EX-99.1 2 banner8k12022exh991.htm
Exhibit 99.1
CONTACT:
MARK J. GRESCOVICH,
 
PRESIDENT & CEO
 
PETER J. CONNER, CFO
 
(509) 527-3636
 
NEWS RELEASE
       
       

Banner Corporation Reports Net Income of $49.9 Million, or $1.44 Per Diluted Share, for Fourth Quarter 2021;
Earns Record $201.0 Million in Net Income, or $5.76 Per Diluted Share, for 2021;
Declares Increased Quarterly Cash Dividend of $0.44 Per Share

Walla Walla, WA - January 20, 2022 - Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $49.9 million, or $1.44 per diluted share, for the fourth quarter of 2021, virtually unchanged from $49.9 million, or $1.44 per diluted share, for the third quarter of 2021 and compared to $39.0 million, or $1.10 per diluted share, for the fourth quarter of 2020.  Banner’s fourth quarter 2021 results include $5.2 million in recapture of provision for credit losses, compared to $8.6 million in recapture of provision for credit losses in the preceding quarter and $602,000 in provision for credit losses in the fourth quarter of 2020.  Net income for 2021 increased 73% to a record $201.0 million, or $5.76 per diluted share, compared to $115.9 million, or $3.26 per diluted share for 2020.  Full year 2021 results include $33.4 million in recapture of provision for credit losses, compared to $67.9 million in provision for credit losses in 2020.
Banner announced that its Board of Directors increased its regular quarterly cash dividend by 7% to $0.44 per share.  The dividend will be payable February 14, 2022, to common shareholders of record on February 3, 2022.
“Banner’s record 2021 operating results reflect the continued execution of our super community bank strategy including implementation of Banner Forward.  We are generating new client relationships and adding to our core funding position by growing core deposits while maintaining a moderate risk profile,” said Mark Grescovich, President and CEO.  “Our performance for the fourth quarter benefited from lower operating expense, continued core deposit growth and an acceleration of SBA PPP loan fee income as a result of SBA PPP loan forgiveness.  The unprecedented level of market liquidity and our continued focus on building client relationships contributed to our core deposits increasing 16% compared to December 31, 2020.  We continue to live by our core values, summed up as doing the right thing for our clients, our communities, our colleagues, our company and our shareholders while providing a consistent and reliable source of capital through all economic cycles and changing events.”

“During the third quarter of 2021 we began implementing Banner Forward, a bank-wide initiative to drive revenue growth and reduce operating expense,” said Grescovich.  “Full implementation is expected by 2023, with the goal of delivering sequential improvements in operating performance over the course of the next six quarters while staying true to our mission and value proposition of being connected, knowledgeable and responsive to our clients, communities and employees.  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 fourth quarter of 2021, we incurred expenses of $1.2 million related to Banner Forward.”

At December 31, 2021, Banner Corporation had $16.80 billion in assets, $8.95 billion in net loans and $14.33 billion in deposits.  Banner operates 150 branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 2

Fourth Quarter 2021 Highlights
•
Revenues decreased 6% to $146.0 million, primarily due to a decline in SBA PPP loan forgiveness related interest income, compared to $155.5 million in the preceding quarter, and increased 1% when compared to $144.9 million in the fourth quarter a year ago.
•
Net interest income decreased to $121.5 million in the fourth quarter of 2021, compared to $130.1 million in the preceding quarter and increased compared to $121.4 million in the fourth quarter a year ago.
•
Net interest margin on a tax equivalent basis was 3.17%, compared to 3.47% in the preceding quarter and 3.64% in the fourth quarter a year ago.
•
Mortgage banking revenues decreased 41% to $5.6 million, compared to $9.6 million in the preceding quarter, and decreased 47% compared to $10.6 million in the fourth quarter a year ago.
•
Return on average assets was 1.18%, compared to 1.20% in the preceding quarter and 1.04% in the fourth quarter a year ago.
•
Net loans receivable decreased to $8.95 billion at December 31, 2021, compared to $9.08 billion at September 30, 2021, and decreased 8% compared to $9.70 billion at December 31, 2020.
•
Non-performing assets decreased to $23.7 million, or 0.14% of total assets, at December 31, 2021, compared to $29.7 million, or 0.18% of total assets in the preceding quarter, and decreased from $36.5 million, or 0.24% of total assets, at December 31, 2020.
•
The allowance for credit losses - loans was $132.1 million, or 1.45% of total loans receivable, as of December 31, 2021, compared to $139.9 million, or 1.52% of total loans receivable as of September 30, 2021 and $167.3 million, or 1.69% of total loans receivable as of December 31, 2020.
•
Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) increased 1% to $13.49 billion at December 31, 2021, compared to $13.31 billion at September 30, 2021, and increased 16% compared to $11.65 billion a year ago.  Core deposits represented 94% of total deposits at December 31, 2021.
•
Dividends to shareholders were $0.41 per share in the quarter ended December 31, 2021.
•
Common shareholders’ equity per share increased 1% to $49.35 at December 31, 2021, compared to $48.67 at the preceding quarter end, and increased 4% from $47.39 a year ago.
•
Tangible common shareholders’ equity per share* increased 2% to $38.02 at December 31, 2021, compared to $37.30 at the preceding quarter end, and increased 5% from $36.17 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
In September 2021, Banner completed the consolidation of five branches as it continues to see migration of transactions to the digital space, reducing in-branch transactions.  In addition, Banner has made the decision to consolidate another seven branches in February 2022.  During the past year, client adoption of mobile and digital banking accelerated, while physical branch transaction volume declined.  Banner anticipates this shift in client service delivery channel preference will continue after the COVID-19 pandemic ends.
Income Statement Review
Net interest income was $121.5 million in the fourth quarter of 2021, compared to $130.1 million in the preceding quarter and $121.4 million in the fourth quarter a year ago.
Banner’s net interest margin on a tax equivalent basis was 3.17% for the fourth quarter of 2021, a 30 basis-point decrease compared to 3.47% in the preceding quarter and a 47 basis-point decrease compared to 3.64% in the fourth quarter a year ago.
“Lower interest income, 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, adversely affected our net interest margin during the quarter.  This impact was partially offset by a decrease in the cost of funding liabilities,” said Grescovich.  Acquisition accounting adjustments added five basis points to the net interest margin in the current quarter, three basis points in the preceding quarter and five basis points in the fourth quarter a year ago.  The total purchase discount for acquired loans was $9.7 million at December 31, 2021, compared to $11.5 million at September 30, 2021, and $16.1 million at December 31, 2020.  For the year ended December 31, 2021, Banner’s net interest margin on a tax equivalent basis was 3.39% compared to 3.85% in 2020.


BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 3

Average yields on interest-earning assets decreased 33 basis points to 3.29% in the fourth quarter compared to 3.62% for the preceding quarter and decreased 58 basis points compared to 3.87% in the fourth quarter a year ago.  These decreases in average yield between periods 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 31 basis points to 4.57% compared to 4.88% in the preceding quarter and increased four basis points compared to 4.53% in the fourth quarter a year ago.  The decrease in average loan yields during the current quarter compared to the preceding quarter was primarily the result of the 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 eight basis points to average loan yields in the current quarter, five basis points in the preceding quarter and seven basis points in the fourth quarter a year ago.  Deposit costs were 0.07% in the fourth quarter of 2021, a one basis-point decrease compared to the preceding quarter and a seven basis-point decrease compared to the fourth 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.  The total cost of funding liabilities was 0.13% during the fourth quarter of 2021, a three basis-point decrease compared to the preceding quarter and an 11 basis-point decrease compared to the fourth quarter a year ago.
Banner recorded a $5.2 million recapture of provision for credit losses in the current quarter (comprised of an $8.1 million recapture 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).  This recapture compares to an $8.6 million recapture of provision for credit losses in the prior quarter (comprised of an $8.9 million recapture of provision for credit losses - loans and a $218,000 provision for credit losses - unfunded loan commitments) and a $602,000 provision for credit losses in the fourth quarter a year ago (comprised of a $593,000 recapture of provision for credit losses - loans and a $1.2 million provision for credit losses - unfunded loan commitments).  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 forecasted economic indicators utilized to calculate credit losses.
Total non-interest income was $24.5 million in the fourth quarter of 2021, compared to $25.3 million in the preceding quarter and $23.5 million in the fourth quarter a year ago.  Deposit fees and other service charges were $10.3 million in the fourth quarter of 2021, compared to $10.5 million in the preceding quarter and $8.3 million in the fourth quarter a year ago.  The increase in deposit fees and other service charges from the fourth quarter a year ago is primarily a result of increased transaction deposit account activity and higher fees on certain transactions.  Mortgage banking revenues, including gains on one- to four-family and multifamily loan sales and loan servicing fees, decreased to $5.6 million in the fourth quarter, compared to $9.6 million in the preceding quarter and decreased compared to $10.6 million in the fourth quarter of 2020.  The lower mortgage banking revenue for the current quarter compared to the prior quarter is primarily due to no multifamily loan sales or related gains during the current quarter compared to the prior quarter, which included $2.4 million of gain on the sale of multifamily loans.  The decrease from the fourth quarter of 2020 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.  Home purchase activity accounted for 64% of one- to four-family mortgage loan originations in the fourth quarter of 2021, compared to 68% in the prior quarter and 51% in the fourth quarter of 2020.  Miscellaneous non-interest income increased to $4.7 million in the fourth quarter of 2021, compared to $2.2 million in the preceding quarter and $1.4 million in the fourth quarter a year ago.  The increase in miscellaneous non-interest income from the prior quarter and fourth quarter a year ago is primarily a result of a valuation adjustment on the SBA servicing asset, higher gains related to SBA loans sold as well as gains related to the disposition of closed branch locations.  For the year ended December 31, 2021, total non-interest income decreased 2% to $96.4 million, compared to $98.6 million in 2020.
Banner’s fourth quarter 2021 results included a $2.7 million 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 $136,000 net loss on the sale of securities.  In the preceding quarter, results included a $1.8 million net gain for fair value adjustments and a $56,000 net gain on the sale of securities.  In the fourth quarter a year ago, results included a $1.7 million net gain for fair value adjustments and a $197,000 net gain on the sale of securities.
Total revenue decreased 6% to $146.0 million for the fourth quarter of 2021, compared to $155.5 million in the preceding quarter, and increased 1% compared to $144.9 million in the fourth quarter a year ago.  For the year, total revenues increased 2% to $593.3 million compared to $579.9 million for the same period one year earlier.  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 $143.4 million in the fourth quarter of 2021, compared to $153.6 million in the preceding quarter and $143.0 million in the fourth quarter of 2020.  For the year ended December 31, 2021, adjusted revenue* was $588.2 million, compared to $579.6 million in 2020.
Total non-interest expense was $91.8 million in the fourth quarter of 2021, compared to $102.1 million in the preceding quarter and $95.6 million in the fourth quarter of 2020.  The decrease in non-interest expense for the current quarter compared to the prior quarter primarily reflects a $10.1 million decrease in professional and legal expenses.  The decrease in professional and legal expenses was primarily due to $5.8 million of consultant expense related to the Banner Forward initiative and a $4.0 million accrual related to pending litigation recorded during the prior quarter.  Additionally, salary and employee benefits expense decreased $2.0 million, primarily due to a reduction in staffing, and payment and card processing services expense decreased $1.1 million, primarily reflecting a decrease in fraud related losses.  These decreases were partially offset by a $2.3 million loss on extinguishment of debt as a result of the redemption of $8.2 million of junior subordinated debentures during the current quarter.  The year-over-year quarterly decrease in non-interest expense also primarily reflects decreases in salary and employee benefits expense, and professional and legal expenses.  The year-over-year quarterly decreases in non-interest expense were partially offset by an increase in payment and card processing services expense, a decrease in capitalized loan origination costs and the previously mentioned loss on extinguishment of debt.  COVID-19 expenses were

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 4

$127,000 for the fourth quarter of 2021, compared to $44,000 for the preceding quarter and $333,000 in the fourth quarter a year ago.  For the year, total non-interest expense was $380.1 million, compared to $369.6 million in the same period a year earlier.  Banner’s efficiency ratio was 62.88% for the current quarter, compared to 65.70% in the preceding quarter and 65.93% in the year ago quarter.  Banner’s adjusted efficiency ratio* was 59.71% for the current quarter, compared to 59.65% in the preceding quarter and 64.31% in the year ago quarter.

For the fourth quarter of 2021, Banner had $9.5 million in state and federal income tax expense for an effective tax rate of 16.0%, 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 23.7%, 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 increased to $16.80 billion at December 31, 2021, compared to $16.64 billion at September 30, 2021, and increased 12% when compared to $15.03 billion at December 31, 2020.  The total of securities and interest-bearing deposits held at other banks was $6.26 billion at December 31, 2021, compared to $6.03 billion at September 30, 2021 and $3.69 billion at December 31, 2020.  The average effective duration of Banner's securities portfolio was approximately 4.6 years at December 31, 2021, compared to 3.6 years at December 31, 2020.
Total loans receivable decreased 1% to $9.08 billion at December 31, 2021, compared to $9.22 billion at September 30, 2021, and decreased 8% when compared to $9.87 billion at December 31, 2020.  The decrease in total loans receivable compared to the prior quarter primarily reflects the forgiveness of SBA PPP loans.  Excluding SBA PPP loans, total loans receivable increased $42.6 million during the current quarter.  SBA PPP loans decreased 57% to $133.9 million at December 31, 2021, compared to $310.2 million at September 30, 2021, and decreased 87% when compared to $1.04 billion at December 31, 2020.  The decrease in SBA PPP loans was partially offset by increases in commercial real estate and multifamily real estate.  Commercial real estate and multifamily real estate loans increased 1% to $4.28 billion at December 31, 2021, compared to $4.24 billion at September 30, 2021, and increased 6% compared to $4.03 billion a year ago.  Commercial business loans decreased 7% to $1.96 billion at December 31, 2021, compared to $2.12 billion at September 30, 2021, and decreased 33% compared to $2.92 billion a year ago, primarily due to SBA PPP loans forgiven.  Excluding SBA PPP loans, commercial business loans increased 1% to $1.83 billion at December 31, 2021, compared to $1.82 billion at September 30, 2021, and decreased 2% compared to $1.88 billion a year ago.  Agricultural business loans decreased to $285.8 million at December 31, 2021, compared to $287.5 million at September 30, 2021 and decreased from $299.9 million a year ago.  Total construction, land and land development loans were $1.31 billion at December 31, 2021, a 1% decrease from $1.33 billion at September 30, 2021, and a 2% increase compared to $1.29 billion a year earlier.  Consumer loans decreased to $555.9 million at December 31, 2021, compared to $561.2 million at September 30, 2021, and decreased from $605.8 million a year ago.  One- to four-family loans increased slightly to $683.3 million at December 31, 2021, compared to $682.4 million at September 30, 2021, and decreased from $717.9 million a year ago.  The year over year decrease primarily reflects held for investment loans being refinanced and sold as held for sale loans.
Loans held for sale were $96.5 million at December 31, 2021, compared to $63.7 million at September 30, 2021, and $243.8 million at December 31, 2020.  The volume of one- to four- family residential mortgage loans sold was $245.9 million in the current quarter, compared to $232.2 million in the preceding quarter and $356.6 million in the fourth quarter a year ago.  Banner sold no multifamily loans during the fourth quarter of 2021, compared to $96.1 million in the preceding quarter and $10.4 million in the fourth quarter a year ago.
Total deposits increased 1% to $14.33 billion at December 31, 2021, compared to $14.16 billion at September 30, 2021, and increased 14% when compared to $12.57 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 decreased to $6.39 billion at December 31, 2021, compared to $6.40 billion at September 30, 2021, and increased 16% compared to $5.49 billion a year ago.  Core deposits were 94% of total deposits at both December 31, 2021 and September 30, 2021.  Certificates of deposit decreased to $838.6 million at December 31, 2021, compared to $851.1 million at September 30, 2021, and decreased 8% compared to $915.3 million a year earlier.  FHLB borrowings were $50.0 million at both December 31, 2021 and September 30, 2021 and decreased from $150.0 million a year ago.
At December 31, 2021, total common shareholders’ equity was $1.69 billion, or 10.06% of assets, compared to $1.67 billion or 10.02% of assets at September 30, 2021, and $1.67 billion or 11.09% of assets a year ago.  At December 31, 2021, tangible common shareholders’ equity*, which excludes goodwill and other intangible assets, net, was $1.30 billion, or 7.93% of tangible assets*, compared to $1.28 billion, or 7.86% of tangible assets, at September 30, 2021, and $1.27 billion, or 8.69% of tangible assets, a year ago.  Banner’s tangible book value per share* increased to $38.02 at December 31, 2021, compared to $36.17 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 December 31, 2021, Banner's common equity Tier 1 capital ratio was 11.54%, its Tier 1 leverage capital to average assets ratio was 8.76%, and its total capital to risk-weighted assets ratio was 14.71%.


BANR - Fourth Quarter 2021 Results
January 20, 2022
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Credit Quality
The allowance for credit losses - loans was $132.1 million at December 31, 2021, or 1.45% of total loans receivable outstanding and 578% of non-performing loans, compared to $139.9 million at September 30, 2021, or 1.52% of total loans receivable outstanding and 485% of non-performing loans, and $167.3 million at December 31, 2020, or 1.69% of total loans receivable outstanding and 470% 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 $12.4 million at December 31, 2021, compared to $10.1 million at September 30, 2021 and $13.3 million at December 31, 2020.  Net loan recoveries totaled $311,000 in the fourth quarter of 2021, compared to $756,000 in the preceding quarter and $93,000 of net loan charge-offs in the fourth quarter a year ago.  Non-performing loans were $22.8 million at December 31, 2021, compared to $28.9 million at September 30, 2021, and $35.6 million a year ago.  Real estate owned and other repossessed assets were $869,000 at both December 31, 2021 and September 30, 2021, compared to $867,000 a year ago.
Banner’s total substandard loans were $198.4 million at December 31, 2021, compared to $225.8 million at September 30, 2021, and $340.2 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 $23.7 million, or 0.14% of total assets, at December 31, 2021, compared to $29.7 million, or 0.18% of total assets, at September 30, 2021, and $36.5 million, or 0.24% of total assets, a year ago.
At December 31, 2021, Banner had 21 mortgage loans totaling $6.4 million operating under forbearance agreements due to COVID-19.  Since these loans were performing loans that were current on their payments prior to the COVID-19 pandemic, these modifications are not considered to be troubled debt restructurings pursuant to applicable accounting and regulatory guidance.
Conference Call
Banner will host a conference call on Friday, January 21, 2022, at 8:00 a.m. PST, to discuss its fourth 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 579750 to participate in the call.  A replay will be available for one week at (866) 813-9403 using access code 905147, or at www.bannerbank.com.
About the Company
Banner Corporation is a $16.80 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.
The COVID-19, pandemic is adversely affecting us, our clients, counterparties, employees, and third-party service providers, and the ultimate extent of the impacts on our business, financial position, results of operations, liquidity, and prospects is uncertain. Deterioration in general business and economic conditions, including increases in unemployment rates, or turbulence in domestic or global financial markets could adversely affect our revenues and the values of our assets and liabilities, reduce the availability of funding, lead to a tightening of credit, and increase stock price volatility. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways. Other factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) 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; (2) 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; (3) competitive pressures among depository institutions; (4) interest rate movements and their impact on client behavior and net interest margin; (5) uncertainty regarding the future of the London Interbank Offered Rate (LIBOR), and the potential transition away from LIBOR toward new interest rate benchmarks; (6) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet clients’ needs and developments in the market place; (9) the ability to access cost-effective funding; (10) disruptions, security breaches or other adverse events, failures



BANR - Fourth Quarter 2021 Results
January 20, 2022
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or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (11) changes in financial markets; (12) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (13) the costs, effects and outcomes of litigation; (14) 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 and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (15) changes in accounting principles, policies or guidelines; (16) future acquisitions by Banner of other depository institutions or lines of business; (17) 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; (18) the costs associated with Banner Forward and (19) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks detailed from time to time in our filings with the Securities and Exchange Commission including our Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K.

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 7

RESULTS OF OPERATIONS
  
Quarters Ended
    
Twelve Months Ended
  
(in thousands except shares and per share data)
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
                               
INTEREST INCOME:
                              
Loans receivable
  
$
104,929
    
$
116,487
    
$
115,545
    
$
445,731
    
$
466,360
  
Mortgage-backed securities
    
13,220
      
11,695
      
7,438
      
45,723
      
31,792
  
Securities and cash equivalents
    
8,397
      
7,686
      
6,170
      
29,046
      
20,994
  
 
    
126,546
      
135,868
      
129,153
      
520,500
      
519,146
  
INTEREST EXPENSE:
                                        
Deposits
    
2,384
      
2,749
      
4,392
      
11,770
      
25,015
  
Federal Home Loan Bank advances
    
348
      
655
      
987
      
2,592
      
5,023
  
Other borrowings
    
109
      
125
      
121
      
467
      
603
  
Junior subordinated debentures and subordinated notes
    
2,175
      
2,193
      
2,216
      
8,780
      
7,204
  
 
    
5,016
      
5,722
      
7,716
      
23,609
      
37,845
  
Net interest income
    
121,530
      
130,146
      
121,437
      
496,891
      
481,301
  
(RECAPTURE)/PROVISION FOR CREDIT LOSSES
    
(5,243
)
    
(8,638
)
    
602
      
(33,388
)
    
67,875
  
Net interest income after (recapture)/provision for credit losses
    
126,773
      
138,784
      
120,835
      
530,279
      
413,426
  
NON-INTEREST INCOME:
                                        
Deposit fees and other service charges
    
10,341
      
10,457
      
8,293
      
39,495
      
34,384
  
Mortgage banking operations
    
5,643
      
9,613
      
10,586
      
33,948
      
51,083
  
Bank-owned life insurance
    
1,203
      
1,245
      
1,319
      
5,000
      
5,972
  
Miscellaneous
    
4,702
      
2,185
      
1,410
      
12,875
      
6,821
  
 
    
21,889
      
23,500
      
21,608
      
91,318
      
98,260
  
Net (loss) gain on sale of securities
    
(136
)
    
56
      
197
      
482
      
1,012
  
Net change in valuation of financial instruments carried at fair value
    
2,721
      
1,778
      
1,704
      
4,616
      
(656
)
Total non-interest income
    
24,474
      
25,334
      
23,509
      
96,416
      
98,616
  
NON-INTEREST EXPENSE:
                                        
Salary and employee benefits
    
57,798
      
59,799
      
60,906
      
244,351
      
245,400
  
Less capitalized loan origination costs
    
(7,647
)
    
(8,290
)
    
(9,415
)
    
(34,401
)
    
(34,848
)
Occupancy and equipment
    
13,885
      
13,153
      
14,248
      
52,850
      
53,362
  
Information / computer data services
    
6,441
      
6,110
      
6,402
      
24,356
      
24,386
  
Payment and card processing services
    
5,062
      
6,181
      
3,960
      
20,544
      
16,095
  
Professional and legal expenses
    
2,251
      
12,324
      
5,643
      
22,274
      
12,093
  
Advertising and marketing
    
2,071
      
1,521
      
2,828
      
6,036
      
6,412
  
Deposit insurance expense
    
1,340
      
1,469
      
1,548
      
5,583
      
6,516
  
State/municipal business and use taxes
    
976
      
1,219
      
1,071
      
4,343
      
4,355
  
Real estate operations
    
49
      
53
      
(283
)
    
(22
)
    
(190
)
Amortization of core deposit intangibles
    
1,574
      
1,575
      
1,865
      
6,571
      
7,732
  
Loss on extinguishment of debt
    
2,284
      
—
      
—
      
2,284
      
—
  
Miscellaneous
    
5,594
      
6,977
      
5,871
      
24,236
      
22,712
  
     
91,678
      
102,091
      
94,644
      
379,005
      
364,025
  
COVID-19 expenses
    
127
      
44
      
333
      
436
      
3,502
  
Merger and acquisition-related expenses
    
—
      
10
      
579
      
660
      
2,062
  
Total non-interest expense
    
91,805
      
102,145
      
95,556
      
380,101
      
369,589
  
Income before provision for income taxes
    
59,442
      
61,973
      
48,788
      
246,594
      
142,453
  
PROVISION FOR INCOME TAXES
    
9,515
      
12,089
      
9,831
      
45,546
      
26,525
  
NET INCOME
  
$
49,927
    
$
49,884
    
$
38,957
    
$
201,048
    
$
115,928
  
Earnings per share available to common shareholders:
                                        
Basic
  
$
1.46
    
$
1.45
    
$
1.11
    
$
5.81
    
$
3.29
  
Diluted
  
$
1.44
    
$
1.44
    
$
1.10
    
$
5.76
    
$
3.26
  
Cumulative dividends declared per common share
  
$
0.41
    
$
0.41
    
$
0.41
    
$
1.64
    
$
1.23
  
Weighted average common shares outstanding:
                                        
Basic
    
34,292,967
      
34,446,510
      
35,200,769
      
34,610,056
      
35,264,252
  
Diluted
    
34,575,607
      
34,669,492
      
35,425,810
      
34,919,188
      
35,528,848
  
Increase (decrease) in common shares outstanding
    
641
      
(298,897
)
    
632
      
(906,568
)
    
(592,376
)

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 8

FINANCIAL CONDITION
   










Percentage Change
  
(in thousands except shares and per share data)
 
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Prior
Qtr
    
Prior
Yr Qtr
  
                                         
ASSETS                                        
Cash and due from banks
  
$
358,461
    
$
392,035
    
$
311,899
      
(8.6)
%
    
14.9
%
Interest-bearing deposits
    
1,775,839
      
1,808,547
      
922,284
      
(1.8)
%
    
92.5
%
Total cash and cash equivalents
    
2,134,300
      
2,200,582
      
1,234,183
      
(3.0)
%
    
72.9
%
Securities - trading
    
26,981
      
26,875
      
24,980
      
0.4
%
    
8.0
%
Securities - available for sale
    
3,638,993
      
3,446,575
      
2,322,593
      
5.6
%
    
56.7
%
Securities - held to maturity
    
520,922
      
447,708
      
421,713
      
16.4
%
    
23.5
%
Total securities
    
4,186,896
      
3,921,158
      
2,769,286
      
6.8
%
    
51.2
%
Federal Home Loan Bank stock
    
12,000
      
12,000
      
16,358
      
—
%
    
(26.6)
%
Securities purchased under agreements to resell
    
300,000
      
300,000
      
—
      
—
%
  
nm
  
Loans held for sale
    
96,487
      
63,678
      
243,795
      
51.5
%
    
(60.4)
%
Loans receivable
    
9,084,763
      
9,218,384
      
9,870,982
      
(1.4)
%
    
(8.0)
%
Allowance for credit losses - loans
    
(132,099
)
    
(139,915
)
    
(167,279
)
    
(5.6)
%
    
(21.0)
%
Net loans receivable
    
8,952,664
      
9,078,469
      
9,703,703
      
(1.4)
%
    
(7.7)
%
Accrued interest receivable
    
42,916
      
43,644
      
46,617
      
(1.7)
%
    
(7.9)
%
Real estate owned (REO) held for sale, net
    
852
      
852
      
816
      
—
%
    
4.4
%
Property and equipment, net
    
148,759
      
151,503
      
164,556
      
(1.8)
%
    
(9.6)
%
Goodwill
    
373,121
      
373,121
      
373,121
      
—
%
    
—
%
Other intangibles, net
    
14,855
      
16,429
      
21,426
      
(9.6)
%
    
(30.7)
%
Bank-owned life insurance
    
244,156
      
192,950
      
191,830
      
26.5
%
    
27.3
%
Operating lease right-of-use assets
    
55,257
      
58,523
      
55,367
      
(5.6)
%
    
(0.2)
%
Other assets
    
242,609
      
224,970
      
210,565
      
7.8
%
    
15.2
%
Total assets
  
$
16,804,872
    
$
16,637,879
    
$
15,031,623
      
1.0
%
    
11.8
%
LIABILITIES
                                       
Deposits:
                                       
Non-interest-bearing
  
$
6,385,177
    
$
6,400,864
    
$
5,492,924
      
(0.2)
%
    
16.2
%
Interest-bearing transaction and savings accounts
    
7,103,125
      
6,912,759
      
6,159,052
      
2.8
%
    
15.3
%
Interest-bearing certificates
    
838,631
      
851,054
      
915,320
      
(1.5)
%
    
(8.4)
%
Total deposits
    
14,326,933
      
14,164,677
      
12,567,296
      
1.1
%
    
14.0
%
Advances from Federal Home Loan Bank
    
50,000
      
50,000
      
150,000
      
—
%
    
(66.7)
%
Customer repurchase agreements and other borrowings
    
264,490
      
247,358
      
184,785
      
6.9
%
    
43.1
%
Subordinated notes, net
    
98,564
      
98,472
      
98,201
      
0.1
%
    
0.4
%
Junior subordinated debentures at fair value
    
119,815
      
124,853
      
116,974
      
(4.0)
%
    
2.4
%
Operating lease liabilities
    
59,756
      
62,946
      
59,343
      
(5.1)
%
    
0.7
%
Accrued expenses and other liabilities
    
148,303
      
175,960
      
143,300
      
(15.7)
%
    
3.5
%
Deferred compensation
    
46,684
      
46,494
      
45,460
      
0.4
%
    
2.7
%
Total liabilities
    
15,114,545
      
14,970,760
      
13,365,359
      
1.0
%
    
13.1
%
SHAREHOLDERS' EQUITY
                                       
Common stock
    
1,299,381
      
1,297,145
      
1,349,879
      
0.2
%
    
(3.7)
%
Retained earnings
    
390,762
      
355,035
      
247,316
      
10.1
%
    
58.0
%
Other components of shareholders’ equity
    
184
      
14,939
      
69,069
      
(98.8)
%
    
(99.7)
%
Total shareholders’ equity
    
1,690,327
      
1,667,119
      
1,666,264
      
1.4
%
    
1.4
%
Total liabilities and shareholders’ equity
  
$
16,804,872
    
$
16,637,879
    
$
15,031,623
      
1.0
%
    
11.8
%
Common Shares Issued:
                                        
Shares outstanding at end of period
    
34,252,632
      
34,251,991
      
35,159,200
                  
Common shareholders’ equity per share (1)
  
$
49.35
    
$
48.67
    
$
47.39
                  
Common shareholders’ tangible equity per share (1) (2)
  
$
38.02
    
$
37.30
    
$
36.17
                  
Common shareholders’ tangible equity to tangible assets (2)
    
7.93
%
    
7.86
%
    
8.69
%
                
Consolidated Tier 1 leverage capital ratio
    
8.76
%
    
8.79
%
    
9.50
%
                

(1)
Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
(2)
Common shareholders’ tangible equity excludes goodwill and other intangible assets.  Tangible assets exclude goodwill and other intangible assets.  These ratios represent
non-GAAP financial measures.  See also Non-GAAP Financial Measures reconciliation tables on the final two pages of the press release tables.

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 9

ADDITIONAL FINANCIAL INFORMATION
                              
(dollars in thousands)
                              
                     
Percentage Change
  
LOANS
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Prior
Qtr
    
Prior Yr
Qtr
  
                               
Commercial real estate:
                              
Owner-occupied
  
$
1,131,828
    
$
1,122,275
    
$
1,076,467
      
0.9
%
    
5.1
%
Investment properties
    
1,990,461
      
1,980,284
      
1,955,684
      
0.5
%
    
1.8
%
Small balance CRE
    
598,212
      
601,751
      
573,849
      
(0.6)
%
    
4.2
%
Multifamily real estate
    
564,100
      
532,760
      
428,223
      
5.9
%
    
31.7
%
Construction, land and land development:
                                        
Commercial construction
    
169,530
      
170,205
      
228,937
      
(0.4)
%
    
(25.9)
%
Multifamily construction
    
259,116
      
278,184
      
305,527
      
(6.9)
%
    
(15.2)
%
One- to four-family construction
    
568,753
      
571,431
      
507,810
      
(0.5)
%
    
12.0
%
Land and land development
    
313,454
      
308,164
      
248,915
      
1.7
%
    
25.9
%
Commercial business:
                                        
Commercial business
    
1,039,502
      
1,039,731
      
1,133,989
      
—
%
    
(8.3)
%
SBA PPP
    
132,574
      
306,976
      
1,044,472
      
(56.8)
%
    
(87.3)
%
Small business scored
    
792,310
      
775,554
      
743,451
      
2.2
%
    
6.6
%
Agricultural business, including secured by farmland:
                                        
Agricultural business, including secured by farmland
    
284,399
      
284,255
      
299,949
      
0.1
%
    
(5.2)
%
SBA PPP
    
1,354
      
3,214
      
—
      
(57.9)
%
  
nm
  
One- to four-family residential
    
683,268
      
682,368
      
717,939
      
0.1
%
    
(4.8)
%
Consumer:
                                        
Consumer—home equity revolving lines of credit
    
458,533
      
462,819
      
491,812
      
(0.9)
%
    
(6.8)
%
Consumer—other
    
97,369
      
98,413
      
113,958
      
(1.1)
%
    
(14.6)
%
Total loans receivable
  
$
9,084,763
    
$
9,218,384
    
$
9,870,982
      
(1.4)
%
    
(8.0)
%
Restructured loans performing under their restructured terms
  
$
5,309
    
$
5,273
    
$
6,673
                  
Loans 30 - 89 days past due and on accrual
  
$
11,558
    
$
6,911
    
$
12,291
                  
Total delinquent loans (including loans on non-accrual), net
  
$
18,688
    
$
18,619
    
$
36,131
                  
Total delinquent loans  /  Total loans receivable
    
0.21
%
    
0.20
%
    
0.37
%
                

LOANS BY GEOGRAPHIC LOCATION
                          
Percentage Change
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Prior
Qtr
    
Prior Yr Qtr
  
   
Amount
    
Percentage
    
Amount
    
Amount
              
                                     
Washington
  
$
4,264,590
      
47.0
%
  
$
4,319,008
    
$
4,647,553
      
(1.3)
%
    
(8.2)
%
California
    
2,138,340
      
23.5
%
    
2,160,280
      
2,279,749
      
(1.0)
%
    
(6.2)
%
Oregon
    
1,652,364
      
18.2
%
    
1,679,452
      
1,792,156
      
(1.6)
%
    
(7.8)
%
Idaho
    
525,141
      
5.8
%
    
536,128
      
537,996
      
(2.0)
%
    
(2.4)
%
Utah
    
74,913
      
0.8
%
    
89,620
      
80,704
      
(16.4)
%
    
(7.2)
%
Other
    
429,415
      
4.7
%
    
433,896
      
532,824
      
(1.0)
%
    
(19.4)
%
Total loans receivable
  
$
9,084,763
      
100.0
%
  
$
9,218,384
    
$
9,870,982
      
(1.4)
%
    
(8.0)
%


BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 10

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)

LOAN ORIGINATIONS
  
Quarters Ended
    
Twelve Months Ended
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
Commercial real estate
  
$
196,350
    
$
174,827
    
$
93,838
    
$
565,809
    
$
356,361
  
Multifamily real estate
    
25,933
      
26,155
      
7,900
      
110,640
      
27,119
  
Construction and land
    
522,081
      
496,386
      
515,280
      
1,975,664
      
1,588,311
  
Commercial business:
                                        
Commercial business
    
203,549
      
229,859
      
133,112
      
731,315
      
628,981
  
SBA PPP
    
—
      
907
      
—
      
485,077
      
1,176,018
  
Agricultural business
    
13,061
      
9,223
      
11,552
      
61,997
      
76,096
  
One-to four-family residential
    
52,251
      
49,594
      
28,402
      
206,662
      
116,713
  
Consumer
    
101,365
      
145,102
      
97,416
      
465,213
      
423,526
  
Total loan originations (excluding loans held for sale)
  
$
1,114,590
    
$
1,132,053
    
$
887,500
    
$
4,602,377
    
$
4,393,125
  






BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 11

ADDITIONAL FINANCIAL INFORMATION
                              
(dollars in thousands)
                              
 
  
Quarters Ended
    
Twelve Months Ended
  
CHANGE IN THE
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
ALLOWANCE FOR CREDIT LOSSES - LOANS
                              
Balance, beginning of period
  
$
139,915
    
$
148,009
    
$
167,965
    
$
167,279
    
$
100,559
  
Beginning balance adjustment for adoption of ASC 326
    
—
      
—
      
—
      
—
      
7,812
  
(Recapture)/provision for credit losses - loans
    
(8,127)

   
(8,850)

   
(593)

   
(33,112)

   
64,285
  
Recoveries of loans previously charged off:
                                        
Commercial real estate
    
635
      
923
      
31
      
1,729
      
275
  
Construction and land
    
—
      
—
      
—
      
100
      
105
  
One- to four-family real estate
    
47
      
19
      
194
      
199
      
467
  
Commercial business
    
267
      
230
      
2,444
      
1,797
      
3,265
  
Agricultural business, including secured by farmland
    
5
      
17
      
51
      
30
      
1,823
  
Consumer
    
140
      
227
      
90
      
760
      
328
  
 
    
1,094
      
1,416
      
2,810
      
4,615
      
6,263
  
Loans charged off:
                                        
Commercial real estate
    
(1)

   
—
      
(1,375)

   
(3,767)

   
(1,854)

Multifamily real estate
    
(59)

   
—
      
—
      
(59)

   
(66)

Construction and land
    
—
      
—
      
—
      
—
      
(100)

One- to four-family real estate
    
—
      
—
      
—
      
—
      
(136)

Commercial business
    
(488)

   
(362)

   
(1,019)

   
(1,762)

   
(7,253)

Agricultural business, including secured by farmland
    
—
      
(179)

   
(37)

   
(181)

   
(591)

Consumer
    
(235)

   
(119)

   
(472)

   
(914)

   
(1,640)

 
    
(783)

   
(660)

   
(2,903)

   
(6,683)

   
(11,640)

Net recoveries (charge-offs)
    
311
      
756
      
(93)

   
(2,068)

   
(5,377)

Balance, end of period
  
$
132,099
    
$
139,915
    
$
167,279
    
$
132,099
    
$
167,279
  
Net recoveries (charge-offs) / Average loans receivable
    
0.003
%
    
0.008
%
    
(0.001)
%
    
(0.021)
%
    
(0.053)
%

                   
ALLOCATION OF
                  
ALLOWANCE FOR CREDIT LOSSES - LOANS
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
Specific or allocated credit loss allowance:
                  
Commercial real estate
  
$
52,995
    
$
57,215
    
$
57,791
  
Multifamily real estate
    
7,043
      
6,657
      
3,893
  
Construction and land
    
27,294
      
29,342
      
41,295
  
One- to four-family real estate
    
8,205
      
9,460
      
9,913
  
Commercial business
    
26,421
      
26,873
      
35,007
  
Agricultural business, including secured by farmland
    
3,190
      
3,177
      
4,914
  
Consumer
    
6,951
      
7,191
      
14,466
  
Total allowance for credit losses - loans
  
$
132,099
    
$
139,915
    
$
167,279
  
Allowance for credit losses - loans / Total loans receivable
    
1.45
%
    
1.52
%
    
1.69
%
Allowance for credit losses - loans / Non-performing loans
    
578
%
    
485
%
    
470
%

 
  
Quarters Ended
    
Twelve Months Ended
  
CHANGE IN THE
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
                            
Balance, beginning of period
  
$
10,127
    
$
9,909
    
$
12,094
    
$
13,297
    
$
2,716
  
Beginning balance adjustment for adoption of ASC 326
    
—
      
—
      
—
      
—
      
7,022
  
Provision/(recapture) for credit losses - unfunded loan commitments
    
2,305
      
218
      
1,203
      
(865
)
    
3,559
  
Balance, end of period
  
$
12,432
    
$
10,127
    
$
13,297
    
$
12,432
    
$
13,297
  


BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 12

ADDITIONAL FINANCIAL INFORMATION
                  
(dollars in thousands)
                  
 
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
NON-PERFORMING ASSETS
                  
Loans on non-accrual status:
                  
Secured by real estate:
                  
Commercial
  
$
14,159
    
$
14,931
    
$
18,199
  
Construction and land
    
479
      
354
      
936
  
One- to four-family
    
2,711
      
3,182
      
3,556
  
Commercial business
    
2,156
      
2,700
      
5,407
  
Agricultural business, including secured by farmland
    
1,022
      
1,022
      
1,743
  
Consumer
    
1,754
      
1,850
      
2,719
  
 
    
22,281
      
24,039
      
32,560
  
Loans more than 90 days delinquent, still on accrual:
                        
Secured by real estate:
                        
Commercial
    
—
      
3,955
      
—
  
One- to four-family
    
436
      
772
      
1,899
  
Commercial business
    
2
      
61
      
1,025
  
Consumer
    
117
      
34
      
130
  
 
    
555
      
4,822
      
3,054
  
Total non-performing loans
    
22,836
      
28,861
      
35,614
  
REO
    
852
      
852
      
816
  
Other repossessed assets
    
17
      
17
      
51
  
Total non-performing assets
  
$
23,705
    
$
29,730
    
$
36,481
  
Total non-performing assets to total assets
    
0.14
%
    
0.18
%
    
0.24
%

                   
 
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
LOANS BY CREDIT RISK RATING
                  
                   
Pass
  
$
8,874,468
    
$
8,956,604
    
$
9,494,147
  
Special Mention
    
11,932
      
36,001
      
36,598
  
Substandard
    
198,363
      
225,779
      
340,237
  
Total
  
$
9,084,763
    
$
9,218,384
    
$
9,870,982
  

 
  
Quarters Ended
    
Twelve Months Ended
  
REAL ESTATE OWNED
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
Balance, beginning of period
  
$
852
    
$
763
    
$
1,795
    
$
816
    
$
814
  
Additions from loan foreclosures
    
—
      
89
      
—
      
512
      
1,588
  
Proceeds from dispositions of REO
    
—
      
—
      
(1,555
)
    
(783
)
    
(2,360
)
Gain on sale of REO
    
—
      
—
      
603
      
307
      
819
  
Valuation adjustments in the period
    
—
      
—
      
(27
)
    
—
      
(45
)
Balance, end of period
  
$
852
    
$
852
    
$
816
    
$
852
    
$
816
  


BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 13

ADDITIONAL FINANCIAL INFORMATION
                              
(dollars in thousands) 
                              
                               
DEPOSIT COMPOSITION
                    
Percentage Change
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Prior Qtr
    
Prior Yr Qtr
  
                               
Non-interest-bearing
  
$
6,385,177
    
$
6,400,864
    
$
5,492,924
      
(0.2)
%
    
16.2
%
Interest-bearing checking
    
1,947,414
      
1,799,657
      
1,569,435
      
8.2
%
    
24.1
%
Regular savings accounts
    
2,784,716
      
2,773,995
      
2,398,482
      
0.4
%
    
16.1
%
Money market accounts
    
2,370,995
      
2,339,107
      
2,191,135
      
1.4
%
    
8.2
%
Total interest-bearing transaction and savings accounts
    
7,103,125
      
6,912,759
      
6,159,052
      
2.8
%
    
15.3
%
Total core deposits
    
13,488,302
      
13,313,623
      
11,651,976
      
1.3
%
    
15.8
%
Interest-bearing certificates
    
838,631
      
851,054
      
915,320
      
(1.5)
%
    
(8.4)
%
Total deposits
  
$
14,326,933
    
$
14,164,677
    
$
12,567,296
      
1.1
%
    
14.0
%

GEOGRAPHIC CONCENTRATION OF DEPOSITS
                          
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Percentage Change
  
   
Amount
    
Percentage
    
Amount
    
Amount
    
Prior Qtr
    
Prior Yr Qtr
  
Washington
  
$
7,952,376
      
55.5
%
  
$
7,877,919
    
$
7,058,404
      
0.9
%
    
12.7
%
Oregon
    
3,067,054
      
21.4
%
    
3,030,109
      
2,604,908
      
1.2
%
    
17.7
%
California
    
2,524,296
      
17.6
%
    
2,501,521
      
2,237,949
      
0.9
%
    
12.8
%
Idaho
    
783,207
      
5.5
%
    
755,128
      
666,035
      
3.7
%
    
17.6
%
Total deposits
  
$
14,326,933
      
100.0
%
  
$
14,164,677
    
$
12,567,296
      
1.1
%
    
14.0
%

INCLUDED IN TOTAL DEPOSITS
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
Public non-interest-bearing accounts
  
$
193,917
    
$
193,414
    
$
175,352
  
Public interest-bearing transaction & savings accounts
    
159,957
      
161,407
      
127,523
  
Public interest-bearing certificates
    
39,961
      
40,851
      
59,127
  
Total public deposits
  
$
393,835
    
$
395,672
    
$
362,002
  




BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 14

ADDITIONAL FINANCIAL INFORMATION
                                    
(dollars in thousands)
                                    
   
Actual
    
Minimum to be
categorized as
"Adequately
Capitalized"
    
Minimum to be
categorized as
"Well Capitalized"
  
REGULATORY CAPITAL RATIOS AS OF
  DECEMBER 31, 2021
Amount
    
Ratio
    
Amount
    
Ratio
    
Amount
    
Ratio
  
                                     
Banner Corporation-consolidated:
                                    
      Total capital to risk-weighted assets
  
$
1,663,943
      
14.71
%
  
$
904,633
      
8.00
%
  
$
1,130,791
      
10.00
%
      Tier 1 capital to risk-weighted assets
    
1,440,694
      
12.74
%
    
678,474
      
6.00
%
    
678,474
      
6.00
%
      Tier 1 leverage capital to average assets
    
1,440,694
      
8.76
%
    
658,091
      
4.00
%
    
n/a
      
n/a
  
      Common equity tier 1 capital to risk-weighted assets
    
1,305,194
      
11.54
%
    
508,856
      
4.50
%
    
n/a
      
n/a
  
Banner Bank:
                                                
      Total capital to risk-weighted assets
    
1,552,204
      
13.73
%
    
904,159
      
8.00
%
    
1,130,199
      
10.00
%
      Tier 1 capital to risk-weighted assets
    
1,428,955
      
12.64
%
    
678,119
      
6.00
%
    
904,159
      
8.00
%
      Tier 1 leverage capital to average assets
    
1,428,955
      
8.69
%
    
657,882
      
4.00
%
    
822,353
      
5.00
%
      Common equity tier 1 capital to risk-weighted assets
    
1,428,955
      
12.64
%
    
508,589
      
4.50
%
    
734,629
      
6.50
%







BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 15

ADDITIONAL FINANCIAL INFORMATION
                                        
(dollars in thousands)
                                        
(rates / ratios annualized)
                                        
ANALYSIS OF NET INTEREST
  SPREAD
Quarters Ended
  
 
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
 
Average
Balance
  
Interest
and
Dividends
  
Yield / Cost(3)
    
Average
Balance
  
Interest
and
Dividends
  
Yield / Cost(3)
    
Average
Balance
  
Interest
and
Dividends
  
Yield / Cost(3)
  
Interest-earning assets:
                                        
Held for sale loans
$
73,101
  
$
601
    
3.26
%
  
$
114,938
  
$
996
    
3.44
%
  
$
110,414
  
$
976
    
3.52
%
Mortgage loans
  
7,362,363
    
83,059
    
4.48
%
    
7,245,962
    
83,803
    
4.59
%
    
7,251,101
    
84,634
    
4.64
%
Commercial/agricultural loans
  
1,460,486
    
14,966
    
4.07
%
    
1,534,978
    
15,776
    
4.08
%
    
1,626,508
    
19,143
    
4.68
%
SBA PPP loans
  
209,776
    
5,845
    
11.05
%
    
566,515
    
15,421
    
10.80
%
    
1,125,844
    
10,002
    
3.53
%
Consumer and other loans
  
119,658
    
1,749
    
5.80
%
    
120,112
    
1,774
    
5.86
%
    
135,498
    
2,057
    
6.04
%
Total loans(1)(3)
  
9,225,384
    
106,220
    
4.57
%
    
9,582,505
    
117,770
    
4.88
%
    
10,249,365
    
116,812
    
4.53
%
Mortgage-backed securities
  
2,838,759
    
13,344
    
1.86
%
    
2,560,027
    
11,820
    
1.83
%
    
1,429,635
    
7,536
    
2.10
%
Other securities
  
1,550,383
    
8,466
    
2.17
%
    
1,491,035
    
7,873
    
2.09
%
    
975,166
    
6,634
    
2.71
%
Equity securities
  
—
    
—
    
—
%
    
—
    
—
    
—
%
    
234,822
    
64
    
0.11
%
Interest-bearing deposits with banks
  
1,901,165
    
731
    
0.15
%
    
1,486,839
    
586
    
0.16
%
    
611,234
    
219
    
0.14
%
FHLB stock
  
12,000
    
135
    
4.46
%
    
13,957
    
135
    
3.84
%
    
16,361
    
162
    
3.94
%
Total investment securities (3)
  
6,302,307
    
22,676
    
1.43
%
    
5,551,858
    
20,414
    
1.46
%
    
3,267,218
    
14,615
    
1.78
%
Total interest-earning assets
  
15,527,691
    
128,896
    
3.29
%
    
15,134,363
    
138,184
    
3.62
%
    
13,516,583
    
131,427
    
3.87
%
Non-interest-earning assets
  
1,306,437
                  
1,301,383
                  
1,349,055
              
Total assets
$
16,834,128
                
$
16,435,746
                
$
14,865,638
              
Deposits:
                                                          
Interest-bearing checking accounts
$
1,875,097
    
289
    
0.06
%
  
$
1,771,869
    
282
    
0.06
%
  
$
1,483,183
    
315
    
0.08
%
Savings accounts
  
2,773,597
    
400
    
0.06
%
    
2,721,028
    
458
    
0.07
%
    
2,375,015
    
691
    
0.12
%
Money market accounts
  
2,367,861
    
559
    
0.09
%
    
2,322,453
    
668
    
0.11
%
    
2,165,960
    
1,047
    
0.19
%
Certificates of deposit
  
840,920
    
1,136
    
0.54
%
    
863,971
    
1,341
    
0.62
%
    
916,286
    
2,339
    
1.02
%
Total interest-bearing deposits
  
7,857,475
    
2,384
    
0.12
%
    
7,679,321
    
2,749
    
0.14
%
    
6,940,444
    
4,392
    
0.25
%
Non-interest-bearing deposits
  
6,523,149
    
—
    
—
%
    
6,275,634
    
—
    
—
%
    
5,499,240
    
—
    
—
%
Total deposits
  
14,380,624
    
2,384
    
0.07
%
    
13,954,955
    
2,749
    
0.08
%
    
12,439,684
    
4,392
    
0.14
%
Other interest-bearing liabilities:
                                                          
FHLB advances
  
50,000
    
348
    
2.76
%
    
98,370
    
655
    
2.64
%
    
150,000
    
987
    
2.62
%
Other borrowings
  
266,559
    
109
    
0.16
%
    
252,720
    
125
    
0.20
%
    
187,560
    
121
    
0.26
%
Junior subordinated debentures and subordinated notes
  
246,510
    
2,175
    
3.50
%
    
247,944
    
2,193
    
3.51
%
    
247,944
    
2,216
    
3.56
%
Total borrowings
  
563,069
    
2,632
    
1.85
%
    
599,034
    
2,973
    
1.97
%
    
585,504
    
3,324
    
2.26
%
Total funding liabilities
  
14,943,693
    
5,016
    
0.13
%
    
14,553,989
    
5,722
    
0.16
%
    
13,025,188
    
7,716
    
0.24
%
Other non-interest-bearing liabilities(2)
  
216,940
                  
202,918
                  
195,965
              
Total liabilities
  
15,160,633
                  
14,756,907
                  
13,221,153
              
Shareholders’ equity
  
1,673,495
                  
1,678,839
                  
1,644,485
              
Total liabilities and shareholders’
  equity
$
16,834,128
                
$
16,435,746
                
$
14,865,638
              
Net interest income/rate spread (tax equivalent)
  
$
123,880
    
3.16
%
        
$
132,462
    
3.46
%
        
$
123,711
    
3.63
%
Net interest margin (tax equivalent)
          
3.17
%
                
3.47
%
                
3.64
%
Reconciliation to reported net interest income:
                                                      
Adjustments for taxable equivalent basis
    
(2,350
)
                
(2,316
)
                
(2,274
)
      
Net interest income and margin, as reported
  
$
121,530
    
3.11
%
        
$
130,146
    
3.41
%
        
$
121,437
    
3.57
%
Additional Key Financial Ratios:
                                                          
Return on average assets
              
1.18
%
                
1.20
%
                
1.04
%
Return on average equity
              
11.84
%
                
11.79
%
                
9.42
%
Average equity/average assets
              
9.94
%
                
10.21
%
                
11.06
%
Average interest-earning assets/average
    interest-bearing liabilities
          
184.40
%
                
182.82
%
                
179.60
%
Average interest-earning assets/average
    funding liabilities
          
103.91
%
                
103.99
%
                
103.77
%
Non-interest income/average assets
              
0.58
%
                
0.61
%
                
0.63
%
Non-interest expense/average assets
              
2.16
%
                
2.47
%
                
2.56
%
Efficiency ratio(4)
              
62.88
%
                
65.70
%
                
65.93
%
Adjusted efficiency ratio(5)
              
59.71
%
                
59.65
%
                
64.31
%
(1)
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due.  Amortization of net deferred loan fees/costs is included with interest on loans.
(2)
Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
(3)
Tax-exempt income is calculated on a tax equivalent basis.  The tax equivalent yield adjustment to interest earned on loans was $1.3 million for each of the three months ended December 31, 2021, September 30, 2021 and December 31, 2020.  The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the three months ended December 31, 2021 and $1.0 million for both the three months ended September 30, 2021 and December 31, 2020.
(4)
Non-interest expense divided by the total of net interest income and non-interest income.
(5)
Adjusted non-interest expense divided by adjusted revenue.  These represent non-GAAP financial measures.  See the non-GAAP Financial Measures on the final two pages of the press release tables.


BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 16

ADDITIONAL FINANCIAL INFORMATION
                                    
(dollars in thousands)
                                    
(rates / ratios annualized)
                                    
ANALYSIS OF NET INTEREST SPREAD
  
Twelve Months Ended
  
   
Dec 31, 2021
    
Dec 31, 2020
  
   
Average
Balance
    
Interest and
Dividends
    
Yield/Cost(3)
    
Average
Balance
    
Interest and
Dividends
    
Yield/Cost(3)
  
Interest-earning assets:
                                    
Held for sale loans
  
$
94,252
    
$
3,066
      
3.25
%
  
$
144,220
    
$
5,482
      
3.80
%
Mortgage loans
    
7,225,860
      
328,115
      
4.54
%
    
7,303,584
      
352,878
      
4.83
%
Commercial/agricultural loans
    
1,498,808
      
62,479
      
4.17
%
    
1,765,265
      
80,567
      
4.56
%
SBA PPP loans
    
770,041
      
49,854
      
6.47
%
    
760,912
      
23,133
      
3.04
%
Consumer and other loans
    
122,520
      
7,298
      
5.96
%
    
147,827
      
9,208
      
6.23
%
Total loans(1)(3)
    
9,711,481
      
450,812
      
4.64
%
    
10,121,808
      
471,268
      
4.66
%
Mortgage-backed securities
    
2,451,110
      
46,199
      
1.88
%
    
1,330,355
      
32,188
      
2.42
%
Other securities
    
1,336,974
      
30,114
      
2.25
%
    
777,378
      
21,839
      
2.81
%
Equity securities
    
429
      
—
      
—
%
    
182,846
      
373
      
0.20
%
Interest-bearing deposits with banks
    
1,392,619
      
1,955
      
0.14
%
    
272,725
      
907
      
0.33
%
FHLB stock
    
13,966
      
592
      
4.24
%
    
18,952
      
947
      
5.00
%
Total investment securities(3)
    
5,195,098
      
78,860
      
1.52
%
    
2,582,256
      
56,254
      
2.18
%
Total interest-earning assets
    
14,906,579
      
529,672
      
3.55
%
    
12,704,064
      
527,522
      
4.15
%
Non-interest-earning assets
    
1,268,348
                      
1,262,170
                  
Total assets
  
$
16,174,927
                    
$
13,966,234
                  
Deposits:
                                                
Interest-bearing checking accounts
  
$
1,755,293
      
1,188
      
0.07
%
  
$
1,385,252
      
1,479
      
0.11
%
Savings accounts
    
2,652,018
      
1,833
      
0.07
%
    
2,194,418
      
4,257
      
0.19
%
Money market accounts
    
2,305,814
      
2,670
      
0.12
%
    
1,996,870
      
6,275
      
0.31
%
Certificates of deposit
    
876,509
      
6,079
      
0.69
%
    
1,030,722
      
13,004
      
1.26
%
Total interest-bearing deposits
    
7,589,634
      
11,770
      
0.16
%
    
6,607,262
      
25,015
      
0.38
%
Non-interest-bearing deposits
    
6,132,875
      
—
      
—
%
    
4,929,768
      
—
      
—
%
Total deposits
    
13,722,509
      
11,770
      
0.09
%
    
11,537,030
      
25,015
      
0.22
%
Other interest-bearing liabilities:
                                                
FHLB advances
    
97,945
      
2,592
      
2.65
%
    
215,093
      
5,023
      
2.34
%
Other borrowings
    
240,817
      
467
      
0.19
%
    
193,862
      
603
      
0.31
%
Junior subordinated debentures and subordinated notes
    
247,583
      
8,780
      
3.55
%
    
198,490
      
7,204
      
3.63
%
Total borrowings
    
586,345
      
11,839
      
2.02
%
    
607,445
      
12,830
      
2.11
%
Total funding liabilities
    
14,308,854
      
23,609
      
0.16
%
    
12,144,475
      
37,845
      
0.31
%
Other non-interest-bearing liabilities(2)
    
206,774
                      
197,422
                  
Total liabilities
    
14,515,628
                      
12,341,897
                  
Shareholders’ equity
    
1,659,299
                      
1,624,337
                  
Total liabilities and shareholders’ equity
  
$
16,174,927
                    
$
13,966,234
                  
Net interest income/rate spread (tax equivalent)
          
$
506,063
      
3.39
%
          
$
489,677
      
3.84
%
Net interest margin (tax equivalent)
                    
3.39
%
                    
3.85
%
Reconciliation to reported net interest income:
                                                
Adjustments for taxable equivalent basis
            
(9,172
)
                    
(8,376
)
        
Net interest income and margin, as reported
          
$
496,891
      
3.33
%
          
$
481,301
      
3.79
%
Additional Key Financial Ratios:
                                                
Return on average assets
                    
1.24
%
                    
0.83
%
Return on average equity
                    
12.12
%
                    
7.14
%
Average equity/average assets
                    
10.26
%
                    
11.63
%
Average interest-earning assets/average interest-bearing liabilities
    

     
182.32
%
                    
176.09
%
Average interest-earning assets/average funding liabilities
              
104.18
%
                    
104.61
%
Non-interest income/average assets
                    
0.60
%
                    
0.71
%
Non-interest expense/average assets
                    
2.35
%
                    
2.65
%
Efficiency ratio(4)
                    
64.06
%
                    
63.73
%
Adjusted efficiency ratio(5)
                    
60.22
%
                    
60.76
%

BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 17

(1)
Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due.  Amortization of net deferred loan fees/costs is included with interest on loans.
(2)
Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
(3)
Tax-exempt income is calculated on a tax equivalent basis.  The tax equivalent yield adjustment to interest earned on loans was $5.1 million and $4.9 million for the twelve months ended December 31, 2021 and December 31, 2020, respectively.  The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.1 million and $3.5 million for the twelve months ended December 31, 2021 and December 31, 2020, respectively.
(4)
Non-interest expense divided by the total of net interest income and non-interest income.
(5)
Adjusted non-interest expense divided by adjusted revenue.  These represent non-GAAP financial measures.  See the non-GAAP Financial Measures on the final two pages of the press release tables.


ADDITIONAL FINANCIAL INFORMATION
                  
(dollars in thousands)
                  
                   
* Non-GAAP Financial Measures
                  
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP 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.  However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP.  Where applicable, comparable earnings information using GAAP financial measures is also presented.  Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:

ADJUSTED REVENUE
  
Quarters Ended
    
Twelve Months Ended
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
Net interest income
  
$
121,530
    
$
130,146
    
$
121,437
    
$
496,891
    
$
481,301
  
Total non-interest income
    
24,474
      
25,334
      
23,509
      
96,416
      
98,616
  
Total revenue (GAAP)
    
146,004
      
155,480
      
144,946
      
593,307
      
579,917
  
Exclude net loss (gain) on sale of securities
    
136
      
(56)

   
(197)

   
(482)

   
(1,012)

Exclude net change in valuation of financial instruments carried at
   fair value
  
(2,721)

   
(1,778)

   
(1,704)

   
(4,616)

   
656
  
Adjusted revenue (non-GAAP)
  
$
143,419
    
$
153,646
    
$
143,045
    
$
588,209
    
$
579,561
  

ADJUSTED EARNINGS
  
Quarters Ended
    
Twelve Months Ended
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
Net income (GAAP)
  
$
49,927
    
$
49,884
    
$
38,957
    
$
201,048
    
$
115,928
  
 Exclude net loss (gain) on sale of securities
    
136
      
(56
)
    
(197
)
    
(482
)
    
(1,012
)
Exclude net change in valuation of financial instruments carried at
   fair value
(2,721
)
    
(1,778
)
    
(1,704
)
    
(4,616
)
    
656
  
Exclude merger and acquisition-related expenses
    
—
      
10
      
579
      
660
      
2,062
  
Exclude COVID-19 expenses
    
127
      
44
      
333
      
436
      
3,502
  
Exclude Banner Forward expenses
    
1,157
      
7,592
      
—
      
11,604
      
—
  
Exclude loss on extinguishment of debt
    
2,284
      
—
      
—
      
2,284
      
—
  
Exclude related net tax (benefit) expense
    
(236
)
    
(1,395
)
    
237
      
(2,373
)
    
(1,239
)
Total adjusted earnings (non-GAAP)
  
$
50,674
    
$
54,301
    
$
38,205
    
$
208,561
    
$
119,897
  
                                         
Diluted earnings per share (GAAP)
  
$
1.44
    
$
1.44
    
$
1.10
    
$
5.76
    
$
3.26
  
Diluted adjusted earnings per share (non-GAAP)
  
$
1.47
    
$
1.57
    
$
1.08
    
$
5.97
    
$
3.37
  






BANR - Fourth Quarter 2021 Results
January 20, 2022
Page 18


ADDITIONAL FINANCIAL INFORMATION
                              
(dollars in thousands)
                              
ADJUSTED EFFICIENCY RATIO
  
Quarters Ended
    
Twelve Months Ended
  
   
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
    
Dec 31, 2021
    
Dec 31, 2020
  
Non-interest expense (GAAP)
  
$
91,805
    
$
102,145
    
$
95,556
    
$
380,101
    
$
369,589
  
Exclude merger and acquisition-related expenses
    
—
      
(10
)
    
(579
)
    
(660
)
    
(2,062
)
Exclude COVID-19 expenses
    
(127
)
    
(44
)
    
(333
)
    
(436
)
    
(3,502
)
Exclude Banner Forward expenses
    
(1,157
)
    
(7,592
)
    
—
      
(11,604
)
    
—
  
Exclude CDI amortization
    
(1,574
)
    
(1,575
)
    
(1,865
)
    
(6,571
)
    
(7,732
)
Exclude state/municipal tax expense
    
(976
)
    
(1,219
)
    
(1,071
)
    
(4,343
)
    
(4,355
)
Exclude REO operations
    
(49
)
    
(53
)
    
283
      
22
      
190
  
Exclude loss on extinguishment of debt
    
(2,284
)
    
—
      
—
      
(2,284
)
    
—
  
Adjusted non-interest expense (non-GAAP)
  
$
85,638
    
$
91,652
    
$
91,991
    
$
354,225
    
$
352,128
  
                                         
Net interest income (GAAP)
  
$
121,530
    
$
130,146
    
$
121,437
    
$
496,891
    
$
481,301
  
Non-interest income (GAAP)
    
24,474
      
25,334
      
23,509
      
96,416
      
98,616
  
Total revenue
    
146,004
      
155,480
      
144,946
      
593,307
      
579,917
  
Exclude net loss (gain) on sale of securities
    
136
      
(56
)
    
(197
)
    
(482
)
    
(1,012
)
Exclude net change in valuation of financial instruments carried at
   fair value
  
(2,721
)
    
(1,778
)
    
(1,704
)
    
(4,616
)
    
656
  
Adjusted revenue (non-GAAP)
  
$
143,419
    
$
153,646
    
$
143,045
    
$
588,209
    
$
579,561
  
                                         
Efficiency ratio (GAAP)
    
62.88
%
    
65.70
%
    
65.93
%
    
64.06
%
    
63.73
%
Adjusted efficiency ratio (non-GAAP)
    
59.71
%
    
59.65
%
    
64.31
%
    
60.22
%
    
60.76
%

                   
TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
  
Dec 31, 2021
    
Sep 30, 2021
    
Dec 31, 2020
  
Shareholders’ equity (GAAP)
  
$
1,690,327
    
$
1,667,119
    
$
1,666,264
  
Exclude goodwill and other intangible assets, net
    
387,976
      
389,550
      
394,547
  
Tangible common shareholders’ equity (non-GAAP)
  
$
1,302,351
    
$
1,277,569
    
$
1,271,717
  
                         
Total assets (GAAP)
  
$
16,804,872
    
$
16,637,879
    
$
15,031,623
  
Exclude goodwill and other intangible assets, net
    
387,976
      
389,550
      
394,547
  
Total tangible assets (non-GAAP)
  
$
16,416,896
    
$
16,248,329
    
$
14,637,076
  
Common shareholders’ equity to total assets (GAAP)
    
10.06
%
    
10.02
%
    
11.09
%
Tangible common shareholders’ equity to tangible assets (non-GAAP)
    
7.93
%
    
7.86
%
    
8.69
%
                         
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
                        
Tangible common shareholders’ equity (non-GAAP)
  
$
1,302,351
    
$
1,277,569
    
$
1,271,717
  
Common shares outstanding at end of period
    
34,252,632
      
34,251,991
      
35,159,200
  
Common shareholders’ equity (book value) per share (GAAP)
  
$
49.35
    
$
48.67
    
$
47.39
  
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP)
  
$
38.02
    
$
37.30
    
$
36.17