Banner Bank parent Banner Corp. on July 29 reported a net loss of $16.5 million for the second quarter compared to a net loss of $52.3 million for the second quarter of 2008. Current results include a $45 million provision for loan losses and a $2.1 million special assessment from the Federal Deposit Insurance Corp. The current quarter also saw an $11 million net gain from the valuation of financial instruments carried at fair value.

"Similar to recent quarters, our significant provision for loan losses during the quarter reflects material levels of non- performing loans and net charge-offs, particularly for loans for the construction of one-to-four family homes and for acquisition and development of land for residential properties," President and CEO D. Michael Jones said in a release. "While certain segments showed modest improvement, housing markets generally remained weak in many of our service areas, resulting in further deterioration in property values and the need to provide for additional loan losses."

"Reflecting continuing weakness in the housing market in many of Banner's primary service areas, non-performing assets remained high, largely in our construction and land development loan portfolios," he said.

Non-housing related segments of Banner's loan portfolio have continued to perform as expected, "with only normal levels of credit problems given the serious economic slowdown," Jones said. "In addition, continued pressure on our net interest margin and substantial increases in FDIC insurance charges had a further negative impact on our operating results."

Credit: IBR Staff

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