Good morning and welcome to the Banner Corporation Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

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

Thank you, Lora, and good morning, everyone. I would also like to welcome you to the full year and fourth quarter 2018 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 Albert Marshall, the Secretary of the Corporation.

Albert, would you please read our forward-looking safe harbor statement?.

Certainly. Good morning. 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, forecast of financial or other performance measures and statements about Banner's general outlook for economic and other conditions.

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 release that was released yesterday and a recently filed Form 10-Q for the quarter ended September 30, 2018.

Forward-looking statements are effective only as of the date they are made, and Banner assumes no obligation to update information concerning its expectations. Thank you..

Thank you, Al. As announced, Banner Corporation reported a profit to common shareholders of $37.5 million, or $1.09 per diluted share for the quarter ended December 31, 2018. This compared to a net profit to common shareholders of $1.17 per share for the third quarter of 2018 and a net loss of $0.41 per share in the fourth quarter of 2017.

Results for the fourth quarter of 2017 were impacted by the write-down of deferred tax assets following the passage of the Tax Cuts and Jobs Act, the sale of our Utah operations and a net loss from the sale of securities in connection with our balance sheet restructuring designed to postpone the adverse impact of the Durbin Amendment on debit card interchange fees.

For the full year ended December 31, 2018, Banner Corporation reported a net income available to common shareholders of $136.5 million compared to $60.8 million for the full year of 2017.

Excluding the impact of the items just described in the fourth quarter of 2017, merger and acquisition expenses, gains and losses on the sale of securities and changes in fair value of financial instruments, earnings from core operations increased 36% to $135 million in 2018 from $99 million in 2017.

Because of 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 continued to reflect the success of our proven client acquisition strategies, which are producing strong core revenue.

Our full year 2018 core revenue reached a record $512 million and increased 9% compared to the full year of 2017, demonstrating that our strategic plan is effective and continuing to build shareholder value. We benefited from a larger and improved earning asset mix and increase in our net interest margin and very good deposit fee income.

Overall, this resulted in a return on average assets of 1.29% for the year. Once again, our performance this quarter and for the full year reflects continued execution on our super community bank strategy.

That is, growing new client relationships, improving our core funding position by growing core deposits and promoting client loyalty and advocacy through our response of service model, while augmenting our growth with opportunistic acquisitions.

To that point, our core deposits increased 13% compared to December 31, 2017 and represent 86% of total deposits. Further, we continued our strong organic generation of new client relationships throughout the year.

Reflective of this solid performance, coupled with our strong tangible common equity ratio of 9.62%, we issued a core dividend in the quarter of $0.38 per share and repurchased 595,000 shares of common stock in 2018. 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 0.16%.

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 and our success at maintaining a moderate credit risk profile. In the quarter and throughout the preceding eight years, continued to invest in our franchise.

We have deepened the executive management team, added talent in commercial and retail banking personnel, and we have invested in further developing and integrating all our bankers into Banner's proven credit and sales culture.

We also have made and are continuing to make significant investments in our risk management infrastructure and our delivery platform, 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 deposit 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 ranked Banner Bank the number one bank in the North West for client satisfaction, the third 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 third consecutive year. And Bankrate.com and Money Magazine named Banner Bank, the best bank in the Pacific region, again, this year.

Also, Banner was ranked in Forbes 2019 top 100 Best Banks in America for the third consecutive year.

Before I turn the call over to Rick Barton to discuss trends in our loan portfolio, I want to, again, recognize our new colleagues and clients from Skagit Bank, which is an outstanding 60-year-old organization in Northwest Washington that joined Banner on November 1.

We're extremely pleased with this opportunity to expand our super community bank model and enhance our density in the Seattle and I-5 corridor. Further, we are thrilled that Cheryl Bishop, Skagit's Chief Executive Officer, has joined Banner's Board of Directors. I'll now turn the call over to Rick Barton to discuss trends in the loan portfolio.

Rick?.

Thanks Mark. At year end 2018, the credit landscape at Banner includes the Skagit Bank loan portfolio.

As you have read in our press release and heard this morning, our credit metrics remain stable in the fourth quarter, which is attributed to the continuing hard work of Banner's bankers, a strong credit culture at Skagit and the effort and spirit and corporation by all involved in planning the integration of Skagit's loan portfolio and loan operations into Banner's.

My remarks this morning will, again, be brief and concentrate on the company's credit metrics and the loan portfolio's moderate risk profile. First, our credit metrics. Delinquent loans increased 18 basis points for the linked quarter to 0.45% of total loans.

Our change in delinquent loans of this magnitude should not be unexpected while total delinquent loans are at their current low levels. A year ago, delinquencies were 0.66%. The company's level of adversely classified assets remain well below historic norms. Nonperforming assets were unchanged from the third quarter, remaining at 0.16% of total assets.

At 12/31/2017, nonperforming assets were 0.28%. Nonperforming assets were split between nonperforming loans of $16 million and REO and other foreclosed assets of $3 million. The increase in REO came from the Skagit portfolio.

Not reflected in these totals are nonperforming assets of $5 million from acquired portfolios, which are not reportable under purchase accounting rules. If we were to include the acquired nonperforming loans in our nonperforming asset totals, the ratio of nonperforming assets to total assets would still be a modest 20 basis points.

Performing trouble debt restructures of $13 million were unchanged from the linked quarter. Net charge-offs for the quarter were $1.3 million or 0.015% of total loans after recoveries of $425,000. And for all of 2018, net charge-offs were $1 million or 0.013% of loans.

The 2018 net charge-off rate was at normally low because of recoveries on previously charged-off loans. Recoveries at this level should not be considered recurring.

After a fourth quarter provision of $2.5 million and net charge-offs of $1.3 million, the allowance for loan and lease losses for the Company totals $96 million and is 1.11% of total loans, compared to 1.22% for the linked quarter and 1.17% at December 31, 2017. The fourth quarter decrease in this metric is a result of the Skagit acquisition.

Coverage of nonperforming assets remains a very robust 616%. The net accounting mark against acquired loans is $26 million, which provides an additional level of protection against loan losses. The discussion of fourth quarter loan growth is complicated by the acquisition of Skagit Bank that included loans of $632 million.

Without adjusting for this acquisition, Banner's portfolio grew by $862 million. After adjusting for the purchase, loan growth in the fourth quarter was $230 million or 12% on an annualized basis. After making the same adjustment for the full year, loans grew by $454 million or 6%.

For all of 2018, growth in the historic portfolio was spread across our footprint. Portfolio segments with most significant increases were the C&I, residential construction, investor real estate, owner-occupied real estate, one-to-four family and ag portfolios. It is also important to note the following.

C&I growth occurred across our footprint at an annualized rate of 9%, excluding Skagit. Banner's construction loan portfolios remain at acceptable concentration levels. Residential construction exposure including land loans is 8.3% of total loans.

When both multi-family commercial construction loans and commercial land exposure are added into this calculation, our total AD&C exposure is 12.8% of total loans. Loans in the market grade, multi-family construction segments are continuing to pay off in a timely manner.

However, we are continuing to observe flattening in the growth of multi-family rents and higher vacancy rates in luxury apartments. Leasing incentives in the luxury segment are also now common.

The markets in which we make residential construction loans remain under-supplied in more affordable price points and are in balance in the more expensive price points. Overall absorption and the inventory of completed homes are at manageable levels.

However, we are continuing to watch closely as sales pace of expensive single-family homes and how interest rates are impacting the demand for entry-level homes. As I said at the outset of my remarks, credit remains stable at Banner post-Skagit acquisition.

This has further solidified a moderate risk profile of our loan portfolios and positions us well for the future. With that said, I will pass the microphone to Peter Conner for his comments.

Peter?.

Good morning. And thank you, Rick. As discussed previously, and as announced in our earnings release, we reported net income of $37.5 million or $1.09 per diluted share for the fourth quarter compared to $37.8 million or $1.17 per diluted share in the prior quarter.

The $0.07 decline in per-share earnings from the prior quarter was due to the following items. Net interest income increased $0.05, due to a $757 million increase in average earning assets due to the acquisition of Skagit Bank and organic loan growth.

Non-interest income declined $0.02 compared to the prior quarter, due to the loss on the sale of securities in the fourth quarter.

Non-interest expense increased $0.26 per share, primarily due to acquisition-related costs, two months of the Skagit operation and increase in legal expense in the fourth quarter, along with year-end and seasonal increases in operating expenses.

Income tax expense decreased $0.16 per share as a result of a credit to tax expense associated with the release of a valuation reserve on deferred tax assets. Turning to the balance sheet.

Lending assets increased $1.3 billion from the end of the third quarter to $11.9 billion at year-end as a result of the Skagit acquisition and strong organic loan growth. Total loans increased $960 million from the prior quarter end as a result of $632 million in loans acquired with Skagit and $328 million in organic loan growth during the quarter.

Organic loan growth was comprised of $230 million in portfolio loans and $98 million in held-for-sale loans. Portfolio organic loan growth was well diversified across all loan types.

The growth in held-for-sale loans was driven by strong fourth quarter production in the multifamily unit and timing of both loan sales that are anticipated to occur in the first quarter. On an annual basis, excluding the impact of the Skagit acquisition compared to the fourth quarter a year ago, portfolio loans grew $454 million or 6%.

Ending core deposits increased $652 million in the fourth quarter as a result of the acquisition of Skagit. On an annual basis, excluding the impact of Skagit, core deposits grew $244 million or 3.4% from the prior year quarter.

While the pace of new organic core deposit account growth remained strong in the fourth quarter, excluding the impact of Skagit ending core deposit balances declined modestly by $45 million. The end of period declines stem from outflows on a small number of higher rate money market clients and balance movement on the last day of the quarter.

When viewed from a quarterly average perspective, excluding Skagit, core deposit balances grew by $52 million. Time deposits increased $140 million in the fourth quarter, due to the Skagit acquisition and increases in brokerage CDs. Net interest income increased $8 million from the prior quarter, due to the Skagit acquisition and organic loan growth.

Loan yields increased 6 basis points to 5.37% in the fourth quarter from 5.31% in the third quarter. Acquired loan interest accretion accounted for 16 basis points of the loan yield in the fourth quarter, the same level as the previous quarter.

The decline in legacy Banner acquired loan accretion was offset by the increase in loan accretion from the Skagit acquisition. Improvement in the contractual loan yield was a result of repricing of loans in the existing loan portfolio as a function of recent rate hikes in September and December.

Fourth quarter prepayment and loan workout related contractual loan interest income ran at the same somewhat elevated level we experienced in the second and third quarter. The total cost of deposits in the fourth quarter was 32 basis points, up 7 basis points from the prior quarter.

Increases in retail deposit costs accounted for 5 basis points of the increase, while brokered CDs accounted for 2 basis points of the increase. In the fourth quarter, brokered CDs accounted for 8 basis points of the total cost to deposits compared to 6 basis points in the prior quarter. The net interest margin declined 1 basis point to 4.47%.

The effects of purchase accounting-related loan accretion accounted for 12 basis points of the net interest margin in the fourth quarter, the same as the previous quarter. Total non-interest income increased $600,000 from the prior quarter.

Core fee income, excluding losses on the sale of and changes in securities carried at fair value, increased $1.3 million. Total mortgage banking income increased $200,000, due to an increase in residential mortgage loan income, driven by higher premiums on loan sales off of production and sales volumes that were reflect for the previous quarter.

BOLI income declined due to debt benefit gains recorded in the previous quarter. Miscellaneous fee income was up this quarter as a result of higher swap fees and $800,000 refund of State of Washington sales taxes from prior periods and an $800,000 loss taken on disposals of fixed assets in the prior quarter.

There were a number of elements to the increase in non-interest expense this quarter that I will break down. Total non-interest expense increased by $13.8 million from the previous quarter. Merger and acquisition-related expenses increased $3.6 million.

Most of the operating expense line items were impacted by the Skagit acquisition during the last few months of the quarter and collectively, Skagit operations represented $3.5 million of the expense increase.

Excluding the impact of the Skagit acquisition, the increase to Banner’s non-interest expense included a $1.2 million increase in health care and bonus incentive-related personnel expense, a $500,000 increase in occupancy costs associated with seasonal facilities maintenance, repair and inspections expense, a $4 million increase in legal expense related to pending litigation, a $500,000 increase in advertising, direct mail and sponsorship expense that the company normally experiences in the fourth quarter, a $500,000 increase in fourth quarter employee training, business development and customer notification related postage expenses.

Taking in total, half of the increase in Banner’s fourth quarter legacy core operating expense from the previous quarter, excluding legal and Skagit, was seasonal or year-end related. Turning to progress on Skagit. Closing and integration have gone as well as we could have expected.

The teams are working well together and the Skagit staff have integrated with their functional counterparts at Banner. We are on track to convert Skagit core systems and consolidate branch locations in February. We announced a 40% expense synergy, and we are on track to achieve it.

We anticipate recognizing 100% of Skagit acquisition-related expense synergies by the third quarter. In terms of M&A transaction expense, we have recorded $5.6 million so far and anticipate another $3 million to $4 million to go, with the majority of that being booked in the first quarter.

We expect quarterly operating expenses will run in the high $80 million range for 2019 as normal growth and operating expenses and investments in the bank’s delivery platform and infrastructure for future scale are offset by expense synergy achievement from the Skagit acquisition over the course of the year. This concludes my prepared remarks.

Mark?.

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

Thank you. [Operator Instructions] And our first question comes from Tyler Stafford of Stephens..

Hi, this is actually Gordon McGuire on for Tyler this morning. Good morning, gentlemen..

Good morning, Gordon..

Peter, I just wanted to start on fees and the mortgage banking line. If I remember from last quarter, the increase in that quarter was kind of – it sounded like it was a little bit of an anomaly. So I would have expected a little bit of a reversion this quarter, but those held kind of flat to up.

So beyond kind of higher premiums that you’ve got on the one to four-family loan sales, was there anything unusual in the quarter? And how should I be thinking about the run rate for the next quarter consider in that line item, considering the higher held-for-sale balances? And maybe what you would expect for 2019 in that line?.

Yes, Gordon, this is Peter. So I’ll answer that question in two components. First, the residential mortgage piece of the gain on sale. So we have a very resilient mortgage business that has responded well for the change in rates and changing market conditions.

And in the fourth quarter, we saw an increase in our refinance volume as a percentage of total production in our mortgage business. And total refinance line was up to 22% in terms of dollars in the fourth quarter. That was up from 18% of total production in the third quarter.

So while we saw some modest decline in purchase volume that we normally see at year-end every year, our mortgage business, that was offset by an increase in refinance volume. And then, we continue to have a very diversified mortgage business across multiple geographies, both metro and rural.

And we have a product set that continues to be very resilient. We did see a modest pickup in the premium on our residential mortgage sales in the fourth quarter. Despite the fact that overall production sales line were flat, we saw that premium pickup, partly a function of long end of the yield curve coming down a bit.

And then secondly, due to the composition of our custom construction, mortgage loan product, which has a higher premium than conventional mortgages normally do. So further increases due to residential mortgage in the fourth quarter.

And then, our multifamily unit had a good third quarter, but they had a very strong fourth quarter in terms of production. And the gain on sale on that business has actually held up from where it was in the third quarter in terms of the premiums we were getting and we expect to get on that business when we sell it.

So we’ve had a very good second half in multifamily overall. I would counsel that looking forward into 2019, that business has always been somewhat lumpy. And so while the last two quarters were very good, and the prospects continue to look good in 2019 and counsel that, that business is lumpy.

So we’ll continue to see some volatility in the quarter-to-quarter gain on sale in that business..

So it does feel like kind of a $6 million run rate, it does feel a little bit appropriate as kind of a starting point, just recognizing volatility quarter-to-quarter?.

Yes, yes, that would be appropriate..

And then, just on the miscellaneous fees, those were up a good bit this quarter.

I assume some of that was from Skagit, but was there anything else in that number that might revert back down for 1Q?.

Yeah. Well as I mentioned, Gordon, in my prepared remarks, we had $800,000 of non-recurring credit for sales tax in the state of Washington that was recorded as miscellaneous income in the fourth quarter, so that’s something clearly that’s not going to continue on in the – into the 2019.

We also always have some SBA and swap fee income and those elements tend to be a little bit lumpy as well. We had a modest amount of swap income in the fourth quarter, that was about $200,000 higher than we saw in the third quarter.

So if you take all that into account, our miscellaneous fees continue to run in the $1.3 million to $1.5 million range quarter-to-quarter on a core basis..

Got it. And then last one from me.

Any updated thoughts on Durbin or is it still kind of around the $14 million level?.

Yeah. So Durbin, we’ve updated our Durbin guidance including Skagit. So inclusive of Skagit, we anticipate Durbin will kick-in in July of 2019. And so for 2019, we’ll see a $7.5 million decline in debit card related fee income in the second half of 2019, which would extrapolate to a $15 million full-year impact in 2020..

Got it. Thank you, guys..

Thanks, Gordon..

The next question comes from Jeff Rulis of D.A. Davidson..

Good morning..

Good morning, Jeff..

Peter, I wanted to circle back to the – your discussion on the expense run rate. Quite a bit of noise in the quarter. So just to get a little more specific, I guess, you back out this quarter’s run rate of 95%-plus, back out the M&A and the legal cost and you’re at 88%.

So if we were to think about 2019 and I think you mentioned the high-80% range, is that a pretty steady number throughout assuming kind of in the back half if you start to get the conversion benefits or cost saves achieved? Could you just kind of walk us through? You’re hovering around 88%, how does that transition throughout the year?.

Yes. Hi, Jeff, it’s Peter. So the – you’re spot on in terms of a very level run rate in the high-80s. So as we go into 2019, we expect to recognize the remaining synergies on the Skagit acquisition over the first and second quarter of 2019.

And so as those synergies are recognized, we’ll see a decline in the Skagit operations related expense in the first half. That will be offset with normal increases in Banner’s core operations related to personnel expense, production related expenses, and then investment in the Bank’s delivery and infrastructure platform through the rest of the year.

So all that being said, we’re going to see a pretty level run rate of expense in the high 80%s throughout the year.

In terms of the synergy timing recognition, we had two of the three months of the fourth quarter inclusive of the Skagit operation, and we’ve recognized half of the expense synergies in the run rate in the fourth quarter for Skagit, and we will recognize the other 50% of the expense synergies in the first and second quarter of 2019.

So all that being said, we’re going to see a pretty level expense number – core expense number throughout 2019 with those offsetting effects..

Pretty steady than. That’s good color. And then maybe for anyone, but Rick sort of alluded to it as well.

But on the loan growth front for the full year, a pretty heady number organic growth, 12% this quarter, 6% for the full year, thoughts on full-year loan growth, obviously you typically see some ag and construction seasonality early in the year, but broad themes on loan growth, any thoughts there for 2019?.

Well, Jeff, I don’t think we’ll see any meaningful change in the pattern that we’ve had over the last couple of years.

There are wildcards that are on the horizon like the shutdown that we are experiencing and the longer term impacts of any kind of tariff or trade wars, but barring some unforeseen of that coming out of those, I think that it's steady as she goes..

And maybe one last on just the tax rate expectation for 2019 kind of interesting Q4, but what's the number you're looking at for the full year?.

Yes, Jeff, it's Peter. So our tax rate is a function of the apportionment of our businesses in the four states we do business in, along with the level of tax exempt revenues we generate from loans and securities.

Based on where we are with Skagit and the composition of our revenues across the organization, anticipate the effective tax rate to run between 21% and 22% in 2019..

Great, thank you..

Thanks Jeff..

And next we have a question from Jackie Bohlen of KBW..

Hi, good morning..

Good morning Jackie..

Sticking to taxes, because it's so overwhelming interesting and just a quick clarification Peter.

The additional $1.3 million, if I take the Tax Cuts and Jobs Act out of it that is completely separate from it and just a onetime event in the quarter, right?.

Right, right. Jackie, there was a total of just under $5.5 million of credit and tax expense and the other amount of credit was related to the prior period return to tax provision credit that was also nonrecurring. So as I mentioned earlier, our effective tax rate going forward, we anticipate to run between 21% and 22%..

Okay, thank you.

And then touching on the buyback a little bit was that just a very strategic repurchase in the quarter given share performance? Or was that something we could see going forward?.

It was a bit of both.

As we've guided to in the past, we look to deploy our excess capital through one of three mechanisms, M&A, special dividends or share repurchases, and we elected to repurchase shares in the fourth quarter as we felt our stock was undervalued and it also supported our strategic target of getting our PCE number into the low to mid-9s by the end of 2019, so both are opportunistic and strategic..

And is the low-to mid-9 level in ongoing target?.

It's an ongoing target. Our guidance is we want to soft landing to that number. We're not going to drop to that number immediately, but we're going to land in that range towards the end of 2019..

Okay.

And I would assume that in part it will depend on the possibility of future strategic acquisitions?.

Exactly. Yes, Jackie. This is Mark. As you might suspect, we've utilized all those options to deploy capital. So I think, going forward, it will be the same. We're agonist and we want to be opportunistic if there's an M&A opportunities as well..

Okay.

And given both real and perceived uncertainties environment today, how is the pace of discussion shifted if at all over the last couple of months?.

Are you referring to M&A discussions?.

That's the M&A discussions..

I would characterize it as not a significant shift. I think, all folks are looking more longer-term, and so I wouldn't categorize it as anything disruptive than it's been historically in the last 12 months..

Okay, thanks Mark. That’s helpful..

Thank you Jackie..

[Operator Instructions] And our next question will come from Tim O'Brien of Sandler O'Neill..

Good morning guys, Just one question for me on – can you just give a little color on margin views with, I don't know range outcomes? If there's no more fed rate hikes that's probably – will that – is your balance sheet relatively neutral tier at the start of this year, and I expect a little bit more benefit from the December rate hike tier NIM perhaps.

Can you give a little color on that?.

Yes. Hi, Tim its Peter. So we – just sort of go back to Q4, so we reported a 4.47% GAAP NIM, that number included some accretion, 12 basis points of accretion. So our core NIM is running in that mid-4.30% range excluding the loan accretion.

We still are modestly asset sensitive although we're somewhat less so as Skagit fully integrated into our balance sheet. So, couple of things will go on in 2019.

One is we'll see a diminishing level of loan accretion relative to the fourth quarter as we run through those discounted loan portfolios, and it's always a bit lumpy as we've guided to in the past. So on a GAAP basis absence of any rate hikes will see the GAAP NIM decline a bit, primarily as a function of diminishing loan accretion.

On the core margin, there's always a little bit of carry on deposit cost increases even if rates drop in terms of how the deposit portfolio reprises, primarily in CDs and to a lesser extent some of the core deposit rates. So if we saw little more rate increases, we may see some pressure on the core margin going into 2019.

If we see, one to two rate increases during 2019, expect that core margin to hold over it as now..

Thanks Peter. I'll step back..

Thank you, Tim..

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

Thank you, Laura.

As I stated, we're pleased with our solid 2018 core performance and see it as evidence that we're making substantial and sustainable progress on our disciplined strategic plan to build shareholder value by executing on 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 the solid performance for our Company. Thank you again for your interest in Banner and for joining us on the call today. We look forward to reporting our results to you again in the future. Have a great day, everyone..

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect..