Solid revenue growth and continued improvement in credit quality led Banner Corporation (BANR) in Walla Walla, Wash., to its most profitable quarter in at least five years.

The $4.2 billion-asset parent of Banner Bank said late Monday that it earned $9.2 million in the first quarter, compared to a profit of $5.1 million in the fourth quarter and a loss of $7.1 million in last year's first quarter. Its earnings per share of 40 beat consensus analysts' estimates by 18 cents, according to Thomson Reuters.

Banner was hit hard by the real estate bust in the Northwest and wound up taking massive losses in 2008, 2009 and 2010.

Its turnaround has been fueled in large part by a sharp reduction in problem loans. With nonperforming loans down 51% year over year and its portfolio of foreclosed properties down 71%, the company was able to lower its loss provision by 71%, to $5 million in the first quarter.

Meanwhile, a 175% jump in mortgage banking revenues and an 11% increase in service charges on deposit fees helped boost revenues from core operations by 7% year over year.

Banner Bank last month was released from federal enforcement order that required it to reduce classified assets and bolster its capital levels. The holding company also exited the Troubled Asset Relief Program when the Treasury Department auctioned off Banner's preferred shares.

Banner's stock closed at $20.66 Monday, down 1.4% from Friday's closing price but still up more than 20% year to date.

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