BANR - Banner Corporation Reports Net Income of $44.0 Million or $1.27 Per Diluted Share for First Quarter 2022; Declares Quarterly Cash Dividend of $0.44 Per Share

WALLA WALLA, Wash., April 20, 2022 (GLOBE NEWSWIRE) -- Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $44.0 million, or $1.27 per diluted share, for the first quarter of 2022, a 12% decrease compared to $49.9 million, or $1.44 per diluted share, for the preceding quarter and a 6% decrease compared to $46.9 million, or $1.33 per diluted share, for the first quarter of 2021. Banner’s first quarter 2022 results include $7.0 million in recapture of provision for credit losses, compared to $5.2 million in recapture of provision for credit losses in the preceding quarter and $9.3 million in recapture of provision for credit losses in the first quarter of 2021.

Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.44 per share. The dividend will be payable May 13, 2022, to common shareholders of record on May 3, 2022.

“Banner’s core operating performance during the first quarter reflects the resilience of our super community bank strategy, and the ongoing implementation of Banner Forward, launched in the third quarter of 2021,” said Mark Grescovich, President and CEO. “Our performance for the first quarter benefited from lower operating expense, continued core deposit growth and the branch consolidations we completed during the current quarter. The unprecedented level of market liquidity and our continued focus on generating new client relationships contributed to our core deposits increasing 9% compared to March 31, 2021. We believe Banner remains well positioned for rising interest rates with a low-cost granular core deposit base and ample on-balance sheet liquidity to support renewed loan demand. Our approach of consistently delivering outstanding service and value to our clients, communities, colleagues, company and shareholders while holding fast to our performance objectives continues to guide our success.”

“During the third quarter of 2021 we began implementing Banner Forward, a bank-wide initiative to enhance revenue growth and reduce operating expense,” said Grescovich. “The remaining efficiency-related initiatives are anticipated to be implemented sequentially over the next two quarters with implementation of the revenue initiatives ramping up in the second half of the year. Full implementation is expected by 2023, with the goal of delivering sequential improvements in operating performance over the course of the next five quarters while staying true to our mission and values. Banner Forward is focused on accelerating growth in commercial banking, deepening relationships with retail clients, and advancing technology strategies to enhance our digital service channels, while streamlining underwriting and back office processes. During the first quarter of 2022, we incurred expenses of $2.5 million related to Banner Forward.”

At March 31, 2022, Banner Corporation had $16.78 billion in assets, $8.98 billion in net loans and $14.52 billion in deposits. Banner operates 141 full service branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.

First Quarter 2022 Highlights

• Revenues decreased 5% to $138.1 million, compared to $146.0 million in the preceding quarter, and decreased 3% when compared to $141.9 million in the first quarter a year ago.
• Net interest income decreased to $118.7 million in the first quarter of 2022, compared to $121.5 million in the preceding quarter and increased compared to $117.7 million in the first quarter a year ago.
• Net interest margin on a tax equivalent basis was 3.18%, compared to 3.17% in the preceding quarter and 3.44% in the first quarter a year ago.
• Mortgage banking revenues decreased 21% to $4.4 million, compared to $5.6 million in the preceding quarter, and decreased 61% compared to $11.3 million in the first quarter a year ago.
• Return on average assets was 1.06%, compared to 1.18% in the preceding quarter and 1.24% in the first quarter a year ago.
• Net loans receivable increased to $8.98 billion at March 31, 2022, compared to $8.95 billion at December 31, 2021, and decreased 8% compared to $9.79 billion at March 31, 2021.
• Asset quality improved with non-performing assets decreasing to $19.1 million, or 0.11% of total assets, at March 31, 2022, compared to $23.7 million, or 0.14% of total assets in the preceding quarter, and decreasing from $37.0 million, or 0.23% of total assets, at March 31, 2021.
• The allowance for credit losses - loans was $125.5 million, or 1.38% of total loans receivable, as of March 31, 2022, compared to $132.1 million, or 1.45% of total loans receivable as of December 31, 2021 and $156.1 million, or 1.57% of total loans receivable as of March 31, 2021.
• Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 2% to $13.72 billion at March 31, 2022, compared to $13.49 billion at December 31, 2021, and increased 9% compared to $12.64 billion a year ago. Core deposits represented 94% of total deposits at March 31, 2022.
• Dividends to shareholders were $0.44 per share in the quarter ended March 31, 2022.
• Common shareholders’ equity per share decreased 8% to $45.49 at March 31, 2022, compared to $49.35 at the preceding quarter end, and decreased 2% from $46.60 a year ago.
• Tangible common shareholders’ equity per share* decreased 10% to $34.25 at March 31, 2022, compared to $38.02 at the preceding quarter end, and decreased 3% from $35.29 a year ago.

*Tangible common shareholders’ equity per share and the ratio of tangible common equity to tangible assets (both of which exclude goodwill and other intangible assets, net), and references to adjusted revenue (which excludes fair value adjustments and net gain (loss) on the sale of securities from the total of net interest income and total non-interest income) and the adjusted efficiency ratio (which excludes merger and acquisition-related expenses, COVID-19 expenses, Banner Forward expenses, amortization of core deposit intangibles, real estate owned operations, loss on extinguishment of debt and state/municipal taxes from non-interest expense divided by adjusted revenue) represent non-GAAP (Generally Accepted Accounting Principles) financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. Where applicable, comparable earnings information using GAAP financial measures is also presented. See also Non-GAAP Financial Measures reconciliation tables on the last two pages of this press release.

Significant Recent Initiatives and Events

On February 18, 2022, Banner Bank completed the consolidation of seven branches and entered into a purchase and assumption agreement with Spokane Teachers Credit Union, Spokane, Washington (“STCU”) with respect to the sale to STCU of four Banner Bank branches located in Hayden, Idaho, and in Chewelah, Colville, and Kettle Falls, Washington, subject to certain regulatory approvals and customary closing conditions.

The sale includes deposit accounts with an approximate balance of $212 million. Banner Bank will receive a 5.0% premium in relation to the core deposits. The sale also includes all related branch premises and equipment.

Banner anticipates that these sale transactions will help to further shape the Bank’s service footprint, while contributing to our capital, reducing excess liquidity, and improving our operating efficiency. The transactions are expected to support the Banner Forward initiative by improving management’s focus on key operations and markets, and providing capital to reinvest in profitability enhancement initiatives. Banner’s goal is that the combined impact of these sales and Banner Forward initiatives will be positive to future annual operating earnings.

Income Statement Review

Net interest income was $118.7 million in the first quarter of 2022, compared to $121.5 million in the preceding quarter and $117.7 million in the first quarter a year ago, primarily reflecting the on-going low interest rate environment and loan forgiveness under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”).

Banner’s net interest margin on a tax equivalent basis was 3.18% for the first quarter of 2022, a one basis-point increase compared to 3.17% in the preceding quarter and a 26 basis-point decrease compared to 3.44% in the first quarter a year ago.

“Higher core deposit balances resulted in a decrease in the cost of funding liabilities which positively affected our net interest margin during the quarter. This impact was partially offset by lower interest income during the quarter, primarily as a result of the decline in the acceleration of the recognition of deferred loan fee income due to loan repayments from SBA PPP loan forgiveness,” said Grescovich. Acquisition accounting adjustments added three basis points to the net interest margin in the current quarter and five basis points in both the preceding quarter and in the first quarter a year ago. The total purchase discount for acquired loans was $8.5 million at March 31, 2022, compared to $9.7 million at December 31, 2021, and $13.9 million at March 31, 2021.

Average yields on interest-earning assets were 3.29% for both the first quarter of 2022 and the preceding quarter and decreased 35 basis points compared to 3.64% in the first quarter a year ago. The year over year decreases in average yield on interest-earning assets primarily reflects decreases in the average yield on investment securities and increases in the average balance of interest-bearing deposits, as excess liquidity was invested in low yielding short term investments. Average loan yields decreased seven basis points to 4.50% compared to 4.57% in the preceding quarter and increased seven basis points compared to 4.43% in the first quarter a year ago. The decrease in average loan yields during the current quarter compared to the preceding quarter was primarily the result of a decline in the acceleration of the recognition of deferred loan fee income due to loan repayments from SBA PPP loan forgiveness during the quarter. Loan discount accretion added five basis points to average loan yields in the current quarter, eight basis points in the preceding quarter and seven basis points in the first quarter a year ago. Deposit costs were 0.06% in the first quarter of 2022, a one basis-point decrease compared to the preceding quarter and a five basis-point decrease compared to the first quarter a year ago. The year-over-year decrease in quarterly deposit costs was primarily the result of decreases in market interest rates during 2020 as well as an increase in the average balance of core deposits. The total cost of funding liabilities was 0.12% during the first quarter of 2022, a one basis-point decrease compared to the preceding quarter and a nine basis-point decrease compared to 0.21% in the first quarter a year ago.

Banner recorded a $7.0 million recapture of provision for credit losses in the current quarter (comprised of a $7.4 million recapture of provision for credit losses - loans, a $428,000 provision for credit losses - unfunded loan commitments and a $13,000 recapture of provision for credit losses - held-to-maturity debt securities). This recapture compares to a $5.2 million recapture of provision for credit losses in the prior quarter (comprised of an $8.1 million recapture of provision for credit losses - loans, a $2.3 million provision for credit losses - unfunded loan commitments and a $579,000 provision for credit losses - held-to-maturity debt securities) and a $9.3 million recapture of provision for credit losses in the first quarter a year ago (comprised of an $8.0 million recapture of provision for credit losses - loans, a $1.2 million recapture of provision for credit losses - unfunded loan commitments and a $4,000 provision for credit losses - held-to-maturity debt securities). The recapture of provision for credit losses for the current and preceding quarters primarily reflects improvement in the level of adversely classified loans, as well as in the economic indicators utilized to calculate credit losses.

Total non-interest income was $19.4 million in the first quarter of 2022, compared to $24.5 million in the preceding quarter and $24.3 million in the first quarter a year ago. Deposit fees and other service charges were $11.2 million in the first quarter of 2022, compared to $10.3 million in the preceding quarter and $8.9 million in the first quarter a year ago. The increase in deposit fees and other service charges from the first quarter a year ago is primarily a result of increased deposit transaction account activity. Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, decreased to $4.4 million in the first quarter, compared to $5.6 million in the preceding quarter and $11.3 million in the first quarter of 2021. The decrease from the prior quarter and from the first quarter of 2021 primarily reflects a reduction in the volume of one- to four-family loans sold, as well as a decrease in the gain on sale margin on one- to four-family held-for-sale loans. The reduction in volumes reflects a reduction in refinancing activity as interest rates increased during the current quarter. Home purchase activity accounted for 64% of one- to four-family mortgage loan originations in both the first quarter of 2022 and in the prior quarter and was 54% in the first quarter of 2021. The lower mortgage banking revenue for the current quarter compared to the prior quarter is also due in part to a $603,000 lower of cost or market downward adjustment recorded on multifamily held for sale loans due to increases in market interest rates, partially offset by $340,000 of gain recognized on the sale of multifamily loans as compared to none in the prior quarter. Miscellaneous non-interest income decreased to $1.7 million in the first quarter of 2022, compared to $4.7 million in the preceding quarter and $2.1 million in the first quarter a year ago. The decrease in miscellaneous non-interest income from the prior quarter is primarily a result of a valuation adjustment on the SBA servicing asset and higher gains recognized in the prior quarter related to both SBA loans sold and the disposition of closed branch locations.

Banner’s first quarter 2022 results included a $49,000 net gain for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of certain investment securities held for trading and limited partnership investments, and a $435,000 net gain on the sale of securities. In the preceding quarter, results included a $2.7 million net gain for fair value adjustments and a $136,000 net loss on the sale of securities. In the first quarter a year ago, results included a $59,000 net gain for fair value adjustments and a $485,000 net gain on the sale of securities.

Total revenue decreased 5% to $138.1 million for the first quarter of 2022, compared to $146.0 million in the preceding quarter, and decreased 3% compared to $141.9 million in the first quarter a year ago. Adjusted revenue* (the total of net interest income and total non-interest income excluding the net gain or loss on the sale of securities and the net change in valuation of financial instruments) was $137.6 million in the first quarter of 2022, compared to $143.4 million in the preceding quarter and $141.4 million in the first quarter of 2021.

Total non-interest expense was $91.2 million in the first quarter of 2022, compared to $91.8 million in the preceding quarter and $93.5 million in the first quarter of 2021. The decrease in non-interest expense for the current quarter compared to the prior quarter reflects a $665,000 decrease in occupancy and equipment expenses, a $1.6 million decrease in advertising and marketing expenses and a $1.5 million decrease in loss on extinguishment of debt, partially offset by a $1.7 million increase in salary and employee benefits expenses primarily due to severance costs and typical higher payroll taxes in the first quarter of a year partially offset by lower salary expense and a $1.4 million decrease in capitalized loan origination costs. Banner recorded a $793,000 loss on extinguishment of debt as a result of the redemption of $50.5 million of junior subordinated debentures during the first quarter of 2022, compared to a $2.3 million loss as a result of the redemption of $8.2 million of junior subordinated debentures during the prior quarter. The year-over-year quarterly decrease in non-interest expense primarily reflects decreases in salary and employee benefits expense, primarily due to a reduction in staffing, and professional and legal expenses, primarily due to a reduction in consultant expense. The year-over-year quarterly decreases in non-interest expense were partially offset by a decrease in capitalized loan origination costs and the previously mentioned loss on extinguishment of debt. Banner’s efficiency ratio was 66.04% for the current quarter, compared to 62.88% in the preceding quarter and 65.90% in same quarter a year ago. Banner’s adjusted efficiency ratio* was 62.09% for the current quarter, compared to 59.71% in the preceding quarter and 63.18% in the year ago quarter.

For the first quarter of 2022, Banner had $9.9 million in state and federal income tax expense for an effective tax rate of 18.4%, reflecting the benefits from tax exempt income and an adjustment to the deferred tax asset during the quarter. Banner’s statutory income tax rate is 23.6%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.

Balance Sheet Review

Total assets decreased to $16.78 billion at March 31, 2022, compared to $16.80 billion at December 31, 2021, and increased 4% when compared to $16.12 billion at March 31, 2021. The total of securities and interest-bearing deposits held at other banks was $6.06 billion at March 31, 2022, compared to $6.26 billion at December 31, 2021 and $4.81 billion at March 31, 2021. During the current quarter, Banner transferred $458.6 million of securities from available for sale to securities held to maturity to limit the impact that potential future interest rates changes would have on its accumulated other comprehensive income. The average effective duration of Banner's securities portfolio was approximately 6.2 years at March 31, 2022, compared to 5.2 years at March 31, 2021.

Total loans receivable increased to $9.11 billion at March 31, 2022, compared to $9.08 billion at December 31, 2021, and decreased when compared to $9.95 billion at March 31, 2021. The decrease in total loans receivable compared to the first quarter a year ago primarily reflects the forgiveness of SBA PPP loans. Excluding SBA PPP loans, total loans receivable increased $100.5 million during the current quarter and increased $420.2 million from the first quarter a year ago. SBA PPP loans decreased 56% to $58.6 million at March 31, 2022, compared to $133.9 million at December 31, 2021, and decreased 96% when compared to $1.32 billion at March 31, 2021. The decrease in SBA PPP loans was offset by increases in multifamily real estate and one- to four-family loans. Multifamily real estate loans increased 13% to $598.6 million at March 31, 2022, compared to $530.9 million at December 31, 2021, and increased 52% compared to $394.8 million a year ago. Commercial real estate loans decreased 2% to $3.71 billion at March 31, 2022, compared to $3.79 billion at December 31, 2021, and increased slightly compared to $3.69 billion a year ago. Commercial business loans were $1.96 billion at both March 31, 2022 and December 31, 2021, and decreased 37% compared to $3.09 billion a year ago, primarily due to SBA PPP loans forgiven. Excluding SBA PPP loans, commercial business loans increased 4% to $1.90 billion at March 31, 2022, compared to $1.83 billion at December 31, 2021, and increased 5% compared to $1.81 billion a year ago. Agricultural business loans decreased to $245.3 million at March 31, 2022, compared to $280.6 million at December 31, 2021 and decreased from $255.7 million a year ago. Total construction, land and land development loans were $1.33 billion at March 31, 2022, a 1% increase from $1.31 billion at both December 31, 2021, and March 31, 2021. Consumer loans increased to $567.6 million at March 31, 2022, compared to $555.9 million at December 31, 2021, and decreased from $570.7 million a year ago. One- to four-family loans increased to $708.1 million at March 31, 2022, compared to $657.5 million at December 31, 2021, and increased from $629.4 million a year ago.

Loans held for sale were $101.0 million at March 31, 2022, compared to $96.5 million at December 31, 2021, and $135.3 million at March 31, 2021. The volume of one- to four- family residential mortgage loans sold was $210.4 million in the current quarter, compared to $245.9 million in the preceding quarter and $300.3 million in the first quarter a year ago. Banner sold $15.8 million of multifamily loans during the first quarter of 2022, compared to none in the preceding quarter and $107.7 million in the first quarter a year ago.

Total deposits increased 1% to $14.52 billion at March 31, 2022, compared to $14.33 billion at December 31, 2021, and increased 7% when compared to $13.55 billion a year ago. The year-over-year increase in total deposits was due primarily to SBA PPP loan funds deposited into client accounts and an increase in general client liquidity due to reduced business investment and consumer spending during the COVID-19 pandemic. Non-interest-bearing account balances increased to $6.49 billion at March 31, 2022, compared to $6.39 billion at December 31, 2021, and increased 8% compared to $5.99 billion a year ago. Core deposits were 94% of total deposits at both March 31, 2022 and December 31, 2021 and 93% of total deposits a year ago. Certificates of deposit decreased to $800.4 million at March 31, 2022, compared to $838.6 million at December 31, 2021, and decreased 12% compared to $907.0 million a year earlier. Banner had no FHLB borrowings at March 31, 2022, compared to $50.0 million at December 31, 2021 and $100.0 million a year ago.

At March 31, 2022, total common shareholders’ equity was $1.56 billion, or 9.32% of assets, compared to $1.69 billion or 10.06% of assets at December 31, 2021, and $1.62 billion or 10.04% of assets a year ago. The decrease in total common shareholders’ equity during the current quarter was primarily due to a $154.3 million decrease in accumulated other comprehensive income related to an increase in the unrealized loss on available for sale securities reflecting the increase in market interest rates during the current quarter. At March 31, 2022, tangible common shareholders’ equity*, which excludes goodwill and other intangible assets, net, was $1.18 billion, or 7.18% of tangible assets*, compared to $1.30 billion, or 7.93% of tangible assets, at December 31, 2021, and $1.23 billion, or 7.80% of tangible assets, a year ago. Banner’s tangible book value per share* decreased to $34.25 at March 31, 2022, compared to $35.29 per share a year ago.

Banner and its subsidiary bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At March 31, 2022, Banner's common equity Tier 1 capital ratio was 11.39%, its Tier 1 leverage capital to average assets ratio was 8.58%, and its total capital to risk-weighted assets ratio was 14.05%.

Credit Quality

The allowance for credit losses - loans was $125.5 million at March 31, 2022, or 1.38% of total loans receivable and 674% of non-performing loans, compared to $132.1 million at December 31, 2021, or 1.45% of total loans receivable and 578% of non-performing loans, and $156.1 million at March 31, 2021, or 1.57% of total loans receivable and 426% of non-performing loans. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $12.9 million at March 31, 2022, compared to $12.4 million at December 31, 2021 and $12.1 million at March 31, 2021. Net loan recoveries totaled $748,000 in the first quarter of 2022, compared to $311,000 in the preceding quarter and $3.2 million of net loan charge-offs in the first quarter a year ago. Non-performing loans were $18.6 million at March 31, 2022, compared to $22.8 million at December 31, 2021, and $36.6 million a year ago. Real estate owned and other repossessed assets were $446,000 at March 31, 2022, compared to $869,000 at December 31, 2021, and $377,000 a year ago.

Banner’s total substandard loans were $178.4 million at March 31, 2022, compared to $198.4 million at December 31, 2021, and $311.6 million a year ago. The quarter over quarter decrease primarily reflects the payoff of substandard loans as well as balance paydowns and risk rating upgrades.

Banner’s total non-performing assets were $19.1 million, or 0.11% of total assets, at March 31, 2022, compared to $23.7 million, or 0.14% of total assets, at December 31, 2021, and $37.0 million, or 0.23% of total assets, a year ago.

Conference Call

Banner will host a conference call on Thursday April 21, 2022, at 8:00 a.m. PDT, to discuss its first quarter results. To listen to the call on-line, go to www.bannerbank.com . Investment professionals are invited to dial (844) 200-6205 using access code 982074 to participate in the call. A replay will be available for one week at (866) 813-9403 using access code 681359, or at www.bannerbank.com.

About the Company

Banner Corporation is a $16.78 billion bank holding company operating one commercial bank in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com .

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner.  Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information.  By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner’s operating and stock price performance.

Factors that could cause Banner’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: (1) the effect of the COVID-19 pandemic, including on Banner’s credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic, such as the extent and duration of the impact on public health, the U.S. and global economies, and consumer and corporate clients, including economic activity, employment levels and market liquidity; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner’s activities; (4) competitive pressures among depository institutions; (5) interest rate movements and their impact on client behavior and net interest margin; (6) uncertainty regarding the future of the London Interbank Offered Rate (LIBOR), and the potential transition away from LIBOR toward new interest rate benchmarks; (7) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (8) fluctuations in real estate values; (9) the ability to adapt successfully to technological changes to meet clients’ needs and developments in the market place; (10) the ability to access cost-effective funding; (11) disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (12) changes in financial markets; (13) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (14) the costs, effects and outcomes of litigation; (15) legislation or regulatory changes, including but not limited to changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, other governmental initiatives affecting the financial services industry including as a result of COVID -19 and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (16) changes in accounting principles, policies or guidelines; (17) future acquisitions by Banner of other depository institutions or lines of business; (18) future goodwill impairment due to changes in Banner’s business, changes in market conditions, including as a result of the COVID-19 pandemic or other factors; (19) the costs associated with Banner Forward and (20) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (21) other risks detailed from time to time in Banner’s filings with the Securities and Exchange Commission including Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

⁽¹⁾ December 31, 2021 and March 31, 2021 loan balances were reclassified to match current period presentation.

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)