- -----------
NET INCOME (LOSS) $ (2,945) $ 5,666 $ 5,267
=========== =========== ===========
Earnings (loss) per share
Basic $ (0.25) $ 0.49 $ 0.47
Diluted $ (0.25) $ 0.47 $ 0.45
Cumulative dividends declared per
common share $ 0.18 $ 0.17 $ 0.17
Weighted average shares
outstanding
Basic 11,635,243 11,593,365 11,207,582
Diluted 12,006,686 11,951,058 11,828,644
Shares repurchased during the
period 24,924 6,047 114,477
PROFORMA DISCLOSURES
NET INCOME (LOSS) from above $ (2,945) $ 5,666 $ 5,267
ADJUSTMENTS FOR BALANCE-SHEET
RESTRUCTURING CHARGES
Loss on sale of securities 7,310
FHLB prepayment penalties 6,077
Income tax benefit related to
restructuring charges (4,819)
-----------
Restructuring charges net of
income tax benefit 8,568
----------- ----------- -----------
NET INCOME FROM RECURRING
OPERATIONS $ 5,623 $ 5,666 $ 5,267
=========== =========== ===========
Earnings per share EXCLUDING
restructuring charges
Basic $ 0.48 $ 0.49 $ 0.47
Diluted $ 0.47 $ 0.47 $ 0.45
RESULTS OF OPERATIONS Twelve Months Ended
--------------------------------- ------------------------
(In thousands except share and Dec 31, Dec 31,
per share data) 2005 2004
----------- -----------
INTEREST INCOME:
Loans receivable $ 165,398 $ 126,992
Mortgage-backed securities 13,336 16,882
Securities and cash equivalents 11,426 12,356
----------- -----------
190,160 156,230
INTEREST EXPENSE:
Deposits 52,253 35,067
Federal Home Loan Bank advances 21,906 20,336
Other borrowings 1,765 1,051
Junior subordinated debentures 5,453 3,461
----------- -----------
81,377 59,915
----------- -----------
Net interest income before
provision for loan losses 108,783 96,315
PROVISION FOR LOAN LOSSES 4,903 5,644
----------- -----------
Net interest income 103,880 90,671
OTHER OPERATING INCOME:
Deposit fees and other service
charges 9,476 8,132
Mortgage banking operations 5,647 5,522
Loan servicing fees 1,452 1,741
Gain (loss) on sale of
securities (7,302) 141
Miscellaneous 1,271 1,432
----------- -----------
Total other operating income
(loss) 10,544 16,968
OTHER OPERATING EXPENSE:
Salary and employee benefits 60,151 52,331
Less capitalized loan
origination costs (9,813) (7,008)
Occupancy and equipment 13,794 11,100
Information / computer data
services 4,782 4,212
Professional services 3,012 3,258
Marketing and advertising 6,503 4,905
FHLB prepayment penalties 6,077 --
Miscellaneous 13,042 10,916
----------- -----------
Total other operating expense 97,548 79,714
----------- -----------
Income (loss) before provision
for income taxes 16,876 27,925
PROVISION (BENEFIT) FOR INCOME
TAXES 4,432 8,585
----------- -----------
NET INCOME (LOSS) $ 12,444 $ 19,340
=========== ===========
Earnings (loss) per share
Basic $ 1.08 $ 1.74
Diluted $ 1.04 $ 1.65
Cumulative dividends declared per
common share $ 0.69 $ 0.65
Weighted average shares
outstanding
Basic 11,558,206 11,142,254
Diluted 11,943,685 11,734,507
Shares repurchased during the
period 106,521 134,263
PROFORMA DISCLOSURES
NET INCOME (LOSS) from above $ 12,444 $ 19,340
ADJUSTMENTS FOR BALANCE-SHEET
RESTRUCTURING CHARGES
Loss on sale of securities 7,310
FHLB prepayment penalties 6,077
Income tax benefit related to
restructuring charges (4,819)
-----------
Restructuring charges net of
income tax benefit 8,568
----------- -----------
NET INCOME FROM RECURRING
OPERATIONS $ 21,012 $ 19,340
=========== ===========
Earnings per share EXCLUDING
restructuring charges
Basic $ 1.82 $ 1.74
Diluted $ 1.76 $ 1.65
FINANCIAL CONDITION
--------------------
(In thousands except share and Dec 31, Sep 30, Dec 31,
per share data) 2005 2005 2004
----------- ----------- -----------
ASSETS
------
Cash and due from banks $ 116,448 $ 117,669 $ 51,767
Securities available for sale 260,284 483,395 547,835
Securities held to maturity 50,949 51,784 49,914
Federal Home Loan Bank stock 35,844 35,844 35,698
Loans receivable:
Held for sale 4,779 3,462 2,145
Held for portfolio 2,434,952 2,361,549 2,090,703
Allowance for loan losses (30,898) (30,561) (29,610)
----------- ----------- -----------
2,408,833 2,334,450 2,063,238
Accrued interest receivable 17,395 15,371 15,097
Real estate owned held for
sale, net 315 1,437 1,485
Property and equipment, net 50,205 47,252 39,315
Goodwill and other intangibles,
net 36,280 36,303 36,369
Deferred income tax asset, net 7,606 8,853 5,888
Bank-owned life insurance 36,930 36,545 35,371
Other assets 19,466 17,144 15,090
----------- ----------- -----------
$ 3,040,555 $ 3,186,047 $ 2,897,067
=========== =========== ===========
LIABILITIES
-----------
Deposits:
Non-interest-bearing $ 328,840 $ 322,043 $ 234,761
Interest-bearing transaction
and savings accounts 792,370 811,748 635,972
Interest-bearing
certificates 1,202,103 1,141,455 1,055,176
----------- ----------- -----------
2,323,313 2,275,246 1,925,909
Advances from Federal Home Loan
Bank 265,030 484,858 583,558
Other borrowings 96,849 69,577 68,116
Junior subordinated debentures 97,942 97,942 72,168
Accrued expenses and other
liabilities 29,503 30,609 25,027
Deferred compensation 6,253 6,329 5,208
Income taxes payable -- 300 1,861
----------- ----------- -----------
2,818,890 2,964,861 2,681,847
STOCKHOLDERS' EQUITY
--------------------
Common stock 130,573 128,516 127,460
Retained earnings 96,783 101,817 92,327
Accumulated other comprehensive
income (loss) (2,736) (5,529) (888)
Unearned shares of common stock
issued to Employee Stock
Ownership Plan (ESOP) trust:
at cost (2,480) (3,096) (3,096)
Net carrying value of stock
related deferred compensation
plans (475) (522) (583)
----------- ----------- -----------
221,665 221,186 215,220
----------- ----------- -----------
$ 3,040,555 $ 3,186,047 $ 2,897,067
=========== =========== ===========
Shares Issued:
Shares outstanding at end of
period 12,082,476 11,991,074 11,856,889
Less unearned ESOP shares at
end of period 300,120 374,595 374,595
----------- ----------- -----------
Shares outstanding at end of
period excluding unearned ESOP
shares 11,782,356 11,616,479 11,482,294
=========== =========== ===========
Book value per share (1) $ 18.81 $ 19.04 $ 18.74
Tangible book value per
share (1) $ 15.73 $ 15.92 $ 15.58
Consolidated Tier 1 leverage
capital ratio 8.59% 8.55% 8.93%
(1) Calculation is based on number of shares outstanding at the end of
the period rather than weighted average shares outstanding and
excludes unallocated shares in the employee stock ownership plan
(ESOP).
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
LOANS (including loans held for Dec 31, Sep 30, Dec 31,
sale): 2005 2005 2004
---------------------------------- ---------- ---------- ----------
Commercial real estate $ 555,889 $ 562,612 $ 547,574
Multifamily real estate 144,512 118,756 107,745
Construction and land 691,652 663,943 506,137
Commercial business 442,232 430,374 395,249
Agricultural business including
secured by farmland 147,562 157,955 148,343
One- to four-family real estate 365,903 341,183 307,986
Consumer 91,981 90,188 79,814
---------- ---------- ----------
Total loans outstanding $2,439,731 $2,365,011 $2,092,848
========== ========== ==========
Dec 31, Sep 30, Dec 31,
NON-PERFORMING ASSETS: 2005 2005 2004
---------------------- ---------- ---------- ----------
Loans on non-accrual status $ 10,349 $ 12,205 $ 15,416
Loans more than 90 days
delinquent, still on accrual 104 116 472
---------- ---------- ----------
Total non-performing loans 10,453 12,321 15,888
Real estate owned (REO) /
Repossessed assets 506 1,622 1,559
---------- ---------- ----------
Total non-performing assets $ 10,959 $ 13,943 $ 17,447
========== ========== ==========
Total non-performing assets /
Total assets 0.36% 0.44% 0.60%
Twelve Months
Quarters Ended Ended
------------------------- ----------------
CHANGE IN THE Dec 31, Sep 30, Dec 31, Dec 31, Dec 31,
ALLOWANCE FOR LOAN LOSSES: 2005 2005 2004 2005 2004
-------------------------- ------- ------- ------- ------- -------
Balance, beginning of
period $30,561 $29,788 $29,407 $29,610 $26,060
Provision 1,100 1,300 1,300 4,903 5,644
Recoveries of loans
previously charged off 269 465 176 1,326 1,587
Loans charged-off (1,032) (992) (1,273) (4,941) (3,681)
------- ------- ------- ------- -------
Net (charge-offs)
recoveries (763) (527) (1,097) (3,615) (2,094)
------- ------- ------- ------- -------
Balance, end of period $30,898 $30,561 $29,610 $30,898 $29,610
======= ======= ======= ======= =======
Net charge-offs / Average
loans outstanding 0.03% 0.02% 0.05% 0.16% 0.11%
Allowance for loan losses
/ Total loans
outstanding 1.27% 1.29% 1.41% 1.27% 1.41%
ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands)
(Rates / Ratios Annualized)
Quarters Ended
----------------------------------
Dec 31, Sep 30, Dec 31,
OPERATING PERFORMANCE: 2005 2005 2004
---------------------------------- ---------- ---------- ----------
Average loans $2,394,069 $2,342,995 $2,031,006
Average securities and deposits 510,808 610,881 656,762
Average non-interest-earning
assets 189,087 186,650 166,997
---------- ---------- ----------
Total average assets $3,093,964 $3,140,526 $2,854,765
========== ========== ==========
Average deposits $2,272,710 $2,182,452 $1,928,851
Average borrowings 562,239 699,664 684,303
Average non-interest-earning
liabilities 36,739 34,218 26,458
---------- ---------- ----------
Total average liabilities 2,871,688 2,916,334 2,639,612
Total average stockholders' equity 222,276 224,192 215,153
---------- ---------- ----------
Total average liabilities and
equity $3,093,964 $3,140,526 $2,854,765
========== ========== ==========
Interest rate yield on loans 7.59% 7.39% 6.78%
Interest rate yield on securities
and deposits 4.19% 4.10% 4.09%
---------- ---------- ----------
Interest rate yield on interest-
earning assets 6.99% 6.71% 6.12%
---------- ---------- ----------
Interest rate expense on deposits 2.72% 2.56% 2.01%
Interest rate expense on
borrowings 4.80% 4.42% 3.80%
---------- ---------- ----------
Interest rate expense on
interest-bearing liabilities 3.14% 3.01% 2.48%
---------- ---------- ----------
Interest rate spread 3.85% 3.70% 3.64%
========== ========== ==========
Net interest margin 3.93% 3.77% 3.72%
========== ========== ==========
Other operating income INCLUDING
restructuring loss
/ Average assets (0.39%) 0.63% 0.60%
Other operating expense INCLUDING
restructuring expense
/ Average assets 3.83% 2.98% 2.85%
Efficiency ratio (other operating
expense / revenue INCLUDING
effects of restructuring
charges) 116.28% 71.26% 69.52%
Return on average assets INCLUDING
net restructuring charges (0.38%) 0.72% 0.73%
Return on average equity INCLUDING
net restructuring charges (5.26%) 10.03% 9.74%
Average equity / Average assets 7.18% 7.14% 7.54%
Operating performance EXCLUDING the effects of the BALANCE-SHEET
RESTRUCTURING CHARGES
Other operating income EXCLUDING
restructuring loss / Average
assets 0.55%
Other operating expense EXCLUDING
restructuring expense / Average
assets 3.05%
Efficiency ratio (other operating
expense / revenue EXCLUDING
effects of restructuring
charges) 72.12%
Return on average assets EXCLUDING
net restructuring charges 0.72%
Return on average equity EXCLUDING
net restructuring charges 10.04%
Twelve Months Ended
----------------------
Dec 31, Dec 31,
OPERATING PERFORMANCE: 2005 2004
---------------------------------- ---------- ----------
Average loans $2,272,676 $1,898,664
Average securities and deposits 596,017 694,365
Average non-interest-earning
assets 180,339 158,891
---------- ----------
Total average assets $3,049,032 $2,751,920
========== ==========
Average deposits $2,122,216 $1,809,072
Average borrowings 672,170 710,443
Average non-interest-earning
liabilities 33,156 22,695
---------- ----------
Total average liabilities 2,827,542 2,542,210
Total average stockholders' equity 221,490 209,710
---------- ----------
Total average liabilities and
equity $3,049,032 $2,751,920
========== ==========
Interest rate yield on loans 7.28% 6.69%
Interest rate yield on securities
and deposits 4.15% 4.21%
---------- ----------
Interest rate yield on interest-
earning assets 6.63% 6.03%
---------- ----------
Interest rate expense on deposits 2.46% 1.94%
Interest rate expense on
borrowings 4.33% 3.50%
---------- ----------
Interest rate expense on
interest-bearing liabilities 2.91% 2.38%
---------- ----------
Interest rate spread 3.72% 3.65%
========== ==========
Net interest margin 3.79% 3.71%
========== ==========
Other operating income INCLUDING
restructuring loss
/ Average assets 0.35% 0.62%
Other operating expense INCLUDING
restructuring expense
/ Average assets 3.20% 2.90%
Efficiency ratio (other operating
expense / revenue INCLUDING
effects of restructuring
charges) 81.75% 70.37%
Return on average assets INCLUDING
net restructuring charges 0.41% 0.70%
Return on average equity INCLUDING
net restructuring charges 5.62% 9.22%
Average equity / Average assets 7.26% 7.62%
Operating performance EXCLUDING the effects of the BALANCE-SHEET
RESTRUCTURING CHARGES
Other operating income EXCLUDING
restructuring loss / Average
assets 0.59%
Other operating expense EXCLUDING
restructuring expense / Average
assets 3.00%
Efficiency ratio (other operating
expense / revenue EXCLUDING
effects of restructuring
charges) 72.23%
Return on average assets EXCLUDING
net restructuring charges 0.69%
Return on average equity EXCLUDING
net restructuring charges 9.49%
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