Banner Corp. (NASDAQ: BANR) reported Q1 EPS of $0.47, $0.24 worse than the analyst estimate of $0.71.

Banner's first quarter earnings reflect the impact of the COVID-19 pandemic resulting in a substantial reduction in business activity or the closing of businesses in all the western states Banner operates.

First quarter of 2020 results also include $1.1 million of acquisition-related expenses, compared to $4.4 million of acquisition-related expenses in the preceding quarter and $2.1 million in the first quarter of 2019.

“We are in unprecedented times - as a health crisis has quickly evolved to also become an economic crisis, creating far-reaching impacts to clients and the communities we serve,” said Mark Grescovich, President and CEO. “In mid-March we began preparations for the COVID-19 pandemic by closing branch lobbies, mobilizing personnel to work from home and providing appropriate IT equipment and services to accommodate Stay-At-Home Orders. Our lending teams have reached out to borrowers that have been affected by the economic decline and offered assistance in various forms including deferred payments and interest-only payments. We have worked with our customers to file applications for the Paycheck Protection Program offered through the Small Business Administration and expect this program to provide some near-term relief to help small businesses sustain operations. Meanwhile, we are monitoring the economy closely and reviewing loan payment deferrals and interest waivers daily and have elevated our liquidity levels in anticipation of cash needs of our customers.”

Grescovich concluded, “In anticipation of future credit losses, we determined it is prudent to increase the allowance for credit losses through the addition of $21.7 million in credit loss provisions for the quarter ended March 31, 2020.” This provision compares to a $4.0 million provision for loan losses during the previous quarter and a $2.0 million provision for loan losses in the first quarter a year ago. The allowance for credit losses - loans was 1.41% of total loans and 299% of non-performing loans at the end of the first quarter of 2020. The increased allowance includes provisions taken in anticipation of changes in risks associated with loan classification assignments and a deteriorating economy.

For earnings history and earnings-related data on Banner Corp. (BANR) click here.