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Banner Corp (NASDAQ:BANR)
Q3 2019 Earnings Call
Oct 24, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Banner Corporation's Third Quarter 2019 Conference Call and Webcast. [Operator Instructions]

I would now like to turn the conference over to Mr. Mark Grescovich, President and CEO. Please go ahead.

Mark J. Grescovich -- President and Chief Executive Officer and Director

Thank you, Aileen and good morning everyone. I would also like to welcome you to the third 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?

Rich Arnold -- Head of Investor Relations

Sure, Mark. Good morning, everyone. 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 announcement with AltaPacific Bancorp. We also may make other forward-looking statements in the question-and-answer period following 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 releases that were released yesterday and a recently filed Form 10-Q for the quarter ended June 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.

Mark J. Grescovich -- President and Chief Executive Officer and Director

Thank you, Rich. As announced, Banner Corporation reported a net profit available to common shareholders of $39.6 million or $1.15 per diluted share for the quarter ended September 30, 2019. This compared to a net profit to common shareholders of a $1.17 per share for the third quarter of 2018 and $1.14 per share in the second quarter of 2019.

Excluding the impact of merger and acquisition expenses, gains and losses on the sale of securities, changes in fair value of financial instruments and tax adjustments, earnings were $40.1 million for the third quarter of 2019 compared to $38.6 million in the third quarter of 2018, and an increase of 4% despite the headwinds of a declining rate environment and the impact of Durbin, which we'll discuss in a moment. 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 continue 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 acquisition of Skagit Bank. Our third quarter 2019 performance demonstrates that our strategic plan continues to be effective and we are building shareholder value. Third quarter 2019 revenue from core operations was $137.5 million compared to $129.4 million in the third quarter 2018. We benefited from a larger and improved earnings asset mix, a solid net interest margin and good deposit and mortgage fee revenue.

Overall, this resulted in a return on average assets of 1.31% for the third quarter of 2019. Once again, our performance this quarter reflects continued execution of our super community bank business strategy that is growing new client relationships, adding to our core funding position by growing core deposits and promoting client loyalty and advocacy through our responsive service model.

To that point, our core deposits increased 13.4% compared to September 30, 2018. Non-interest bearing deposits increased 12% from one year ago and represents a stable 40% of total deposits. Further, we continued our strong organic generation of new client relationships again this quarter.

Reflective of this solid performance, coupled with our strong tangible common equity ratio of 9.9%, we issued a core dividend of $0.41 per share in the quarter and repurchased 400,000 shares of common stock. In a few moments, Peter Conner will discuss our operating performance in more detail. While we have been effectively executing on our strategies to protect our net interest margin, grow client relationships, deliver sustainable profitability and prudently invest our capital, we have also focused on maintaining the improved risk profile of Banner. Again this quarter, our credit quality metrics reflect our moderate risk profile.

At the end of the quarter, our ratio of allowance for loan and lease losses to total loans was 1.11% and our total non-performing assets totaled 0.15%. In a moment, Rick Barton, our Chief Credit Officer, will discuss the credit metrics of the company and provide some context around the loan portfolio in our success at maintaining a moderate credit risk profile.

In the quarter and throughout the preceding nine years, we've continue to invest in our franchise. We have added talented commercial and retail banking personnel to our company and we have been investing and further developing and integrating all our bankers into Banner's proven credit and sales culture. We also have made and our continuing to make, significant investments enhancing our digital and physical delivery platforms, positioning the company for continued growth and scale. While these investments have increased our core operating expenses, they have resulted in core revenue growth, strong customer acquisition, year-over-year growth in the loan portfolio and strong fee income.

Further, as I have noted before, we have received marketplace recognition of our progress and our value proposition as J.D. Power and Associates this year again ranked Banner Bank, the number 1 bank in the Northwest for client satisfaction, the fifth year we have won this award.

The Small Business Administration named Banner Bank Community Lender of the Year for the Seattle and Spokane District for two consecutive years. And this year named Banner Bank Regional Lender of the Year for the fifth consecutive year. And Money Magazine named Banner Bank the Best Bank in Pacific Region again this year. Also, Banner was ranked in the Forbes 2019 Best Banks in America for the third consecutive year.

Before I turn the call over to Rick Barton to discuss trends in the loan portfolio, I'd like to note that we anticipate closing on our acquisition of the AltaPacific Bank in the fourth quarter.

As mentioned before, we're extremely pleased with this opportunity to expand our super community bank model and enhance our density in our California market with such an outstanding community business bank and we look forward to soon having our clients and employees fully on board at Banner.

I'll now turn the call over to Rick Barton to discuss trends in our loan portfolio. Rick?

Richard B. Barton -- Chief Credit Officer

Thanks, Mark. During the third quarter, Banner's pattern of stable credit metrics continued to maintain a moderate risk profile of the company's loan portfolio. Once again, my specific remarks on our credit metrics this morning will be brief. Delinquent loans decreased 10 basis points from the linked-quarter to 0.30% of total loans. Delinquencies one year ago were 0.27%. The company's level of adversely classified assets at quarter end remains well below historical norms.

Non-performing assets decreased $2.4 million to $18.6 million during the quarter and are now 0.15% of total assets. The reduction in non-performing assets resulted from the sale of REO. This metric at September 30, 2018 was 0.16%.

Non-performing assets were split between non-performing loans of $18.3 million and REO and other assets a $300,000. Non-performing loans are not concentrated in any single loan category. Not reflected in these totals are the remaining non-performing loans of $5 million acquired from Siuslaw, AmericanWest and Skagit Banks, which are not reportable under purchase accounting rules.

If we were to include the acquired non-performing loans in our non-performing asset totals, the ratio of non-performing assets to total assets would still be a modest 20 basis points. For the quarter, the company recorded net loan charge offs $2.5 million. Gross charge offs for the quarter were $3.2 million. While gross charge offs were up $1.3 million from the linked-quarter, we still consider charge offs at this level to be low when compared to historical norms and have not observed any pattern of correlation in the charge offs take.

After second quarter provision of $2 million and net loan losses of $2.5 million, the allowance for loan and lease losses for the company totals $97.8 million and is 1.11% of total loans, down 1 basis point from last quarter. For the quarter ending September 30, 2018, this measure was 1.22%.

Coverage of non-performing loans remained very robust at 536%, up from 534% last quarter. The remaining net accounting mark against acquired loans is $21 million, which provides a further level of protection against loan losses.

During the just completed quarter, total loans receivable were up $88 million when compared to the second quarter of 2019. On an annualized basis this equates to a growth rate of 4%. When viewing this number it is important to note several points.

C&I growth occurred across our footprint. As expected, agricultural loans continued their seasonal drawdown. The residential construction portfolio, including land and land development was down by $37 million or 5.4% driven by continued strong new home sales in our markets.

Commercial real estate construction and permanent loans both were up slightly during the quarter. The increases in multifamily construction and permanent loans continue to be driven by commitments to finance affordable housing.

Additionally, Banner's construction loan portfolios remain at acceptable concentration levels. Residential construction exposure, including land loans, is 7.4% of total loans. When both multifamily and commercial construction and non-residential land loans are added into this calculation, our total construction of the land exposure remained stable at 12.3% of total loans.

The markets in which we make residential construction loans are experiencing strong sales, driven by both lower interest rates and continued robust economic activity. Market dynamics are unchanged with more affordable housing segments undersupplied and some inventory buildup noted in luxury homes.

The pace of the lease up activity in multifamily projects remain steady with a continuing moderation in the growth of rents. The permanent loan market for new stabilizing multifamily projects remains robust.

As I said at the outset of my remarks, the credit story at our company remained stable during the third quarter of 2019. We continue to be well positioned to deal with the emergence of a credit cycle and the portfolio impacts of macroeconomic factors.

Additionally, our CECL taskforce is preparing for -- us for this change in provisioning methodology. We continue to feel we are well positioned for the implementation of CECL.

With that said, I will pass the microphone to Peter Conner for his comments. Peter?

Peter Conner -- Chief Financial Officer

Thank you, Rick, and good morning everybody. As discussed previously, and as announced in our earnings release, we reported net income of $39.6 million or $1.15 per diluted share for the third quarter compared to $39.7 million or $1.14 per diluted share in the prior quarter. The third quarter results benefited from growth in core deposit balances, strong mortgage production and a refund from the FDIC.

Despite a challenging rate environment and the decline in the net interest margin, the company's net interest income remained steady. The $0.01 increase in per share earnings in the prior quarter was the result of a 384,000 share reduction in average diluted shares outstanding as a result of share repurchases made during the current quarter divided into the same amount of net income in the prior quarter.

Total loans increased $163 million from the prior quarter end as a result of a $74 million increase in multifamily and residential mortgage loans held for sale, and an $89 million increase in portfolio loans.

Portfolio loan growth in the second quarter was well diversified across commercial real estate, commercial construction and C&I. Growth in held-for-sale loans was -- increased as a result of strong residential mortgage production carried over at quarter end combined with good multifamily loan production.

Ending core deposits increased $292 million from prior quarter end due to expected strong seasonal average balance increases, combined with continued growth in net new clients.

Compared to prior quarter average balances, core deposits increased $199 million. Time deposits increased $148 million due to a shift into brokerage CDs and out of FHLB borrowings. FHLB borrowings declined $224 million due to growth in core deposits and the aforementioned increase in brokerage CDs.

Net interest income was flat to the prior quarter as an increase in earning asset balances offset the decline in net interest margin.

Loan yields decreased 13 basis points principally due to declines in prime and LIBOR index loan yields, a drop in acquired loan accretion and declines in certain loan fees recorded in interest income.

The average loan coupon rate declined 8 basis points, while loan accretion related interest income dropped 2 basis points and the combination of deferred loan origination, prepayment and interest penalty related fees accounted for 3 basis points of the decline.

Total cost of funds increased 1 basis point to 57 basis points as the increase in deposit cost was partially offset by a decline in wholesale borrowing expense.

The total cost to deposits in the second quarter was 42 basis points, up 3 basis points from the prior quarter as a result of lagged increases in retail deposit rates, combined with an increase in the mix of higher cost brokerage CDs. Brokerage CDs accounted for 5 basis points of total deposit costs up from 4 basis points in the prior quarter.

The composition of non-interest bearing deposit to total deposits increased modestly to 40% and the ratio of core deposits to total deposit remained steady at 87% in the third quarter.

The net interest margin declined 13 basis points to 4.25%, driven by the 2 Fed funds reductions on either end of the third quarter along with the cumulative effect of the decline in the 10-year treasury rate over the last several quarters and the gradual catching up of our lagged deposit pricing changes relative to market rates.

Also the effects of purchase accounting related loan accretion at 6 basis points in the current quarter was 1 basis point less than the prior quarter.

The bank began reducing deposit rates at the end of the third quarter and anticipates prepaying a portion of higher cost FHLB term advances in the fourth quarter.

Total non-interest income declined $1.8 million. Core non-interest income excluding losses on the sales of and changes in securities carried at fair value declined $1.9 million. Deposit fees declined $3.7 million due to the implementation of the Durbin Amendment cap on the bank's debit card transaction fees.

Total mortgage banking income increased $700,000, due to increased refinance volume and a modest increase in multifamily production over the prior quarter, which also benefited from an increase in refinance related loan production. Miscellaneous fee income increased $1.2 million due to increased swap and SBA fee income, along with the gain on the sale of a single branch.

Turning to expense. Core non-interest expense increased by $200,000, excluding acquisition expense from the prior quarter. Deposit insurance expense declined $3 million due to a $2.7 million refund of FDIC deposit insurance assessment expense related to Banner share of the FDIC's small bank deposit insurance refund. Partially offsetting this credit was a $1.6 million increase in the supplemental retirement and defined benefit expense as a result of reducing the discount rate on the liability established for future beneficiary payments captured under salary and employment benefits.

In addition to salary and benefits, volume increased due to volume driven production incentives, lower open position vacancy rates and targeted adjustments to existing staff salaries. Tax expense benefited from a $1.6 million credit primarily associated with refunds of prior period tax payments.

Finally, we look forward to closing the AltaPacific acquisition in the fourth quarter, converting in the first quarter and recognizing the expense synergies in the second quarter of next year.

This concludes my prepared remarks. Mark?

Mark J. Grescovich -- President and Chief Executive Officer and Director

Thank you, Peter and Rick for your comments. That concludes our prepared remarks and Aileen we will now open the call and welcome your questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Jeff Rulis with D. A. Davidson.

Levi Posen -- D. A. Davidson. -- Analyst

Thanks. Good morning. This is Levi Posen on for Jeff Rulis this morning. I want to start off with expenses. I was just curious what level of the compensation increase in this quarter was tied to the increase in mortgage production? Kind of looking for that variable portion.

Peter Conner -- Chief Financial Officer

Yes, Levi, this is Peter. So if you back out the increase associated with the SERP and defined benefit plan increase from the discount rate adjustment, there is about $1.8 million of quarter-over-quarter salary and benefits related increase. About half of that $1.8 million is due to what we would consider commission and production related incentives, principally due to a strong quarter of mortgage production and also a strong quarter of deposit production. We do have some incentive tied to the deposit production as well.

And the rest of that increase was related to a lower vacancy rate, so we had a lower rate of employee turnover and a lower rate of open positions than we saw on the second quarter. And then to a more minor extent, we did make some sorted salary adjustments and we had some additional vacation related accruals that accounted for the rest of it. So on balance there was no impact from a increase in headcount other than just filling open positions.

Levi Posen -- D. A. Davidson. -- Analyst

Okay, great. Thank you. And sticking with the expenses, just curious if you have any input on the 2020 expense growth rate with AltaPacific included? And is it fair to assume that the $1.6 million in compensation adjustment will be absent from the base going forward or should we start with kind of where we're right now?

Peter Conner -- Chief Financial Officer

Yes. The true up on the SERP liability is a onetime event, so that will not reoccur in future periods. The impact -- to your other question on the Alta expense rate, so if Alta has been running at about $3.3 million in a quarter in expense prior to closing and we guided a 45% expense synergies. So if you do the math, we'd expect about $1.5 million of that $3.3 million to go away once all of the synergies are recognized after branch consolidations and full integration activities are concluded. And we'd expect to recognize that synergy -- almost all of it by the second quarter of 2020.

Levi Posen -- D. A. Davidson. -- Analyst

And then last question is on loan growth expectations moving into 2020?

Mark J. Grescovich -- President and Chief Executive Officer and Director

Yes. Levi, this is Mark. I think if you look at our year-over-year growth rate running at about 4%, we haven't really changed our guidance on what we anticipate. The economy continues to cooperate. But that rate should be consistent.

Levi Posen -- D. A. Davidson. -- Analyst

Okay, thanks.

Mark J. Grescovich -- President and Chief Executive Officer and Director

Thank you, Joe.

Operator

Our next question comes from Tim O'Brien with Sandler O'Neil & Partners. Please go ahead.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

First question, what was the gain on sale of that branch? How much was that?

Peter Conner -- Chief Financial Officer

Yes, Tim its Peter. That was in the $500,000 to $600,000 range.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

And then can you walk us through or give a little bit color on that shifting funding strategy. Obviously, the FHLB borrowings were less attractive because of -- how much of that was tied to existing current rate, was there just cost savings there and does that have any structural impact or benefit in 2020 more -- down the road versus now? Or are you going to get the full benefit of that here right away from the shift out of FHLB and into brokered?

Peter Conner -- Chief Financial Officer

Yes, Tim, I would say that the cost of funds benefit from the remixing of brokerage CDs, FHLB in the third quarter was pretty de minimis. We do it on a -- for both liquidity and for -- as a liability management purposes and to a lesser extent also from a cost benefit. The benefit of remixing FHLB and brokerage CDs will be more apparent with the fourth quarter. We do have some term FHLB advances that are two to three years out in duration that we're contemplating prepaying, and paying a prepayment penalty on, but saving 50 to 60 basis points of funding cost of that portion of the FHLB borrowing base once we conclude the prepayment activity. So we'd see the benefits of doing that, not so much in the fourth quarter, but in the first quarter of 2020.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

And then just kind of backing up accretion benefit or lack of lower benefit here this quarter to the NIM and your NIM prospects given the 2 rate cuts that we saw in the third quarter. Fourth quarter setting up to see a October and December rate cut, can we kind of expect similar tracking? Or are you guys going to be able to do better on the deposit funding side as far as pricing there and get more proactive there? Kind of how are you -- generalized how are you looking at margin prospects here for the fourth quarter given everything that's on the table?

Peter Conner -- Chief Financial Officer

Yes. So we -- the third quarter was challenging because we still had some inertia in deposit costs moving up with loan yields coming down. We began reducing offered deposit rates at the end of the third quarter, and so we expect to see a decline in deposit cost and funding costs going into the fourth quarter. Now the deposit costs have begun moving down and will begin moving down in closer lock step to the decline in loan yields. So when you think about the fourth quarter, we got to a mid to upper single digit margin decline in part due to the fact that now deposit and funding costs are moving down and capturing some and -- or lot of the loan yield decline.

And then secondly, as we restructure the wholesale funding cost, we will see a bigger decline in wholesale funding costs beginning at the end of the fourth quarter and more into the first quarter of 2020. And then remember, we anticipate closing the AltaPacific acquisition in the fourth quarter and Alta carries a higher net interest margin than Banner. So albeit its relatively small balance sheet, it will have a positive effect on our margin.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

Thanks. That's great color, Peter. And then just 2 quick questions. FDIC refund, is there a full benefit assessment credit, is there a full benefit to that or was it all kind of captured this quarter?

Peter Conner -- Chief Financial Officer

We took it all this quarter.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

And then last question. Share buyback authorization remaining, how much of that is there?

Peter Conner -- Chief Financial Officer

We -- as you've noted, we've repurchased 1 million shares this year. Our authorization was 5% of shares outstanding, which equates to about 1.6 million shares. So there's some authorization left for this year.

Operator

Our next question comes from Tim Coffey with Janney.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

Peter, do you have an idea of what the prepay penalty is going to be in the fourth quarter?

Peter Conner -- Chief Financial Officer

Yes. Tim it depends on the exact amount of term advance that we prepay, but the range is somewhere between, -- its $400,000 to $800,000 depending on the term advance and the time at which we prepay them. But I'd guide you to something in that range. And that by the way will show up as an expense as opposed to an impact to interest expense.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

And then shifting talking points. You do some multifamily business in the State of California and California has reasonably put in kind of a cap on rent increases. Does that change your strategy or your outlook on the market?

Richard B. Barton -- Chief Credit Officer

Tim, this is Rick Barton. At this point, we're working our way through and thinking about what that does to the production of that portfolio. My guess is that it's not going to have a major impact. And I'd also point out that Oregon instituted a similar rent control act statewide and we're further down on the analysis of that and don't think it will have any impact on our loan production in that product category.

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

And then Rick, in Oregon, did you see a spike up in cap rates from the cap on rent increases.

Richard B. Barton -- Chief Credit Officer

It's been recent enough that we can't make that assessment. Yet, it will have some value on or some impact on valuation.

Operator

Our next question comes from Jackie Bohlen with KBW.

Jackie Bohlen -- KBW -- Analyst

I just wanted to touch on to deposits. You'd mentioned that you're in the process of moving some of the cost down just alongside rates. Do you anticipate any outflows or any other unusual fluctuations as you do that or is what you're doing more in line with what you're seeing from competitors as well?

Peter Conner -- Chief Financial Officer

Yes. Hi, Jackie. It's Peter. Yes. We don't anticipate any outflows from our deposit rate adjustments. We've been very deliberate in the way we increase rates as the rate cycle went up and we've been very deliberate as they've come down. We have no significant amounts of campaign money that's very price sensitive. As you know, our deposit base is 40% non-interest bearing and relatively low cost. So we don't anticipate any volatility as we bring rates down. And to your question, we don't anticipate bringing our rates down any more aggressively than our competitors, but really managing around what the market will bear as rates come in.

Jackie Bohlen -- KBW -- Analyst

And would this be more generalized across the portfolio or more on an individual analysis kind of basis.

Peter Conner -- Chief Financial Officer

Yes. I think the -- in terms of the deposit reduction it'll be broad based across all of our geographies and product sets. We don't have any particular deposit products that's high yielding or any customer segment that's particularly price sensitive. So I'd characterize the reductions as broad base and deliberate and consistent quarter-to-quarter.

Jackie Bohlen -- KBW -- Analyst

And then just lastly for me. Most of what I had have already been answered. But the incentive comps that's tied to deposit production, in a quarter with growth that's this strong as this one was, how much of the swing can that have on compensation?

Peter Conner -- Chief Financial Officer

It's pretty minor. It's, call it, within a couple of hundred thousand of the impact. This quarter was tied to deposit -- good deposit growth. It's a plan that we pay within certain targeted positions in the retail bank, but it's not -- it's relatively small say compared to the mortgage commission component.

Jackie Bohlen -- KBW -- Analyst

So enough to motivate, but not enough to be a large -- something that we can see in swinging in any given quarter from our end.

Peter Conner -- Chief Financial Officer

Yes, that's fair. Yes.

Operator

[Operator Instructions] Our next question comes from Don Worthington with Raymond James.

Donald Allen Worthington -- Raymond James & Associates -- Analyst

Rick, you talked a little bit about CECL. Is it a little too early to tell at least in the ballpark what the impact might be in the first quarter either dollars or percentage?

Richard B. Barton -- Chief Credit Officer

Yes, it is too premature to lay any numbers out on the table. As Peter and Mark and myself have said many times, we feel we are well positioned to adopt the CECL standard and look forward to doing that in the first quarter of next year.

Donald Allen Worthington -- Raymond James & Associates -- Analyst

And then in terms of mortgage banking, maybe what's the outlook going forward on gain on sale and then where premiums are say this quarter versus last?

Peter Conner -- Chief Financial Officer

Hi, Don. Its Peter. Yes, in terms of gain on sale, we ran in the mid to high 2% range in the third quarter. That's down just a little bit from what we've seen in the last -- the 2 prior quarters. Just as -- by way of reference, we had a very strong quarter of mortgage production in the third quarter, in fact, a record for Banner. And we saw purchase volume actually hold steady between the second and third quarter and refinance volume increased from 23% of volume to 44% in the third quarter.

And then normally we do see a bit of a seasonal slowdown in mortgage production activity in the fourth quarter and in the first quarter, a lot of that having to do with weather, in the reticence to change houses in that part of the season. But so far in the fourth quarter, we're continuing to see the same level of pipeline production activity that we saw in the third quarter. So it's looking very promising thus far in the fourth quarter. Although, I would counsel that we will see some normal seasonal reduction like we always do in the fourth quarter. But the pipelines are looking stronger than they have in prior fourth quarters.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Mark Grescovich for any closing remarks.

Mark J. Grescovich -- President and Chief Executive Officer and Director

Thank you, Aileen. As we've stated, we're pleased with our solid third quarter 2019 performance in a challenging interest rate environment and see it as evidence that we are making substantial and sustainable progress on our disciplined strategic plan of building shareholder value by executing our super community bank model, by growing market share, strengthening our deposit franchise, improving our core operating performance, maintaining a moderate risk profile and prudently deploying excess capital.

I would like to thank all my colleagues who are driving this solid performance for our company. Thank you for your interest in Banner and for joining our call today. We look forward to reporting our results to you again in the future. Have a great day everyone.

Operator

[Operator Closing Remarks]

Duration: 38 minutes

Call participants:

Mark J. Grescovich -- President and Chief Executive Officer and Director

Rich Arnold -- Head of Investor Relations

Richard B. Barton -- Chief Credit Officer

Peter Conner -- Chief Financial Officer

Levi Posen -- D. A. Davidson. -- Analyst

Tim O'Brien -- Sandler O'Neill & Partners -- Analyst

Jackie Bohlen -- KBW -- Analyst

Donald Allen Worthington -- Raymond James & Associates -- Analyst

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