Banner Corporation Reports First Quarter Earnings of $16.9 million; Initiates Pandemic Relief and Community Support Actions
WALLA WALLA, Wash., April 27, 2020 (GLOBE NEWSWIRE) — Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank and Islanders Bank, today reported net income of $16.9 million, or $0.47 per diluted share, for the first quarter 2020, compared to $33.7 million, or $0.95 per diluted share, in the preceding quarter and $33.3 million, or $0.95 per diluted share, in the first quarter of 2019. Banner’s first quarter earnings reflect the impact of the COVID-19 pandemic resulting in a substantial reduction in business activity or the closing of businesses in all the western states Banner operates.
First quarter of 2020 results also include $1.1 million of acquisition-related expenses, compared to $4.4 million of acquisition-related expenses in the preceding quarter and $2.1 million in the first quarter of 2019.“We are in unprecedented times – as a health crisis has quickly evolved to also become an economic crisis, creating far-reaching impacts to clients and the communities we serve,” said Mark Grescovich, President and CEO. “In mid-March we began preparations for the COVID-19 pandemic by closing branch lobbies, mobilizing personnel to work from home and providing appropriate IT equipment and services to accommodate Stay-At-Home Orders. Our lending teams have reached out to borrowers that have been affected by the economic decline and offered assistance in various forms including deferred payments and interest-only payments. We have worked with our customers to file applications for the Paycheck Protection Program offered through the Small Business Administration and expect this program to provide some near-term relief to help small businesses sustain operations. Meanwhile, we are monitoring the economy closely and reviewing loan payment deferrals and interest waivers daily and have elevated our liquidity levels in anticipation of cash needs of our customers.”Grescovich concluded, “In anticipation of future credit losses, we determined it is prudent to increase the allowance for credit losses through the addition of $21.7 million in credit loss provisions for the quarter ended March 31, 2020.” This provision compares to a $4.0 million provision for loan losses during the previous quarter and a $2.0 million provision for loan losses in the first quarter a year ago. The allowance for credit losses – loans was 1.41% of total loans and 299% of non-performing loans at the end of the first quarter of 2020. The increased allowance includes provisions taken in anticipation of changes in risks associated with loan classification assignments and a deteriorating economy.At March 31, 2020, Banner Corporation had $12.78 billion in assets, $9.16 billion in net loans and $10.45 billion in deposits. Banner operates 176 branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.COVID-19 Pandemic ResponseSBA Paycheck Protection Program. The U.S. Small Business Administration (SBA) is providing assistance to small businesses impacted by COVID-19 through the Paycheck Protection Program (PPP), which is designed to provide near-term relief to help small businesses sustain operations. Banner is offering small businesses loans to clients in its service area through this program. As of April 16, 2020, the funds allocated to the PPP from the CARES Act had been fully allocated. Congress recently approved a second round of funding for the PPP. Banner will continue to process applications received under the PPP until the available funds have been fully allocated. Banner is also planning to assist small businesses with accessing other borrowing options as they become available, including the Main Street Lending Program and other government sponsored lending programs, as appropriate.
Loan Accommodations. Banner is offering payment and financial relief programs for borrowers impacted by COVID-19. These programs include loan payment deferrals for up to 90 days, waived late fees, and, on a more limited basis, waived interest or allowed interest-only loan payments and we have temporarily suspended foreclosure proceedings. Since these loans were performing loans that were current on their payments prior to COVID-19, these modifications are not considered to be troubled debt restructurings.
Allowance for Credit Losses – Loans. Banner recorded a provision for credit losses of $21.7 million for the first quarter of 2020, compared to a $4.0 million provision in the preceding quarter and a $2.0 million provision in the first quarter a year ago. The provision for the current quarter reflects expected lifetime credit losses based upon the conditions and economic outlook that existed as of March 31, 2020. The probability of further decline in economic conditions, including higher unemployment rates and lower gross domestic product, has increased since quarter end and should it materialize, an additional provision for expected credit losses will be necessary.
Branch Operations, IT Changes and One-Time Expenses. We have taken various steps to help protect customers and staff by limiting branch activities to appointment only and use of our drive-up facilities, and by encouraging the use of our digital and electronic banking channels, all the while adjusting for evolving State and Federal guidelines. To further the well-being of staff and customers, Banner implemented measures to allow employees to work from home to the extent practicable. To facilitate this approach, Banner allocated additional computer equipment to staff and enhanced the Company’s network capabilities with several upgrades. These expenses plus other expenses incurred in response to the COVID-19 pandemic resulted in $239,000 of related costs during the first quarter of 2020.
Capital Management. At March 31, 2020, the tangible common shareholders’ equity to tangible assets ratio was 9.70% and Banner’s capital was well in excess of all regulatory requirements. During the current quarter, prior to the COVID-19 pandemic outbreak, Banner repurchased 624,780 shares of its common stock. To preserve capital, Banner has discontinued any additional repurchase of shares until further notice and will closely monitor capital levels going forward.First Quarter 2020 HighlightsRevenues were $138.4 million, compared to $139.8 million in the preceding quarter, and increased 3% when compared to $134.2 million in the first quarter a year ago.
Net interest income, before the provision for loan losses, was $119.3 million in the first quarter of 2020, compared to $119.5 million in the preceding quarter and $116.1 million in the first quarter a year ago.
Net interest margin was 4.19%, compared to 4.20% in the preceding quarter and 4.37% in the first quarter a year ago.
Mortgage banking revenues increased 63% to $10.2 million, compared to $6.2 million in the preceding quarter, and increased 198% compared to $3.4 million in the first quarter a year ago, reflecting strong refinance demand due to decreasing market interest rates.
Return on average assets was 0.54%, compared to 1.07% in the preceding quarter and 1.15% in the first quarter a year ago.Net loans receivable decreased modestly to $9.16 billion at March 31, 2020, compared to $9.20 billion at December 31, 2019, and increased 7% when compared to $8.60 billion at March 31, 2019.Non-performing assets increased to $46.1 million, or 0.36% of total assets, at March 31, 2020, compared to $40.5 million, or 0.32% of total assets in the preceding quarter, and $22.0 million, or 0.19% of total assets, at March 31, 2019.Provision for credit losses – loans was $21.7 million, and the allowance for credit losses – loans was $130.5 million, or 1.41% of total loans receivable, as of March 31, 2020, compared to $100.6 million, or 1.08% of total loans receivable as of December 31, 2019.Provision for credit losses – unfunded loan commitments was $1.7 million, and the allowance for credit losses – unfunded loan commitments was $11.5 million as of March 31, 2020, compared to $2.7 million as of December 31, 2019.Core deposits increased 4% to $9.28 billion at March 31, 2020, compared to $8.93 billion at December 31, 2019, and increased 13% compared to $8.21 billion a year ago. Core deposits represented 89% of total deposits at March 31, 2020.Dividends to shareholders were $0.41 per share in the quarter ended March 31, 2020.Common shareholders’ equity per share increased 2% to $45.63 at March 31, 2020, compared to $44.59 at the preceding quarter end, and increased 6% from $42.99 a year ago.Tangible common shareholders’ equity per share* increased 3% to $34.23 at March 31, 2020, compared to $33.33 at the preceding quarter end, and increased 5% from $32.47 a year ago.*Tangible common shareholders’ equity per share and the ratio of tangible common equity to tangible assets (both of which exclude goodwill and other intangible assets, net), and references to adjusted revenue (which excludes fair value adjustments and net gain (loss) on the sale of securities from the total of net interest income before provision for loan losses and non-interest income) and the adjusted efficiency ratio (which excludes acquisition-related expenses, COVID-19 expenses, amortization of core deposit intangibles, real estate owned gain (loss), Federal Home Loan Bank (FHLB) prepayment penalties and state/municipal taxes from non-interest expense divided by adjusted revenue) represent non-GAAP (Generally Accepted Accounting Principles) financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. Where applicable, comparable earnings information using GAAP financial measures is also presented. See also Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.Significant Recent Initiatives and EventsOn November 1, 2019, Banner completed the acquisition of AltaPacific Bancorp (“AltaPacific”) and its wholly-owned subsidiary, AltaPacific Bank, of Santa Rosa, California. At closing AltaPacific Bank had six branch locations, including one in Northern California and five in Southern California. Pursuant to the previously announced terms, AltaPacific shareholders received 0.2712 shares of Banner common stock in exchange for each share of AltaPacific common stock, plus cash in lieu of any fractional shares and cash to buyout AltaPacific stock options for a total consideration paid of $87.6 million.The AltaPacific merger was accounted for using the acquisition method of accounting. Accordingly, the assets (including identifiable intangible assets) and the liabilities of AltaPacific were measured at their respective estimated fair values as of the merger date. The excess of the purchase price over the fair value of the net assets acquired was attributed to goodwill. The fair value on the merger date represents management’s best estimates based on available information and facts and circumstances in existence on the merger date. The acquisition accounting is subject to adjustment within a measurement period of one year from the acquisition date. The acquisition provided $425.7 million of assets, $332.4 million of loans, and $313.4 million of deposits to Banner. During the first quarter of 2020, Banner completed the integration of AltaPacific systems into Banner’s core systems and closure of overlapping branches.Adoption of New Accounting StandardIn June 2016, Financial Accounting Standards Board issued Accounting Standard Update No. 2016-13, Measurement of Credit Losses on Financial Instruments (ASU 2016-13). GAAP prior to ASU 2016-13 required an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The main objective of ASU 2016-13 is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. ASU 2016-13 became effective for Banner on January 1, 2020. The adoption of ASU No. 2016-13 resulted in a $7.8 million increase to its allowance for credit losses – loans and a $7.0 million increase to its allowance for credit losses – unfunded loan commitments. The combined increases were recorded net of tax as an $11.2 million reduction to retained earnings as of the adoption date.Income Statement ReviewNet interest income, before the provision for credit losses, was $119.3 million in the first quarter of 2020, compared to $119.5 million in the preceding quarter and $116.1 million in the first quarter a year ago.Banner’s net interest margin was 4.19% for the first quarter of 2020, a one basis-point decrease compared to 4.20% in the preceding quarter and an 18 basis-point decrease compared to 4.37% in the first quarter a year ago. Grescovich added, “The net interest margin remained steady during the quarter as improved securities yields combined with a decline in funding cost helped offset the decline in loan yields. The 150 basis-point decrease in the fed funds target rate did not occur until late in the quarter in March 2020, and the full effect of the lower interest rate environment had not yet been realized at quarter end. Banner expects to see further margin compression during the second quarter.” Acquisition accounting adjustments added ten basis points to the net interest margin in the current quarter compared to eight basis points in the preceding quarter and seven basis points in the first quarter a year ago. The total purchase discount for acquired loans was $22.2 million at March 31, 2020, compared to $25.0 million at December 31, 2019, and $24.2 million at March 31, 2019.Average interest-earning asset yields decreased six basis points to 4.63% in the first quarter compared to 4.69% for the preceding quarter and decreased 26 basis points compared to 4.89% in the first quarter a year ago. Average loan yields decreased ten basis points to 5.03% compared to 5.13% in the preceding quarter and decreased 28 basis points compared to 5.31% in the first quarter a year ago. Loan discount accretion added 12 basis points to loan yields in the first quarter of 2020, compared to 11 basis points in the preceding quarter and nine basis points in the first quarter a year ago. Deposit costs were 0.35% in the first quarter of 2020, a five basis-point decrease compared to the preceding quarter and a two basis-point decrease compared to the first quarter a year ago. The decrease in deposit costs during the current quarter compared to the preceding quarter are the result of recent decreases in market interest rates; however, changes in the average rate paid on interest-bearing deposits tend to lag changes in market interest rates. The total cost of funds was 0.46% during the first quarter of 2020, a six basis-point decrease compared to the preceding quarter and a ten basis-point decrease compared to the first quarter a year ago.Banner recorded a $21.7 million provision for credit losses in the current quarter, compared to $4.0 million in the prior quarter and $2.0 million in the same quarter a year ago as calculated under the prior incurred loss methodology. The provision for the current quarter reflects expected lifetime credit losses based upon the conditions that existed as of March 31, 2020 and the potential effects from forecasted deterioration of economic metrics due to the COVID-19 pandemic based on the outlook as of March 31, 2020.Total non-interest income was $19.2 million in the first quarter of 2020, compared to $20.3 million in the fourth quarter of 2019 and $18.1 million in the first quarter a year ago. Deposit fees and other service charges were $9.8 million in the first quarter of 2020, compared to $9.6 million in the preceding quarter and $12.6 million in the first quarter a year ago. The decrease in deposit fees and other service charges from the first quarter a year ago is primarily a result of Banner becoming subject to the Durbin Amendment on July 1, 2019, which reduced interchange fee income by approximately $7 million during the second half of 2019. Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, increased to $10.2 million in the first quarter, compared to $6.2 million in the preceding quarter and $3.4 million in the first quarter of 2019. The higher mortgage banking revenue quarter-over-quarter primarily reflects an increase in the gain on sale spread on one- to four-family held for sale loans. The increases compared to the first quarter of 2019 were primarily due to increased production of one- to four-family held-for-sale loans primarily due to increased refinance activity. Home purchase activity accounted for 54% of one- to four-family mortgage loan originations in the first quarter of 2020, compared to 56% in the prior quarter and 80% in the first quarter of 2019.Banner’s first quarter 2020 results included a $4.6 million net loss for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of certain investment securities held for trading as a result of widening market spreads during the quarter, and a $78,000 net gain on the sale of securities. In the preceding quarter, results included a $36,000 net loss for fair value adjustments and a $62,000 net gain on the sale of securities. In the first quarter a year ago, results included an $11,000 net gain for fair value adjustments and a $1,000 net gain on the sale of securities.Total revenue decreased nominally to $138.4 million for the first quarter of 2020, compared to $139.8 million in the preceding quarter, and increased 3% compared to $134.2 million in the first quarter a year ago. Adjusted revenue* (the total of net interest income before provision for credit losses and total non-interest income excluding the net gain and loss on the sale of securities and the net change in valuation of financial instruments) was $142.9 million in the first quarter of 2020, compared to $139.7 million in the preceding quarter and $134.2 million in the first quarter of 2019.Banner’s total non-interest expense was $95.2 million in the first quarter of 2020, compared to $93.7 million in the preceding quarter and $90.0 million in the first quarter of 2019. The increase in non-interest expense during the first quarter of 2020 reflects the first full quarter expenses associated with the operations acquired from AltaPacific, as well as lower deferred loan costs primarily related to lower loan originations. Acquisition-related expenses were $1.1 million for the first quarter of 2020, compared to $4.4 million for the preceding quarter and $2.1 million in the first quarter of 2019. The current quarter includes a $1.7 million provision for credit losses – unfunded loan commitments compared to no provision for the prior quarter or the year ago quarter. Banner’s efficiency ratio was 68.76% for the current quarter, compared to 67.03% in the preceding quarter and 67.06% in the year ago quarter. Banner’s adjusted efficiency ratio* was 63.47% for the current quarter, compared to 61.19% in the preceding quarter and 63.32% in the year ago quarter.For the first quarter of 2020, Banner had $4.6 million in state and federal income tax expense for an effective tax rate of 21.4%, reflecting the benefits from tax exempt income. Banner’s statutory income tax rate is 23.5%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.Balance Sheet ReviewTotal assets increased 1% to $12.78 billion at March 31, 2020, compared to $12.60 billion at December 31, 2019, and increased 9% when compared to $11.74 billion at March 31, 2019. The total of securities and interest-bearing deposits held at other banks was $2.15 billion at March 31, 2020, compared to $1.89 billion at both December 31, 2019 and March 31, 2019. The increase during the current quarter was primarily the result of security purchases made towards the end of the quarter as balance sheet liquidity increased and market spreads widened. The average effective duration of Banner’s securities portfolio was approximately 2.9 years at March 31, 2020, compared to 3.0 years at March 31, 2019.Net loans receivable decreased modestly to $9.16 billion at March 31, 2020, compared to $9.20 billion at December 31, 2019, and increased 7% when compared to $8.60 billion at March 31, 2019. The year-over-year increase in net loans included $332.4 million of portfolio loans acquired in the AltaPacific acquisition during the preceding quarter. Commercial real estate and multifamily real estate loans increased slightly to $4.02 billion at March 31, 2020, compared to $4.01 billion at December 31, 2019, and increased 11% compared to $3.63 billion a year ago. Commercial business loans increased 1% to $2.17 billion at March 31, 2020, compared to $2.14 billion at December 31, 2019, and increased 12% compared to $1.94 billion a year ago. Agricultural business loans decreased to $330.3 million at March 31, 2020, compared to $337.3 million three months earlier and $339.5 million a year ago. Total construction, land and land development loans were $1.22 billion at March 31, 2020, a small decrease from $1.23 billion at December 31, 2019, and a 6% increase compared to $1.15 billion a year earlier. Consumer loans decreased to $661.8 million at March 31, 2020, compared to $664.3 million at December 31, 2019, and $693.3 million a year ago. One- to four-family loans decreased to $881.4 million at March 31, 2020, compared to $925.5 million at December 31, 2019, and $942.5 million a year ago.Loans held for sale were $182.4 million at March 31, 2020, compared to $210.4 million at December 31, 2019, and $45.9 million at March 31, 2019. The volume of one- to four- family residential mortgage loans sold was $204.0 million in the current quarter, compared to $268.1 million in the preceding quarter and $107.2 million in the first quarter a year ago. During the first quarter of 2020, Banner sold $119.7 million in multifamily loans compared to $103.4 million in the preceding quarter and $149.9 million in the first quarter a year ago.Total deposits increased 4% to $10.45 billion at March 31, 2020, compared to $10.05 billion at December 31, 2019, and increased 11% when compared to $9.38 billion a year ago. The year-over-year increase in deposits included $313.4 million in deposits acquired in the AltaPacific acquisition during the preceding quarter. Non-interest-bearing account balances increased 4% to $4.11 billion at March 31, 2020, compared to $3.95 billion at December 31, 2019, and increased 12% compared to $3.68 billion a year ago. Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 4% from the prior quarter and increased 13% compared to a year ago and represented 89% of total deposits at March 31, 2020. Certificates of deposit increased 4% to $1.17 billion at March 31, 2020, compared to $1.12 billion at December 31, 2019, and increased slightly compared to $1.16 billion a year earlier. The increase in certificates of deposit during the first quarter of 2020 primarily reflects the increase in brokered deposits to $251.0 million at March 31, 2020, compared to $202.9 million at December 31, 2019 and $239.4 million a year ago. FHLB borrowings totaled $247.0 million at March 31, 2020, compared to $450.0 million at December 31, 2019, and $418.0 million a year earlier.At March 31, 2020, total common shareholders’ equity was $1.60 billion, or 12.53% of assets, compared to $1.59 billion or 12.65% of assets at December 31, 2019, and $1.51 billion or 12.87% of assets a year ago. At March 31, 2020, tangible common shareholders’ equity*, which excludes goodwill and other intangible assets, net, was $1.20 billion, or 9.70% of tangible assets*, compared to $1.19 billion, or 9.77% of tangible assets, at December 31, 2019, and $1.14 billion, or 10.04% of tangible assets, a year ago. Banner’s tangible book value per share* increased to $34.23 at March 31, 2020, compared to $32.47 per share a year ago.Banner and its subsidiary banks continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At March 31, 2020, Banner’s common equity Tier 1 capital ratio was 10.52%, its Tier 1 leverage capital to average assets ratio was 10.45%, and its total capital to risk-weighted assets ratio was 12.98%.Credit QualityThe allowance for credit losses – loans was $130.5 million at March 31, 2020, or 1.41% of total loans receivable outstanding and 299% of non-performing loans, compared to $100.6 million at December 31, 2019, or 1.08% of total loans receivable outstanding and 254% of non-performing loans, and $97.3 million at March 31, 2019, or 1.12% of total loans receivable outstanding and 504% of non-performing loans. In addition to the allowance for credit losses – loans, Banner maintains an allowance for credit losses – unfunded loan commitments which was $11.5 million at March 31, 2020, compared to $2.7 million at December 31, 2019 and $2.6 million at March 31, 2019. Net loan recoveries totaled $404,000 in the first quarter, compared to net loan charge-offs of $1.2 million in both the preceding quarter and in the first quarter a year ago. Banner recorded a $21.7 million provision for credit losses in the current quarter, compared to $4.0 million in the prior quarter and $2.0 million in the year ago quarter primarily due to forecasted credit losses related to the COVID-19 pandemic. Non-performing loans were $43.7 million at March 31, 2020, compared to $39.6 million at December 31, 2019, and $19.3 million a year ago. The increase in non-performing loans year-over-year was largely due to one commercial banking relationship totaling $14.7 million moving to nonaccrual during the prior quarter. Real estate owned and other repossessed assets were $2.4 million at March 31, 2020, compared to $936,000 at December 31, 2019, and $2.7 million a year ago.In accordance with acquisition accounting, loans acquired from acquisitions were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts, a portion of which reflects a discount for possible credit losses. Credit discounts are included in the determination of fair value, and as a result, no allowance for credit losses is recorded for acquired loans at the acquisition date. At March 31, 2020, the total purchase discount for acquired loans was $22.2 million.Banner’s total non-performing assets were $46.1 million, or 0.36% of total assets, at March 31, 2020, compared to $40.5 million, or 0.32% of total assets, at December 31, 2019, and $22.0 million, or 0.19% of total assets, a year ago.Conference CallBanner will host a conference call on Tuesday, April 28, 2020, at 8:00 a.m. PDT, to discuss its first quarter results. To listen to the call on-line, go to www.bannerbank.com. Investment professionals are invited to dial (866) 235-9915 to participate in the call. A replay will be available for one week at (877) 344-7529 using access code 10140349, or at www.bannerbank.com.About the CompanyBanner Corporation is a $12.78 billion bank holding company operating two commercial banks in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.Forward-Looking StatementsWhen used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner’s operating and stock price performance.Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) the effect of the COVID-19 pandemic, including on Banner’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate customers, including economic activity, employment levels and market liquidity; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner’s activities; (5) competitive pressures among depository institutions; (6) interest rate movements and their impact on customer behavior and net interest margin; (6) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the market place; (9) the ability to access cost-effective funding; (10) changes in financial markets; (11) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (12) the costs, effects and outcomes of litigation; (13) legislation or regulatory changes, including but not limited to the impact of the Dodd-Frank Act and regulations adopted thereunder, changes in regulatory capital requirements pursuant to the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (14) changes in accounting principles, policies or guidelines; (15) future acquisitions by Banner of other depository institutions or lines of business; (16) future goodwill impairment due to changes in Banner’s business, changes in market conditions, including as a result of the COVID-19 pandemic or other factors; and (17) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed from time to time in our filings with the Securities and Exchange Commission including our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K.
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)The following table shows loan originations (excluding loans held for sale) activity for the quarters ending March 31, 2020, December 31, 2019, and March 31, 2019.
