Banner Corp. of Walla Walla, Wash., has warned investors to be ready for a particularly large loss for the third quarter.

The $4.6 billion-asset company expects to post a wider year-over-year loss of as much as $45 million when it reports third-quarter results Oct. 20.

It reported a $4.9 million loss in the second quarter of 2010. Banner announced its projections Wednesday.

Driving the anticipated loss is a $24 million valuation allowance against Banner's deferred tax asset.

Banner said it expects to book a $20 million provision for loan losses, down 20% from a year earlier, but up 25% from the second quarter.

Banner also said that for the third quarter total nonperforming assets are expected to decline slightly.

It expects that its bank unit will remain well capitalized at the end of the third quarter, with a leverage ratio of 12.1%.

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