Banner Corp (NASDAQ:BANR) Q4 2019 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 11:00 am ET

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Banner Corp (NASDAQ:BANR) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day everyone, and welcome to the Banner Corporation's Fourth Quarter and Full-Year Conference Call and Webcast. [Operator Instructions]

At this time, I'd like to turn the conference call over to Mark Grescovich, President and CEO. Sir, please go ahead.

Executive
Mark J. Grescovich

Thank you, Jamie, and good morning everyone. I would also like to welcome you to the full year and fourth quarter 2019 earnings call for Banner Corporation. As is customary, joining me on the call today is Rick Barton, our Chief Credit Officer; Peter Conner, our Chief Financial Officer; and Rich Arnold, our Head of Investor Relations.

Rich, would you please read our forward-looking safe harbor statement?

Executive
Rich Arnold

Good morning. Our presentation today discusses Banner's business outlook and will include forward-looking statements. Those statements include descriptions of management's plans, objectives or goals for future operations, products or services, forecasts of financial or other performance measures and statements about Banner's general outlook for economic and other conditions as well as statements concerning the merger with AltaPacific Bancorp.

We also may make other forward-looking statements in the question and answer period following the management's discussion. These forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially from those discussed today. Information on the risk factors that could cause actual results to differ are available from the earnings press release that was released yesterday and a recently filed Form 10-Q for the quarter ended September 30, 2019. Forward-looking statements are effective only as of the date they are made and Banner assumes no obligation to update information concerning its expectations.

Executive
Mark J. Grescovich

Thank you, Rich. As announced Banner Corporation reported net income to common shareholders of $33.7 million or $0.95 per diluted share for the quarter ended December 31, 2019. This compares to a net income to common shareholders of $1.15 per share for the third quarter of 2019 and a net income of $1.09 per share in the fourth quarter of 2018.

Results for the fourth quarter of 2019 were impacted by $7.5 million of acquisition-related expenses. For the full year ended December 31, 2019 Banner Corporation reported net income available to common shareholders of $146.3 million, compared to $136.5 million for the full year 2018, an increase of 7%. Excluding the impact of merger and acquisition expenses, gains and losses on the sale of securities, prepayment penalties on federal home loan bank borrowings and changes in fair value of financial instruments, earnings from core operations increased 14% to $153 million in 2019 from $135 million in 2018, despite the headwinds of a declining rate environment in the impact of the Durbin Amendment. Due to the hard work of our employees throughout the company, we are successfully executing on our strategies and priorities to deliver sustainable profitability and revenue growth to Banner. Our core operating performance continued to reflect the success of our proven client acquisition strategies which are producing strong core revenue and we are benefiting from the successful integration of our recent acquisitions.

Our full year 2019