Banner(US:BANR)2021-01-22 20:55Financial Data and Key Metrics Changes - Banner Corporation reported a net profit available to common shareholders of $39 million or $1.10 per diluted share for Q4 2020, compared to $1.03 per share in Q3 2020 and $0.95 per share in Q4 2019 [10] - For the full year 2020, net income available to common shareholders was $115.9 million, down from $146.3 million in 2019, impacted by credit loss allowances due to COVID-19 [10] - Pre-tax pre-provision earnings for 2020 were $211.9 million, a 5% increase from $201.6 million in 2019, indicating core earnings power [11] Business Line Data and Key Metrics Changes - Core revenue from operations increased by 5% to $579.6 million in 2020, compared to $551 million in 2019, driven by a larger earning asset mix and strong mortgage banking revenue [11] - Core deposits increased by 31% year-over-year, representing 93% of total deposits, reflecting strong organic growth in client relationships [12] Market Data and Key Metrics Changes - The loan portfolio saw a quarter-over-quarter decline of 2.9% excluding PPP loans, and a year-over-year decline of 5.1%, primarily due to strong residential purchase and refinance activity [19] - Credit line utilization decreased nearly 5% compared to year-end 2019, indicating borrowers are maintaining liquidity [21] Company Strategy and Development Direction - The company continues to execute its super community bank strategy, focusing on growing client relationships and core funding through deposits [12] - Banner Corporation is committed to assisting clients during the pandemic, providing various assistance programs including $1.15 billion in SBA Payroll Protection Funds [13] Management's Comments on Operating Environment and Future Outlook - Management anticipates normalized loan growth rates to return in the second half of 2021 as the economy stabilizes with vaccine distribution [21] - The company expects a flat year in terms of loan growth overall for 2021, with potential modest growth in the latter half [43] Other Important Information - The company has maintained a strong balance sheet with a robust reserve for credit losses, well above regulatory requirements [26] - Banner Corporation has consolidated 21 branch locations, representing a 12% reduction in branches since the second quarter [35] Q&A Session Summary Question: What are the expectations for core expenses in 2021? - Management expects a continued decline in core expenses due to branch consolidations and efficiency initiatives, with a soft landing anticipated by the fourth quarter [39][41] Question: What is the outlook for loan growth in 2021? - Management indicated that normalized growth rates are expected to return in the second half of 2021, with a flat year overall due to the pandemic's impact [43][44] Question: How is the company managing asset sensitivity? - The company has become more asset sensitive, keeping excess deposit liquidity invested in short-term instruments, which will benefit from rising rates [55] Question: What is the status of the mortgage business? - The mortgage business remains strong, with a robust pipeline expected to continue into the first quarter of 2021, despite seasonal declines [59] Question: What is the status of PPP loan forgiveness? - The company is processing a steady pace of loan forgiveness, with expectations for higher forgiveness in Q2 2021 compared to Q1 [63] Question: How does the company view capital allocation? - The company is agnostic on the use of excess capital, considering share repurchases, acquisitions, and special dividends based on the best opportunities [87]