Banner Corporation (BANR) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders of Banner Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mark Grescovich, President and Chief Executive Officer of Banner Corporation. Mr. Grescovich, the floor is yours.

Thank you, Lisa, and good morning, everyone. The meeting will please come to order. Welcome to the Annual Meeting of Shareholders of Banner Corporation. I'm Mark Grescovich, President and Chief Executive Officer of the company, and I will act as Chairman of the meeting today. Craig Miller, Secretary of the company, will act as Secretary of the meeting. Please take a moment to review the rules of conduct that are posted on the meeting site. These rules offer guidance on a variety of aspects of the meeting, including what to do in the event we experience any technology challenges as well as considerations related to voting through the meeting site and parameters for asking questions during the meeting. Our forward-looking statements disclosure is also reflected in that document. As you all are aware, we are living in an extraordinary time. COVID-19 risk mitigation measures are keeping most of us in our homes and away from our typical daily routines. I hope that all of you are staying safe and healthy. At Banner, hosting our first ever virtual shareholders meeting is just one example of the many adjustments we have made to help combat the virus and the pandemic while continuing to fulfill our responsibilities. Most, if not all, our -- and our directors' tenure. Brent Orrico, a Director since 1999 and is currently our Chairman of the Board; Cheryl Bishop, a Director since November 2018; Connie Collingsworth, a Director since April 2013; Roberto Herencia, a Director since March 2016; David Klaue, a Director since May 2007; John Layman, a Director since May 2007; David Matson, a Director since March 2016; Kevin Riordan, a Director since April 2018; Merline Saintil, a Director since March 2017; Terry Schwakopf, a director since April 2018; and me, I've been on the Board since May 2010. We are also fortunate to be able to call on past members of the Board for their counsel and assistance to -- for the organization. They include Gary Sirmon, Former President, CEO and Chairman of Banner; Jess Foster, Former Vice Chairman of the Board of Directors; Gordon Budke; Bob Adams, Wilbert Bilski, Dean Mitchell, Dave Casper, Mike Smith, Ed Epstein and Mike Jones, all former directors of Banner. I would also like to mention a number of other individuals who are -- been an instrumental in the affairs of the company over the years. First, the executive management of Banner Bank, a subsidiary of the company that includes the executive team of Richard Barton, Executive Vice President and Chief Credit Officer; Peter Conner, Executive Vice President and Chief Financial Officer; Jim Garcia, Executive Vice President and Chief Audit Executive; Ken Johnson, Executive Vice President, Operations; Kayleen Kohler, Executive Vice President, Human Resources; Ken Larsen, Executive Vice President, Mortgage Banking; James McLean, Executive Vice President, Commercial Real Estate Lending; Craig Miller, Executive Vice President and General Counsel of Banner Bank and Banner Corporation; Cynthia Purcell, Executive Vice President of Retail Banking and Administration; Kirk Quillin, Executive Vice President, Commercial Banking; Jim Reed, Executive Vice President, Commercial Banking, North Region; Steve Rust, Executive Vice President and Chief Information Officer; Judy Steiner, Executive Vice President and Chief Risk Officer; Gary Wagers, Executive Vice President, Retail, Banking and Product Services; and Keith Western, Executive Vice President, Commercial Banking, South region. I'd also like to mention several other individuals who have been instrumental in the performance of the company over the last several years. They include Lloyd Baker, Former Executive Vice President and Chief Financial Officer; Doug Bennett, Former Executive Vice President of Commercial Real Estate Lending; Mike Larsen, Former President, Mortgage division; John Breyer, our Legal Counsel with Breyer & Associates, Mr. Breyer will also serve as parliamentarian for us today; Lisa Porter with Computershare Investor Services, our transfer agent, and Inspector of Election; and Mike Thronson from the accounting firm of Moss Adams. It's now time to continue with the business portion of our meeting. The secretary informs me that the records of the company show that there were 35,282,502 shares of common stock outstanding as of the close of business on March 2, 2020, the record date for voting, which were entitled to receive notice of and to vote at this annual meeting. Of these shares, 17,641,252 shares represent a majority. We have previously received an affidavit that the notice of meeting and a form of proxy therefore were mailed on or about March 20, 2020, and a supplemental notice regarding the virtual meeting format was mailed on or about April 13, 2020 to each holder of record at the close of business on March 2, 2020. A copy of the affidavit with documents attached will be attached to the minutes of this meeting. It is now in order to appoint an inspector to count and examine all voting. The Board of Directors has previously appointed Computershare as the Inspector of Elections to act at this meeting and any adjournments. Lisa Porter is representing Computershare today. The certificate and report of the inspector will be attached to the minutes. The Secretary has previously delivered to the inspector the list of shareholders and all proxies, which have been received. The secretary informs me that substantially more than a majority of the shares of the common stock entitled to vote at the meeting are present in person or by proxy. The inspector is making an exact count and will include this information in the report of the inspector. A quorum is declared present, subject to the confirmation of that fact by the inspector in her report. We will waive the reading of the minutes of last year's annual meeting, but a copy of the minutes is available should any shareholder wish to review them. We will next proceed to take votes on the relevant proposals. After the business meeting has concluded, I will provide just a very brief report on the affairs of the company and answer shareholder questions. The Ask a Question feature is available now on the online meeting site, and you can begin entering your questions at any time. If you were a shareholder of record on March 2, 2020, you have the right to vote using the online platform in relation to the election of directors and the other proposals to be voted upon at this meeting. If you have already voted by proxy by mail, telephone or Internet, you need not vote again at this meeting. Please note that the voting through the online platform will supercede your prior vote. The first item of business to be acted upon, as stated in the notice of this meeting, is the election of directors. In accordance with the bylaws of the company, 3 directors have been nominated for reelection, David Klaue, Merline Saintil, and me, Mark Grescovich, each for a 3-year term. No nominations may be made at the meeting. Therefore, I declare nominations to be closed. Shareholders are entitled to 1 vote for each share of stock owned, as shown in the records of the company. The vote is now requested on the election of directors. If you wish to vote using the online platform, please vote now on each of the director nominees. I will pause momentarily to allow that tabulation. [Voting]

The next item on the agenda is the advisory vote on the approval of the compensation of the company's named executive officers as disclosed in the Compensation Discussion and Analysis, the compensation tables and related materials included in the proxy statement for this annual meeting. I will now entertain a motion to submit the advisory proposals on the compensation of the company's named executive officers to a vote.

I so move.

I second the motion.

There is a move and a second. The vote is now requested on the motion. If you wish to vote using the online platform, please vote now on the advisory proposal on compensation of the company's named executive officers. I will now pause momentarily while that is also tabulated. [Voting]

The final item on the agenda is the ratification of the appointment of Moss Adams LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. I will entertain a motion that the appointment of Moss Adams LLP as the company's independent registered public accounting firm for the 2020 fiscal year be ratified.

I so move.

I second the motion.

There is a movement and a second. The vote is now requested on the motion. If you wish to vote using the online platform, please vote now on the ratification of the appointment of Moss Adams LLP as the company's independent registered public accounting firm for the fiscal year ending December 31 2020. I'll now pause momentarily while those votes are tabulated. [Voting]

We will also now pause for 1 more minute just to ensure that everyone has had an opportunity to vote. [Voting]

Thank you to everyone who has voted. I now declare the polls closed on all proposals. The inspector has completed the account and the Secretary will now report on the voting results. Craig?

Thank you, Mark. The report of the inspector confirms that a quorum is and has been in attendance at the meeting for all purposes. It also shows that Dave Klaue, Merline Saintil and Mark Grescovich have each been duly elected as a Director of the company for a 3-year term. The report of inspector also indicates that more than a majority of the shares present in person or by proxy at this meeting have been voted in favor of the approval of; first, the advisory vote on the compensation of the company's named executive officers; and second, the ratification of the appointment of Moss Adams LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. Thank you. Back to you, Mark.

The report of the inspector has been accepted and approved and will be attached to the minutes of the meeting. There being no further business to come before the meeting, a motion to adjourn is in order.

I move that the meeting be adjourned.

Is there a second?

I second the motion.

With a motion and a second, the meeting has now adjourned. I would like to thank all of you for participating in our virtual meeting. At this time, we would entertain questions that any shareholder may have regarding the company and Banner Bank. If you have a question, please input your question in the Ask a Question section of the online meeting site. While we tabulate some of the questions, I just want to make a couple of brief comments on the performance of Banner Corporation. Obviously, coming into 2020 in anticipation of this annual meeting, Banner had very solid performance -- financial performance and market share improvements for 2019. The first quarter, as interesting as it has been, has created a series of events and required the company to take specific actions associated with the COVID-19 pandemic and implementation of our pandemic response. I encourage everyone to read the first quarter earnings release that was released on April 27 in the afternoon. Also, there was an earnings call that outlined a number of the items that we are doing as an organization, not only to have prepared for the pandemic, operating through the pandemic, but our anticipation of how the company will operate as we get through this pandemic. And there is a call transcript on our website based on the earnings call that occurred on April 28. With that, I will now ask, are there any questions?

Mark, we have received no questions.

Hearing that there are no questions. Thank you, again, for your loyalty and continued support of Banner Corporation. We look forward to seeing you again next year when I hope we all can return to our usual meeting format in Walla Walla. Have a very good day, everyone, and please be safe.

This concludes the meeting. You may now disconnect.