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Commercial Bank Says Rise in Defaults will Eliminate Q4 Profits

WALLA WALLA, WA-The parent of Banner Bank says it expects to increase the provision for loan losses from $4 million in the third quarter to approximately $7 million in the fourth quarter, substantially eliminating fourth quarter profitability.

By Gina Binole | Updated on December 20, 2002

WALLA WALLA, WA-Banner Corp. on Friday said rising loan-loss provisions will “substantially eliminate” fourth quarter profitability for Banner Bank, its commercial bank subsidiary.

The company is reporting that during the fourth quarter and particularly in December, Banner Bank’s loan portfolio quality, as measured by the levels of past due, classified or non-performing loans, shows deterioration. Based that level of deterioration, the company says it expects to increase the provision for loan losses from a $4 million level recorded in the third quarter to approximately $7 million in the fourth quarter.

“This increase in the provision for loan losses will substantially eliminate fourth quarter profitability for the Company,” states a Friday morning news release. As a result, the company’s share price was off $0.33 in afternoon trading to $18.02 despite an up day for the Nasdaq and triple digit gains the in the Dow Jones Industrial Average.

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