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. During the meeting, we'll have a question-and-answer session. You could submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Banner Corporation's President and Chief Executive Officer; Mark J. Grescovich, Mr. Grescovich, the floor is yours.

Thank you, Justin. Good morning. The meeting will please come to order. Welcome to the Annual Meeting of Shareholders of Banner Corporation. I am 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 contained in that document. Please take a moment to review that as well. As you are all aware, we are living in an extraordinary time. COVID-19 risk mitigation measures have kept most of us in our homes and away from our typical daily routines for over a year now. I hope that all of you are continuing to stay safe and healthy. With multiple vaccines now approved and being more widely distributed, we remain hopeful that we will soon be able to resume more normal activities. This is now our second virtual shareholder meeting and is just one example of the many adjustments we have made to help combat the virus while continuing to fulfill our responsibilities. We are proud of the way our employees and branches have responded and adjusted to a new way of doing business, but we look forward to the day when we can see you all in person again as well. Most, if not all, of our Directors and Executive Management are attending this meeting virtually, just as you are. I will read the list of our directors to give you a sense of Banner's Board composition and our Directors' tenures: Brent Orrico, a Director since April 1999 and currently Chairman of the Board; Ellen Boyer, a Director since February of 2021; Connie Collingsworth, a Director since April of 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; John Pedersen, a Director since February of 2021; Kevin Riordan, a Director since April 2018; Merline Saintil, a Director since March of 2017; Terry Schwakopf, a Director since April 2018; and me, I've been on the Board since May of 2010. We are also fortunate to be able to call on past members of the Board for their counsel and assistance. They include Gary Sirmon, former President and CEO and Chairman of Banner Corporation; Jeff Foster, Former Vice Chairman of Banner Corporation; Gordon Budke, Bob Adams, Wilber Pribilsky and Dean Mitchell. I would also like to mention a number of other individuals who have been instrumental in the affairs of the company over the years, first, the Executive Manager -- Management of Banner Bank, a subsidiary of the company. They include Janet Brown, Executive Vice President and Chief Information 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 of Human Resources and Chief Diversity Officer; Ken Larsen, Executive Vice President, Mortgage Banking; Jim McLean, Executive Vice President, Commercial Real Estate Lending; Craig Miller, Executive Vice President, General Counsel and Ethics Officer; Cindy Purcell, Executive Vice President of Retail Banking and Administration; Kirk Quillin, Executive Vice President and Chief Commercial Executive; Jim Reed, Executive Vice President, Commercial Banking; Jill Rice, Executive Vice President and Chief Credit Officer; Judy Steiner, Executive Vice President and Chief Risk Officer; and Gary Wagers, Executive Vice President, Retail Products and Services. I'd also like to mention several other individuals, first, a few of our retired executives: Rick Barton, who retired in October of 2020 as Executive Vice President and Chief Credit Officer; Keith Western, who retired in December of 2020 as Executive Vice President, Commercial Banking, Southern Region; Steve Rust, who retired just last month as Executive Vice President and Chief Information Officer; Lloyd Baker, former Executive Vice President and Chief Financial Officer; and Mike Larsen, former President of the Mortgage division. Additionally, some of our key partners include John Breyer, our Legal Counsel with Breyer & Associates. Mr. Breyer will also serve as parliamentarian for this meeting. Lisa Porter with Computershare Investor Services, our transfer agent and inspector of election; and Mike Thronson from the accounting firm of Moss Adams. It is 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 34,795,540 shares of common stock outstanding as of the close of business on March 1, 2021, the record date for voting, which were entitled to receive notice of, and to vote at, this annual meeting. Of these shares, 17,397,771 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 22, 2021, to each holder of record at the close of business on March 1, 2021. A copy of that 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 election 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 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 its 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 answer shareholder questions. The Ask a Question feature is available now on the online meeting site, and you may begin entering your questions at any time. If you are a shareholder of record on March 1, 2021, 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 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, 7 directors have been nominated for reelection: Roberto Herencia, John Layman, Kevin Riordan and Terry Schwakopf, each for a 3-year term; and Ellen Boyer, David Matson and John Pedersen, each for a 1-year term. No nominations may be made at the meeting. Therefore, I declare nominations to be closed. Shareholders who own 10% or less of the company's stock are entitled to 1 vote for each share of stock owned as shown in the records of the company. Shares owned in excess of 10% are entitled to 1/100 of a vote for each share owned. 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. We will pause momentarily. [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 proposal on the compensation of the company's named executive officers to a vote.

I so move.

I second the motion.

There has been a motion 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 the compensation of the company's named Executive Officers. We will pause momentarily to allow you to vote. [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, 2021. I will entertain a motion that the appointment of Moss Adams LLP as the company's independent registered public accounting firm for the 2021 fiscal year be ratified.

I so move.

I second the motion.

There's been a motion 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, 2021. We will pause momentarily to allow you to vote. [Voting]

As we continue the meeting, we will pause one more time to ensure everyone has had an opportunity to vote. We'll take a short pause now. [Voting]

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

Thank you, Mark, and good morning, everyone. 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 Roberto R. Herencia, John R. Layman, Kevin F. Riordan and Terry Schwakopf have each been duly elected as a Director of the company for a 3-year term; and that Ellen R.M. Boyer, David I. Matson and John Pedersen have each been duly elected as a Director of the company for a 1-year term. The report of the inspector also indicates that more than a majority of the shares present in person or by proxy at this meeting have voted in favor of the proposal #2, that being the advisory vote on the compensation of the company's named Executive Officers; and proposal #3, 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, 2021. Thank you, Mark, and back to you.

Thank you, Craig. The report of the inspector has been accepted and approved and will be attached to the minutes of this 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 to the motion?

I second the motion.

There has been a motion and a second. The meeting is now adjourned. I would like to thank all of you for participating in our virtual meeting. At this time, we will 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. Craig, do we have any relevant questions from shareholders?

Mark, there are no such questions.

Thank you again for your loyalty and continued support of Banner Corporation. We look forward to speaking with you again next year when I hope we can return to our usual meeting format in person in Walla Walla. Have a great day, everyone. Thank you again.

This concludes the meeting. You may now disconnect.