Banner's Q4 2024 Earnings Call: Unpacking Contradictions in Expenses, Deposits, and Loan Growth

Financial Performance and Core Earnings:
- Banner Corporation reported a net profit available to common shareholders of $46.4 million or $1.34 per diluted share for the quarter ended December 31, 2024, compared to $1.24 per share for the fourth quarter of 2023.
- Full-year net income available to common shareholders was $168.9 million.
- Core earnings were $223.2 million for the full year 2024.
- The growth was attributed to a strong core deposit base, a good net interest margin, and effective expense control.

Loan Portfolio and Credit Quality:
- Delinquent loans ended the quarter at 0.49%, up 9 basis points compared to the previous quarter and year-end 2023.
- Adversely classified loans increased to 1.69% of total loans.
- The increase in adversely classified loans was not concentrated in any specific business line or industry, reflecting the impact of the current economic environment on certain borrowers.

Margin and Deposit Cost Management:
- Banner's net interest margin increased by 10 basis points to 3.82% due to a 13 basis point decrease in funding costs, with deposit costs decreasing by 8 basis points.
- The margin also benefited from a balance sheet hedge that matured during the quarter, adding 4 basis points to the margin.

Geographical Expansion and Market Strategies:
- Banner maintains a strong presence in growth markets across its four-state footprint in the West, with no plans for significant geographical expansion outside this region.
- The company focuses on building brand recognition and hiring talented bankers within its existing footprint to capitalize on market disruptions and opportunities.