• Net Profit: $46.4 million or $1.34 per diluted share for Q4 2024.
• Full-Year Net Income: $168.9 million for 2024.
• Core Earnings: $223.2 million for full-year 2024.
• Q4 Revenue from Core Operations: $160 million.
• Full-Year Revenue from Core Operations: $615 million for 2024.
• Return on Average Assets: 1.15% for Q4 2024.
• Core Deposits: 89% of total deposits.
• Loan Growth: Loans increased by 5% year-over-year.
• Core Deposit Growth: Core deposits increased by 4% year-over-year.
• Tangible Common Equity Per Share: Increased by 9% year-over-year.
• Dividend: Core dividend of $0.48 per common share.
• Delinquent Loans: 0.49%, up 9 basis points from the previous quarter.
• Adversely Classified Loans: Increased by $42 million, totaling 1.69% of total loans.
• Non-Performing Assets: Declined by $6 million, representing 0.24% of total assets.
• Net Provision for Credit Losses: $3 million for the quarter.
• Loan Originations: Declined moderately compared to the previous quarter.
• Loan-to-Deposit Ratio: 84% at the end of the quarter.
• Net Interest Margin: Increased 10 basis points to 3.82%.
• Non-Interest Income: Increased by $2 million from the prior quarter.
• Non-Interest Expense: Increased by $3.2 million from the prior quarter.

• Warning! GuruFocus has detected 7 Warning Sign with BANR.

Release Date: January 23, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Banner Corp (NASDAQ:BANR) reported a net profit of $46.4 million or $1.34 per diluted share for Q4 2024, an increase from $1.24 per share in Q4 2023.
• The company maintained a strong core deposit base, with core deposits representing 89% of total deposits.
• Banner Corp's core earnings for the full year 2024 were $223.2 million, showcasing strong operational performance.
• The company was recognized by Forbes and Newsweek as one of America's 100 best banks and one of the most trustworthy companies.
• Banner Corp's liquidity and capital profile remain robust, with all capital ratios exceeding regulatory well-capitalized levels.

Negative Points

• Delinquent loans increased to 0.49%, up 9 basis points compared to the previous quarter and year-end 2023.
• Adversely classified loans rose by $42 million, now totaling 1.69% of total loans.
• Loan originations declined moderately due to reduced consumer demand and muted construction and development loan closings.
• Non-interest expense increased by $3.2 million from the prior quarter, reflecting higher professional fees and marketing expenses.
• The agricultural loan portfolio faced challenges due to lower commodity prices, impacting smaller borrowers.

Q & A Highlights

Q: Were there any recoveries in the quarter that helped the margin? A: Robert Butterfield, CFO: There were no unusual recoveries. The margin benefited from a decline in funding costs, particularly due to a decrease in deposit costs and a balance sheet hedge that rolled off, adding four basis points to the margin.

Q: How do you view the margin for 2025, especially if rate cuts occur? A: Robert Butterfield, CFO: In Q1, margins are expected to be flat due to loan yields decreasing slightly. However, deposit costs may decline, and wholesale borrowing might increase. For the rest of the year, margins could be flat to down following rate cuts, but without cuts, margins might increase slightly each quarter.

Q: Is there an opportunity in the mortgage business given market exits by competitors? A: Mark Grescovich, CEO: Mortgage banking has been a strength for Banner for 134 years. We see opportunities due to market disruptions and believe our core competency will allow us to capitalize on these changes, provided interest rates cooperate.

Q: What is the outlook for loan growth in 2025? A: Jill Rice, Chief Credit Officer: We are targeting mid-single-digit growth rates for 2025. Our commercial pipelines are healthy, but potential economic factors like interest rates and tariffs could impact growth.

Q: How are you managing deposit costs, and have you seen any client attrition? A: Robert Butterfield, CFO: Conversations with clients, especially larger business clients, have been positive. We remain competitive in interest rates, and there has been no significant client attrition. Mark Grescovich, CEO, added that the number of accounts increased, indicating client retention despite rate reductions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.