Banner(BANR) - 2024 Q4 - Annual Report

Financial Performance - Revenues for the year ended December 31, 2024, were $608.6 million, a decrease of 1.3% from$ 620.4 million in the prior year[253]. - Net income for the year ended December 31, 2024, was $168.9 million, or$ 4.88 per diluted share, down from $183.6 million, or$ 5.33 per diluted share in the prior year[253]. - Adjusted revenue for 2024 was $614.776 million, a decrease of 4.5% from$ 643.874 million in 2023[261]. - Net income for 2024 was $168.898 million, down 8.0% from$ 183.624 million in 2023[261]. - The company's net income for the year was $168.9 million, with cash dividends paid or accrued amounting to$ 67.0 million[276]. Interest Income and Expenses - Net interest income decreased to $541.7 million for the year ended December 31, 2024, compared to$ 576.0 million in the prior year, reflecting a net interest margin of 3.75% versus 4.01%[253]. - Interest expense rose to $224.4 million for the year ended December 31, 2024, an increase of$ 98.8 million, or 79%, driven by a 72 basis-point increase in the average cost of funding liabilities[324]. - The average yield on interest-earning assets increased by 39 basis points to 5.26%, with interest income for the year ended December 31, 2024, reaching $766.1 million, up from$ 701.6 million in the prior year[321]. - The net interest margin on a tax-equivalent basis was 3.75% for the year ended December 31, 2024, a decrease of 26 basis points from the prior year[320]. - The net change in net interest income (tax equivalent) for 2024 was a decrease of $33.253 million compared to 2023[333]. Loan and Deposit Growth - Total deposits rose to$ 13.51 billion at December 31, 2024, up from $13.03 billion a year ago, with core deposits representing 89% of total deposits[253]. - Total loans receivable increased by$ 544.2 million, or 5%, to $11.35 billion at December 31, 2024, compared to$ 10.81 billion at December 31, 2023[272]. - Total deposits increased by $484.9 million, or 4%, reaching$ 13.51 billion at December 31, 2024, compared to $13.03 billion at December 31, 2023[301]. - Total loans increased to$ 11.123 billion in 2024, up from $10.483 billion in 2023, reflecting a growth of approximately 6.1%[329]. - Total loans increased to$ 11.355 billion in 2024 from $10.810 billion in 2023, indicating a growth of approximately 5%[335]. Asset Quality - Non-performing assets increased to$ 39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $30.1 million, or 0.19% of total assets a year ago[253]. - The provision for credit losses was$ 7.6 million for the year ended December 31, 2024, down from $10.8 million in 2023, reflecting risk rating downgrades and growth in loan balances[316]. - Total non-performing loans increased to$ 36.96 million for the year ended December 31, 2024, compared to $29.60 million in 2023[311]. - The allowance for credit losses on loans was$ 155.5 million, or 1.37% of total loans receivable, at December 31, 2024, compared to 1.38% a year ago[253]. - The provision for credit losses decreased to $8.6 million in 2024 from$ 11.1 million in 2023, indicating improved credit quality[333]. Equity and Capital Ratios - Common shareholders' equity per share increased to $51.49 at December 31, 2024, from$ 48.12 a year ago[253]. - Total shareholders' equity increased by $121.6 million to$ 1.77 billion at December 31, 2024, compared to $1.65 billion at December 31, 2023[276]. - Tangible common shareholders' equity rose to$ 1.40 billion, or 8.84% of tangible assets, at December 31, 2024, up from $1.27 billion, or 8.33%, at December 31, 2023[276]. - Banner Corporation's tier 1 common equity to risk-weighted assets ratio is 12.44%[381]. - Both Banner Corporation and Banner Bank exceeded all current regulatory capital requirements to be classified as "well capitalized" as of December 31, 2024[379]. Non-Interest Income and Expenses - Total non-interest income increased to$ 66.9 million for the year ended December 31, 2024, compared to $44.4 million in 2023, mainly due to a decrease in the net loss on the sale of securities[317]. - Non-interest income for 2024 was$ 66.888 million, a significant increase of 51% compared to $44.409 million in 2023[339]. - Non-interest expense for the year ended December 31, 2024, increased by$ 9 million, or 2%, compared to 2023, totaling $391.538 million[346]. - Salary and employee benefits rose by$ 5.992 million, or 2%, to $250.555 million in 2024, driven by annual salary increases and higher loan production commissions[346][347]. - Miscellaneous income surged by 60% to$ 8.289 million in 2024, primarily due to gains from the sale of SBA loans and a non-performing loan[342]. Interest Rate Risk Management - The company actively manages interest rate risk through adjustments in the mix of interest-earning assets and funding sources[356]. - The Bank actively uses interest rate swaps to manage interest rate risk and reduce volatility in net interest income[366]. - A positive interest rate sensitivity gap indicates that during rising rates, net interest income is likely to increase, while a negative gap would adversely affect it[361]. - The company anticipates a decrease in net interest income of $8.730 million, or 1.5%, over the next 12 months if interest rates drop by 100 basis points[360]. - As of December 31, 2024, total interest-earning assets maturing or repricing within one year exceeded total interest-bearing liabilities by$ 2.17 billion, representing a one-year cumulative gap to total assets ratio of 13.37%[363].