10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q 

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2023

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ to ______________

 Commission File Number 000-26584

BANNER CORPORATION

(Exact name of registrant as specified in its charter)

Washington	91-1691604
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

10 South First Avenue, Walla Walla, Washington 99362

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (509) 527-3636

Securities registered pursuant to Section 12(b) of the Act

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	BANR	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
							Yes	☒	No	☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
							Yes	☒	No	☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer	☒		Accelerated filer   ☐	Non-accelerated filer  ☐		Smaller reporting company				☐
Emerging growth company		☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).							Yes	☐	No	☒
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Title of class:					As of July 31, 2023
Common Stock, $.01 par value per share					34,345,210 shares

1

BANNER CORPORATION AND SUBSIDIARIES

Table of Contents

PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements.  The Unaudited Condensed Consolidated Financial Statements of Banner Corporation and Subsidiaries filed as a part of the report are as follows:
Consolidated Statements of Financial Condition as of June 30, 2023 and December 31, 2022	4
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022	5
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022	6
Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2023 and the Year Ended December 31, 2022	7
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	8
Selected Notes to the Consolidated Financial Statements	10
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Overview	47
Comparison of Financial Condition at June 30, 2023 and December 31, 2022	49
Comparison of Results of Operations for the Three Months Ended June 30, 2023 and March 31, 2023 and the Six Months Ended June 30, 2023 and 2022	53
Asset Quality	61
Liquidity and Capital Resources	62
Capital Requirements	63
Item 3 – Quantitative and Qualitative Disclosures About Market Risk
Market Risk and Asset/Liability Management	63
Sensitivity Analysis	64
Item 4 – Controls and Procedures	67
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings	68
Item 1A – Risk Factors	68
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3 – Defaults upon Senior Securities	69
Item 4 – Mine Safety Disclosures	69
Item 5 – Other Information	69
Item 6 – Exhibits	70
SIGNATURES	72

2

All references to “Banner” refer to Banner Corporation and those to the “Bank” refer to its wholly-owned subsidiary, Banner Bank. As used throughout this report, the terms “we,” “our,” “us,” or the “Company” refer to Banner Corporation and its consolidated subsidiaries, unless the context otherwise requires.

Special Note Regarding Forward-Looking Statements

Certain matters in this Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance and projections of financial items, including statements about our financial condition, liquidity and results of operations. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth caused by increasing political instability from acts of war including Russia’s invasion of Ukraine, as well as increasing supply chain disruptions; higher inflation and the current and future monetary policies of the Federal Reserve in response thereto; the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses and provisions for credit losses; the ability to manage loan delinquency rates; competitive pressures among financial services companies; changes in consumer spending or borrowing and spending habits; interest rate movements generally and the relative differences between short and long-term interest rates, loan and deposit interest rates, net interest margin and funding sources; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; the transition away from the London Interbank Offered Rate (LIBOR) toward new interest rate benchmarks; the impact of repricing and competitors’ pricing initiatives on loan and deposit products; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values; the ability to adapt successfully to technological changes to meet clients’ needs and developments in the marketplace; the ability to access cost-effective funding; the ability to control operating costs and expenses, including the costs associated with our “Banner Forward” initiative; the use of estimates in determining fair value of certain assets and liabilities, which estimates may prove to be incorrect and result in significant changes in valuation; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect employees, and potential associated charges; 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; changes in financial markets; changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; secondary market conditions for loans and the ability to sell loans in the secondary market; the costs, effects and outcomes of litigation; legislation or regulatory changes, including but not limited to changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, results of safety and soundness and compliance examinations by the Board of Governors of the Federal Reserve System (the Federal Reserve), the Federal Deposit Insurance Corporation (the FDIC), the Washington State Department of Financial Institutions, Division of Banks (the Washington DFI), or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, require restitution or institute an informal or formal enforcement action which could require an increase in reserves for loan losses, write-downs of assets or changes in regulatory capital position, or affect the ability to borrow funds, or maintain or increase deposits, or impose additional requirements and restrictions, any of which could adversely affect liquidity and earnings; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; the quality and composition of our securities portfolio and the impact of adverse changes in the securities markets; the inability of key third-party providers to perform their obligations; changes in accounting principles, policies or guidelines, including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; other economic, competitive, governmental, regulatory and technological factors affecting operations, pricing, products and services; future acquisitions by the Company of other depository institutions or lines of business; and future goodwill impairment due to changes in the Company’s business, changes in market conditions; and other risks detailed in our Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”) and in our reports filed with or furnished to the U.S. Securities and Exchange Commission (SEC), including this report on Form 10-Q.

Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We do not undertake and specifically disclaim any obligation to update any forward-looking statements included in this report or the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur, and you should not put undue reliance on any forward-looking statements.

3

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited) (In thousands, except shares and per share amounts)

June 30, 2023 and December 31, 2022

ASSETS	June 30, 2023		December 31, 2022
Cash and due from banks	$	229,918	$	198,154
Interest bearing deposits	51,407		44,908
Total cash and cash equivalents	281,325		243,062
Securities—trading	25,659		28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960		2,789,031
Securities—held-to-maturity, net of allowance for credit losses of $355 and $379, respectively	1,098,570		1,117,588
Total securities	3,590,189		3,935,313
Federal Home Loan Bank (FHLB) stock	20,800		12,000
Securities purchased under agreements to resell	—		300,000
Loans held for sale (includes $59,336 and $51,779, at fair value, respectively)	60,612		56,857
Loans receivable	10,472,407		10,146,724
Allowance for credit losses – loans	(144,680)		(141,465)
Net loans receivable	10,327,727		10,005,259
Accrued interest receivable	57,007		57,284
Property and equipment, net	135,414		138,754
Goodwill	373,121		373,121
Other intangibles, net	7,399		9,440
Bank-owned life insurance (BOLI)	301,260		297,565
Deferred tax assets, net	167,993		178,131
Operating lease right-of-use assets	45,812		49,283
Other assets	216,077		177,362
Total assets	$	15,584,736	$	15,833,431
LIABILITIES
Deposits:
Non-interest-bearing	$	5,369,187	$	6,176,998
Interest-bearing transaction and savings accounts	6,373,269		6,719,531
Interest-bearing certificates	1,356,600		723,530
Total deposits	13,099,056		13,620,059
Advances from FHLB	270,000		50,000
Other borrowings	193,019		232,799
Subordinated notes, net	92,646		98,947
Junior subordinated debentures at fair value (issued in connection with Trust Preferred Securities)	67,237		74,857
Operating lease liabilities	51,234		55,205
Accrued expenses and other liabilities	223,565		200,839
Deferred compensation	45,466		44,293
Total liabilities	14,042,223		14,376,999
COMMITMENTS AND CONTINGENCIES (Note 12)
SHAREHOLDERS’ EQUITY
Preferred stock - $0.01 par value per share, 500,000 shares authorized; no shares outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock and paid in capital - $0.01 par value per share, 50,000,000 shares authorized; 34,344,627 shares issued and outstanding at June 30, 2023; 34,194,018 shares issued and outstanding at December 31, 2022	1,294,934		1,293,959
Common stock (non-voting) and paid in capital - $0.01 par value per share, 5,000,000 shares authorized; no shares issued and outstanding at June 30, 2023; no shares issued and outstanding at December 31, 2022	—		—
Retained earnings	587,027		525,242
Carrying value of shares held in trust for stock-based compensation plans	(6,702)		(6,905)
Liability for common stock issued to stock related compensation plans	6,702		6,905
Accumulated other comprehensive loss	(339,448)		(362,769)
Total shareholders’ equity	1,542,513		1,456,432
Total liabilities and shareholders’ equity	$	15,584,736	$	15,833,431

See Selected Notes to the Consolidated Financial Statements

4

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (In thousands, except shares and per share amounts)

For the Three and Six Months Ended June 30, 2023 and 2022

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
INTEREST INCOME:
Loans receivable	$	140,848	$	104,506	$	274,105	$	204,856
Mortgage-backed securities	18,285		16,819		37,263		30,928
Securities and cash equivalents	12,676		11,676		27,402		20,108
Total interest income	171,809		133,001		338,770		255,892
INTEREST EXPENSE:
Deposits	20,539		2,008		29,783		4,094
FHLB advances	5,157		—		6,421		291
Other borrowings	771		80		1,152		164
Subordinated debt	2,824		1,902		5,584		3,678
Total interest expense	29,291		3,990		42,940		8,227
Net interest income	142,518		129,011		295,830		247,665
PROVISION (RECAPTURE) FOR CREDIT LOSSES	6,764		4,534		6,240		(2,427)
Net interest income after provision (recapture) for credit losses	135,754		124,477		289,590		250,092
NON-INTEREST INCOME:
Deposit fees and other service charges	10,600		11,000		21,162		22,189
Mortgage banking operations	1,686		3,978		4,377		8,418
BOLI	2,386		2,239		4,574		3,870
Miscellaneous	1,428		2,051		3,068		3,734
	16,100		19,268		33,181		38,211
Net (loss) gain on sale of securities	(4,527)		32		(11,779)		467
Net change in valuation of financial instruments carried at fair value	(3,151)		69		(3,703)		118
Gain on sale of branches, including related deposits	—		7,804		—		7,804
Total non-interest income	8,422		27,173		17,699		46,600
NON-INTEREST EXPENSE:
Salary and employee benefits	61,972		60,832		123,361		120,318
Less capitalized loan origination costs	(4,457)		(7,222)		(7,888)		(13,452)
Occupancy and equipment	11,994		13,284		23,964		26,504
Information and computer data services	7,082		5,997		14,229		12,648
Payment and card processing services	4,669		5,682		9,287		10,578
Professional and legal expenses	2,400		2,878		4,521		5,058
Advertising and marketing	940		822		1,746		1,283
Deposit insurance	2,839		1,440		4,729		2,964
State and municipal business and use taxes	1,229		1,004		2,529		2,166
Real estate operations, net	75		(121)		(202)		(200)
Amortization of core deposit intangibles	991		1,425		2,041		2,849
Loss on extinguishment of debt	—		—		—		793
Miscellaneous	5,671		6,032		11,709		11,739
Total non-interest expense	95,405		92,053		190,026		183,248
Income before provision for income taxes	48,771		59,597		117,263		113,444
PROVISION FOR INCOME TAXES	9,180		11,632		22,117		21,516
NET INCOME	$	39,591	$	47,965	$	95,146	$	91,928
Earnings per common share:
Basic	$	1.15	$	1.40	$	2.77	$	2.68
Diluted	$	1.15	$	1.39	$	2.76	$	2.66
Cumulative dividends declared per common share	$	0.48	$	0.44	$	0.96	$	0.88
Weighted average number of common shares outstanding:
Basic	34,373,434		34,307,001		34,306,853		34,303,889
Diluted	34,409,024		34,451,740		34,435,221		34,532,935

See Selected Notes to the Consolidated Financial Statements

5

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited) (In thousands)

For the Three and Six Months Ended June 30, 2023 and 2022

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
NET INCOME	$	39,591	$	47,965	$	95,146	$	91,928
OTHER COMPREHENSIVE INCOME (LOSS), NET OF INCOME TAXES:
Unrealized holding (loss) gain on securities—available-for-sale arising during the period	(31,395)		(129,352)		4,748		(282,416)
Income tax benefit (expense) related to securities—available-for-sale unrealized holding losses	7,535		31,044		(1,140)		67,780
Reclassification for net loss (gain) on securities—available-for-sale realized in earnings	4,527		(32)		11,779		(467)
Income tax (benefit) expense related to securities—available-for-sale realized in earnings	(1,087)		8		(2,827)		112
Reclassification of provision for credit losses on securities—available-for-sale realized in earnings	2,000		—		2,000		—
Income tax expense related to the reclassification of provision for credit losses on securities—available-for-sale realized in earnings	(480)		—		(480)		—
Unrealized loss on securities transferred from available-for-sale to held-to-maturity	—		—		—		(34,596)
Income tax benefit related to securities transferred from available-for-sale to held-to-maturity	—		—		—		8,303
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity	584		904		1,156		1,228
Income tax expense related to amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity	(139)		(218)		(276)		(295)
Net unrealized (loss) gain on interest rate swaps used in cash flow hedges	(1,356)		(3,779)		3,382		(18,554)
Income tax benefit (expense) related to interest rate swaps used in cash flow hedges	325		907		(812)		4,453
Changes in fair value of junior subordinated debentures related to instrument specific credit risk	7,466		(1,719)		7,620		(2,932)
Income tax (expense) benefit related to junior subordinated debentures	(1,792)		413		(1,829)		704
Reclassification of fair value of junior subordinated debentures redeemed	—		—		—		765
Income tax expense related to junior subordinated debentures redeemed	—		—		—		(184)
Other comprehensive income (loss)	(13,812)		(101,824)		23,321		(256,099)
COMPREHENSIVE INCOME (LOSS)	$	25,779	$	(53,859)	$	118,467	$	(164,171)

See Selected Notes to the Consolidated Financial Statements

6

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited) (In thousands, except shares and per share amounts)

For the Six Months Ended June 30, 2023 and the Year Ended December 31, 2022

	Common Stock and Paid in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Shares	Amount
Balance, January 1, 2022	34,252,632	$	1,299,381	$	390,762	$	184	$	1,690,327
Net income				43,963				43,963
Other comprehensive loss, net of income tax						(154,275)		(154,275)
Accrual of dividends on common stock ($0.44/share)				(15,066)				(15,066)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	120,152	(1,169)						(1,169)
Balance, March 31, 2022	34,372,784	$	1,298,212	$	419,659	$	(154,091)	$	1,563,780
Net income				47,965				47,965
Other comprehensive loss, net of income tax						(101,824)		(101,824)
Accrual of dividends on common stock ($0.44/share)				(15,378)				(15,378)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	18,546	2,247						2,247
Repurchase of common stock	(200,000)	(10,960)						(10,960)
Balance, June 30, 2022	34,191,330	$	1,289,499	$	452,246	$	(255,915)	$	1,485,830
Net income				49,070				49,070
Other comprehensive loss, net of income tax						(113,275)		(113,275)
Accrual of dividends on common stock ($0.44/share)				(15,208)				(15,208)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	429	2,242						2,242
Balance, September 30, 2022	34,191,759	$	1,291,741	$	486,108	$	(369,190)	$	1,408,659
Net income				54,380				54,380
Other comprehensive income, net of income tax						6,421		6,421
Accrual of dividends on common stock ($0.44/share)				(15,246)				(15,246)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	2,259	2,218						2,218
Balance, December 31, 2022	34,194,018	$	1,293,959	$	525,242	$	(362,769)	$	1,456,432

Balance, January 1, 2023	34,194,018	$	1,293,959	$	525,242	$	(362,769)	$	1,456,432
Net income				55,555				55,555
Other comprehensive income, net of income tax						37,133		37,133
Accrual of dividends on common stock ($0.48/share)				(16,691)				(16,691)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	114,522	(734)						(734)
Balance, March 31, 2023	34,308,540	1,293,225		564,106		(325,636)		1,531,695
Net income				39,591				39,591
Other comprehensive loss, net of income tax						(13,812)		(13,812)
Accrual of dividends on common stock ($0.48/share)				(16,670)				(16,670)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	36,087	1,709						1,709
Balance, June 30, 2023	34,344,627	$	1,294,934	$	587,027	$	(339,448)	$	1,542,513

See Selected Notes to the Consolidated Financial Statements

7

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (In thousands)

For the Six Months Ended June 30, 2023 and 2022

	Six Months Ended June 30,
	2023		2022
OPERATING ACTIVITIES:
Net income	$	95,146	$	91,928
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation	8,815		8,304
Deferred income and expense, net of amortization	(1,560)		(3,422)
Capitalized loan servicing rights, net of amortization	1,179		(282)
Amortization of core deposit intangibles	2,041		2,849
Loss (gain) on sale of securities, net	11,779		(467)
Net change in valuation of financial instruments carried at fair value	3,703		(118)
Gain on sale of branches, including related deposits	—		(7,804)
Decrease in deferred taxes	2,774		5,469
(Decrease) increase in current taxes payable	(4,836)		11,935
Stock-based compensation	4,393		4,417
Net change in cash surrender value of BOLI	(4,295)		(3,176)
Gain on sale of loans, excluding capitalized servicing rights	(1,815)		(4,370)
Gain on disposal of real estate held for sale and property and equipment, net	(311)		(65)
Provision (recapture) for credit losses	6,240		(2,427)
Loss on extinguishment of debt	—		765
Origination of loans held for sale	(110,364)		(299,105)
Proceeds from sales of loans held for sale	112,388		314,427
Net change in:
Other assets	(22,636)		(22,956)
Other liabilities	15,314		19,475
Net cash provided from operating activities	117,955		115,377
INVESTING ACTIVITIES:
Purchases of securities—available-for-sale	(52,791)		(469,135)
Principal repayments and maturities of securities—available-for-sale	93,897		204,222
Proceeds from sales of securities—available-for-sale	277,610		24,491
Purchases of securities—held-to-maturity	—		(194,897)
Principal repayments and maturities of securities—held-to-maturity	18,915		26,052
Loan originations, net of repayments	(327,402)		(279,298)
Purchases of loans and participating interest in loans	—		(75,919)
Proceeds from sales of other loans	1,519		9,962
Net cash paid related to branch divestiture	—		(168,137)
Purchases of property and equipment	(5,505)		(7,414)
Proceeds from sale of real estate held for sale and sale of other property	358		5,870
Proceeds from FHLB stock repurchase program	79,040		2,000
Purchase of FHLB stock	(87,840)		—
Proceeds from maturity of securities purchased under agreements to resell	300,000		—
Investment in bank-owned life insurance	(41)		(50,043)
Other	517		3,601
Net cash provided from (used by) investing activities	298,277		(968,645)

Continued on next page

8

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited) (In thousands)

For the Six Months Ended June 30, 2023 and 2022

	Six Months Ended June 30,
	2023		2022
FINANCING ACTIVITIES:
(Decrease) increase in deposits, net	$	(521,003)	$	63,833
Repayment of long term FHLB advances	—		(50,000)
Advances of overnight and short term FHLB advances, net	220,000		—
Decrease in other borrowings, net	(39,780)		(29,752)
Repayment of junior subordinated debentures	—		(50,518)
Proceeds from redemption of trust preferred securities related to junior subordinated debentures	—		1,518
Cash dividends paid	(33,768)		(30,967)
Cash paid for repurchase of common stock	—		(10,960)
Taxes paid related to net share settlement of equity awards	(3,418)		(3,339)
Net cash used by financing activities	(377,969)		(110,185)
NET CHANGE IN CASH AND CASH EQUIVALENTS	38,263		(963,453)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	243,062		2,134,300
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	281,325	$	1,170,847

	Six Months Ended June 30,
	2023		2022
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid in cash	$	34,698	$	8,704
Tax paid	20,735		1,540
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Dividends accrued but not paid until after period end	751		816
Loans, held-for-sale, transferred (from) to portfolio	(3,964)		13,420
Securities, available-for-sale, transferred to held-to-maturity	—		462,159
DISPOSITIONS:
Assets divested	—		(1,539)
Liabilities divested	—		(178,209)

See Selected Notes to the Consolidated Financial Statements

9

BANNER CORPORATION AND SUBSIDIARIES

SELECTED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements include the accounts of Banner Corporation (the Company or Banner), a bank holding company incorporated in the State of Washington and its wholly-owned subsidiary, Banner Bank (the Bank).

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). In preparing these financial statements, the Company has evaluated events and transactions subsequent to June 30, 2023, for potential recognition or disclosure. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. Certain reclassifications have been made to the 2022 Consolidated Financial Statements and/or schedules to conform to the 2023 presentation. These reclassifications may have affected certain ratios for the prior periods. The effect of these reclassifications is considered immaterial. All significant intercompany transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.

The information included in this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Interim results are not necessarily indicative of results for a full year or any other interim period.

Note 2: ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED

Financial Instruments – Credit Losses (Topic 326)

On January 1, 2023, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU eliminated the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that a creditor evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The ASU also introduced new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. In addition, the ASU requires vintage disclosures including current-period gross write-offs by year of origination for financing receivables. The Company applied the ASU prospectively and new disclosures have been added when applicable.

Reference Rate Reform (Topic 848)

In March 2020, the FASB issued guidance within ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, in response to the scheduled discontinuation of LIBOR on December 31, 2021. The amendments in this ASU provide optional guidance designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform. Since the issuance of this guidance, the publication cessation of U.S. dollar LIBOR was extended to June 30, 2023.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of Sunset Date of Topic 848. This ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. This deferral of the sunset date is in response to the extension of the publication cessation date. The amendments in this ASU are effective upon the issuance date of December 2022.

The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: 1) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; 2) modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts; 3) modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract; and 4) the amendments in this ASU also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

10

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this ASUs are effective upon the issuance date of March 12, 2020, and applies to contract modifications made and new hedging relationships entered into through December 31, 2022.

The Company used the expedients in the Reference Rate Reform guidance to manage through the transition from LIBOR, specifically as they relate to loans, leases and hedging relationships. The adoption of this accounting guidance did not have a material impact on the Company’s Consolidated Financial Statements.

Fair Value Measurement (Topic 820)

In June 2022, the FASB issued guidance within ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU affects all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The ASU is effective for fiscal years, beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

Note 3: SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):

	June 30, 2023
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	25,659
	$	27,203	$	25,659

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	49,471	$	14	$	(1,123)	$	—	$	48,362
Municipal bonds	194,660		181		(34,073)		—		160,768
Corporate bonds	118,160		—		(16,372)		(2,000)		99,788
Mortgage-backed or related securities	2,294,371		275		(352,248)		—		1,942,398
Asset-backed securities	222,517		63		(7,936)		—		214,644
	$	2,879,179	$	533	$	(411,752)	$	(2,000)	$	2,465,960

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	309	$	—	$	(7)	$	302	$	—
Municipal bonds	497,546		105		(62,883)		434,598		(170)
Corporate bonds	2,844		—		(24)		2,635		(185)
Mortgage-backed or related securities	598,226		—		(102,645)		495,581		—
	$	1,098,925	$	105	$	(165,559)	$	933,116	$	(355)

11

	December 31, 2022
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	28,694
	$	27,203	$	28,694

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	56,344	$	8	$	(1,244)	$	55,108
Municipal bonds	301,449		530		(40,770)		261,209
Corporate bonds	133,334		—		(11,481)		121,853
Mortgage-backed or related securities	2,505,172		885		(366,721)		2,139,336
Asset-backed securities	222,478		40		(10,993)		211,525
	$	3,218,777	$	1,463	$	(431,209)	$	2,789,031

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	312	$	—	$	(7)	$	305	$	—
Municipal bonds	503,117		109		(70,907)		432,319		(183)
Corporate bonds	2,961		—		(16)		2,945		(196)
Mortgage-backed or related securities	611,577		—		(104,966)		506,611		—
	$	1,117,967	$	109	$	(175,896)	$	942,180	$	(379)

Accrued interest receivable on held-to-maturity debt securities was $4.7 million and $4.8 million as of June 30, 2023 and December 31, 2022, respectively, and was $11.1 million and $12.4 million on available-for-sale debt securities at June 30, 2023 and December 31, 2022, respectively. Accrued interest receivable on securities is reported in accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the calculation of the allowance for credit losses.

At June 30, 2023 and December 31, 2022, the gross unrealized losses and the fair value for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):

	June 30, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	—	$	—	$	45,207	$	(1,123)	$	45,207	$	(1,123)
Municipal bonds	34,744		(559)		119,287		(33,514)		154,031		(34,073)
Corporate bonds	9,599		(314)		95,502		(16,058)		105,101		(16,372)
Mortgage-backed or related securities	259,765		(9,381)		1,635,349		(342,867)		1,895,114		(352,248)
Asset-backed securities	121,210		(4,603)		83,292		(3,333)		204,502		(7,936)
	$	425,318	$	(14,857)	$	1,978,637	$	(396,895)	$	2,403,955	$	(411,752)

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	December 31, 2022
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	33,407	$	(882)	$	16,732	$	(362)	$	50,139	$	(1,244)
Municipal bonds	188,920		(25,592)		33,907		(15,178)		222,827		(40,770)
Corporate bonds	108,187		(9,547)		13,066		(1,934)		121,253		(11,481)
Mortgage-backed or related securities	930,566		(90,537)		1,159,110		(276,184)		2,089,676		(366,721)
Asset-backed securities	201,437		(10,993)		—		—		201,437		(10,993)
	$	1,462,517	$	(137,551)	$	1,222,815	$	(293,658)	$	2,685,332	$	(431,209)

At June 30, 2023, there were 245 securities—available-for-sale with unrealized losses, compared to 298 at December 31, 2022. As of June 30, 2023, we have an allowance for credit losses of $2.0 million related to the estimated credit loss on one security.  Management does not believe that any remaining individual unrealized loss as of June 30, 2023 or December 31, 2022 resulted from credit loss.  The decline in fair market value of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase.

There were no sales of securities—trading during the six months ended June 30, 2023 or 2022. There were no securities—trading in a nonaccrual status at June 30, 2023 or December 31, 2022.  Net unrealized holding losses of $3.0 million were recognized during the six months ended June 30, 2023, compared to $905,000 of net unrealized holding gains recognized during the six months ended June 30, 2022.

The following table presents gross gains and losses on sales and partial calls of securities available-for-sale (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Available-for-Sale:
Gross Gains	$	145	$	81	$	377	$	516
Gross Losses	(4,672)		(49)		(12,156)		(49)
Balance, end of the period	$	(4,527)	$	32	$	(11,779)	$	467

There were no securities—available-for-sale in a nonaccrual status at June 30, 2023 or December 31, 2022.

The following table presents the amortized cost and estimated fair value of securities at June 30, 2023, by contractual maturity and does not reflect any required periodic payments (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.

	June 30, 2023
	Trading				Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturing within one year	$	—	$	—	$	719	$	716	$	21,769	$	21,243
Maturing after one year through five years	—		—		158,285		143,916		21,090		20,352
Maturing after five years through ten years	—		—		416,915		364,317		26,732		25,554
Maturing after ten years	27,203		25,659		2,303,260		1,957,011		1,029,334		865,967
	$	27,203	$	25,659	$	2,879,179	$	2,465,960	$	1,098,925	$	933,116

13

The following table presents, as of June 30, 2023, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):

	June 30, 2023
	Carrying Value		Amortized Cost		Fair Value
Purpose or beneficiary:
State and local governments public deposits	$	248,951	$	256,711	$	224,566
Federal Reserve	118,643		118,643		100,314
Interest rate swap counterparties	3,039		3,249		2,865
Repurchase transaction accounts	273,613		273,613		225,628
Other	4,779		4,779		4,558
Total pledged securities	$	649,025	$	656,995	$	557,931

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings which are reviewed and updated quarterly. The Company’s non-rated held-to-maturity debt securities are primarily United States government sponsored enterprise debentures carrying minimal to no credit risk. The non-rated corporate bonds primarily consist of Community Reinvestment Act related bonds secured by loan instruments from low to moderate income borrowers. The remaining non-rated held-to-maturity debt securities balance is comprised of local municipal debt from within the Company’s geographic footprint and is monitored through quarterly or annual financial review. This municipal debt is predominately essential service or unlimited general obligation backed debt. The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	487,763	$	500	$	16,574	$	504,837
Not Rated	309		9,783		2,344		581,652		594,088
	$	309	$	497,546	$	2,844	$	598,226	$	1,098,925

	December 31, 2022
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	492,105	$	500	$	16,681	$	509,286
Not Rated	312		11,012		2,461		594,896		608,681
	$	312	$	503,117	$	2,961	$	611,577	$	1,117,967

The following tables present the activity in the allowance for credit losses for securities available-for-sale by major type for the three and six months ended June 30, 2023 (in thousands). We had no allowance for credit losses for securities available-for-sale during three and six months ended June 30, 2022.

	For the Three Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000
	For the Six Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000

14

Note 4: LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES - LOANS

The following table presents the loans receivable at June 30, 2023 and December 31, 2022 by class (dollars in thousands).

	June 30, 2023				December 31, 2022
	Amount		Percent of Total		Amount		Percent of Total
Commercial real estate:
Owner-occupied	$	894,876	8.5	%	$	845,320	8.3	%
Investment properties	1,558,176		14.9		1,589,975		15.7
Small balance CRE	1,172,825		11.2		1,200,251		11.8
Multifamily real estate	699,830		6.7		645,071		6.4
Construction, land and land development:
Commercial construction	183,765		1.8		184,876		1.8
Multifamily construction	433,868		4.1		325,816		3.2
One- to four-family construction	547,200		5.2		647,329		6.4
Land and land development	345,053		3.3		328,475		3.2
Commercial business:
Commercial business (1)	1,313,226		12.5		1,283,407		12.7
Small business scored	982,283		9.4		947,092		9.3
Agricultural business, including secured by farmland (2)	310,120		3.0		295,077		2.9
One- to four-family residential	1,340,126		12.8		1,173,112		11.6
Consumer:
Consumer—home equity revolving lines of credit	577,725		5.5		566,291		5.6
Consumer—other	113,334		1.1		114,632		1.1
Total loans	10,472,407		100.0	%	10,146,724		100.0	%
Less allowance for credit losses – loans	(144,680)				(141,465)
Net loans	$	10,327,727			$	10,005,259

(1)    Includes $4.5 million and $7.6 million of U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) loans as of June 30, 2023 and December 31, 2022, respectively.

(2)    Includes $20,000 of SBA PPP loans as of June 30, 2023, and $334,000 as of December 31, 2022.

Loan amounts are net of unearned loan fees in excess of unamortized costs of $9.4 million as of June 30, 2023, and $8.1 million as of December 31, 2022. Net loans include net discounts on acquired loans of $5.5 million and $6.6 million as of June 30, 2023 and December 31, 2022, respectively. Net loans does not include accrued interest receivable. Accrued interest receivable on loans was $40.9 million as of June 30, 2023, and $39.8 million as of December 31, 2022 and was reported in accrued interest receivable on the Consolidated Statements of Financial Condition.

The Company had pledged $6.5 billion of loans as collateral for FHLB and other borrowings at both June 30, 2023 and December 31, 2022, respectively.

Purchased credit-deteriorated and purchased non-credit-deteriorated loans. Loans acquired in business combinations are recorded at their fair value at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased credit-deteriorated (PCD) or purchased non-credit-deteriorated. There were no PCD loans acquired during the six months ended June 30, 2023 or June 30, 2022.

Troubled Loan Modifications. Occasionally, the Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or any combination of these. When principal forgiveness is provided, the amount of the forgiveness is charged-off against the allowance for credit losses - loans. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses - loans is adjusted by the same amount.

15

The following table presents the amortized cost basis and financial effect of loans at June 30, 2023, that were both experiencing financial difficulty and modified during the six months ended June 30, 2023 (in thousands):

	June 30, 2023
	Term Extension		Weighted-Average Term Extension (in months)
One- to four-family construction	$	6,361	7
Total	$	6,361	7

The Company has committed to lend additional amounts totaling $250,000 to the borrowers included in the previous table. The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

16

Credit Quality Indicators:  To appropriately and effectively manage the ongoing credit quality of the Company’s loan portfolio, management has implemented a risk-rating or loan grading system for its loans.  The system is a tool to evaluate portfolio asset quality throughout each applicable loan’s life as an asset of the Company.  Generally, loans are risk rated on an aggregate borrower/relationship basis with individual loans sharing similar ratings.  There are some instances when specific situations relating to individual loans will provide the basis for different risk ratings within the aggregate relationship.  Loans are graded on a scale of 1 to 9.  A description of the general characteristics of these categories is shown below.

Overall Risk Rating Definitions:  Risk-ratings contain both qualitative and quantitative measurements and take into account the financial strength of a borrower and the structure of the loan.  Consequently, the definitions are to be applied in the context of each lending transaction and judgment must also be used to determine the appropriate risk rating, as it is not unusual for a loan to exhibit characteristics of more than one risk-rating category.  Consideration for the final rating is centered in the borrower’s ability to repay, in a timely fashion, both principal and interest.  The Company’s risk-rating and loan grading policies are reviewed and approved annually. There were no material changes in the risk-rating or loan grading system for the periods presented.

Risk Ratings 1-5: Pass

Credits with risk ratings of 1 to 5 meet the definition of a pass risk rating. The strength of credits vary within the pass risk ratings, ranging from a risk rated 1 being an exceptional credit to a risk rated 5 being an acceptable credit that requires a more than normal level of supervision.

Risk Rating 6: Special Mention

A credit with potential weaknesses that deserves management’s close attention is risk rated a 6.  If left uncorrected, these potential weaknesses will result in deterioration in the capacity to repay debt.  A key distinction between Special Mention and Substandard is that in a Special Mention credit, there are identified weaknesses that pose potential risk(s) to the repayment sources, versus well defined weaknesses that pose risk(s) to the repayment sources.  Assets in this category are expected to be in this category no more than 9-12 months as the potential weaknesses in the credit are resolved.

Risk Rating 7: Substandard

A credit with well-defined weaknesses that jeopardize the ability to repay in full is risk rated a 7.  These credits are inadequately protected by either the sound net worth and payment capacity of the borrower or the value of pledged collateral.  These are credits with a distinct possibility of loss.  Loans headed for foreclosure and/or legal action due to deterioration are rated 7 or worse.

Risk Rating 8: Doubtful

A credit with an extremely high probability of loss is risk rated 8.  These credits have all the same critical weaknesses that are found in a substandard loan; however, the weaknesses are elevated to the point that based upon current information, collection or liquidation in full is improbable.  While some loss on doubtful credits is expected, pending events may make the amount and timing of any loss indeterminable.  In these situations taking the loss is inappropriate until the outcome of the pending event is clear.

Risk Rating 9: Loss

A credit that is considered to be currently uncollectible or of such little value that it is no longer a viable bank asset is risk rated 9.  Losses should be taken in the accounting period in which the credit is determined to be uncollectible.  Taking a loss does not mean that a credit has absolutely no recovery or salvage value but, rather, it is not practical or desirable to defer writing off the credit, even though partial recovery may occur in the future.

17

The following tables present the Company’s portfolio of risk-rated loans by class and by grade as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	68,946	$	168,118	$	171,741	$	142,543	$	69,567	$	183,759	$	31,381	$	836,055
Special Mention	—		—		—		—		—		—		—		—
Substandard	1,771		13,209		12,248		11,909		19,279		205		200		58,821
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	70,717	$	181,327	$	183,989	$	154,452	$	88,846	$	183,964	$	31,581	$	894,876
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - investment properties
Risk Rating
Pass	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	662,188	$	38,699	$	1,554,025
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,955		1,196		4,151
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	665,143	$	39,895	$	1,558,176
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily real estate
Risk Rating
Pass	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

18

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial construction
Risk Rating
Pass	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily construction
Risk Rating
Pass	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
One- to four- family construction
Risk Rating
Pass	$	275,674	$	241,523	$	17,924	$	—	$	332	$	—	$	616	$	536,069
Special Mention	—		—		—		—		—		—		—		—
Substandard	7,070		—		4,061		—		—		—		—		11,131
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	282,744	$	241,523	$	21,985	$	—	$	332	$	—	$	616	$	547,200
Current period gross charge-offs	$	136	$	—	$	—	$	—	$	—	$	—	$	—	$	136

19

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Land and land development
Risk Rating
Pass	$	138,821	$	116,643	$	54,314	$	14,000	$	9,160	$	11,545	$	1	$	344,484
Special Mention	—		—		—		—		—		—		—		—
Substandard	499		—		—		—		—		70		—		569
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	139,320	$	116,643	$	54,314	$	14,000	$	9,160	$	11,615	$	1	$	345,053
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	20	$	—	$	20
Commercial business
Risk Rating
Pass	$	103,662	$	246,605	$	134,384	$	139,435	$	112,084	$	155,259	$	386,683	$	1,278,112
Special Mention	—		—		—		3,277		—		—		898		4,175
Substandard	26		330		11,523		2,839		1,612		5,640		8,969		30,939
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	103,688	$	246,935	$	145,907	$	145,551	$	113,696	$	160,899	$	396,550	$	1,313,226
Current period gross charge-offs	$	—	$	—	$	700	$	—	$	—	$	27	$	133	$	860
Agricultural business, including secured by farmland
Risk Rating
Pass	$	23,165	$	36,514	$	26,739	$	18,500	$	25,586	$	44,985	$	113,594	$	289,083
Special Mention	550		—		652		—		1,690		401		2,541		5,834
Substandard	1,631		3,528		970		—		6,566		2,508		—		15,203
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	25,346	$	40,042	$	28,361	$	18,500	$	33,842	$	47,894	$	116,135	$	310,120
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

20

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	167,150	$	198,787	$	150,272	$	74,171	$	57,095	$	148,902	$	10,833	$	807,210
Special Mention	—		—		—		2,829		—		42		201		3,072
Substandard	13,756		—		7,211		13,564		—		307		200		35,038
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	180,906	$	198,787	$	157,483	$	90,564	$	57,095	$	149,251	$	11,234	$	845,320
Commercial real estate - investment properties
Risk Rating
Pass	$	190,627	$	323,160	$	142,476	$	182,853	$	169,667	$	547,899	$	25,691	$	1,582,373
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		3,283		—		3,007		1,312		7,602
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	190,627	$	323,160	$	142,476	$	186,136	$	169,667	$	550,906	$	27,003	$	1,589,975
Multifamily real estate
Risk Rating
Pass	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071

21

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial construction
Risk Rating
Pass	$	112,229	$	46,679	$	12,952	$	4,260	$	1,107	$	—	$	—	$	177,227
Special Mention	—		—		—		—		—		—		—		—
Substandard	2,931		1		—		—		4,717		—		—		7,649
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	115,160	$	46,680	$	12,952	$	4,260	$	5,824	$	—	$	—	$	184,876
Multifamily construction
Risk Rating
Pass	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
One- to four- family construction
Risk Rating
Pass	$	572,701	$	56,530	$	677	$	331	$	—	$	—	$	711	$	630,950
Special Mention	—		—		—		—		—		—		—		—
Substandard	13,473		2,906		—		—		—		—		—		16,379
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	586,174	$	59,436	$	677	$	331	$	—	$	—	$	711	$	647,329

22

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Land and land development
Risk Rating
Pass	$	199,339	$	88,066	$	16,278	$	11,866	$	6,242	$	6,164	$	339	$	328,294
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		97		84		—		181
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	199,339	$	88,066	$	16,278	$	11,866	$	6,339	$	6,248	$	339	$	328,475
Commercial business
Risk Rating
Pass	$	249,609	$	149,140	$	161,494	$	126,416	$	86,712	$	85,386	$	391,852	$	1,250,609
Special Mention	74		26		3,467		—		—		—		200		3,767
Substandard	464		12,599		1,956		1,161		5,954		796		6,101		29,031
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	250,147	$	161,765	$	166,917	$	127,577	$	92,666	$	86,182	$	398,153	$	1,283,407
Agricultural business, including secured by farmland
Risk Rating
Pass	$	36,848	$	35,440	$	18,946	$	28,354	$	24,710	$	27,063	$	109,606	$	280,967
Special Mention	—		336		271		—		—		—		357		964
Substandard	2,015		970		—		6,565		—		2,599		997		13,146
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	38,863	$	36,746	$	19,217	$	34,919	$	24,710	$	29,662	$	110,960	$	295,077

23

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Small balance CRE
Past Due Category
Current	$	48,371	$	173,212	$	219,220	$	169,205	$	123,643	$	437,208	$	404	$	1,171,263
30-59 Days Past Due	599		—		—		—		—		961		—		1,560
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	48,970	$	173,212	$	219,220	$	169,205	$	123,643	$	438,171	$	404	$	1,172,825
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Small business scored
Past Due Category
Current	$	98,904	$	290,943	$	186,977	$	92,432	$	70,196	$	114,229	$	126,832	$	980,513
30-59 Days Past Due	—		198		46		123		23		14		134		538
60-89 Days Past Due	—		25		20		17		—		—		20		82
90 Days + Past Due	—		35		177		93		460		219		166		1,150
Total Small business scored	$	98,904	$	291,201	$	187,220	$	92,665	$	70,679	$	114,462	$	127,152	$	982,283
Current period gross charge-offs	$	—	$	175	$	84	$	162	$	262	$	181	$	—	$	864
One- to four- family residential
Past Due Category
Current	$	163,136	$	588,388	$	270,567	$	58,947	$	32,763	$	217,977	$	234	$	1,332,012
30-59 Days Past Due	—		100		—		78		—		437		—		615
60-89 Days Past Due	—		—		—		393		377		228		—		998
90 Days + Past Due	1,060		—		1,632		753		1,160		1,896		—		6,501
Total One- to four- family residential	$	164,196	$	588,488	$	272,199	$	60,171	$	34,300	$	220,538	$	234	$	1,340,126
Current period gross charge-offs	$	—	$	—	$	—	$	4	$	—	$	30	$	—	$	34

24

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	5,397	$	2,932	$	2,683	$	1,446	$	1,391	$	5,354	$	554,579	$	573,782
30-59 Days Past Due	72		101		—		—		52		165		741		1,131
60-89 Days Past Due	—		—		—		—		—		241		217		458
90 Days + Past Due	—		—		49		1,043		311		854		97		2,354
Total Consumer—home equity revolving lines of credit	$	5,469	$	3,033	$	2,732	$	2,489	$	1,754	$	6,614	$	555,634	$	577,725
Current period gross charge-offs	$	—	$	—	$	13	$	73	$	—	$	20	$	(4)	$	102
Consumer-other
Past Due Category
Current	$	6,093	$	35,734	$	11,076	$	7,880	$	4,843	$	19,880	$	27,527	$	113,033
30-59 Days Past Due	—		53		14		39		1		48		86		241
60-89 Days Past Due	—		—		—		—		4		—		52		56
90 Days + Past Due	—		—		—		4		—		—		—		4
Total Consumer-other	$	6,093	$	35,787	$	11,090	$	7,923	$	4,848	$	19,928	$	27,665	$	113,334
Current period gross charge-offs	$	—	$	19	$	44	$	15	$	34	$	64	$	377	$	553

25

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Small balance CRE
Past Due Category
Current	$	177,605	$	215,801	$	172,286	$	134,552	$	142,592	$	354,924	$	630	$	1,198,390
30-59 Days Past Due	—		—		460		—		—		1,399		—		1,859
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	177,605	$	215,801	$	172,746	$	134,552	$	142,592	$	356,325	$	630	$	1,200,251
Small business scored
Past Due Category
Current	$	307,109	$	201,628	$	99,867	$	81,603	$	56,420	$	78,025	$	119,281	$	943,933
30-59 Days Past Due	146		518		54		262		46		280		173		1,479
60-89 Days Past Due	—		54		—		275		149		7		176		661
90 Days + Past Due	—		—		26		157		70		305		461		1,019
Total Small business scored	$	307,255	$	202,200	$	99,947	$	82,297	$	56,685	$	78,617	$	120,091	$	947,092
One- to four- family residential
Past Due Category
Current	$	555,833	$	279,331	$	59,672	$	34,607	$	37,740	$	191,890	$	1,335	$	1,160,408
30-59 Days Past Due	2,030		846		755		—		116		1,462		78		5,287
60-89 Days Past Due	1,060		—		—		—		115		1,067		—		2,242
90 Days + Past Due	—		1,819		973		712		94		1,577		—		5,175
Total One- to four- family residential	$	558,923	$	281,996	$	61,400	$	35,319	$	38,065	$	195,996	$	1,413	$	1,173,112

26

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	7,442	$	1,089	$	329	$	1,355	$	1,611	$	3,788	$	547,068	$	562,682
30-59 Days Past Due	49		40		75		—		74		214		1,372		1,824
60-89 Days Past Due	—		50		—		—		49		45		59		203
90 Days + Past Due	—		14		73		476		64		675		280		1,582
Total Consumer—home equity revolving lines of credit	$	7,491	$	1,193	$	477	$	1,831	$	1,798	$	4,722	$	548,779	$	566,291
Consumer-other
Past Due Category
Current	$	39,740	$	12,138	$	9,334	$	5,695	$	5,384	$	16,675	$	25,219	$	114,185
30-59 Days Past Due	49		—		16		5		2		67		120		259
60-89 Days Past Due	41		9		29		24		—		13		62		178
90 Days + Past Due	—		10		—		—		—		—		—		10
Total Consumer-other	$	39,830	$	12,157	$	9,379	$	5,724	$	5,386	$	16,755	$	25,401	$	114,632

27

The following tables provide the amortized cost basis of collateral-dependent loans as of June 30, 2023 and December 31, 2022 (in thousands). Our collateral dependent loans presented in the tables below have no significant concentrations by property type or location.

	June 30, 2023
	Real Estate		Equipment		Inventory		Total
Small balance CRE	$	1,865	$	—	$	—	$	1,865
Construction, land and land development:
One- to four-family construction	8,072		—		—		8,072
Land and land development	499		—		—		499
Commercial business
Commercial business	94		4,023		9		4,126
Small business scored	—		288		—		288
Agricultural business, including secured by farmland	3,175		89		139		3,403
One- to four-family residential	3,541		—		—		3,541
Consumer—home equity revolving lines of credit	821		—		—		821
Total	$	18,067	$	4,400	$	148	$	22,615

	December 31, 2022
	Real Estate		Equipment		Total
Small balance CRE	$	2,953	$	—	$	2,953
Commercial business
Commercial business	—		4,537		4,537
Small business scored	—		307		307
One- to four-family residential	1,622		—		1,622
Total	$	4,575	$	4,844	$	9,419

28

The following tables provide additional detail on the age analysis of the Company’s past due loans as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	894,876	$	894,876	$	—	$	66	$	—
Investment properties	—		—		—		—		1,558,176		1,558,176		—		—		—
Small balance CRE	1,560		—		2		1,562		1,171,263		1,172,825		1,865		2,412		—
Multifamily real estate	—		—		—		—		699,830		699,830		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		183,765		183,765		—		—		—
Multifamily construction	—		—		—		—		433,868		433,868		—		—		—
One- to four-family construction	—		1,255		709		1,964		545,236		547,200		1,711		1,711		—
Land and land development	—		498		—		498		344,555		345,053		499		569		—
Commercial business:
Commercial business	17		—		6,290		6,307		1,306,919		1,313,226		5,979		6,397		—
Small business scored	538		82		1,150		1,770		980,513		982,283		284		2,042		—
Agricultural business, including secured by farmland	1,724		—		2,952		4,676		305,444		310,120		3,997		3,997		—
One- to four-family residential	615		998		6,501		8,114		1,332,012		1,340,126		3,479		7,605		60
Consumer:
Consumer—home equity revolving lines of credit	1,131		458		2,354		3,943		573,782		577,725		821		3,258		49
Consumer—other	241		56		4		301		113,033		113,334		—		14		—
Total	$	5,826	$	3,347	$	19,962	$	29,135	$	10,443,272	$	10,472,407	$	18,635	$	28,071	$	109

29

	December 31, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	845,320	$	845,320	$	—	$	143	$	—
Investment properties	—		—		—		—		1,589,975		1,589,975		—		—		—
Small balance CRE	1,859		—		2		1,861		1,198,390		1,200,251		2,927		3,540		—
Multifamily real estate	—		—		—		—		645,071		645,071		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		184,876		184,876		—		—		—
Multifamily construction	—		—		—		—		325,816		325,816		—		—		—
One- to four-family construction	900		—		—		900		646,429		647,329		—		—		—
Land and land development	921		—		97		1,018		327,457		328,475		—		181		—
Commercial business:
Commercial business	2,100		4,145		649		6,894		1,276,513		1,283,407		6,998		7,356		—
Small business scored	1,479		661		1,019		3,159		943,933		947,092		303		2,530		—
Agricultural business, including secured by farmland	1,185		—		594		1,779		293,298		295,077		594		594		—
One-to four-family residential	5,287		2,242		5,175		12,704		1,160,408		1,173,112		1,569		5,236		1,023
Consumer:
Consumer—home equity revolving lines of credit	1,824		203		1,582		3,609		562,682		566,291		—		2,124		254
Consumer—other	259		178		10		447		114,185		114,632		—		2		10
Total	$	15,814	$	7,429	$	9,128	$	32,371	$	10,114,353	$	10,146,724	$	12,391	$	21,706	$	1,287

(1)     The Company did not recognize any interest income on non-accrual loans during the six months ended June 30, 2023, or the year ended December 31, 2022.

30

The following tables provide the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	42,975	$	8,475	$	28,433	$	33,735	$	3,094	$	15,736	$	9,009	$	141,457
Provision/(recapture) for credit losses	587		(436)		1,567		187		477		969		208		3,559
Recoveries	74		—		—		524		2		36		117		753
Charge-offs	—		—		(156)		(566)		—		(4)		(363)		(1,089)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680
	For the Six Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	44,086	$	7,734	$	29,171	$	33,299	$	3,475	$	14,729	$	8,971	$	141,465
(Recapture)/provision for credit losses	(708)		305		829		1,662		(13)		1,889		369		4,333
Recoveries	258		—		—		643		111		153		286		1,451
Charge-offs	—		—		(156)		(1,724)		—		(34)		(655)		(2,569)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680

31

	For the Three Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	47,264	$	7,183	$	26,679	$	26,655	$	2,586	$	8,109	$	6,995	$	125,471
(Recapture)/provision for credit losses	(1,020)		(277)		260		2,032		402		1,366		381		3,144
Recoveries	129		—		—		234		14		98		112		587
Charge-offs	—		—		—		(248)		—		—		(252)		(500)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702
	For the Six Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for loan losses:
Beginning balance	$	52,995	$	7,043	$	27,294	$	26,421	$	3,190	$	8,205	$	6,951	$	132,099
(Recapture)/provision for credit losses	(6,836)		(137)		(734)		2,199		(320)		1,230		366		(4,232)
Recoveries	216		—		384		383		132		138		328		1,581
Charge-offs	(2)		—		(5)		(330)		—		—		(409)		(746)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702

32

Note 5: GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS

Goodwill and Other Intangible Assets:  At June 30, 2023, intangible assets are comprised of goodwill and core deposit intangibles (CDI) acquired in business combinations. Goodwill represents the excess of the purchase consideration paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in a business combination, and is not amortized but is reviewed at least annually for impairment. The Company has identified one reporting unit for the purpose of evaluating goodwill for impairment. The Company completed an assessment of qualitative factors as of December 31, 2022 and concluded that no further analysis was required as it is more likely than not that the fair value of Banner Bank, the reporting unit, exceeds the carrying value.

CDI represents the value of transaction-related deposits and the value of the client relationships associated with the deposits. The Company amortizes CDI assets over their estimated useful lives and reviews them at least annually for events or circumstances that could impair their value. 

The following table summarizes the changes in the Company’s goodwill and other intangibles for the six months ended June 30, 2023, and the year ended December 31, 2022 (in thousands):

	Goodwill		CDI		Total
Balance, December 31, 2021	$	373,121	$	14,855	$	387,976
Amortization	—		(5,279)		(5,279)
Other changes(1)	—		(136)		(136)
Balance, December 31, 2022	373,121		9,440		382,561
Amortization	—		(2,041)		(2,041)
Balance, June 30, 2023	$	373,121	$	7,399	$	380,520

(1)    Acquired CDI was adjusted for the sale of branches in 2022.

The following table presents the estimated amortization expense with respect to CDI as of June 30, 2023, for the periods indicated (in thousands):

	Estimated Amortization
Remainder of 2023	$	1,715
2024	2,626
2025	1,567
2026	904
2027	426
Thereafter	161
	$	7,399

Mortgage Servicing Rights:  Mortgage and SBA servicing rights are reported in other assets.  SBA servicing rights are initially recorded and carried at fair value. Mortgage servicing rights are initially recognized at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.  Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value).  If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income.  However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value.  During the three and six months ended June 30, 2023 and 2022, the Company did not record any impairment charges or recoveries against mortgage servicing rights. The unpaid principal balance of loans for which mortgage and SBA servicing rights have been recognized totaled $2.74 billion and $2.77 billion at June 30, 2023 and December 31, 2022, respectively.  Custodial accounts maintained in connection with this servicing totaled $17.7 million and $11.2 million at June 30, 2023 and December 31, 2022, respectively.

33

An analysis of the mortgage and SBA servicing rights for the three and six months ended June 30, 2023 and 2022 is presented below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Balance, beginning of the period	$	15,613	$	18,008	$	16,166	$	17,206
Additions—amounts capitalized	349		804		485		2,757
Additions—through purchase	85		83		124		145
Amortization (1)	(827)		(1,115)		(1,674)		(2,346)
Fair value adjustments (3)	(109)		(147)		10		(129)
Balance, end of the period (2)	$	15,111	$	17,633	$	15,111	$	17,633

(1)    Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.

(2)    There was no valuation allowance on mortgage servicing rights as of both June 30, 2023 and 2022.

(3)    Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

Note 6: DEPOSITS

Deposits consisted of the following at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Non-interest-bearing accounts	$	5,369,187	$	6,176,998
Interest-bearing checking	1,908,402		1,811,153
Regular savings accounts	2,588,298		2,710,090
Money market accounts	1,876,569		2,198,288
Total interest-bearing transaction and savings accounts	6,373,269		6,719,531
Certificates of deposit:
Certificates of deposit greater than or equal to $250,000	397,784		178,324
Certificates of deposit less than $250,000	958,816		545,206
Total certificates of deposit	1,356,600		723,530
Total deposits	$	13,099,056	$	13,620,059
Included in total deposits:
Public fund transaction and savings accounts	$	380,731	$	392,859
Public fund interest-bearing certificates	45,840		26,810
Total public deposits	$	426,571	$	419,669
Total brokered certificates of deposit	$	203,649	$	—

Scheduled maturities and weighted average interest rates of certificates of deposit at June 30, 2023 are as follows (dollars in thousands):

	June 30, 2023
	Amount		Weighted Average Rate
Maturing in one year or less	$	1,259,221	3.20	%
Maturing after one year through two years	60,692		1.15
Maturing after two years through three years	24,503		0.66
Maturing after three years through four years	6,572		0.35
Maturing after four years through five years	4,686		0.57
Maturing after five years	926		0.86
Total certificates of deposit	$	1,356,600	3.04	%

34

Note 7: FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents estimated fair values of the Company’s financial instruments as of June 30, 2023 and December 31, 2022, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (dollars in thousands):

		June 30, 2023				December 31, 2022
	Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Cash and cash equivalents	1	$	281,325	$	281,325	$	243,062	$	243,062
Securities—trading	3	25,659		25,659		28,694		28,694
Securities—available-for-sale	2	2,465,960		2,465,960		2,789,031		2,789,031
Securities—held-to-maturity	2	1,090,949		925,485		1,109,319		933,513
Securities—held-to-maturity	3	7,621		7,631		8,648		8,667
Securities purchased under agreements to resell	2	—		—		300,000		300,000
Loans held for sale	2	60,612		60,645		56,857		56,948
Loans receivable, net	3	10,327,727		9,895,896		10,005,259		9,810,965
Equity securities	1	547		547		553		553
FHLB stock	3	20,800		20,800		12,000		12,000
Bank-owned life insurance	1	301,260		301,260		297,565		297,565
Mortgage servicing rights	3	14,266		35,185		15,331		35,148
SBA servicing rights	3	845		845		835		835
Investments in limited partnerships	3	12,776		12,776		12,427		12,427
Derivatives:
Interest rate swaps	2	18,996		18,996		19,339		19,339
Interest rate lock and forward sales commitments	2,3	349		349		142		142
Liabilities:
Demand, interest checking and money market accounts	2	9,154,158		9,154,158		10,186,439		10,186,439
Regular savings	2	2,588,298		2,588,298		2,710,090		2,710,090
Certificates of deposit	2	1,356,600		1,335,503		723,530		702,581
FHLB advances	2	270,000		270,000		50,000		50,000
Other borrowings	2	193,019		193,019		232,799		232,799
Subordinated notes, net	2	92,646		90,163		98,947		96,718
Junior subordinated debentures	3	67,237		67,237		74,857		74,857
Derivatives:
Interest rate swaps	2	36,777		36,777		37,150		37,150
Interest rate lock and forward sales commitments	2,3	2		2		118		118
Risk participation agreement	2	52		52		67		67

The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). When measuring fair value, management will maximize the use of observable inputs and minimize the use of unobservable inputs whenever possible. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions.

The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date.  The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.  In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for many of the financial instruments.  This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

35

Items Measured at Fair Value on a Recurring Basis:

The following tables present financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets and liabilities as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	25,659	$	25,659
Securities—available-for-sale
U.S. Government and agency obligations	—		48,362		—		48,362
Municipal bonds	—		160,768		—		160,768
Corporate bonds	—		99,788		—		99,788
Mortgage-backed or related securities	—		1,942,398		—		1,942,398
Asset-backed securities	—		214,644		—		214,644
	—		2,465,960		—		2,465,960
Loans held for sale(1)	—		17,201		—		17,201
Equity securities	547		—		—		547
SBA servicing rights	—		—		845		845
Investment in limited partnerships	—		—		12,776		12,776
Derivatives
Interest rate swaps	—		18,996		—		18,996
Interest rate lock and forward sales commitments	—		79		270		349
	$	547	$	2,502,236	$	39,550	$	2,542,333
Liabilities:
Junior subordinated debentures	$	—	$	—	$	67,237	$	67,237
Derivatives
Interest rate swaps	—		36,777		—		36,777
Interest rate lock and forward sales commitments	—		—		2		2
Risk participation agreement	—		52		—		52
	$	—	$	36,829	$	67,239	$	104,068

36

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	28,694	$	28,694
Securities—available-for-sale
U.S. Government and agency obligations	—		55,108		—		55,108
Municipal bonds	—		261,209		—		261,209
Corporate bonds	—		121,853		—		121,853
Mortgage-backed or related securities	—		2,139,336		—		2,139,336
Asset-backed securities	—		211,525		—		211,525
	—		2,789,031		—		2,789,031
Loans held for sale(1)	—		2,305		—		2,305
Equity securities	553		—		—		553
SBA servicing rights	—		—		835		835
Investment in limited partnerships	—		—		12,427		12,427
Derivatives
Interest rate swaps	—		19,339		—		19,339
Interest rate lock and forward sales commitments	—		61		81		142
	$	553	$	2,810,736	$	42,037	$	2,853,326
Liabilities:
Junior subordinated debentures	$	—	$	—	$	74,857	$	74,857
Derivatives
Interest rate swaps	—		37,150		—		37,150
Interest rate lock and forward sales commitments	—		76		42		118
Risk participation agreement	—		67		—		67
	$	—	$	37,293	$	74,899	$	112,192

(1)    The unpaid principal balance of residential mortgage loans held for sale carried at fair value on a recurring basis was $16.8 million and $2.2 million at June 30, 2023 and December 31, 2022, respectively.

The following methods were used to estimate the fair value of each class of financial instruments above:

Securities:  The estimated fair values of investment securities and mortgaged-backed securities are priced using current active market quotes, if available, which are considered Level 1 measurements.  For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value.  These measurements are considered Level 2.  Due to the continued limited activity in the trust preferred markets that have limited the observability of market spreads for some of the Company’s trust preferred securities (TPS), management has classified these securities as a Level 3 fair value measure. Management periodically reviews the pricing information received from third-party pricing services and tests those prices against other sources to validate the reported fair values.

Loans Held for Sale: Fair values for residential mortgage loans held for sale are determined by comparing actual loan rates to current secondary market prices for similar loans.

Equity Securities: Equity securities are invested in a publicly traded stock. The fair value of these securities is based on daily quoted market prices.

SBA Servicing Rights: Fair values are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing. The evaluation utilizes assumptions market participants would use in determining fair value including prepayment speeds, delinquency and foreclosure rates, the discount rate, servicing costs, and the timing of cash flows.  The SBA servicing portfolio is stratified by loan type and fair value estimates are adjusted up or down based on the serviced loan interest rates versus current rates on new loan originations since the most recent independent analysis.

37

Junior Subordinated Debentures:  The fair value of junior subordinated debentures is estimated using an income approach technique. The significant inputs included in the estimation of fair value are the credit risk adjusted spread and three month LIBOR. The credit risk adjusted spread represents the nonperformance risk of the liability. The Company utilizes an external valuation firm to validate the reasonableness of the credit risk adjusted spread used to determine the fair value. The junior subordinated debentures are carried at fair value which represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants. Due to inactivity in the trust preferred markets that have limited the observability of market spreads, management has classified this as a Level 3 fair value measurement.

Derivatives: Derivatives include interest rate swap agreements, interest rate lock commitments to originate loans held for sale, forward sales contracts to sell loans and securities related to mortgage banking activities and risk participation agreements. Fair values for these instruments, which generally change as a result of changes in the level of market interest rates, are estimated based on dealer quotes and secondary market sources. As the interest rate lock commitments use a pull-through rate that is considered an unobservable input, these derivatives are classified as a level 3 fair value measurement.

Off-Balance Sheet Items: Off-balance sheet financial instruments include unfunded commitments to extend credit, including standby letters of credit, and commitments to purchase investment securities. The fair value of these instruments is not considered to be material.

Limitations: The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2023 and December 31, 2022.  The factors used in the fair value estimates are subject to change subsequent to the dates the fair value estimates are completed, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3):

The following table provides a description of the valuation technique, unobservable inputs, and quantitative and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and non-recurring basis at June 30, 2023 and December 31, 2022:

			Weighted Average Rate
Financial Instruments	Valuation Technique	Unobservable Inputs	June 30, 2023		December 31, 2022
Corporate bonds (TPS)	Discounted cash flows	Discount rate	10.55	%	8.27	%
Junior subordinated debentures	Discounted cash flows	Discount rate	10.55	%	8.27	%
Loans individually evaluated	Collateral valuations	Discount to appraised value	n/a		n/a
REO	Appraisals	Discount to appraised value	58.18	%	68.35	%
Interest rate lock commitments	Pricing model	Pull-through rate	87.76	%	78.65	%
SBA servicing rights	Discounted cash flows	Constant prepayment rate	14.61	%	14.10	%

Trust preferred securities: Management believes that the credit risk-adjusted spread used to develop the discount rate utilized in the fair value measurement of TPS is indicative of the risk premium a willing market participant would require under current market conditions for instruments with similar contractual rates and terms and conditions and issuers with similar credit risk profiles and with similar expected probability of default. Management attributes the change in fair value of these instruments, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of assets subsequent to their issuance.

Junior subordinated debentures: Similar to the TPS discussed above, management believes that the credit risk-adjusted spread utilized in the fair value measurement of the junior subordinated debentures is indicative of the risk premium a willing market participant would require under current market conditions for an issuer with Banner’s credit risk profile. Management attributes the change in fair value of the junior subordinated debentures, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of liabilities subsequent to their issuance. Future contractions in the risk adjusted spread relative to the spread currently utilized to measure the Company’s junior subordinated debentures at fair value as of June 30, 2023, or the passage of time, will result in negative fair value adjustments. At June 30, 2023, the discount rate utilized was based on a credit spread of 500 basis points and three-month LIBOR of 555 basis points.

Interest rate lock commitments: The fair value of the interest rate lock commitments is based on secondary market sources adjusted for an estimated pull-through rate. The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments. An increase or decrease in the pull-through rate would have a corresponding, positive or negative fair value adjustment.

SBA servicing asset: The constant prepayment rate (CPR) is set based on industry data. An increase in the CPR would result in a negative fair value adjustment, where a decrease in CPR would result in a positive fair value adjustment.

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The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,591	$	74,703	$	480	$	12,394	$	954
Net change recognized in earnings	(2,932)		—		(212)		(142)		(109)
Net change recognized in accumulated other comprehensive income (AOCI)	—		(7,466)		—		—		—
Purchases, issuances and settlements	—		—		—		524		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Six Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,694	$	74,857	$	39	$	12,427	$	835
Net change recognized in earnings	(3,035)				229		(662)		10
Net change recognized in AOCI			(7,620)		—		—		—
Purchases, issuances and settlements	—		—		—		1,011		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Three Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	27,354	$	70,510	$	(66)	$	10,982	$	1,162
Net change recognized in earnings	532		—		423		(155)		(147)
Net change recognized in AOCI	—		1,719		—		—		—
Purchases, issuances and settlements	—		—		—		1,054		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015
	Six Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	26,981	$	119,815	$	1,467	$	10,257	$	1,161
Net change recognized in earnings	905		—		(1,110)		(372)		(146)
Net change recognized in AOCI	—		2,932		—		—		—
Purchases, issuances and settlements	—		—		—		1,996		—
Redemptions	—		(50,518)		—		—		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015

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Interest income and dividends from TPS are recorded as a component of interest income. Interest expense related to the junior subordinated debentures is measured based on contractual interest rates and reported in interest expense.  The change in fair value of the junior subordinated debentures, which represents changes in instrument specific credit risk, is recorded in other comprehensive income. The change in fair value of TPS securities, investments in limited partnerships and the SBA servicing asset are recorded as a component of non-interest income. The change in fair value of the interest rate lock and forward sales commitments are included in mortgage banking operations in non-interest income.

Items Measured at Fair Value on a Non-recurring Basis:

The following tables present financial assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
REO	—		—		546		546
Loans held for sale	—		42,134		—		42,134
	December 31, 2022
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	1,883	$	1,883
REO	—		—		340		340
Loans held for sale	—		49,474		—		49,474

The following table presents the gains and losses resulting from non-recurring fair value adjustments for the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REO	—		—		—		—
Loans held for sale	(757)		(458)		(463)		(1,061)
Total loss from non-recurring measurements	$	(757)	$	(458)	$	(463)	$	(1,061)

Loans individually evaluated: Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or when the Bank determines that foreclosure is probable, the expected credit loss is measured based on the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. As a practical expedient, the Bank measures the expected credit loss for a loan using the fair value of the collateral, if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Bank’s assessment as of the reporting date. In both cases, if the fair value of the collateral is less than the amortized cost basis of the loan, the Bank will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off. Subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported.

REO: The Company records REO (acquired through a lending relationship) at fair value on a non-recurring basis. Fair value adjustments on REO are based on updated real estate appraisals which are based on current market conditions. All REO properties are recorded at the lower of the estimated fair value of the real estate, less expected selling costs, or the carrying amount of the defaulted loans. From time to time, non-recurring fair value adjustments to REO are recorded to reflect partial write-downs based on an observable market price or current appraised value of property. Banner considers any valuation inputs related to REO to be Level 3 inputs. The individual carrying values of these assets are reviewed for impairment at least annually and any additional impairment charges are expensed.

Loans held for sale: The multifamily held for sale loans are carried at the lower of cost or market value. Lower of cost or market adjustments for multifamily loans held for sale are calculated based on discounted cash flows using a discount rate that is a combination of market spreads for similar loan types added to selected index rates. If the fair value of the multifamily held for sale loans is lower than the amortized cost basis of the loans, a net unrealized loss is recognized through the valuation allowance as a charge against income.

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Note 8: INCOME TAXES AND DEFERRED TAXES

The Company files a consolidated income tax return including all of its wholly-owned subsidiaries on a calendar year basis. Income taxes are accounted for using the asset and liability method. Under this method, a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company’s income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is recognized as a reduction to deferred tax assets when management determines it is more likely than not that deferred tax assets will not be available to offset future income tax liabilities.

Accounting standards for income taxes prescribe a recognition threshold and measurement process for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return, and also provide guidance on the de-recognition of previously recorded benefits and their classification, as well as the proper recording of interest and penalties, accounting in interim periods, disclosures and transition. The Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

As of June 30, 2023, the Company has recognized $1.6 million of unrecognized tax benefits for uncertain tax positions. The Company does not anticipate that there are additional uncertain tax positions or that any uncertain tax position which has not been recognized would materially affect the effective tax rate if recognized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense. The Company files consolidated income tax returns in the U.S. federal jurisdiction and in the Oregon, California, Utah, Idaho and Montana state jurisdictions.

Tax credit investments: The Company invests in low income housing tax credit funds that are designed to generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and tax credit investment amortization expense is a component of the provision for income taxes.

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Tax credit investments	$	106,486	$	71,430
Unfunded commitments—tax credit investments	74,299		44,563

The following table presents other information related to the Company’s tax credit investments for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Tax credits and other tax benefits recognized	$	2,134	$	1,486	$	4,269	$	2,972
Tax credit amortization expense included in provision for income taxes	1,722		1,263		3,444		2,571

Note 9: CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER SHARE (EPS)

The following table reconciles basic to diluted weighted average shares outstanding used to calculate earnings per share data for the three and six months ended June 30, 2023 and 2022 (in thousands, except shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	39,591	$	47,965	$	95,146	$	91,928
Basic weighted average shares outstanding	34,373,434		34,307,001		34,306,853		34,303,889
Dilutive effect of unvested restricted stock	35,590		144,739		128,368		229,046
Diluted weighted shares outstanding	34,409,024		34,451,740		34,435,221		34,532,935
Earnings per common share
Basic	$	1.15	$	1.40	$	2.77	$	2.68
Diluted	$	1.15	$	1.39	$	2.76	$	2.66

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Note 10: STOCK-BASED COMPENSATION PLANS

The Company operates the 2014 Omnibus Incentive Plan (the 2014 Plan), the 2018 Omnibus Incentive Plan (the 2018 Plan) and the 2023 Omnibus Incentive Plan (the 2023 Plan), all of which were approved by its shareholders. The 2023 Plan was approved by shareholders on May 24, 2023. The purpose of these plans is to promote the success and enhance the value of the Company by providing a means for attracting and retaining highly skilled employees, officers and directors of the Company and linking their personal interests with those of the Company’s shareholders. Under these plans, the Company currently has outstanding awards of restricted stock shares and restricted stock units.

The Company reserved 900,000 shares of its common stock for issuance under the 2014 Plan in connection with the exercise of awards. As of June 30, 2023, 276,904 restricted stock shares and 440,336 restricted stock units have been granted under the 2014 Plan of which 4,409 restricted stock shares and 22,626 restricted stock units were unvested.

The Company reserved 900,000 shares of common stock for issuance under the 2018 Plan in connection with the exercise of awards. As of June 30, 2023, 741,429 restricted stock units have been granted under the 2018 Plan of which 343,033 restricted stock units were unvested.

The Company reserved 625,000 shares of common stock for issuance under the 2023 Plan in connection with the exercise of awards. As of June 30, 2023, no shares had been granted under the 2023 Plan.

The expense associated with all restricted stock grants (including restricted stock shares and restricted stock units) was $2.3 million and $4.4 million for the three and six month periods ended June 30, 2023, and was $2.3 million and $4.3 million for the three and six month periods ended June 30, 2022, respectively. Unrecognized compensation expense for these awards as of June 30, 2023, was $16.7 million and will be recognized over a weighted average period of 13 months.

Note 11: COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance-Sheet Risk — The Company has financial instruments with off-balance-sheet risk generated in the normal course of business to meet the financing needs of our clients.  These financial instruments include commitments to extend credit, commitments related to standby letters of credit, commitments to originate loans, commitments to sell loans and commitments to buy or sell securities.  These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved in on-balance-sheet items.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument from commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments.  We use the same credit policies in making commitments and conditional obligations as for on-balance-sheet instruments.

Outstanding commitments for which no asset or liability for the notional amount has been recorded consisted of the following at the dates indicated (in thousands):

	Contract or Notional Amount
	June 30, 2023		December 31, 2022
Commitments to extend credit	$	3,911,428	$	4,031,954
Standby letters of credit and financial guarantees	33,534		26,119
Commitments to originate loans	47,601		53,266
Risk participation agreements	47,146		48,566
Derivatives also included in Note 13:
Commitments to originate loans held for sale	24,671		10,525
Commitments to sell loans secured by one- to four-family residential properties	13,063		12,568
Commitments to sell securities related to mortgage banking activities	22,500		7,000

In addition to the commitments disclosed in the table above, the Company is committed to funding its’ unfunded tax credit investments. The Company has also entered into agreements to invest in several limited partnerships. As of June 30, 2023 and December 31, 2022, the funded balances and remaining outstanding commitments of these limited partnership investments were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Funded Balance		Unfunded Balance		Funded Balance		Unfunded Balance
Limited partnerships investments	$	11,283	$	11,217	$	10,272	$	12,228

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Commitments to extend credit are agreements to lend to a client, as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Many of the commitments may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. Each client’s creditworthiness is evaluated on a case-by-case basis.  The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the client. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income producing commercial properties. The Company’s allowance for credit losses - unfunded loan commitments at both June 30, 2023 and December 31, 2022 was $14.7 million.

Standby letters of credit are conditional commitments issued to guarantee a client’s performance or payment to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients. Under a risk participation agreement, the Bank guarantees the financial performance of a borrower on the participated portion of an interest rate swap on a loan.

Interest rates on residential one- to four-family mortgage loan applications are typically rate locked (committed) to clients during the application stage for periods ranging from 30 to 60 days, the most typical period being 45 days. Traditionally, these loan applications with rate lock commitments had the pricing for the sale of these loans locked with various qualified investors under a best-efforts delivery program at or near the time the interest rate is locked with the client. The Bank then attempts to deliver these loans before their rate locks expired. This arrangement generally required delivery of the loans prior to the expiration of the rate lock. Delays in funding the loans would require a lock extension. The cost of a lock extension at times was borne by the client and at times by the Bank. These lock extension costs have not had a material impact to the Company’s operations. For mandatory delivery commitments the Company enters into forward commitments at specific prices and settlement dates to deliver either: (1) residential mortgage loans for purchase by secondary market investors (i.e., Freddie Mac or Fannie Mae), or (2) mortgage-backed securities to broker/dealers. The purpose of these forward commitments is to offset the movement in interest rates between the execution of its residential mortgage rate lock commitments with borrowers and the sale of those loans to the secondary market investor. There were no counterparty default losses on forward contracts during the three and six months ended June 30, 2023 or June 30, 2022. Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates. The Company limits its exposure to market risk by monitoring differences between commitments to clients and forward contracts with market investors and securities broker/dealers. In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the transaction is completed by either paying or receiving a fee to or from the investor or broker/dealer equal to the increase or decrease in the market value of the forward contract.

In the normal course of business, the Company and/or its subsidiaries have various legal proceedings and other contingent matters outstanding.  These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable.  These claims and counter-claims typically arise during the course of collection efforts on problem loans or with respect to action to enforce liens on properties in which the Bank holds a security interest.   Based upon the information known to management at this time, the Company has accrued $14.8 million related to outstanding legal proceedings. There are no other legal proceedings that management believes would have a material adverse effect on the results of operations or consolidated financial position at June 30, 2023.

In connection with certain asset sales, the Bank typically makes representations and warranties about the underlying assets conforming to specified guidelines.  If the underlying assets do not conform to the specifications, the Bank may have an obligation to repurchase the assets or indemnify the purchaser against any loss.  The Bank believes that the potential for material loss under these arrangements is remote.  Accordingly, the fair value of such obligations is not material.

Note 12: DERIVATIVES AND HEDGING

Banner Bank is party to various derivative instruments that are used for asset and liability management and client financing needs. Derivative instruments are contracts between two or more parties that have a notional amount and an underlying variable, require no net investment and allow for the net settlement of positions. The notional amount serves as the basis for the payment provision of the contract and takes the form of units, such as shares or dollars. The underlying variable represents a specified interest rate, index, or other component. The interaction between the notional amount and the underlying variable determines the number of units to be exchanged between the parties and influences the market value of the derivative contract.

The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain term loans and forward sales contracts associated with mortgage banking activities. Generally, these instruments help the Company manage exposure to market risk and meet client financing needs. Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors.

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As of June 30, 2023 and December 31, 2022, the notional values or contractual amounts and fair values of the Company’s derivatives were as follows (in thousands):

	Asset Derivatives								Liability Derivatives
	June 30, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value
Hedged interest rate swaps	$	—	$	—	$	—	$	—	$	400,000	$	24,198	$	400,000	$	26,485
Interest rate swaps not designated in hedge relationships	426,710		35,660		440,731		37,119		426,710		35,682		440,731		37,150
Less: Master netting agreements			(16,664)				(17,780)				(16,664)				(17,780)
Less: Cash settlements			—				—				(6,439)				(8,705)
Net interest rate swaps			18,996				19,339				36,777				37,150
Risk participation agreements	1,167		—		1,283		—		45,979		52		47,283		67
Mortgage loan commitments	24,671		270		15,920		81		—		—		12,367		42
Forward sales contracts	32,010		79		16,568		61		2,276		2		3,000		76
Total	$	484,558	$	19,345	$	474,502	$	19,481	$	474,965	$	36,831	$	503,381	$	37,335

The Company’s asset derivatives are included in other assets, while the liability derivatives are included in accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

Interest Rate Swaps used in Cash Flow Hedges: The Company’s floating rate loans result in exposure to losses in value or net interest income as interest rates change. The risk management objectives in using interest rate derivatives are to reduce volatility in net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. During the fourth quarter of 2021, the Company entered into interest rate swaps designated as cash flow hedges to hedge the variable cash flows associated with existing floating rate loans. These hedge contracts involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making floating-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are made on the Company’s variable-rate assets. During the next 12 months, the Company estimates that an additional $17.5 million will be reclassified as a decrease to interest income.

The following table presents the effect of cash flow hedge accounting on AOCI for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(5,514)	$	(5,514)	$	—	Interest Income	$	(4,159)	$	(4,159)	$	—
	For the Six Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(4,390)	$	(4,390)	$	—	Interest Income	$	(7,772)	$	(7,772)	$	—

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	For the Three Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(3,617)	$	(3,617)	$	—	Interest Income	$	161	$	161	$	—
	For the Six Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(17,642)	$	(17,642)	$	—	Interest Income	$	912	$	912	$	—

At June 30, 2023 and December 31, 2022, we recorded total net unrealized losses on cash flow hedges in AOCI of $17.6 million and $20.1 million, respectively.

Interest Rate Swaps: The Bank uses an interest rate swap program for commercial loan clients, that provides the client with a variable-rate loan and enters into an interest rate swap in which the client receives a variable-rate payment in exchange for a fixed-rate payment. The Bank offsets its risk exposure by entering into an offsetting interest rate swap with a dealer counterparty for the same notional amount and length of term as the client interest rate swap providing the dealer counterparty with a fixed-rate payment in exchange for a variable-rate payment. These swaps do not qualify as designated hedges; therefore, each swap is accounted for as a freestanding derivative.

Risk Participation Agreements: In conjunction with the purchase or sale of participating interests in loans, the Company also participates in related swaps through risk participation agreements. The existing credit derivatives resulting from these participations are not designated as hedges as they are not used to manage interest rate risk in the Company’s assets or liabilities and are not speculative.

Mortgage Loan Commitments: The Company sells originated one- to four-family mortgage loans into the secondary mortgage loan markets. During the period of loan origination and prior to the sale of the loans in the secondary market, the Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one- to four-family loans that are intended to be sold and for closed one- to four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market. The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one- to four-family mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates.

Gains (losses) recognized in income within mortgage banking operations on non-designated hedging instruments for the three and six months ended June 30, 2023 and 2022, were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Mortgage loan commitments	$	(210)	$	1,889	$	230	$	(1,110)
Forward sales contracts	(221)		(2,287)		79		(1)
	$	(431)	$	(398)	$	309	$	(1,111)

The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk of the financial contract is controlled through the credit approval, limits, and monitoring procedures and management does not expect the counterparties to fail their obligations.

45

In connection with the interest rate swaps between the Bank and the dealer counterparties, the agreements contain a provision where if the Bank fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations. Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as a publicly issued prompt corrective action directive, cease and desist order, or a capital maintenance agreement that required the Bank to maintain a specific capital level. If the Bank had breached any of these provisions at June 30, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value. As of June 30, 2023 and December 31, 2022, the Company had no obligations to dealer counterparties related to these agreements. The Company generally posts collateral against derivative liabilities in the form of cash, government agency-issued bonds, mortgage-backed securities, or commercial mortgage-backed securities. Collateral posted against derivative liabilities was $17.1 million and $22.2 million as of June 30, 2023 and December 31, 2022, respectively. The collateral posted included restricted cash of $14.1 million and $15.9 million as of June 30, 2023 and 2022, respectively.

Derivative assets and liabilities are recorded at fair value on the balance sheet. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis and to offset net derivative positions with related collateral where applicable. In addition, some of interest rate swap derivatives between the Company and the dealer counterparties are cleared through central clearing houses. These clearing houses characterize the variation margin payments as settlements of the derivative’s market exposure and not as collateral. The variation margin is treated as an adjustment to our cash collateral, as well as a corresponding adjustment to our derivative liability. As of June 30, 2023 and December 31, 2022, the variation margin adjustment was a negative adjustment of $6.4 million and $8.7 million, respectively.

The following tables present additional information related to the Company’s derivative contracts, by type of financial instrument, as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
Derivative liabilities
Interest rate swaps	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	December 31, 2022
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
Derivative liabilities
Interest rate swaps	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178
	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178

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ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Banner is a bank holding company incorporated in the State of Washington, which wholly owns one subsidiary bank, Banner Bank. The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington and, as of June 30, 2023, it had 137 branch offices and 18 loan production offices located in Washington, Oregon, California, Idaho and Utah.  Banner is subject to regulation by the Federal Reserve.  The Bank is subject to regulation by the Washington DFI and the FDIC.  As of June 30, 2023, we had total consolidated assets of $15.58 billion, total loans of $10.47 billion, total deposits of $13.10 billion and total shareholders’ equity of $1.54 billion.

The Bank is a regional bank which offers a wide variety of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas.  The Bank’s primary business is that of traditional banking institutions, accepting deposits and originating loans in locations surrounding our offices in Washington, Oregon, California, Idaho and Utah.  The Bank is also an active participant in secondary loan markets, engaging in mortgage banking operations largely through the origination and sale of one- to four-family and multifamily residential loans.  Lending activities include commercial business and commercial real estate loans, agriculture business loans, construction and land development loans, one- to four-family and multifamily residential loans, SBA loans and consumer loans.

Banner’s successful execution of its super community bank model and strategic initiatives have delivered solid core operating results and profitability over the last several years. Banner’s longer term strategic initiatives continue to focus on originating high quality assets and client acquisition, which we believe will continue to generate strong revenue while maintaining the Company’s moderate risk profile.

SEC regulations allow registrants to compare the results of the most recently completed quarter to the results of either the immediately preceding quarter or the corresponding quarter of the preceding year. Banner has elected to compare our results for the three months ended June 30, 2023 and March 31, 2023, where applicable, throughout this Management’s Discussion and Analysis.

Second Quarter 2023 Highlights

•Revenues decreased 7% to $150.9 million, compared to $162.6 million in the preceding quarter.

•Net interest income decreased 7% to $142.5 million in the second quarter of 2023, compared to $153.3 million in the preceding quarter.

•Net interest margin, on a tax equivalent basis, was 4.00%, compared to 4.30% in the preceding quarter.

•Mortgage banking revenues decreased 37% to $1.7 million, compared to $2.7 million in the preceding quarter.

•Return on average assets was 1.02%, compared to 1.44% in the preceding quarter.

•Net loans receivable increased 3% to $10.33 billion at June 30, 2023, compared to $10.02 billion at March 31, 2023.

•Non-performing assets increased to $28.7 million, or 0.18% of total assets, at June 30, 2023, compared to $27.1 million, or 0.17% of total assets at March 31, 2023.

•The allowance for credit losses - loans was $144.7 million, or 1.38% of total loans receivable, as of June 30, 2023, compared to $141.5 million, or 1.39% of total loans receivable, at March 31, 2023.

•Total deposits were $13.10 billion at June 30, 2023, compared to $13.15 billion at March 31, 2023.

•Core deposits (non-interest-bearing and interest-bearing transaction and savings accounts) decreased to $11.74 billion at June 30, 2023, compared to $12.20 billion at March 31, 2023. Core deposits represented 90% of total deposits at June 30, 2023.

•The Bank’s uninsured deposits were 31% of total deposits at June 30, 2023, compared to 33% at March 31, 2023.

•The Bank’s uninsured deposits excluding collateralized public deposits and affiliate deposits were 28% of total deposits at June 30, 2023, compared to 31% at March 31, 2023.

•Available borrowing capacity was $4.02 billion at June 30, 2023, compared to $4.25 billion at March 31, 2023.

•On balance sheet liquidity was $3.07 billion at June 30, 2023, compared to $3.40 billion at March 31, 2023.

•Dividends paid to shareholders were $0.48 per share in the quarter ended June 30, 2023.

•Common shareholders’ equity per share increased 1% to $44.91 at June 30, 2023, compared to $44.64 at the preceding quarter end.

•Tangible common shareholders’ equity per share* increased 1% to $33.83 at June 30, 2023, compared to $33.52 at the preceding quarter end.

*Non-GAAP Financial Measures: Management has presented non-GAAP financial measures in this discussion and analysis because it believes that they provide useful and comparative information to assess trends in our core operations and to 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, we have also presented comparable earnings information using GAAP financial measures. For a reconciliation of these non-GAAP financial measures, see the tables below. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies.

Adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio are non-GAAP financial measures. To calculate the adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations. Management believes that these non-GAAP financial measures provide information to investors that is useful in evaluating the operating performance and trends of financial services companies, including the Company (dollars in thousands except per share data).

47

	Quarters Ended						For the Six Months Ended June 30,
	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		2023		2022
ADJUSTED REVENUE
Net interest income (GAAP)	$	142,518	$	153,312	$	129,011	$	295,830	$	247,665
Non-interest income (GAAP)	8,422		9,277		27,173		17,699		46,600
Total revenue (GAAP)	150,940		162,589		156,184		313,529		294,265
Exclude: Net loss (gain) on sale of securities	4,527		7,252		(32)		11,779		(467)
Net change in valuation of financial instruments carried at fair value	3,151		552		(69)		3,703		(118)
Gain on sale of branches	—		—		(7,804)		—		(7,804)
Adjusted Revenue (non-GAAP)	$	158,618	$	170,393	$	148,279	$	329,011	$	285,876

	Quarters Ended						For the Six Months Ended June 30,
	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		2023		2022
ADJUSTED EARNINGS
Net income (GAAP)	$	39,591	$	55,555	$	47,965	$	95,146	$	91,928
Exclude: Net loss (gain) on sale of securities	4,527		7,252		(32)		11,779		(467)
Net change in valuation of financial instruments carried at fair value	3,151		552		(69)		3,703		(118)
Gain on sale of branches	—		—		(7,804)		—		(7,804)
Banner Forward expenses	195		143		1,579		338		4,044
Loss on extinguishment of debt	—		—		—		—		793
Related net tax benefit	(1,890)		(1,907)		1,518		(3,797)		852
Total adjusted earnings (non-GAAP)	$	45,574	$	61,595	$	43,157	$	107,169	$	89,228
Diluted earnings per share (GAAP)	$	1.15	$	1.61	$	1.39	$	2.76	$	2.66
Diluted adjusted earnings per share (non-GAAP)	$	1.32	$	1.79	$	1.25	$	3.11	$	2.58

	Quarters Ended									For the Six Months Ended June 30,
	Jun 30, 2023			Mar 31, 2023			Jun 30, 2022			2023			2022
ADJUSTED EFFICIENCY RATIO
Non-interest expense (GAAP)	$	95,405		$	94,621		$	92,053		$	190,026		$	183,248
Exclude: Banner Forward expenses	(195)			(143)			(1,579)			(338)			(4,044)
CDI amortization	(991)			(1,050)			(1,425)			(2,041)			(2,849)
State and municipal tax expense	(1,229)			(1,300)			(1,004)			(2,529)			(2,166)
REO operations	(75)			277			121			202			200
Loss on extinguishment of debt	—			—			—			—			(793)
Adjusted non-interest expense (non-GAAP)	$	92,915		$	92,405		$	88,166		$	185,320		$	173,596
Net interest income (GAAP)	$	142,518		$	153,312		$	129,011		$	295,830		$	247,665
Non-interest income (GAAP)	8,422			9,277			27,173			17,699			46,600
Total revenue (GAAP)	150,940			162,589			156,184			313,529			294,265
Exclude: Net loss (gain) on sale of securities	4,527			7,252			(32)			11,779			(467)
Net change in valuation of financial instruments carried at fair value	3,151			552			(69)			3,703			(118)
Gain on sale of branches	—			—			(7,804)			—			(7,804)
Adjusted revenue (non-GAAP)	$	158,618		$	170,393		$	148,279		$	329,011		$	285,876
Efficiency ratio (GAAP)	63.21		%	58.20		%	58.94		%	60.61		%	62.27		%
Adjusted efficiency ratio (non-GAAP)	58.58		%	54.23		%	59.46		%	56.33		%	60.72		%

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The ratio of tangible common shareholders’ equity to tangible assets is also a non-GAAP financial measure. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholders’ equity. We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets. We believe that this is consistent with the treatment by our bank regulatory agencies, which exclude goodwill and other intangible assets from the calculation of risk-based capital ratios. Management believes that this non-GAAP financial measure provides information to investors that is useful in understanding the basis of our capital position (dollars in thousands except per share data).

TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
	June 30, 2023			December 31, 2022			June 30, 2022
Shareholders’ equity (GAAP)	$	1,542,513		$	1,456,432		$	1,485,830
Exclude goodwill and other intangible assets, net	380,520			382,561			384,991
Tangible common shareholders’ equity (non-GAAP)	$	1,161,993		$	1,073,871		$	1,100,839
Total assets (GAAP)	$	15,584,736		$	15,833,431		$	16,385,197
Exclude goodwill and other intangible assets, net	380,520			382,561			384,991
Total tangible assets (non-GAAP)	$	15,204,216		$	15,450,870		$	16,000,206
Common shareholders’ equity to total assets (GAAP)	9.90		%	9.20		%	9.07		%
Tangible common shareholders’ equity to tangible assets (non-GAAP)	7.64		%	6.95		%	6.88		%
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
Tangible common shareholders’ equity (non-GAAP)	$	1,161,993		$	1,073,871		$	1,100,839
Common shares outstanding at end of period	34,344,627			34,194,018			34,191,330
Common shareholders’ equity (book value) per share (GAAP)	$	44.91		$	42.59		$	43.46
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP)	$	33.83		$	31.41		$	32.20

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial condition and results of operations.  The information contained in this section should be read in conjunction with the Consolidated Financial Statements and accompanying Selected Notes to the Consolidated Financial Statements contained in Item 1 of this Form 10-Q.

Summary of Critical Accounting Estimates

Our critical accounting estimates are described in detail in the Critical Accounting Estimates section of the 2022 Form 10-K. The condensed consolidated financial statements are prepared in conformity with GAAP and follow general practices within the financial services industry, in which the Company operates. This preparation requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements. As this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. Certain estimates inherently have a greater reliance on the use of assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Management believes that the allowance for credit losses, fair value, goodwill, income taxes and deferred tax assets and legal contingencies are important to the portrayal of the Company’s financial condition and results of operations and requires significant judgements and assumptions which are susceptible to significant changes based on the current environment. There have been no significant changes in our application of critical accounting estimates since December 31, 2022.

Comparison of Financial Condition at June 30, 2023 and December 31, 2022

General:  Total assets decreased $248.7 million to $15.58 billion at June 30, 2023, from $15.83 billion at December 31, 2022. The decrease was primarily due to $300.0 million of reverse repurchase agreements maturing as well as the sale of securities during 2023, partially offset by loan growth.

Loans and lending: Loans are our most significant and generally highest yielding earning assets. We attempt to maintain a portfolio of loans to total deposits ratio at a level designed to enhance our revenues, while adhering to sound underwriting practices and appropriate diversification guidelines in order to maintain a moderate risk profile. Our loan to deposit ratio typically ranges from 90% to 95%. Our loan to deposit ratio at June 30, 2023 was 80%. During the most recent quarters, our loan to deposit ratio has begun to trend upward as the unprecedented level of market liquidity begins to reduce. We offer a wide range of loan products to meet the demands of our clients. Our lending activities are primarily directed toward the origination of real estate and commercial loans. Total loans receivable (gross loans less deferred fees and discounts and excluding loans held for sale) increased $325.7 million at June 30, 2023, compared to December 31, 2022, primarily reflecting increased one-to-four family residential, multifamily real estate, commercial business and multifamily construction. At June 30, 2023, our loans receivable totaled $10.47 billion compared to $10.15 billion at December 31, 2022.

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The following table sets forth the composition of the Company’s loans receivable by type of loan as of the dates indicated (dollars in thousands):

							Percentage Change
	Jun 30, 2023		Dec 31, 2022		Jun 30, 2022		Year End		Prior Year Qtr.
Commercial real estate:
Owner-occupied	$	894,876	$	845,320	$	845,184	5.9	%	5.9	%
Investment properties	1,558,176		1,589,975		1,628,105		(2.0)		(4.3)
Small balance CRE	1,172,825		1,200,251		1,191,903		(2.3)		(1.6)
Total Commercial real estate	3,625,877		3,635,546		3,665,192		(0.3)		(1.1)
Multifamily real estate	699,830		645,071		575,183		8.5		21.7
Construction, land and land development:
Commercial construction	183,765		184,876		193,984		(0.6)		(5.3)
Multifamily construction	433,868		325,816		256,952		33.2		68.9
One- to four-family construction	547,200		647,329		625,488		(15.5)		(12.5)
Land and land development	345,053		328,475		320,041		5.0		7.8
Total Construction, land and land development	1,509,886		1,486,496		1,396,465		1.6		8.1
Commercial business:
Commercial business	1,313,226		1,283,407		1,206,938		2.3		8.8
Small business scored	982,283		947,092		865,828		3.7		13.5
Total Commercial business	2,295,509		2,230,499		2,072,766		2.9		10.7
Agricultural business, including secured by farmland	310,120		295,077		283,415		5.1		9.4
One- to four-family residential	1,340,126		1,173,112		868,175		14.2		54.4
Consumer:
Consumer—home equity revolving lines of credit	577,725		566,291		506,524		2.0		14.1
Consumer—other	113,334		114,632		89,109		(1.1)		27.2
Total Consumer	691,059		680,923		595,633		1.5		16.0
Total loans receivable	$	10,472,407	$	10,146,724	$	9,456,829	3.2	%	10.7	%

Our commercial real estate loans totaled $3.63 billion, or 35% of our loan portfolio, at June 30, 2023. In addition, multifamily real estate loans totaled $699.8 million and comprised 7% of our loan portfolio at June 30, 2023. Commercial real estate loans decreased by $9.7 million during the first six months of 2023, while multifamily real estate loans increased by $54.8 million.

Our construction, land and land development loans totaled $1.51 billion, or 14% of our loan portfolio at June 30, 2023, compared to $1.49 billion at December 31, 2022. The largest shifts in our construction, land and land development portfolio occurred in multifamily and one- to four-family construction loans. Multifamily construction loans increased $108.1 million, or 33%, to $433.9 million at June 30, 2023, compared December 31, 2022. Multifamily construction loans represented approximately 4% of our total loan portfolio at June 30, 2023 and is comprised of market rate multifamily and affordable housing projects. One- to four-family construction loans decreased $100.1 million, or 15%, to $547.2 million at June 30, 2023, compared to $647.3 million at December 31, 2022. One- to four-family construction loans represented approximately 5% of our total loan portfolio at June 30, 2023, and included speculative construction loans, as well as “all-in-one” construction loans made to owner occupants that convert to permanent loans upon completion of the homes that, depending on market conditions, may be subsequently sold into the secondary market.

Our commercial business lending is directed toward meeting the credit and related deposit needs of various small- to medium-sized business and agribusiness borrowers operating in our primary market areas.  Our commercial and agricultural business loans increased $80.1 million, or 3%, to $2.61 billion at June 30, 2023, compared to $2.53 billion at December 31, 2022. Commercial and agricultural business loans represented approximately 25% of our loan portfolio at June 30, 2023. Our commercial business lending, to a lesser extent, includes participation in certain syndicated loans, including shared national credits, which totaled $276.8 million at June 30, 2023, compared to $234.1 million at December 31, 2022.

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We are active originators of one- to four-family residential loans in most communities where we have established offices in Washington, Oregon, California, Idaho and Utah. Most of the one- to four-family residential loans we originate in normal market conditions are sold in secondary markets with net gains on sales and loan servicing fees reflected in our revenues from mortgage banking operations. Although our originations of loans held for sale have declined significantly, originations of portfolio one- to four-family residential loans have remained relatively strong despite increases in interest rates during 2023 and 2022. At June 30, 2023, one- to four-family residential loans retained in our portfolio increased $167.0 million, to $1.34 billion, compared to $1.17 billion at December 31, 2022. The increase in one- to four-family residential loans was primarily the result of a higher percentage of new production and one- to four-family construction loans converting to one- to four-family residential loans being held in portfolio. One- to four-family residential loans represented 13% of our loan portfolio at June 30, 2023.

Our consumer loan activity is primarily directed at meeting demand from our existing deposit clients. At June 30, 2023, consumer loans, including home equity revolving lines of credit, increased $10.1 million to $691.1 million, compared to $680.9 million at December 31, 2022.

The following table shows the commitment amount for loan origination (excluding loans held for sale) activity for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, as well as the six months ended June 30, 2023 and June 30, 2022 (in thousands):

	Three Months Ended						Six Months Ended
	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		Jun 30, 2023		Jun 30, 2022
Commercial real estate	$	94,640	$	75,768	$	121,365	$	170,408	$	208,786
Multifamily real estate	3,441		35,520		2,959		38,961		24,128
Construction and land	488,980		247,842		643,832		736,822		1,189,307
Commercial business	128,404		131,826		245,997		260,230		518,510
Agricultural business	28,367		23,181		26,786		51,548		55,462
One-to four- family residential	52,618		34,265		126,963		86,883		182,784
Consumer	112,555		60,888		193,853		173,443		315,812
Total commitment amount for loan originations (excluding loans held for sale)	$	909,005	$	609,290	$	1,361,755	$	1,518,295	$	2,494,789

Loans held for sale increased to $60.6 million at June 30, 2023, compared to $56.9 million at December 31, 2022, as originations exceeded sales of held-for-sale loans during the six months ended June 30, 2023. Originations of loans held for sale decreased to $110.4 million for the six months ended June 30, 2023, compared to $299.1 million for the same period last year, primarily due to decreased refinance activity as well as an overall decrease in purchase activity for one- to four-family residential mortgage and multifamily loans due to the increase in interest rates during the current year. The volume of one- to four-family residential mortgage loans sold was $103.1 million during the six months ended June 30, 2023, compared to $299.0 million in the same period a year ago. During the six months ended June 30, 2023, we sold $7.6 million of multifamily loans, compared to $15.8 million for the same period a year ago. Loans held for sale included $42.1 million and $49.5 million of multifamily loans at June 30, 2023 and December 31, 2022, respectively, with the remaining balance in one- to four-family residential mortgage loans.

The following table presents loans by geographic concentration at June 30, 2023, December 31, 2022 and June 30, 2022 (dollars in thousands):

	Jun 30, 2023				Dec 31, 2022		Jun 30, 2022		Percentage Change
	Amount		Percentage		Amount		Amount		Year End		Prior Year Qtr.
Washington	$	4,945,074	47.2	%	$	4,777,546	$	4,436,092	3.5	%	11.5	%
California	2,537,121		24.2		2,484,980		2,227,532		2.1		13.9
Oregon	1,913,929		18.3		1,826,743		1,699,238		4.8		12.6
Idaho	595,065		5.7		565,586		562,464		5.2		5.8
Utah	62,720		0.6		75,967		94,508		(17.4)		(33.6)
Other	418,498		4.0		415,902		436,995		0.6		(4.2)
Total loans receivable	$	10,472,407	100.0	%	$	10,146,724	$	9,456,829	3.2	%	10.7	%

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Investment Securities: Total securities decreased $345.1 million to $3.59 billion at June 30, 2023, from $3.94 billion at December 31, 2022, primarily due to the sale of securities as well as normal portfolio cash flows. Securities sales, paydowns and maturities exceeded purchases during the six-month period ended June 30, 2023. Purchases during the six months ended June 30, 2023, consisted primarily of state and local government obligations and agency commercial mortgage-backed securities. The average effective duration of the Company’s securities portfolio was 6.8 years at June 30, 2023, compared to 6.5 years at December 31, 2022. Net fair value adjustments to the portfolio of securities held for trading, which were included in net income, decreased $3.0 million in the six months ended June 30, 2023. In addition, fair value adjustments for securities designated as available-for-sale increased $4.7 million for the six months ended June 30, 2023, which was included, net of the associated tax expense of $1.1 million, as a component of other comprehensive income, and largely occurred as a result of decreases in market interest rates during the six months ended June 30, 2023. In addition, we recorded a $2.0 million provision for credit losses on the available for sale securities portfolio related to an investment in subordinated debt. The Company held no securities purchased under resell agreements at June 30, 2023, compared to $300.0 million at December 31, 2022. The decrease in securities purchased under resell agreements was due to $300.0 million of reverse repurchase agreements maturing during the six months ended June 30, 2023.

Deposits: Deposits, client retail repurchase agreements and loan repayments are the major sources of our funds for lending and other investment purposes. We compete with other financial institutions and financial intermediaries in attracting deposits and we generally attract deposits within our primary market areas. Much of the focus of our branch strategy and marketing efforts over the last several years have been directed toward attracting additional deposit client relationships and balances. This effort has been particularly directed towards emphasizing core deposit activity in non-interest-bearing and other transaction and savings accounts. Despite rate sensitive deposits moving off balance sheet during the last couple of quarters, our strategy of focusing on relationship banking remains intact.

The following table sets forth the Company’s deposits by type of deposit account as of the dates indicated (dollars in thousands):

							Percentage Change
	Jun 30, 2023		Dec 31, 2022		Jun 30, 2022		Year End		Prior Year Qtr.
Non-interest-bearing	$	5,369,187	$	6,176,998	$	6,388,815	(13.1)	%	(16.0)	%
Interest-bearing checking	1,908,402		1,811,153		1,859,582		5.4		2.6
Regular savings accounts	2,588,298		2,710,090		2,801,177		(4.5)		(7.6)
Money market accounts	1,876,569		2,198,288		2,406,678		(14.6)		(22.0)
Interest-bearing transaction & savings accounts	6,373,269		6,719,531		7,067,437		(5.2)		(9.8)
Total core deposits	11,742,456		12,896,529		13,456,252		(8.9)		(12.7)
Interest-bearing certificates	1,356,600		723,530		756,312		87.5		79.4
Total deposits	$	13,099,056	$	13,620,059	$	14,212,564	(3.8)	%	(7.8)	%

Total deposits decreased $521.0 million compared to December 31, 2022, with core deposits decreasing $1.15 billion, partially offset by a $633.1 million increase in certificates of deposit. The decline in deposits during the first six months of 2023 was primarily due to interest rate sensitive clients moving a portion of their non-operating deposit balances to higher yielding investments, as well as seasonal customer deposit outflows. Certificates of deposit increased 87% at June 30, 2023, compared to December 31, 2022, reflecting increasing rates attracting customers to these deposit types and a $203.6 million increase in brokered deposits. We had $203.6 million of brokered deposits at June 30, 2023, compared to none at December 31, 2022. Core deposits represented 90% and 95% of total deposits at June 30, 2023 and December 31, 2022, respectively.

The Bank’s uninsured deposits were $4.06 billion or 31% of total deposits at June 30, 2023, compared to $4.84 billion or 35% of total deposits at December 31, 2022. The uninsured deposit calculation includes $309.7 million and $304.2 million of collateralized public deposits at June 30, 2023 and December 31, 2022, respectively. Uninsured deposits also includes cash held by the Company of $95.0 million and $77.2 million at June 30, 2023 and December 31, 2022, respectively. The Bank’s uninsured deposits, excluding collateralized public deposits and cash held at the holding company, were 28% of total deposits at June 30, 2023, compared to 33% of total deposits at December 31, 2022.

The following table sets forth the number and average account balance of the Company’s deposit accounts as of the dates indicated (dollars in thousands):

	Jun 30, 2023		Dec 31, 2022		Jun 30, 2022
Number of deposit accounts	467,490		471,140		495,249
Average account balance per account	$	28	$	29	$	29

52

The following table presents deposits by geographic concentration at June 30, 2023, December 31, 2022 and June 30, 2022 (dollars in thousands):

	Jun 30, 2023				Dec 31, 2022		Jun 30, 2022		Percentage Change
	Amount		Percentage		Amount		Amount		Year End		Prior Year Qtr.
Washington	$	7,255,731	55.5	%	$	7,563,056	$	7,820,321	(4.1)	%	(7.2)	%
Oregon	2,914,267		22.2		2,998,572		3,123,110		(2.8)		(6.7)
California	2,257,247		17.2		2,331,524		2,520,493		(3.2)		(10.4)
Idaho	671,811		5.1		726,907		748,640		(7.6)		(10.3)
Total deposits	$	13,099,056	100.0	%	$	13,620,059	$	14,212,564	(3.8)	%	(7.8)	%

Borrowings: We had $270.0 million of FHLB advances at June 30, 2023, compared to $50.0 million at December 31, 2022. Other borrowings, consisting of retail repurchase agreements primarily related to client cash management accounts, decreased $39.8 million, or 17%, to $193.0 million at June 30, 2023, compared to $232.8 million at December 31, 2022. Junior subordinated debentures totaled $67.2 million at June 30, 2023, compared to $74.9 million at December 31, 2022. Subordinated notes, net of issuance costs were $92.6 million at June 30, 2023, compared to $98.9 million at December 31, 2022. The decrease in subordinated notes was primarily due to Banner Bank’s purchase of $6.5 million of Banner’s subordinated debt during the second quarter of 2023.

Shareholders’ Equity: Total shareholders’ equity increased $86.1 million to $1.54 billion at June 30, 2023, as compared to $1.46 billion at December 31, 2022. The increase in shareholders’ equity was primarily due to a $61.8 million increase in retained earnings, as a result of $95.1 million in net income partially offset by the accrual of cash dividends during the six months ended June 30, 2023, and a $23.3 million increase in AOCI, primarily due to a decrease in the unrealized loss on the security portfolio. There were no shares of common stock repurchased during the six months ended June 30, 2023. Tangible common shareholders’ equity, which excludes goodwill and other intangible assets, increased $88.1 million to $1.16 billion, or 7.64% of tangible assets at June 30, 2023, compared to $1.07 billion, or 6.95% of tangible assets at December 31, 2022.

Comparison of Results of Operations for the Three Months Ended June 30, 2023, and March 31, 2023, and the Six Months Ended June 30, 2023 and 2022

For the quarter ended June 30, 2023, net income was $39.6 million, or $1.15 per diluted share, compared to $55.6 million, or $1.61 per diluted share, for the preceding quarter. For the six months ended June 30, 2023, our net income was $95.1 million, or $2.76 per diluted share, compared to net income of $91.9 million, or $2.66 per diluted share for the same period a year earlier. The decrease in net income for the current quarter was primarily due to decreased net interest income as a result of an increase in funding costs and an increase in the provision for credit losses. Our net income for the six months ended June 30, 2023, included increased net interest income, partially offset by a decrease in non-interest income and increases in the provision for credit losses and non-interest expense. The increased net interest income for the current six months is due to increased interest-earning assets, offset by higher interest expense, compared to the same period a year ago.

Net interest margin for the current quarter was impacted by an increase in funding costs due to an increase in higher cost certificates of deposit and the lag effect of prior market rate increases on current period deposit costs, partially offset by increased yields on loans due to the rising interest rates during the quarter. The increased funding costs resulted in decreased total revenue for the quarter ended June 30, 2023, compared to the preceding quarter. Rising market interest rates during the current and previous year resulted in yields on loans and investment securities increasing at a faster pace than our funding costs for the six months ended June 30, 2023, compared to the same period a year ago. The increase in the yields on loans and investment securities, partially offset by increased funding costs during the period improved our net interest margin for the six months ended June 30, 2023, compared to the same period a year earlier. Total revenue increased during the six months ended June 30, 2023, compared to the same period a year earlier due to increased interest income, partially offset by increased funding costs and the net loss on the sale of securities recorded during the current period.

We recorded a $6.8 million provision for credit losses for the quarter ended June 30, 2023, compared to a $524,000 recapture of provision for credit losses in the prior quarter. The provision for credit losses for the current quarter primarily reflects increased loan balances and unfunded loan commitments, a deterioration in forecasted economic conditions, and rating downgrades on bank subordinated debt investments. The recapture of provision for credit losses for the preceding quarter primarily reflected a decrease in unfunded construction loan commitments, which was partially offset by higher net loan charge-offs during the preceding quarter. Banner recorded a $6.2 million provision for credit losses for the six months ended June 30, 2023, compared to a $2.4 million recapture of provision for credit losses for the same period a year ago. The provision for credit losses for the six months ended June 30, 2023, reflects growth in loan balances, a deterioration in forecasted economic conditions and rating downgrades on bank subordinated debt investments.

Non-interest expenses increased in the quarter ended June 30, 2023, compared to the prior quarter and increased during the six months ended June 30, 2023, compared to the same period a year ago. The increase in non-interest expense for the current quarter compared to the prior quarter primarily reflects increases in salary and employee benefits and deposit insurance, partially offset by an increase in the capitalized loan origination costs. The six month year-over-year increase in non-interest expense primarily reflects an increase in salary and employee benefits, a decrease in capitalized loan origination costs, and increases in information and computer data services and deposit insurance, partially offset by decreases in occupancy and equipment, payment and card processing services, and amortization of core deposit intangibles.

53

OPERATING DATA:	Quarters Ended						Six months ended
(In thousands)	June 30, 2023		March 31, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Interest income	$	171,809	$	166,961	$	133,001	$	338,770	$	255,892
Interest expense	29,291		13,649		3,990		42,940		8,227
Net interest income	142,518		153,312		129,011		295,830		247,665
Provision (recapture) for credit losses	6,764		(524)		4,534		6,240		(2,427)
Net interest income after provision (recapture) for credit losses	135,754		153,836		124,477		289,590		250,092
Deposit fees and other service charges	10,600		10,562		11,000		21,162		22,189
Mortgage banking operations	1,686		2,691		3,978		4,377		8,418
Net (loss) gain on sale of securities	(4,527)		(7,252)		32		(11,779)		467
Net change in valuation of financial instruments carried at fair value	(3,151)		(552)		69		(3,703)		118
All other non-interest income	3,814		3,828		12,094		7,642		15,408
Total non-interest income	8,422		9,277		27,173		17,699		46,600
Salary and employee benefits	61,972		61,389		60,832		123,361		120,318
All other non-interest expenses	33,433		33,232		31,221		66,665		62,930
Total non-interest expense	95,405		94,621		92,053		190,026		183,248
Income before provision for income tax expense	48,771		68,492		59,597		117,263		113,444
Provision for income tax expense	9,180		12,937		11,632		22,117		21,516
Net income	$	39,591	$	55,555	$	47,965	$	95,146	$	91,928

PER COMMON SHARE DATA:	Quarters Ended						Six months ended
	June 30, 2023		March 31, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income:
Basic	$	1.15	$	1.62	$	1.40	$	2.77	$	2.68
Diluted	1.15		1.61		1.39		2.76		2.66

Net Interest Income. Net interest income decreased by $10.8 million, or 7%, for the quarter ended June 30, 2023, compared to the preceding quarter. The decrease in net interest income was primarily due to increases in the cost of funding liabilities, partially offset by increases in the average yields on loans and investment securities.

The net interest margin on a tax equivalent basis decreased 30 basis points to 4.00% for the quarter ended June 30, 2023, compared to a net interest margin on a tax equivalent basis of 4.30% for the preceding quarter, reflecting a 46 basis-point increase in the cost of funding liabilities, partially offset by a 12 basis-point increase in the average yields on interest-earning assets during the current quarter. Since March 2022, in response to inflation, the Federal Open Market Committee of the Federal Reserve System has increased the target range for the federal funds rate by 500 basis points, including 25 basis points during the second quarter of 2023, to a range of 5.00% to 5.25%. The increase in average yields on interest-earning assets reflects the benefit of variable rate interest-earning assets repricing higher, as well as new loans being originated at higher interest rates. The increase in the overall cost of funding liabilities compared to the previous quarter was primarily due to the increase in the costs of deposits which was due to an increase in higher cost certificates of deposit and the lag effect of prior market rate increases on current period deposit costs.

Net interest income increased by $48.2 million, or 19%, to $295.8 million for the six months ended June 30, 2023, compared to $247.7 million for the same period one year earlier, primarily due to an increase in the average yields on interest-earning assets, partially offset by increased funding costs. The higher average yield on interest-earning assets compared to same period a year ago is primarily the result of rising interest rates. The net interest margin on a tax equivalent basis increased to 4.15% for the six months ended June 30, 2023, compared to 3.31% for the same period in the prior year.

Interest Income. Interest income for the quarter ended June 30, 2023 was $171.8 million, compared to $167.0 million for the preceding quarter.  The increase in interest income during the current quarter compared to the prior quarter occurred primarily as a result of average yields on total interest-earning assets increasing 12 basis points, partially offset by the average balance of interest-earning assets decreasing $141.9 million. The increased yield on interest-earning assets primarily reflects increases in the average yields on loans.

Interest income on loans increased by $7.6 million for the current quarter from the preceding quarter. The increased interest income on loans was due to the average loan yields increasing to 5.51% for the quarter ended June 30, 2023, from 5.38% in the preceding quarter, reflecting the impact of rising interest rates. Average loans receivable for the quarter ended June 30, 2023 increased 2%, compared to the preceding quarter, primarily reflecting the increase in one- to four-family loans.

54

The combined average balance of mortgage-backed securities, other investment securities, equity securities, interest-bearing deposits and FHLB stock (total investment securities or combined portfolio) decreased to $4.21 billion for the quarter ended June 30, 2023 (excluding the effect of fair value adjustments), compared to $4.57 billion for the preceding quarter. The interest and dividend income from those investments decreased by $2.7 million compared to the preceding quarter. The average yield on the combined portfolio decreased to 3.05% for the quarter ended June 30, 2023, from 3.10% in the preceding quarter. The decrease in the average yield for the current quarter compared to the preceding quarter reflects higher yielding reverse repurchase agreements maturing during the current and previous quarters.

Interest income for the six months ended June 30, 2023 was $338.8 million, compared to $255.9 million for the same period in the prior year, an increase of $82.9 million. The results between the periods primarily reflect an increase in the average yield on interest-earning assets, mostly due to rising interest rates, partially offset by lower average balance of interest-earning assets.

Interest Expense. Interest expense for the quarter ended June 30, 2023 increased $15.6 million, or 115%, compared to the prior preceding quarter. The increase in interest expense occurred as a result of a 46 basis-point increase in the average cost of all funding liabilities to 0.86%, partially offset by the average balance of funding liabilities decreasing $156.9 million. The decrease in the average balance of funding liabilities reflects decreases in non-interest-bearing deposits and interest-bearing transaction and savings accounts, partially offset by higher average balances of certificates of deposit and FHLB advances.

Interest expense for the six months ended June 30, 2023 was $42.9 million, compared to $8.2 million for the same period in the prior year. The increase in interest expense occurred as a result of a 52 basis-point increase in the average cost of all funding liabilities to 0.63% for the six months ended June 30, 2023, compared to 0.11% for the same period in the prior year, partially offset by a $1.12 billion, or 7%, decrease in average funding liabilities.  The decrease in the average balance of funding liabilities reflects decreases in non-interest-bearing deposits and interest-bearing transaction and savings accounts, partially offset by higher average balances of certificates of deposit and FHLB advances.

Deposit interest expense for the quarter ended June 30, 2023 increased $11.3 million, or 122%, compared to the preceding quarter, primarily as a result of an increase in the average rate paid on interest-bearing deposits. The cost of interest-bearing deposits increased by 59 basis points to 1.10% for the quarter ended June 30, 2023, compared to 0.51% in the preceding quarter. The average rate paid on total deposits was 0.64% for the quarter ended June 30, 2023, compared to 0.28% in the preceding quarter. Average deposit balances decreased to $12.94 billion for the quarter ended June 30, 2023, from $13.33 billion for the preceding quarter. The increase in the average costs of deposits was due an increase in higher cost certificates of deposits, including brokered deposits, and the lag effect of prior market rate increases on current period deposit costs.

Deposit interest expense for the six months ended June 30, 2023 increased $25.7 million to $29.8 million, compared to $4.1 million for the same period in the prior year. Average deposit balances decreased to $13.13 billion for the six months ended June 30, 2023, from $14.43 billion for the same period a year earlier, while the average rate paid on deposits increased to 0.46% for the six months ended June 30, 2023 from 0.06% for the same period in the prior year. The average cost of interest-bearing deposits increased by 71 basis points to 0.81% for the six months ended June 30, 2023, compared to 0.10% in the same period a year earlier. The increase in the average cost of interest-bearing deposits was primarily the result of a 162 basis-point increase in the cost of certificates of deposit along with a $165.4 million increase in the average balance of certificates of deposit.

Interest expense on total borrowings for the quarter ended June 30, 2023 increased to $8.8 million from $4.4 million for the preceding quarter, primarily due to an increase in the average rate paid and average balance of total borrowings. The average rate paid on total borrowings for the quarter ended June 30, 2023 increased to 4.60% from 3.41% for the preceding quarter. Average total borrowings were $763.9 million for the quarter ended June 30, 2023, compared to $524.6 million for the preceding quarter. The increase in average total borrowings was largely due to a $284.7 million increase in the average balance of FHLB advances, partially offset by a $41.4 million decrease in the average balance of other borrowings.

Interest expense on total borrowings for the six months ended June 30, 2023 increased to $13.2 million from $4.1 million for the same period a year earlier. Average total borrowings were $645.9 million for the six months ended June 30, 2023, compared to $470.6 million for the same period a year earlier. The increase was primarily due to a $228.1 million increase in the average balance of FHLB advances, partially offset by a $50.4 million decrease in the average balance of other borrowings. The average rate paid on total borrowings for the six months ended June 30, 2023 increased to 4.11% from 1.77% for the same period a year earlier.

Analysis of Net Interest Spread. The following tables present for the periods indicated our condensed average balance sheet information, together with interest income and yields earned on average interest-earning assets and interest expense and rates paid on average interest-bearing liabilities with additional comparative data on our operating performance (dollars in thousands):

55

ANALYSIS OF NET INTEREST SPREAD	Quarters Ended
(rates / ratios annualized)	Jun 30, 2023						Mar 31, 2023
(dollars in thousands)	Average Balance		Interest and Dividends(3)		Yield / Cost(3)		Average Balance		Interest and Dividends(3)		Yield / Cost(3)
Interest-earning assets:
Held for sale loans	$	56,073	$	738	5.28	%	$	52,657	$	671	5.17	%
Mortgage loans	8,413,392		112,097		5.34		8,267,386		106,900		5.24
Commercial/agricultural loans	1,763,264		27,616		6.28		1,702,553		25,176		6.00
SBA PPP loans	5,247		67		5.12		6,792		50		2.99
Consumer and other loans	138,902		2,137		6.17		137,096		2,115		6.26
Total loans(1)	10,376,878		142,655		5.51		10,166,484		134,912		5.38
Mortgage-backed securities	2,958,700		18,429		2.50		3,093,860		19,123		2.51
Other securities	1,184,503		12,932		4.38		1,404,355		15,095		4.36
Interest-bearing deposits with banks	44,922		557		4.97		53,584		608		4.60
FHLB stock	25,611		157		2.46		14,236		90		2.56
Total investment securities	4,213,736		32,075		3.05		4,566,035		34,916		3.10
Total interest-earning assets	14,590,614		174,730		4.80		14,732,519		169,828		4.68
Non-interest-earning assets	939,100						921,217
Total assets	$	15,529,714					$	15,653,736
Deposits:
Interest-bearing checking accounts	$	1,870,605	2,331		0.50		$	1,779,664	906		0.21
Savings accounts	2,536,713		4,895		0.77		2,615,173		1,884		0.29
Money market accounts	1,957,553		6,007		1.23		2,167,138		3,799		0.71
Certificates of deposit	1,126,647		7,306		2.60		810,821		2,655		1.33
Total interest-bearing deposits	7,491,518		20,539		1.10		7,372,796		9,244		0.51
Non-interest-bearing deposits	5,445,960		—		—		5,960,791		—		—
Total deposits	12,937,478		20,539		0.64		13,333,587		9,244		0.28
Other interest-bearing liabilities:
FHLB advances	390,705		5,157		5.29		105,984		1,264		4.84
Other borrowings	188,060		771		1.64		229,459		381		0.67
Junior subordinated debentures and subordinated notes	185,096		2,824		6.12		189,178		2,760		5.92
Total borrowings	763,861		8,752		4.60		524,621		4,405		3.41
Total funding liabilities	13,701,339		29,291		0.86		13,858,208		13,649		0.40
Other non-interest-bearing liabilities(2)	279,232						293,205
Total liabilities	13,980,571						14,151,413
Shareholders’ equity	1,549,143						1,502,323
Total liabilities and shareholders’ equity	$	15,529,714					$	15,653,736
Net interest income/rate spread (tax equivalent)			$	145,439	3.94	%			$	156,179	4.28	%
Net interest margin (tax equivalent)					4.00	%					4.30	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis			(2,921)						(2,867)
Net interest income and margin, as reported			$	142,518	3.92	%			$	153,312	4.22	%
Additional Key Financial Ratios:
Return on average assets					1.02	%					1.44	%
Return on average equity					10.25						15.00
Average equity/average assets					9.98						9.60
Average interest-earning assets/average interest-bearing liabilities					176.74						186.55
Average interest-earning assets/average funding liabilities					106.49						106.31
Non-interest income/average assets					0.22						0.24
Non-interest expense/average assets					2.46						2.45
Efficiency ratio(4)					63.21						58.20
Adjusted efficiency ratio(5)					58.58						54.23

(1)Average balances include loans accounted for on a nonaccrual basis and accruing 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 $1.8 million and $1.7 million for the three months ended June 30, 2023 and March 31, 2023, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million and $1.2 million for the three months ended June 30, 2023 and March 31, 2023, 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. Represent non-GAAP financial measures. See, non-GAAP financial measure reconciliations presented above following Second Quarter 2023 Highlights.

56

	Six months ended June 30, 2023						Six months ended June 30, 2022
	Average Balance		Interest and Dividends (3)		Yield/ Cost (3)		Average Balance		Interest and Dividends (3)		Yield/ Cost (3)
Interest-earning assets:
Held for sale loans	$	54,375	$	1,409	5.23	%	$	103,508	$	1,770	3.45	%
Mortgage loans	8,340,792		218,997		5.29		7,453,483		166,440		4.50
Commercial/agricultural loans	1,733,075		52,792		6.14		1,526,345		32,164		4.25
SBA PPP loans	6,016		117		3.92		67,111		3,840		11.54
Consumer and other loans	138,004		4,252		6.21		116,525		3,383		5.85
Total loans(1)(3)	10,272,262		277,567		5.45		9,266,972		207,597		4.52
Mortgage-backed securities	3,025,907		37,552		2.50		3,073,630		31,200		2.05
Other securities	1,294,743		28,027		4.37		1,600,164		18,755		2.36
Interest-bearing deposits with banks	49,229		1,165		4.77		1,435,629		3,101		0.44
FHLB stock	19,955		247		2.50		10,873		206		3.82
Total investment securities (3)	4,389,834		66,991		3.08		6,120,296		53,262		1.75
Total interest-earning assets	14,662,096		344,558		4.74		15,387,268		260,859		3.42
Non-interest-earning assets	930,208						1,327,169
Total assets	$	15,592,304					$	16,714,437
Deposits:
Interest-bearing checking accounts	$	1,825,386	3,237		0.36		$	1,941,766	562		0.06
Savings accounts	2,575,726		6,779		0.53		2,829,098		706		0.05
Money market accounts	2,061,767		9,806		0.96		2,411,152		1,037		0.09
Certificates of deposit	969,607		9,961		2.07		804,167		1,789		0.45
Total interest-bearing deposits	7,432,486		29,783		0.81		7,986,183		4,094		0.10
Non-interest-bearing deposits	5,701,953		—		—		6,438,885		—		—
Total deposits	13,134,439		29,783		0.46		14,425,068		4,094		0.06
Other interest-bearing liabilities:
FHLB advances	249,131		6,421		5.20		20,994		291		2.80
Other borrowings	208,645		1,152		1.11		259,078		164		0.13
Junior subordinated debentures and subordinated notes	188,142		5,584		5.99		190,573		3,678		3.89
Total borrowings	645,918		13,157		4.11		470,645		4,133		1.77
Total funding liabilities	13,780,357		42,940		0.63		14,895,713		8,227		0.11
Other non-interest-bearing liabilities (2)	286,084						232,853
Total liabilities	14,066,441						15,128,566
Shareholders’ equity	1,525,863						1,585,871
Total liabilities and shareholders’ equity	$	15,592,304					$	16,714,437
Net interest income/rate spread (tax equivalent)			$	301,618	4.11	%			$	252,632	3.31	%
Net interest margin (tax equivalent)					4.15	%					3.31	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis			(5,788)						(4,967)
Net interest income and margin			$	295,830	4.07	%			$	247,665	3.25	%
Additional Key Financial Ratios:
Return on average assets					1.23	%					1.11	%
Return on average equity					12.57						11.69
Average equity / average assets					9.79						9.49
Average interest-earning assets / average interest-bearing liabilities					181.50						181.95
Average interest-earning assets / average funding liabilities					106.40						103.30
Non-interest income / average assets					0.23						0.56
Non-interest expense / average assets					2.46						2.21
Efficiency ratio (4)					60.61						62.27
Adjusted efficiency ratio (5)					56.33						60.72

(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 $3.5 million and $2.7 million for the six months ended June 30, 2023 and 2022, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.3 million and $2.2 million for the six months ended June 30, 2023 and 2022, 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. Represent non-GAAP financial measures. See, non-GAAP financial measure reconciliations presented above following Second Quarter 2023 Highlights.

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Provision and Allowance for Credit Losses. Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio.  These factors include, among others, changes in the size and composition of the loan portfolio, differences in underwriting standards, delinquency rates, actual loss experience and current economic conditions. The following table sets forth an analysis of our allowance for credit losses - loans for the periods indicated (dollars in thousands):

	Quarters Ended									Six Months Ended
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - LOANS	Jun 30, 2023			Mar 31, 2023			Jun 30, 2022			Jun 30, 2023			Jun 30, 2022
Balance, beginning of period	$	141,457		$	141,465		$	125,471		$	141,465		$	132,099
Provision (recapture) for credit losses – loans	3,559			774			3,144			4,333			(4,232)
Recoveries of loans previously charged off:
Commercial real estate	74			184			129			258			216
Construction and land	—			—			—			—			384
One- to four-family residential	36			117			98			153			138
Commercial business	524			119			234			643			383
Agricultural business, including secured by farmland	2			109			14			111			132
Consumer	117			169			112			286			328
	753			698			587			1,451			1,581
Loans charged off:
Commercial real estate	—			—			—			—			(2)
Construction and land	(156)			—			—			(156)			(5)
One- to four-family residential	(4)			(30)			—			(34)			—
Commercial business	(566)			(1,158)			(248)			(1,724)			(330)
Consumer	(363)			(292)			(252)			(655)			(409)
	(1,089)			(1,480)			(500)			(2,569)			(746)
Net (charge-offs) recoveries	(336)			(782)			87			(1,118)			835
Balance, end of period	$	144,680		$	141,457		$	128,702		$	144,680		$	128,702
Net (charge-offs) recoveries / Average loans receivable	(0.003)		%	(0.008)		%	0.001		%	(0.011)		%	0.009		%
Allowance for credit losses - loans as a percentage of total loans	1.38		%	1.39		%	1.36		%	1.38		%	1.36		%

The provision for credit losses - loans reflects the amount required to maintain the allowance for credit losses - loans at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves. During the quarter ended June 30, 2023, we recorded a provision for credit losses - loans of $3.6 million, compared to a provision for credit losses - loans of $774,000 during the prior quarter. The provision for credit losses - loans for the current quarter primarily reflects increased loan balances and a deterioration in forecasted economic conditions. The provision for credit losses – loans for the preceding quarter was recorded to offset the loan charge-offs during the first quarter of 2023 and provided allowance for the nominal increase in loan balances during the preceding quarter. Future assessments of the expected credit losses will not only be impacted by changes in the composition of and amount of loans and to the reasonable and supportable forecast, but will also include an updated assessment of qualitative factors, as well as consideration of any required changes in the reasonable and supportable forecast reversion period.

Net loan charge-offs were $336,000 for the quarter ended June 30, 2023, compared to net loan charge-offs of $782,000 in the preceding quarter. The allowance for credit losses - loans as a percentage of total loans (loans receivable excluding allowance for credit losses - loans) was 1.38% at June 30, 2023, as compared to 1.39% at March 31, 2023.

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The provision for credit losses - unfunded loan commitments reflects the amount required to maintain the allowance for credit losses - unfunded loan commitments at an appropriate level based upon management’s evaluation of the adequacy of collective and individual loss reserves. The following table sets forth an analysis of our allowance for credit losses - unfunded loan commitments for the periods indicated (dollars in thousands):

	Quarters Ended						Six Months Ended
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		Jun 30, 2023		Jun 30, 2022
Balance, beginning of period	$	13,443	$	14,721	$	12,860	$	14,721	$	12,432
Provision (recapture) for credit losses - unfunded loan commitments	1,221		(1,278)		1,386		(57)		1,814
Balance, end of period	$	14,664	$	13,443	$	14,246	$	14,664	$	14,246

The increase in the allowance for credit losses - unfunded loan commitments reflects an increase in the balance of unfunded loan commitments as of June 30, 2023 in addition to changes in forecasted economic factors.

Non-interest Income. The following table presents the key components of non-interest income for the three months ended June 30, 2023 and March 31, 2023 (dollars in thousands):

	Quarters Ended								Six months ended June 30,
	Jun 30, 2023		Mar 31, 2023		Change Amount		Change Percent		2023		2022		Change Amount		Change Percent
Deposit fees and other service charges	$	10,600	$	10,562	$	38	0.4	%	$	21,162	$	22,189	$	(1,027)	(4.6)	%
Mortgage banking operations	1,686		2,691		(1,005)		(37.3)		4,377		8,418		(4,041)		(48.0)
Bank owned life insurance	2,386		2,188		198		9.0		4,574		3,870		704		18.2
Miscellaneous	1,428		1,640		(212)		(12.9)		3,068		3,734		(666)		(17.8)
	16,100		17,081		(981)		(5.7)		33,181		38,211		(5,030)		(13.2)
Net (loss) gain on sale of securities	(4,527)		(7,252)		2,725		(37.6)		(11,779)		467		(12,246)		nm
Net change in valuation of financial instruments carried at fair value	(3,151)		(552)		(2,599)		470.8		(3,703)		118		(3,821)		nm
Gain on sale of branches, including related deposits	—		—		—		nm		—		7,804		(7,804)		(100.0)
Total non-interest income	$	8,422	$	9,277	$	(855)	(9.2)	%	$	17,699	$	46,600	$	(28,901)	(62.0)	%

Non-interest income was $8.4 million for the quarter ended June 30, 2023, compared to $9.3 million for the preceding quarter, and was $17.7 million for the six months ended June 30, 2023, compared to $46.6 million for the same period a year earlier. The decrease in non-interest income during the current quarter compared to the prior quarter was primarily due to the increased negative change in the valuation of financial instruments and a decrease in mortgage banking revenues, partially offset by a decrease in the net loss on the sale of securities. The decrease in non-interest income for the six months ended June 30, 2023, compared to the same period a year earlier was primarily due to an increase in the net loss recorded during the current period on the sale of securities, the recognition of a net loss for fair value adjustments on financial instruments carried at fair value, decreases in revenues from mortgage banking operations and deposit fees and other service charges and a gain on sale of branches recognized during the six months ended June 30, 2022.

Deposit fees and other service charges were flat for the quarter ended June 30, 2023, compared to the preceding quarter. Deposit fees and other service charges decreased by $1.0 million, or 5%, for the six months ended June 30, 2023, compared to the same period a year earlier, primarily as a result of increased deposit transaction activity during the six months ended June 30, 2022.

Revenues from mortgage banking operations, including gains on one- to four-family and multifamily loan sales and loan servicing fees, decreased $1.0 million for the quarter ended June 30, 2023, compared to the preceding quarter, and decreased $4.0 million for the six months ended June 30, 2023, compared to the same period a year earlier. Gains on sales of one- to four-family loans resulted in income of $1.5 million and $2.7 million for the quarter and six months ended June 30, 2023, respectively, compared to $1.2 million in the preceding quarter, and $7.8 million for the six months ended June 30, 2022. Home purchase activity accounted for 93% of one- to four-family mortgage loan originations in the second quarter of 2023, compared to 88% in the preceding quarter. Mortgage banking operations included a $757,000 lower of cost or market downward adjustment on multifamily held for sale loans for the quarter ended June 30, 2023, due to increases in market interest rates during the second quarter of 2023. There were no multifamily loans sold during the quarter ended June 30, 2023. This compares to a $295,000 lower of cost or market upward adjustment recorded during the preceding quarter due to decreases in market interest rates during the first quarter as well as $87,000 of gain recognized on the sale of multifamily loans. Mortgage banking revenue included a $463,000 lower of cost or market downward adjustment on multifamily held for sale loans for the six months ended June 30, 2023, due to increases in market interest rates during the first six months of 2023, as well as $87,000 of gain recognized on the sale of multifamily loans. This compares to a $1.1 million lower of cost or market downward adjustment recorded during the six months ended June 30, 2022, due to increases in market interest rates, as well as $340,000 of gain recognized on the sale of multifamily loans.

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The net loss on sale of securities in the three and six months ended June 30, 2023 reflect strategic sales of securities to minimize the impact of increasing rates on our securities portfolio. The net loss for fair value adjustments for changes in the valuation of financial instruments carried at fair value were due to declines in the current market valuation of investment securities held for trading and limited partnership investments.

Non-interest Expense.  The following table represents key elements of non-interest expense for the three months ended June 30, 2023 and March 31, 2023 (dollars in thousands):

	Quarters Ended								Six months ended June 30,
	Jun 30, 2023		Mar 31, 2023		Change Amount		Change Percent		2023		2022		Change Amount		Change Percent
Salary and employee benefits	$	61,972	$	61,389	$	583	0.9	%	$	123,361	$	120,318	$	3,043	2.5	%
Less capitalized loan origination costs	(4,457)		(3,431)		(1,026)		29.9		(7,888)		(13,452)		5,564		(41.4)
Occupancy and equipment	11,994		11,970		24		0.2		23,964		26,504		(2,540)		(9.6)
Information and computer data services	7,082		7,147		(65)		(0.9)		14,229		12,648		1,581		12.5
Payment and card processing services	4,669		4,618		51		1.1		9,287		10,578		(1,291)		(12.2)
Professional and legal expenses	2,400		2,121		279		13.2		4,521		5,058		(537)		(10.6)
Advertising and marketing	940		806		134		16.6		1,746		1,283		463		36.1
Deposit insurance	2,839		1,890		949		50.2		4,729		2,964		1,765		59.5
State and municipal business and use taxes	1,229		1,300		(71)		(5.5)		2,529		2,166		363		16.8
Real estate operations, net	75		(277)		352		(127.1)		(202)		(200)		(2)		1.0
Amortization of core deposit intangibles	991		1,050		(59)		(5.6)		2,041		2,849		(808)		(28.4)
Loss on extinguishment of debt	—		—		—		nm		—		793		(793)		(100.0)
Miscellaneous	5,671		6,038		(367)		(6.1)		11,709		11,739		(30)		(0.3)
Total non-interest expense	$	95,405	$	94,621	$	784	0.8	%	$	190,026	$	183,248	$	6,778	3.7	%

Non-interest expense was $95.4 million for the quarter ended June 30, 2023, compared to $94.6 million for the preceding quarter, and $190.0 million for the six months ended June 30, 2023, compared to $183.2 million for the same period last year. The current quarter increase in non-interest expense primarily reflects increases in salary and employee benefits and deposit insurance, partially offset by an increase in capitalized loan origination costs. The increase in non-interest expense for the six months ended June 30, 2023, compared to the same period a year earlier was primarily due to an increase in salary and employee benefits, a decrease in capitalized loan origination costs, and increases in information and computer data services and deposit insurance, partially offset by decreases in occupancy and equipment, and payment and card processing services.

Salary and employee benefits increased for the quarter ended June 30, 2023, compared to the preceding quarter, primarily due to normal annual salary and wage increases. Salary and employee benefits increased for the six months ended June 30, 2023, compared to the same period last year, primarily due to normal annual salary and wage increases, partially offset by decreases in loan production related commission expense and severance expense.

Capitalized loan origination costs increased for the quarter ended June 30, 2023, compared to the preceding quarter, due to increased loan production in the second quarter of 2023, and decreased for the six months ended June 30, 2023, compared to the same period in the prior year, primarily due to decreased loan production compared to the same period last year.

Occupancy and equipment decreased for the six months ended June 30, 2023, compared to the same period last year, primarily due to a reduction in building rent expense during the current year as a result of exiting a large lease agreement in the second quarter of 2022.

Information and computer data services increased for the six months ended June 30, 2023, compared to the same period last year, primarily due to an increase in computer software expenses. Deposit insurance increased $949,000 for the quarter ended June 30, 2023, compared to the preceding quarter, and increased $1.8 million compared to the same period last year due to an increase in the FDIC assessment rate in 2023.

Our efficiency ratio was 63.21% for the current quarter, compared to 58.20% in the preceding quarter. Our adjusted efficiency ratio, a non-GAAP financial measure, was 58.58% for the current quarter, compared to 54.23% in the preceding quarter. See, non-GAAP financial measure reconciliations presented above in the Second Quarter 2023 Highlights section.

Income Taxes. For the quarter ended June 30, 2023, we recognized $9.2 million in income tax expense for an effective tax rate of 18.8%, which reflects our blended statutory tax rate reduced by the effect of tax-exempt income, certain tax credits, and tax benefits related to restricted stock vesting. Our statutory income tax rate is 23.5%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates. For the quarter ended March 31, 2023, we recognized $12.9 million in income tax expense for an effective tax rate of 18.9%. For the six months ended June 30, 2023, we recognized $22.1 million in income tax expense for an effective tax rate of 18.9%, compared to $21.5 million in income tax expense for an effective tax rate of 19.0% for the same period in the prior year.

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Asset Quality

Maintaining a moderate risk profile by employing appropriate underwriting standards, avoiding excessive asset concentrations and aggressively managing troubled assets has been and will continue to be a primary focus for us. We actively engage with our borrowers to resolve classified loans and other problem assets and effectively manage REO as a result of foreclosures.

Non-Performing Assets:  Non-performing assets increased to $28.7 million, or 0.18% of total assets, at June 30, 2023, from $23.4 million, or 0.15% of total assets, at December 31, 2022. Our allowance for credit losses - loans was $144.7 million, or 513% of non-performing loans, at June 30, 2023, compared to $141.5 million, or 615% of non-performing loans, at December 31, 2022.

The following table sets forth information with respect to our non-performing assets at the dates indicated (dollars in thousands):

	June 30, 2023			December 31, 2022			June 30, 2022
Nonaccrual Loans:
Secured by real estate:
Commercial	$	2,478		$	3,683		$	10,041
Construction and land	2,280			181			200
One- to four-family	7,605			5,236			2,002
Commercial business	8,439			9,886			1,521
Agricultural business, including secured by farmland	3,997			594			1,022
Consumer	3,272			2,126			1,874
	28,071			21,706			16,660
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:
Commercial	—			—			899
One- to four-family	60			1,023			1,053
Commercial business	—			—			20
Consumer	49			264			83
	109			1,287			2,055
Total non-performing loans	28,180			22,993			18,715
REO, net	546			340			340
Other repossessed assets held for sale	—			17			17
Total non-performing assets	$	28,726		$	23,350		$	19,072
Total non-performing assets to total assets	0.18		%	0.15		%	0.12		%
Total nonaccrual loans to loans before allowance for credit losses - loans	0.27		%	0.21		%	0.18		%
Loans 30-89 days past due and on accrual	$	6,259		$	17,186		$	8,336

For the six months ended June 30, 2023, interest income was reduced by $870,000 as a result of nonaccrual loan activity, which includes the reversal of $295,000 of accrued interest as of the date the loan was placed on nonaccrual. There was no interest income recognized on nonaccrual loans for the six months ended June 30, 2023.

The following table presents the Company’s portfolio of risk-rated loans and non-risk-rated loans by grade at the dates indicated (in thousands):

	June 30, 2023		December 31, 2022		June 30, 2022
Pass	$	10,315,687	$	10,000,493	$	9,274,655
Special Mention	11,745		9,081		27,711
Substandard	144,975		137,150		154,463
Total	$	10,472,407	$	10,146,724	$	9,456,829

The increase in substandard loans during the six months ended June 30, 2023, primarily reflects commercial real estate loan risk rating downgrades during the first half of 2023.

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Liquidity and Capital Resources

Our primary sources of funds are deposits, borrowings, proceeds from loan principal and interest payments and sales of loans, and the maturity of and interest income on mortgage-backed and investment securities. While maturities and scheduled amortization of loans and mortgage-backed securities are a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by market interest rates, economic conditions, competition and our pricing strategies.

Our primary investing activity is the origination of loans and, in certain periods, the purchase of securities or loans.  During the six months ended June 30, 2023 and 2022, our loan originations, including originations of loans held for sale, exceeded our loan repayments by $437.8 million and $578.4 million, respectively. There were no loan purchases during the six months ended June 30, 2023, and $75.9 million of loan purchases during the six months ended June 30, 2022. This activity was funded primarily through borrowings. During the six months ended June 30, 2023 and 2022, we received proceeds of $113.9 million and $324.4 million, respectively, from the sale of loans. Securities purchased during the six months ended June 30, 2023 and 2022 totaled $52.8 million and $664.0 million, respectively, and securities repayments, maturities and sales in those periods were $390.4 million and $254.8 million, respectively.

Our primary financing activity is gathering deposits. Total deposits decreased by $521.0 million during the first six months of 2023, as a $1.15 billion decrease in core deposits was partially offset by the $633.1 million increase in certificates of deposit. The decline in deposits during the first six months of 2023 was primarily due to interest rate sensitive clients moving a portion of their non-operating deposit balances to higher yielding investments, however the pace of deposit outflows was slower near the end of the second quarter of 2023, as compared to the first quarter of 2023. Certificates of deposit are generally more vulnerable to competition and more price sensitive than other retail deposits and our pricing of those deposits varies significantly based upon our liquidity management strategies at any point in time.  At June 30, 2023, certificates of deposit totaled $1.36 billion, or 10% of our total deposits, including $1.26 billion which were scheduled to mature within one year.  The increase in certificates of deposits during the first six months of 2023 was primarily due a $203.6 million increase in brokered deposits and clients seeking higher yields moving funds from core deposit accounts to higher yielding certificates of deposits. While no assurance can be given as to future periods, historically, we have been able to retain a significant amount of our certificates of deposit as they mature.

The Bank’s uninsured deposits were $4.06 billion or 31% of total deposits at June 30, 2023, compared to $4.84 billion or 35% of total deposits at December 31, 2022. The uninsured deposit calculation includes $309.7 million and $304.2 million of collateralized public deposits at June 30, 2023 and December 31, 2022, respectively. Uninsured deposits also includes cash held by the Company of $95.0 million and $77.2 million at June 30, 2023 and December 31, 2022, respectively. Banner Bank’s uninsured deposits, excluding collateralized public deposits and cash held at the holding company, were 28% of total deposits at June 30, 2023, compared to 33% of total deposits at December 31, 2022.

We had $270.0 million of FHLB advances at June 30, 2023, compared to $50.0 million at December 31, 2022. Other borrowings decreased $39.8 million to $193.0 million at June 30, 2023 from $232.8 million at December 31, 2022. Subordinated notes, net of issuance costs decreased to $92.6 million at June 30, 2023, compared to $98.9 million at December 31, 2022, primarily due to Banner Bank’s purchase of $6.5 million investment in Banner’s subordinated debt during the second quarter of 2023.

We must maintain an adequate level of liquidity to ensure the availability of sufficient funds to accommodate deposit withdrawals, to support loan growth, to satisfy financial commitments and to take advantage of investment opportunities. During the six months ended June 30, 2023, we used our sources of funds primarily to fund loan growth. At June 30, 2023, we had outstanding loan commitments totaling $4.06 billion, primarily relating to undisbursed loans in process and unused credit lines. While representing potential growth in the loan portfolio and lending activities, this level of commitments is proportionally consistent with our historical experience and does not represent a departure from normal operations.

We generally maintain sufficient cash and readily marketable securities to meet short-term liquidity needs; however, our primary liquidity management practice to supplement deposits is to increase or decrease short-term borrowings, including FHLB advances and Federal Reserve Bank of San Francisco (FRBSF) borrowings.  We maintain credit facilities with the FHLB, which provide for advances that in the aggregate would equal the lesser of 45% of the Bank’s assets or adjusted qualifying collateral (subject to a sufficient level of ownership of FHLB stock).  At June 30, 2023, under these credit facilities based on pledged collateral, the Bank had $2.64 billion of available credit capacity. Advances under these credit facilities totaled $270.0 million at June 30, 2023. In addition, the Bank has been approved for participation in the FRBSF’s Borrower-In-Custody program. Under this program, based on pledged collateral, the Bank had available lines of credit of approximately $1.13 billion as of June 30, 2023, subject to certain collateral requirements, namely the collateral type and risk rating of eligible pledged loans. The Bank also had $124.2 million of additional borrowing capacity through the FRBSF’s bank term funding program. We had no funds borrowed from the FRBSF at June 30, 2023 or December 31, 2022. At June 30, 2023, the Bank also had uncommitted federal funds line of credit agreements with other financial institutions totaling $125.0 million. No balances were outstanding under these agreements as of June 30, 2023 or December 31, 2022. Availability of lines is subject to federal funds balances available for loan and continued borrower eligibility. These lines are intended to support short-term liquidity needs and the agreements may restrict consecutive day usage. Management believes it has adequate resources and funding potential to meet our foreseeable liquidity requirements.

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Banner is a separate legal entity from the Bank and, on a stand-alone level, must provide for its own liquidity and pay its own operating expenses and cash dividends. Banner’s primary sources of funds consist of capital raised through dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends. We currently expect to continue our current practice of paying quarterly cash dividends on our common stock subject to our Board of Directors’ discretion to modify or terminate this practice at any time and for any reason without prior notice. Our current quarterly common stock dividend rate is $0.48 per share, as approved by our Board of Directors, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash to our shareholders. Assuming continued dividend payments during 2023 at this rate of $0.48 per share, our average total dividend paid each quarter would be approximately $16.5 million based on the number of outstanding shares at June 30, 2023. At June 30, 2023, Banner (on an unconsolidated basis) had liquid assets of $97.8 million.

As noted below, Banner Corporation and its subsidiary bank continued to maintain capital levels significantly in excess of the requirements to be categorized as “Well-Capitalized” under applicable regulatory standards.  During the six months ended June 30, 2023, total shareholders’ equity increased $86.1 million, to $1.54 billion.  At June 30, 2023, tangible common shareholders’ equity, which excludes goodwill and other intangible assets, was $1.16 billion, or 7.64% of tangible assets.  Tangible common shareholders’ equity represents a non-GAAP financial measure. See, non-GAAP financial measure reconciliations presented above in the Second Quarter 2023 Highlights section

Capital Requirements

Banner is a bank holding company registered with the Federal Reserve.  Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve.  The Bank, as state-chartered, federally insured commercial bank, is subject to the capital requirements established by the FDIC.

The capital adequacy requirements are quantitative measures established by regulation that require Banner and the Bank to maintain minimum amounts and ratios of capital.  The Federal Reserve requires Banner to maintain capital adequacy that generally parallels the FDIC requirements.  The FDIC requires the Bank to maintain minimum ratios of Total Capital, Tier 1 Capital, and Common Equity Tier 1 Capital to risk-weighted assets as well as Tier 1 leverage capital to average assets.  In addition to the minimum capital ratios, the Bank has to maintain a capital conservation buffer consisting of additional Common Equity Tier 1 Capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses. At June 30, 2023, Banner and the Bank each exceeded all regulatory capital requirements to be “well capitalized”.

The actual regulatory capital ratios calculated for Banner Corporation and Banner Bank as of June 30, 2023, along with the minimum capital amounts and ratios, were as follows (dollars in thousands):

	Actual				Minimum to be Categorized as “Adequately Capitalized”				Minimum to be Categorized as “Well-Capitalized”
	Amount		Ratio		Amount		Ratio		Amount		Amount
Banner Corporation—consolidated
Total capital to risk-weighted assets	$	1,838,722	14.19	%	$	1,036,732	8.00	%	$	1,295,915	10.00	%
Tier 1 capital to risk-weighted assets	1,587,820		12.25		777,549		6.00		777,549		6.00
Tier 1 leverage capital to average assets	1,587,820		10.22		621,427		4.00		n/a		n/a
Common equity tier 1 capital	1,501,320		11.59		583,162		4.50		n/a		n/a
Banner Bank
Total capital to risk-weighted assets	1,734,777		13.39		1,036,372		8.00		1,295,465		10.00
Tier 1 capital to risk-weighted assets	1,583,875		12.23		777,279		6.00		1,036,372		8.00
Tier 1 leverage capital to average assets	1,583,875		10.20		621,054		4.00		776,318		5.00
Common equity tier 1 capital	1,583,875		12.23		582,959		4.50		842,052		6.50

ITEM 3 – Quantitative and Qualitative Disclosures About Market Risk

Market Risk and Asset/Liability Management

Our financial condition and operations are influenced significantly by general economic conditions, including the absolute level of interest rates as well as changes in interest rates and the slope of the yield curve.  Our profitability is dependent to a large extent on our net interest income, which is the difference between the interest received from our interest-earning assets and the interest expense incurred on our interest-bearing liabilities.

Our activities, like all financial institutions, inherently involve the assumption of interest rate risk.  Interest rate risk is the risk that changes in market interest rates will have an adverse impact on the institution’s earnings and underlying economic value.  Interest rate risk is determined by the maturity and repricing characteristics of an institution’s assets, liabilities and off-balance-sheet contracts.  Interest rate risk is measured by the variability of financial performance and economic value resulting from changes in interest rates.  Interest rate risk is the primary market risk affecting our financial performance.

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The greatest source of interest rate risk to us results from the mismatch of maturities or repricing intervals for rate sensitive assets, liabilities and off-balance-sheet contracts.  This mismatch or gap is generally characterized by a substantially shorter maturity structure for interest-bearing liabilities than interest-earning assets, although our floating-rate assets tend to be more immediately responsive to changes in market rates than most deposit liabilities.  Additional interest rate risk results from mismatched repricing indices and formula (basis risk and yield curve risk), and product caps and floors and early repayment or withdrawal provisions (option risk), which may be contractual or market driven, that are generally more favorable to clients than to us.  An exception to this generalization is the beneficial effect of interest rate floors on a portion of our performing floating-rate loans, which help us maintain higher loan yields in periods when market interest rates decline significantly.  However, in a declining interest rate environment, as loans with floors are repaid they generally are replaced with new loans which have lower interest rate floors.  As of June 30, 2023, our loans with interest rate floors totaled $4.49 billion and had a weighted average floor rate of 4.21% compared to a current average note rate of 6.27%.  As of June 30, 2023, our loans with interest rates at their floors totaled $1.44 billion and had a weighted average note rate of 4.11%. The Company actively manages its exposure to interest rate risk through on-going adjustments to the mix of interest-earning assets and funding sources that affect the repricing speeds of loans, investments, interest-bearing deposits and borrowings.

The principal objectives of asset/liability management are: to evaluate the interest rate risk exposure; to determine the level of risk appropriate given our operating environment, business plan strategies, performance objectives, capital and liquidity constraints, and asset and liability allocation alternatives; and to manage our interest rate risk consistent with regulatory guidelines and policies approved by the Board of Directors.  Through such management, we seek to reduce the vulnerability of our earnings and capital position to changes in the level of interest rates.  Our actions in this regard are taken under the guidance of the Asset/Liability Management Committee, which is comprised of members of our senior management.  The Committee closely monitors our interest sensitivity exposure, asset and liability allocation decisions, liquidity and capital positions, and local and national economic conditions and attempts to structure the loan and investment portfolios and funding sources to maximize earnings within acceptable risk tolerances.

Sensitivity Analysis

Our primary monitoring tool for assessing interest rate risk is asset/liability simulation modeling, which is designed to capture the dynamics of balance sheet, interest rate and spread movements and to quantify variations in net interest income resulting from those movements under different rate environments.  The sensitivity of net interest income to changes in the modeled interest rate environments provides a measurement of interest rate risk.  We also utilize economic value analysis, which addresses changes in estimated net economic value of equity arising from changes in the level of interest rates.  The net economic value of equity is estimated by separately valuing our assets and liabilities under varying interest rate environments.  The extent to which assets gain or lose value in relation to the gains or losses of liability values under the various interest rate assumptions determines the sensitivity of net economic value to changes in interest rates and provides an additional measure of interest rate risk.

The interest rate sensitivity analysis performed by us incorporates beginning-of-the-period rate, balance and maturity data, using various levels of aggregation of that data, as well as certain assumptions concerning the maturity, repricing, amortization and prepayment characteristics of loans and other interest-earning assets and the repricing and withdrawal of deposits and other interest-bearing liabilities into an asset/liability simulation model.  We update and prepare simulation modeling at least quarterly for review by senior management and oversight by the directors. We believe the data and assumptions are realistic representations of our portfolio and possible outcomes under the various interest rate scenarios.  Nonetheless, the interest rate sensitivity of our net interest income and net economic value of equity could vary substantially if different assumptions were used or if actual experience differs from the assumptions used.

The following table sets forth, as of June 30, 2023, the estimated changes in our net interest income over one-year and two-year time horizons and the estimated changes in economic value of equity based on the indicated interest rate environments (dollars in thousands):

	Estimated Increase (Decrease) in
Change (in Basis Points) in Interest Rates (1)	Net Interest Income Next 12 Months				Net Interest Income Next 24 Months				Economic Value of Equity
+300	$	(20,930)	(3.5)	%	$	(13,046)	(1.0)	%	$	(355,442)	(12.9)	%
+200	(3,813)		(0.6)		13,098		1.0		(199,060)		(7.2)
+100	2,975		0.5		17,060		1.4		(86,424)		(3.1)
0	—		—		—		—		—		—
-100	(21,548)		(3.6)		(59,289)		(4.7)		48,775		1.8
-200	(44,257)		(7.4)		(123,246)		(9.8)		17,574		0.6
-300	(69,700)		(11.7)		(196,707)		(15.6)		(108,447)		(3.9)

(1)    Assumes an instantaneous and sustained uniform change in market interest rates at all maturities; however, no rates are allowed to go below zero.  The targeted Federal Funds Rate was between 5.0% and 5.25% at June 30, 2023.

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Another monitoring tool for assessing interest rate risk is gap analysis.  The matching of the repricing characteristics of assets and liabilities may be analyzed by examining the extent to which assets and liabilities are interest sensitive and by monitoring an institution’s interest sensitivity gap.  An asset or liability is said to be interest sensitive within a specific time period if it will mature or reprice within that time period.  The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets anticipated, based upon certain assumptions, to mature or reprice within a specific time period and the amount of interest-bearing liabilities anticipated to mature or reprice, based upon certain assumptions, within that same time period.  A gap is considered positive when the amount of interest-sensitive assets exceeds the amount of interest-sensitive liabilities.  A gap is considered negative when the amount of interest-sensitive liabilities exceeds the amount of interest-sensitive assets.  Generally, during a period of rising rates, a negative gap would tend to adversely affect net interest income while a positive gap would tend to result in an increase in net interest income.  During a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to adversely affect net interest income.

Certain shortcomings are inherent in gap analysis.  For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market rates.  Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market rates, while interest rates on other types may lag behind changes in market rates.  Additionally, certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset.  Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table.  Finally, the ability of some borrowers to service their debt may decrease in the event of a severe change in market rates.

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The following table presents our interest sensitivity gap between interest-earning assets and interest-bearing liabilities at June 30, 2023 (dollars in thousands).  The following table sets forth the amounts of interest-earning assets and interest-bearing liabilities which are anticipated by us, based upon certain assumptions, to reprice or mature in each of the future periods shown.  At June 30, 2023, total interest-earning assets maturing or repricing within one year exceeded total interest-bearing liabilities maturing or repricing in the same time period by $2.22 billion, representing a one-year cumulative gap to total assets ratio of 14.25%.  The interest rate risk indicators and interest sensitivity gaps as of June 30, 2023 are within our internal policy guidelines and management considers that our current level of interest rate risk is reasonable.

	Within 6 Months			After 6 Months Within 1 Year			After 1 Year Within 3 Years			After 3 Years Within 5 Years			After 5 Years Within 10 Years			Over 10 Years			Total
Interest-earning assets: (1)
Construction loans	$	878,359		$	62,546		$	171,147		$	36,019		$	21,562		$	183		$	1,169,816
Fixed-rate mortgage loans	255,460			213,267			725,382			558,238			768,414			258,480			2,779,241
Adjustable-rate mortgage loans	1,091,072			321,912			1,300,315			938,727			348,988			57,179			4,058,193
Fixed-rate mortgage-backed securities	87,986			85,851			333,820			418,102			879,739			1,035,727			2,841,225
Adjustable-rate mortgage-backed securities	310,695			375			3,356			210			4,130			—			318,766
Fixed-rate commercial/agricultural loans	95,841			103,295			252,413			141,400			151,731			31,716			776,396
Adjustable-rate commercial/agricultural loans	875,344			28,190			65,678			63,304			3,949			—			1,036,465
Consumer and other loans	458,775			70,815			64,908			35,017			28,654			43,762			701,931
Investment securities and interest-earning deposits	114,097			13,192			71,189			41,040			237,637			437,611			914,766
Total rate sensitive assets	4,167,629			899,443			2,988,208			2,232,057			2,444,804			1,864,658			14,596,799
Interest-bearing liabilities: (2)
Regular savings	242,811			157,821			528,604			396,833			616,412			645,817			2,588,298
Interest checking accounts	215,790			100,954			336,529			253,732			410,130			591,267			1,908,402
Money market deposit accounts	204,947			112,045			377,131			284,955			444,837			452,654			1,876,569
Certificates of deposit	558,804			700,432			85,195			11,259			911			—			1,356,601
FHLB advances	270,000			—			—			—			—			—			270,000
Subordinated notes	—			—			93,500			—			—			—			93,500
Junior subordinated debentures	89,178			—			—			—			—			—			89,178
Retail repurchase agreements	193,019			—			—			—			—			—			193,019
Total rate sensitive liabilities	1,774,549			1,071,252			1,420,959			946,779			1,472,290			1,689,738			8,375,567
Excess (deficiency) of interest-sensitive assets over interest-sensitive liabilities	$	2,393,080		$	(171,809)		$	1,567,249		$	1,285,278		$	972,514		$	174,920		$	6,221,232
Cumulative excess of interest-sensitive assets	$	2,393,080		$	2,221,271		$	3,788,520		$	5,073,798		$	6,046,312		$	6,221,232		$	6,221,232
Cumulative ratio of interest-earning assets to interest-bearing liabilities	234.86		%	178.05		%	188.79		%	197.32		%	190.43		%	174.28		%	174.28		%
Interest sensitivity gap to total assets	15.36			(1.10)			10.06			8.25			6.24			1.12			39.92
Ratio of cumulative gap to total assets	15.36			14.25			24.31			32.56			38.80			39.92			39.92

(Footnotes on following page)

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Footnotes for Table of Interest Sensitivity Gap

(1)Adjustable-rate assets are included in the period in which interest rates are next scheduled to adjust rather than in the period in which they are due to mature, and fixed-rate assets are included in the period in which they are scheduled to be repaid based upon scheduled amortization, in each case adjusted to take into account estimated prepayments.  Mortgage loans and other loans are not reduced for allowances for credit losses and non-performing loans.  Mortgage loans, mortgage-backed securities, other loans and investment securities are not adjusted for deferred fees or unamortized acquisition premiums and discounts.

(2)Adjustable-rate liabilities are included in the period in which interest rates are next scheduled to adjust rather than in the period they are due to mature.  Although regular savings, demand, interest checking, and money market deposit accounts are subject to immediate withdrawal, based on historical experience management considers a substantial amount of such accounts to be core deposits having significantly longer maturities.  For the purpose of the gap analysis, these accounts have been assigned decay rates to reflect their longer effective maturities.  If all of these accounts had been assumed to be short-term, the one-year cumulative gap of interest-sensitive assets would have been $(3.1) billion, or (20.00)% of total assets at June 30, 2023.

ITEM 4 – Controls and Procedures

The management of Banner Corporation is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934 (Exchange Act).  A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met.  Also, because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  As a result of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Further, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

(a)Evaluation of Disclosure Controls and Procedures:  An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) was carried out under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and several other members of our senior management as of the end of the period covered by this report.  Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2023, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b)Changes in Internal Controls Over Financial Reporting:  In the quarter ended June 30, 2023, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1 – Legal Proceedings

In the normal course of our business, we have various legal proceedings and other contingent matters pending. These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable. Furthermore, in some matters, it is difficult to assess potential exposure because the legal proceeding is still in the pretrial stage. These claims and counter claims typically arise during the course of collection efforts on problem loans or with respect to actions to enforce liens on properties in which we hold a security interest, although we also are subject to claims related to employment matters. Claims related to employment matters may include, but are not limited to: claims by our employees of discrimination, harassment, violations of wage and hour requirements, or violations of other federal, state, or local laws and claims of misconduct or negligence on the part of our employees. Some or all of these claims may lead to litigation, including class action litigation, and these matters may cause us to incur negative publicity with respect to alleged claims. Our insurance may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Should the ultimate judgments or settlements in any litigation exceed our insurance coverage, they could have a material adverse effect on our financial condition and results of operation for any period. At June 30, 2023, we had accrued $14.8 million related to these legal proceedings. The ultimate outcome of these legal proceedings could be more or less than what we have accrued. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, operations or cash flows, except as set forth below.

A class and collective action lawsuit, Bolding et al. v. Banner Bank, US Dist. Ct., WD WA., was filed against Banner Bank on April 17, 2017. The plaintiffs are former and/or current mortgage loan officers of AmericanWest Bank and/or Banner Bank, who allege that the employer bank failed to pay all required regular and overtime wages that were due pursuant to the Fair Labor Standards Act (FLSA) and related laws of the state respective to each individual plaintiff. The plaintiffs seek regular and overtime wages, plus certain penalty amounts and legal fees. On December 15, 2017, the Court granted the plaintiffs’ motion for conditional certification of a class with regard to the FLSA claims; following notice given to approximately 160 potential class members, 33 persons elected to “opt-in” as plaintiffs in the class. On October 10, 2018, the Court granted plaintiffs’ motion for certification of a different class of approximately 200 members, with regard to state law claims. Significant pre-trial motions were filed by both parties, including various motions by Banner Bank seeking to dismiss and/or limit the class claims. The Court granted in part and denied in part Banner Bank’s motions and has ultimately allowed the case to proceed. The Court ruled on the last of the pre-trial motions on September 13, 2021, increasing the likelihood of trial or settlement. The parties participated in a mediation in December 2022. The parties have reached agreement in principle regarding fundamental settlement terms, which they are in the process of reducing to a written settlement agreement for execution and presentation to the Court for its preliminary approval.

ITEM 1A – Risk Factors

The following risk factor supplements, and should be read in conjunction with, the Company’s risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Risks related to recent events impacting the banking industry could adversely affect our stock price, results of operations and financial condition

The banking industry has been negatively impacted by the failures of Silicon Valley Bank and Signature Bank in March 2023, and First Republic Bank in May 2023. These failures have highlighted deposit-related risks to the banking industry, in particular the speed at which deposits can be moved. These events have led to decreased investor and depositor confidence in regional banks as well as increased volatility in the stock trading prices of regional banks, to varying degrees. Despite differences in business models across the banking industry, further concerns related to these events could adversely impact our deposits, liquidity, results of operations and the trading price of our stock.

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ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) The following table provides information about repurchases of common stock by the Company during the quarter ended June 30, 2023:

Period	Total Number of Common Shares Purchased (1)	Average Price Paid per Common Share		Total Number of Shares Purchased as Part of Publicly Announced Authorization	Maximum Number of Remaining Shares that May be Purchased as Part of Publicly Announced Authorization
April 1, 2023 - April 30, 2023	11,632	$	54.28	—	—
May 1, 2023 - May 31, 2023	—	—		—	—
June 1, 2023 - June 30, 2023	—	—		—	—
Total for quarter	11,632	$	54.28	—

(1)    Includes 11,632 shares surrendered by employees to satisfy tax withholding obligations upon the vesting of restricted stock grants during the three months ended June 30, 2023.

ITEM 3 – Defaults upon Senior Securities

Not Applicable.

ITEM 4 – Mine Safety Disclosures

Not Applicable.

ITEM 5 – Other Information

(a) None

(b) None

(c) None

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ITEM 6 – Exhibits

Exhibit	Index of Exhibits
3{a}	Restated Articles of Incorporation of Banner Corporation [incorporated by reference to Exhibit 3.1 (b) to the Registrant’s Current Report on Form 8-K filed on May 24, 2022 (File No. 000-26584)].
3{b}	Amended and Restated Bylaws of Banner Corporation [incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on May 24, 2022 (File No. 000-26584)].
10{a}	Amended and Restated Employment Agreement, with Mark J. Grescovich [incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 4, 2013 (File No. 000-26584].
10{b}	Form of Supplemental Executive Retirement Program Agreement with Gary Sirmon, Michael K. Larsen, Lloyd W. Baker, Cynthia D. Purcell and Richard B. Barton [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 and the exhibits filed with the Form 8-K on May 6, 2008 (File No. 000-26584)].
10{c}	Form of Employment Contract entered into with Peter J. Conner, Cynthia D. Purcell and Judith A. Steiner [incorporated by reference to exhibits filed with the Form 8-K on June 25, 2014 (File No. 000-26584)].
10{d}	2005 Executive Officer and Director Stock Account Deferred Compensation Plan [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 000-26584)].
10{e}	Entry into an Indemnification Agreement with each of the Registrant’s Directors [incorporated by reference to exhibits filed with the Form 8-K on January 29, 2010 (File No. 000-26584)].
10{f}	2014 Omnibus Incentive Plan [incorporated by reference as Appendix C to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 24, 2014 (File No. 000-26584)] and amendments [incorporated by reference to the Form 8-K filed on March 25, 2015 (File No. 000-26584)].
10{g}	Forms of Equity-Based Award Agreements: Incentive Stock Option Award Agreement, Non-Qualified Stock Option Award Agreement, Restricted Stock Award Agreement, Restricted Stock Unit Award Agreement, Stock Appreciation Right Award Agreement, and Performance Unit Award Agreement [incorporated by reference to Exhibits 10.2 - 10.7 included in the Registration Statement on Form S-8 dated May 9, 2014 (File No. 333-195835)].
10{h}	2018 Omnibus Incentive Plan [incorporated by reference as Appendix D to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 23, 2018 (File No. 000-26584)]
10{i}	Forms of Equity-Based Award Agreements: Incentive Stock Option Award Agreement, Non-Qualified Stock Option Award Agreement under the Banner Corporation 2018 Omnibus Incentive Plan; Director Restricted Stock Award Agreement; Director Restricted Stock Unit Award Agreement; Employee Time-based Restricted Stock Unit Award Agreement; Employee performance-based Restricted Stock Unit Award Agreement; Stock Appreciation Right Award Agreement; and Performance Unit Award Agreement [incorporated by reference to Exhibits 10.2 - 10.9 included in the Registration Statement on Form S-8 dated May 4, 2018 (File No. 333-224693)]
10{j}	Amended and Restated Executive Severance and Change in Control Plan and Summary Plan Description (Amended and Restated effective as of July 1, 2023)
10{k}	2023 Omnibus Incentive Plan [incorporated by reference as Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 18, 2023 (File No. 000-26584)]
31.1	Certification of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

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Exhibit	Index of Exhibits
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL (included in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Banner Corporation
August 3, 2023	/s/ Mark J. Grescovich
	Mark J. Grescovich
	President and Chief Executive Officer (Principal Executive Officer)
August 3, 2023	/s/ Peter J. Conner
	Peter J. Conner
	Executive Vice President, Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)

72

EX-10.J

EXHIBIT 10 {j}

BANNER BANK

AMENDED AND RESTATED
EXECUTIVE SEVERANCE AND CHANGE IN CONTROL PLAN

AND

SUMMARY PLAN DESCRIPTION

(Amended and Restated effective as of July 1, 2023)

TABLE OF CONTENTS

Page

Section 1.Introduction.	1
Section 2.Definitions.	1
Section 3.Participation.	5
Section 4.Severance and Change in Control Benefits.	5
Section 5.Benefit Conditions.	7
Section 6.Code Section 280G Reductions.	9
Section 7.Plan Administration.	10
Section 8.Claims Procedures.	11
Section 9.General Provisions.	13
Section 10.ERISA Rights and Information.	16

Page i –Amended and REstated Executive Severance and Change in Control Plan

BANNER BANK

AMENDED AND RESTATED
EXECUTIVE SEVERANCE AND CHANGE IN CONTROL PLAN

Section 1.Introduction.

Banner Bank (the “Bank”), a wholly-owned subsidiary of Banner Corporation (the “Company”), established the Executive Severance and Change in Control Plan (as amended and restated in this document, the “Plan”) on January 1, 2018 (the “Effective Date”), to provide certain executive employees of the Bank with the opportunity to receive severance benefits in connection with certain terminations of employment, including a termination of employment after a change in control of the Bank or the Company. The purpose of the Plan is to attract and retain qualified executives and to assure the present and future continuity, objectivity, and dedication of management in the event of any change in control.

The Bank previously amended and restated the Plan, effective as of January 1, 2020, to revise the non-competition obligations of Plan participants. The Bank amended and restated the Plan, effective as of October 1, 2021, to update the severance payable upon a termination of employment in connection with a change in control. The Bank is now amending and restating the Plan, effective July 1, 2023, to update the titles of both the Administrator and the contact person for the Administrator and to update participants listed in Appendix A.

The Plan, as a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), is intended to be and shall be administered and maintained as an unfunded, top-hat welfare benefit plan under ERISA Section 3(1).

This document is intended to serve as both the summary plan description of the Plan and its plan document for purposes of ERISA.

Section 2.Definitions.

When used in this Plan, the following terms are defined as set forth below:

2.1“Administrator” means the Compensation and Human Capital Committee or any other committee of the Board or other person that is duly authorized by the Board to administer the Plan.1

2.2“Applicable CIC Multiplier” means the multiplier that is set forth next to a Participant’s name in Appendix A.

2.3“Applicable Severance Multiplier” means the multiplier that is set forth next to a Participant’s name in Appendix A.

2.4“Board” means the Bank’s Board of Directors.

2.5“Change in Control” means

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2.6“Cause,” with respect to any particular Participant, means “cause” as described in the Participant’s employment agreement (or offer letter of employment or other written contract of engagement) with the Company, the Bank or another Subsidiary. If the Participant does not have an employment agreement, or the agreement does not define “cause” or an equivalent concept, then a Termination of Employment with the Company, the Bank or another Subsidiary will be deemed to be for “cause” if it is as a result of the Participant’s (a) personal dishonesty, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties (unless the Participant is prevented from performing such duties because the Participant is disabled (as defined in the Participant’s employment agreement, or if the Participant does not have an employment agreement or the agreement does not define “disabled”, the Participant is suffering from a medical condition that reasonably prevents the Participant from performing such duties despite following a treatment plan provided by a physician or licensed medical specialist); (b) willful violation of any law, rule, or regulation (other than traffic violations or offenses that are classified as misdemeanors) or final cease-and-desist order; (c) acts or failures to act that may have a material detrimental effect on the reputation or business of the Company or the Bank or would be reasonably likely to result in regulatory sanctions, penalties or restrictions on the Company’s or the Bank’s operations; or (d) material breach of any provision of the Participant’s employment agreement (if any) unless the Participant cures such material breach within thirty (30) days after a written notice describing such material breach is received by the Participant. A Participant’s Termination of Employment will be deemed to have been for Cause if, after such termination, facts and circumstances are discovered that would have justified a termination for Cause.

2.7“Change in Control” means:

(a)Any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any of the Consolidated Subsidiaries (as hereinafter defined), any person (as defined above) acting on behalf of the Company as underwriter pursuant to an offering who is temporarily holding securities in connection with such offering, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or the Bank, or any corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company or the Bank representing 25% or more of the combined voting power of the Company’s or the Bank’s then-outstanding securities;

(b)Individuals who are members of the Company’s Board of Directors on the Effective Date (in each case, the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date (i) whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board or whose nomination for election by the Company’s shareholders was approved by the nominating committee serving under an Incumbent Board or (ii) who was appointed as a result of a change at the direction of the Washington Department of Financial Institutions (“DFI”) or the Federal Deposit Insurance Corporation (“FDIC”), shall be considered a member of the Incumbent Board;

(c)The shareholders of the Company or the Bank approve a merger or consolidation of the Company or the Bank with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company or the Bank outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or the Bank, or such surviving entity

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outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company or the Bank (or similar transaction) in which no person (as hereinabove defined) acquires more than 25% of the combined voting power of the Company’s or the Bank’s then outstanding securities; or

(d)The shareholders of the Company or the Bank approve a plan of complete liquidation of the Company or the Bank, or an agreement for the sale or disposition by the Company or the Bank of all or substantially all of the Company’s or the Bank’s assets (or any transaction having a similar effect);

provided that the term “Change in Control” shall not include an acquisition of securities by an employee benefit plan of the Company or the Bank or a change in the composition of the Company’s Board of Directors or the Board at the direction of the DFI or the FDIC. Notwithstanding anything herein to the contrary, no Change in Control shall be considered to have occurred pursuant to a transaction or event described herein, if such transaction or event occurred pursuant to, or in connection with, a public offering approved by the Company’s Board of Directors.

2.8“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.

2.9“Compensation and Human Capital Committee” means the Compensation and Human Capital Committee of the Board.

2.10“Covered Period” means the period of time beginning on the first occurrence of a Change in Control and lasting through the two (2)-year anniversary of the occurrence of the Change in Control. The Covered Period shall also include the six (6)-month period before the occurrence of the Change in Control if a Qualifying Termination occurs during such period and the Change in Control occurs.

2.11“Eligible Employees” means any full-time employee of the Company who is recommended by the Bank’s chief executive officer to the Administrator to be a key employee who should be eligible to participate in the Plan. Eligible Employees shall be limited to a select group of management or highly compensated employees within the meaning of Sections 201, 301, and 404 of ERISA.

2.12“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, including valid regulations promulgated under ERISA.

2.13“Good Reason” means:

(a)A material reduction in the Participant’s then-current base (other than as part of a Company-wide or the Bank-wide reduction in staff or similar reduction or unless such action was effected to comply with a regulatory compliance requirement);

(b)A material, adverse change in the Participant’s title, reporting relationship, authority, duties or responsibilities (other than temporarily while the Participant is physically or mentally incapacitated, other than as part of a Company-wide or the Bank-wide reduction in staff or similar reduction or unless such action was effected to comply with a regulatory compliance requirement or as otherwise required by applicable law); or

(c)A relocation of the Participant’s principal place of employment by more than 50 miles, except for reasonable travel on Bank business;

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provided that a Participant cannot terminate the Participant’s employment for Good Reason unless the Participant has provided written notice to the Bank of the existence of the circumstances providing grounds for termination for Good Reason within thirty (30) days of the initial existence of such grounds and the Bank has had at least thirty (30) days from the date on which such notice is provided to cure such circumstances, if curable. If the Participant does not terminate the Participant’s employment for Good Reason within ninety (90) days after the first occurrence of the applicable grounds, then the Participant will be deemed to have waived the Participant’s right to terminate for Good Reason with respect to such grounds.

2.14“Participant” has the meaning set forth in Section 3.1.

2.15“Qualifying Termination” means a Participant’s Termination of Employment (a) by the Company without Cause, if the Termination of Employment does not occur during the Covered Period, or (b) by the Company without Cause or by the Participant for Good Reason if the Termination of Employment occurs during the Covered Period. A Qualifying Termination that occurs during the six (6)-month period before the first occurrence of a Change in Control will be deemed to occur upon the occurrence of the Change in Control for purposes of the Plan.

2.16“Subsidiary” means any corporation, limited liability company or other entity in an unbroken chain of such entities beginning with the Company if each of the entities, other than the last such entity in the chain, then owns equity interests possessing fifty percent (50%) or more of the total combined voting power of all classes of equity interests in one of the other entities in such chain.

2.17“Termination of Employment” means a “separation from service,” as defined pursuant to Code Section 409A and corresponding regulations, that is a termination of services as an employee of the Bank. Transferring employment from the Company to the Bank or another Subsidiary (or vice versa) will not be considered a Termination of Employment.

Section 3.Participation.

3.1Participants.

The Administrator shall designate and provide written notice to each Eligible Employee chosen by the Administrator to participate in the Plan (each, a “Participant”). Appendix A of the Plan, as it may be updated from time to time by the Administrator, shall at all times contain a current list of Participants.

Section 4.Severance and Change in Control Benefits.

4.1Severance.

If a Participant experiences a Qualifying Termination that does not occur during the Covered Period, then, subject to Section 5, the Bank will provide the Participant with the following, in addition to any amounts due by the Bank to the Participant in connection with services performed by the Participant for the Bank prior to the date of the Termination of Employment:

(a)Severance in an amount equal to the product of the Participant’s Applicable Severance Multiplier times the Participant’s base salary in effect immediately prior to the date of the Qualifying Termination (the “Severance”). Subject to Section 9.11, the Severance will be paid in substantially equal installment payments over the one (1)-year period following

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the Qualifying Termination, payable in accordance with the Bank’s normal payroll practices, but no less frequently than monthly, which payments in the aggregate are equal to the Severance and which shall begin on the sixty-first (61st) day following the Qualifying Termination.

(b)Reimbursement for the monthly COBRA premium paid by the Participant for the Participant and the Participant’s eligible dependents for the twelve (12)-month period following the date of the Qualifying Termination (the “Benefit Reimbursement”). Notwithstanding the foregoing, the Bank’s obligation to make payments under this Section 4.1(b) is subject to the Bank’s reasonable determination that providing such payments does not violate applicable law or give rise to any penalty or excise tax under applicable law. If the Bank reasonably determines that providing such payments may violate applicable law or give rise to a penalty or excise tax under applicable law, the Bank shall reform this Section 4.1(b) in a manner as is necessary to avoid such penalty or excise tax or make an after-tax payment to the Participant in an amount that is equal to the monthly COBRA premium that the Participant would be required to pay to continue the Participant’s group health coverage in effect on the date of the Participant’s Termination of Employment for the twelve (12)-month period following the date of the Participant’s Termination of Employment (less any payments that have already been made pursuant the first sentence of this Section 4.1(b) prior to such determination by the Bank). Subject to Section 9.11, the Benefit Reimbursement shall be paid to the Participant no later than the fifteenth (15th) day of the month immediately following the month in which the Participant timely remits the premium payment.

4.2Change in Control Benefits.

If a Participant experiences a Qualifying Termination during the Covered Period, then, subject to Section 5, the Bank will provide the Participant with the following, in addition to any amounts due by the Bank to the Participant in connection with services performed by the Participant for the Bank prior to the date of the Termination of Employment:

(a)Severance in an amount equal to the product of the Participant’s Applicable CIC Multiplier times the sum of (i) Participant’s base salary in effect on the date of the Qualifying Termination or, if greater, in effect on the first occurrence of a Change in Control, plus (ii) the Participant’s target annual cash incentive compensation for the incentive plan year in which the Qualifying Termination occurs (the “CIC Severance”). Subject to Section 9.11, the CIC Severance will be paid in a single lump-sum payment on the sixty-first (61st) day following the Qualifying Termination.

(b)A pro-rated annual bonus equal to the product of (i) the annual bonus, if any, that the Participant would have earned for the entire year in which the Qualifying Termination occurs at target level; and (ii) a fraction, the numerator of which is the number of days the Participant was employed by the Company during the year in which the Qualifying Termination occurs and the denominator of which is the number of days in such year (a “Pro-Rata Bonus”). Subject to Section 9.11, the Pro-Rata Bonus will be paid in a single lump-sum payment on the sixty-first (61st) day following the Qualifying Termination.

(c)Reimbursement for the monthly COBRA premium paid by the Participant for the Participant and the Participant’s eligible dependents until the earliest of (i) the date on which the Participant becomes eligible to receive substantially similar coverage from another employer and (ii) the date the Participant is no longer eligible to receive COBRA continuation coverage (the “CICBenefit Reimbursement”). Notwithstanding the foregoing, the Bank’s obligation to make payments under this Section 4.2(c) is subject to the Bank’s reasonable determination that providing such payments does not violate applicable law or give rise to any penalty or excise tax under applicable law. If the Bank reasonably determines that providing such

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payments may violate applicable law or give rise to a penalty or excise tax under applicable law, the Bank shall reform this Section 4.2(c) in a manner as is necessary to avoid such penalty or excise tax or make an after-tax payment to the Participant in an amount that is equal to the monthly COBRA premium that the Participant would be required to pay to continue the Participant’s group health coverage in effect on the date of the Participant’s Termination of Employment for the eighteen (18)-month period following the date of the Participant’s Termination of Employment (less any payments that have already been made pursuant the first sentence of this Section 4.2(c) prior to such determination by the Bank). Subject to Section 9.11, the CIC Benefit Continuation shall be paid to the Participant no later than the fifteenth (15th) day of the month immediately following the month in which the Participant timely remits the premium payment.

4.3Equity Awards.

The Plan does not affect the terms of any outstanding equity awards of the Company. The treatment of any outstanding equity awards will be determined in accordance with the terms of the Company’s equity plan or plans under which they were granted and any applicable award agreements.

4.4No Duplication of Benefits.

A Participant shall be entitled to payments under only one of Section 4.1 and Section 4.2. Without limiting the scope of the preceding sentence, no payments shall be made under both Section 4.1 and 4.2. If payments are made under Section 4.1, and payments become due under Section 4.2, then any payments made in accordance with Section 4.1 shall be applied against the amounts due under Section 4.2.

Section 5.Benefit Conditions.

5.1Conditions.

Notwithstanding any provisions in this Plan or the Appendices to the contrary, a Participant’s entitlement to any benefits under Section 4 of this Plan will be subject to the following conditions:

(a)The Participant must experience a Qualifying Termination.

(b)The Participant must execute a severance agreement (the “Severance Agreement”) to the reasonable satisfaction of the Bank and the Company and such Severance Agreement must become effective and irrevocable within sixty (60) days following the Participant’s Qualifying Termination. Any such Severance Agreement will include, without limitation, (i) a release of claims in favor of the Company, the Bank, their affiliates and their respective officers and directors; (ii) non-solicitation, non-disparagement, confidentiality and further cooperation provisions substantially similar to those set forth in Appendix B hereto; and (iii) non-competition provisions no more restrictive than those set forth in Appendix C hereto (and limited to the one (1)-year period following the Qualifying Termination); provided that if the period for the Participant to provide and not revoke the Severance Agreement spans two (2) calendar years, any payment of Severance, CIC Severance or Pro-Rata Bonus payable under Section 4shall, as applicable, commence or be paid in the second of such two (2) years. If the Severance Agreement is not executed and has not become irrevocable by the ninetieth (90th) day following the date of the Participant’s Qualifying Termination, no Plan benefits will be paid.

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(c)With respect to the Benefit Reimbursement or the CIC Benefit Reimbursement, as applicable, the Participant must timely and properly elect continuation coverage under COBRA.

5.2Right to Offset.

Notwithstanding any provisions in this Plan or the Appendices to the contrary, benefits under Section 4 of this Plan will be subject to the following:

(a)The Severance or the CIC Severance, as applicable, will be reduced by an amount equal to the outstanding balance of any loan from the Company or the Bank to the Participant or any other amounts the Participant owes to the Company or the Bank (which reduction shall not exceed $5,000).

(b)The benefits will be determined without reference to any period of time after the date of the Participant’s Qualifying Termination, regardless of whether the Participant receives compensation from the Company or the Bank or is providing services to the Company or the Bank during that time, as an employee, consultant or in any other capacity; provided that benefits under this Plan are conditioned upon the Participant’s separation from service (as defined in Treasury Regulation Section 1.409A-1(h) after giving effect to the presumptions contained therein).

(c)The Severance or the CIC Severance, as applicable, will be reduced by any payments required to be paid by the Bank or the Company to the Participant under any federal or state law, including without limitation the Worker Adjustment Retraining Notification Act of 1988, as amended (except unemployment benefits payable in accordance with state law and payment for accrued but unused vacation and personal time off).

5.3Regulatory Conditions.

Notwithstanding any provisions in this Plan or the Appendices to the contrary, benefits under Section 4 of this Plan will be subject to the following:

(a)If, at the time benefits under Section 4 are otherwise payable to a Participant, the Participant is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. Section 1818(e)(3) and (g)(1), or pursuant to Chapter 30A.12 of the Revised Code of Washington (“RCW”), the Bank’s obligations to pay such benefits shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay the Participant all or part of the benefits withheld while its obligations under this Agreement were suspended and (ii) reinstate in whole or in part any of its obligations which were suspended, all in a manner that does not violate Section 409A of the Code.

(b)If, at the time benefits under Section 4 are otherwise payable to a Participant, the Participant is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 USC Section 1818(e)(4) and (g)(1), or pursuant to RCW Chapter 30.12, all obligations of the Bank under this Plan with respect to the Participant shall terminate as of the effective date of the order.

(c)If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Plan shall terminate as of the date of default.

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(d)All obligations of the Bank under this Plan shall be terminated, except to the extent determined by the Bank to be necessary for the continued operation of the Bank: (i) at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (ii) by the FDIC or the Federal Reserve, at the time either agency approves a supervisory merger to resolve problems related to operation of the Bank or the Company, respectively.

(e)No payment shall be made under Section 4 that would cause the Bank to be “undercapitalized” for purposes of 12 CFR Part 225 or any successor A provision.

(f)No payment of any type or amount of compensation or benefits shall be made or owed by Bank to any Participant pursuant to the Plan or otherwise if payment of such type or amount is prohibited by, is not permitted under, or has not received any required approval under, any applicable governmental statute, regulation, rule, order (including any cease and desist order), determination, opinion, or similar provision whether now in existence or hereafter adopted or imposed, including without limitation, by or under (i) any provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and regulations promulgated thereunder, (ii) any governmental provisions relating to indemnification by the Bank or an affiliate, including without limitation any applicable prohibitions or restrictions on depository institutions and their affiliates set forth in 12 USC 1828(k) or in 12 CFR Part 359, or (iii) any governmental provisions relating to payment of golden parachutes or similar payments, including without limitation any prohibitions or restrictions on such payments by troubled institutions and companies and their affiliates set forth in 12 USC 1828(k) or in 12 CFR Part 359. If any payment to a Participant is prohibited or otherwise restricted, (x) such payment shall, to the extent allowed by law, order or regulatory determination and not objected to by applicable banking or other regulatory agencies, be reinstated as an obligation of the obligor(s) without further action immediately upon the cessation of such prohibition or restriction, and (y) the Bank shall use its best efforts to secure the consent, if any shall be required, of the FDIC or other applicable, banking or other regulatory agencies to make such payments in the highest amount permissible, up to the amount provided for in Section 4.

(g)All amounts payable to a Participant under the Plan shall be subject to such clawback (recovery) as may be required to be made pursuant to law, rule, regulation or stock exchange listing requirement or any policy of the Company or the Bank adopted pursuant to any such law, rule, regulation or stock exchange listing requirement. If any payment made to a Participant under the Plan is required under any applicable governmental provision (including, without limitation, Dodd-Frank and regulations promulgated thereunder) to be paid back to the Bank, the Participant shall, upon written demand from the Bank or the Company, promptly pay such amount back to the Bank.

Section 6.Code Section 280G Reductions.

6.1Reductions of Benefits to Avoid Violation of Code Section 280G.

Notwithstanding any other provision of the Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Bank, the Company or its affiliates to a Participant or for a Participant’s benefit pursuant to the terms of the Plan or otherwise (“Covered Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Code and would, but for this Section 6, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be either:

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(a)Reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax (that amount, the “Reduced Amount”); or

(b)Payable in full if the Participant’s receipt on an after-tax basis of the full amount of payments and benefits (after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax)) would result in the Participant receiving an amount at least twenty-five percent (25%) greater than the Reduced Amount.

6.2Order of Reduction.

Any such reduction shall be made by the Bank in its sole discretion consistent with the requirements of Section 409A of the Code; provided that the Bank will, to the extent the Board determines is reasonable, make such reduction in a manner that maximizes the Participant’s economic position after the reduction.

6.3Determination.

Any determination required under this Section 6, including whether any payments or benefits are Parachute Payments, shall be made by the Bank in its sole discretion. The Participant shall provide the Company and the Bank with such information and documents as the Company or the Bank may reasonably request in order to make a determination under this Section 6. The Bank’s determination shall be final and binding on the Participant.

Section 7.Plan Administration.

7.1Administration.

The Plan is administered and operated by the Administrator, who has complete and exclusive authority in its sole discretion to construe the terms of the Plan (and any related or underlying documents or policies), to make any findings of fact needed in the administration of the Plan, to determine the eligibility for, and amount of, benefits due under the Plan, and to establish and enforce such rules and regulations as the Administrator shall deem proper for the efficient administration of the Plan. All such interpretations and determinations of the Administrator will be made in its sole discretion and will be final, conclusive, and binding upon all persons to the fullest extent permitted by law. Any decision by the Administrator that does not constitute an abuse of discretion must be upheld by a court of law. The Administrator may delegate any of its duties under the Plan to such individuals or entities from time to time as it may designate. The Administrator is authorized, on behalf of the Plan, to engage accountants, legal counsel and such other personnel as it deems necessary or advisable to assist it in the performance of its duties under the Plan. The Plan Administrator shall utilize the Company’s and the Bank’s records with respect to a Participant’s service with the Bank, employment history, salary, absences, illnesses and all other relevant matters and such records shall be conclusive for all purposes under the Plan.

7.2Scope and Delegation of Authority.

Notwithstanding the delegation of administrative authority with respect to the Plan to the Administrator, the Board has exclusive authority to amend or terminate this Plan as provided in Section 9.1. The Administrator may further its delegate administrative duties to those officers of the Bank as it so determines.

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7.3Liability.

The Administrator will not be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan.

Section 8.Claims Procedures.

8.1Initial Claims.

To file a claim to receive benefits under the Plan, the Participant or the Participant’s authorized representative must submit a written claim for benefits to the Plan within 60 days after the date of the Participant’s Qualifying Termination. Claims must be addressed and sent to the Administrator at the address set forth in Section 10.2.

8.2Denied Claims.

If the Participant’s claim is denied, in whole or in part, the Participant will be furnished with written notice of the denial within 90 days after the Administrator’s receipt of the Participant’s written claim, unless special circumstances require an extension of time for processing the claim, in which case a period not to exceed 180 days will apply. If such an extension of time is required, written notice of the extension will be furnished to the Participant before the termination of the initial 90 day period and will describe the special circumstances requiring the extension, and the date on which a decision is expected to be rendered. Written notice of the denial of the Participant’s claim will contain the following information:

(a)The specific reason(s) for the denial of the Participant’s claim;

(b)References to the specific Plan provisions on which the denial of the Participant’s claim was based;

(c)A description of any additional information or material required by the Administrator to reconsider the Participant’s claim (to the extent applicable) and an explanation of why such material or information is necessary; and

(d)A description of the Plan’s review procedure and time limits applicable to such procedures, including a statement of the Participant’s right to bring a civil action under Section 502(a) of ERISA following a benefit claim denial on review.

8.3Appeal of Denied Claims.

If the Participant’s claim is denied and he wishes to submit a request for a review of the denied claim, the Participant or the Participant’s authorized representative must follow the procedures described below:

(a)Upon receipt of the denied claim, the Participant (or the Participant’s authorized representative) may file a request for review of the claim in writing with the Administrator. This request for review must be filed no later than 60 days after the Participant has received written notification of the denial.

(b)The Participant has the right to submit in writing to the Administrator any comments, documents, records or other information relating to the Participant’s claim for benefits.

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(c)The Participant has the right to be provided with, upon request and free of charge, reasonable access to and copies of all pertinent documents, records and other information that is relevant to the Participant’s claim for benefits.

(d)The review of the denied claim will take into account all comments, documents, records and other information that the Participant submitted relating to the Participant’s claim, without regard to whether such information was submitted or considered in the initial denial of the Participant’s claim.

8.4Administrator’s Response to Appeal.

The Administrator will provide the Participant with written notice of its decision within 60 days after the Administrator’s receipt of the Participant’s written claim for review. There may be special circumstances which require an extension of this 60-day period. In any such case, the Administrator will notify the Participant in writing within the 60-day period and the final decision will be made no later than 120 days after the Administrator’s receipt of the Participant’s written claim for review. The Plan Administrator’s decision on the Participant’s claim for review will be communicated to the Participant in writing and will clearly state:

(a)The specific reason or reasons for the denial of the Participant’s claim;

(b)Reference to the specific Plan provisions on which the denial of the Participant’s claim is based;

(c)A statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, the Plan and all documents, records and other information relevant to the Participant’s claim for benefits; and

(d)A statement describing the Participant’s right to bring an action under Section 502(a) of ERISA.

8.5Exhaustion of Administrative Remedies.

The exhaustion of these claims procedures is mandatory for resolving every claim and dispute arising under the Plan. As to such claims and disputes:

(a)No claimant shall be permitted to commence any legal action to recover benefits or to enforce or clarify rights under the Plan under Section 502 or Section 510 of ERISA or under any other provision of law, whether or not statutory, until these claims procedures have been exhausted in their entirety; and

(b)In any such legal action, all explicit and implicit determinations by the Administrator (including, but not limited to, determinations as to whether the claim, or a request for a review of a denied claim, was timely filed) shall be afforded the maximum deference permitted by law.

Section 9.General Provisions.

9.1Amendment and Termination.

There is no legal requirement for the Bank to provide the severance benefits detailed in the Plan. Benefits will be payable only in accordance with the terms of the Plan and the Appendices that may be in effect from time to time, if any. The Bank reserves the right, in its

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sole discretion and by action of the Board, to terminate, amend, or modify the Plan, in whole or in part, at any time, and from time to time, for any reason, including with respect to Section 409A of the Code as described below. The benefits provided for in this Plan are not vested benefits. If the Plan is terminated, amended, or modified, eligibility to participate in or to receive benefits under the Plan may be terminated or changed.

9.2Unfunded Plan.

The Plan is unfunded. All benefits paid under this Plan shall be paid from the general assets of the Bank, and the status of any claim to any benefit shall be the same as the status of a claim against the Bank by any general and unsecured creditor. The Company is not required to segregate any monies or other assets from its general funds with respect to these obligations. No Participant, employee of the Bank or any other person shall have any rights to or interest in any specific assets or accounts of the Company, the Bank or any of their respective affiliates by reason of the Plan.

9.3Death of Participant.

In the event of the death of a Participant after a Qualifying Termination but prior to receipt of all benefits payable to the Participant under this Plan, any unpaid benefits due under this Plan shall be paid no later than March 15th following the calendar year in which the Participant’s death occurs to the Participant’s surviving spouse, children or estate, as the Bank determines in its sole discretion. No benefits shall be paid under this Plan to beneficiaries if the Participant dies prior to a Qualifying Termination.

9.4Limitation on Liability.

Neither the establishment of the Plan, nor any modification of the Plan, nor the payment of any benefits under the Plan shall be construed as giving to any Participant, Eligible Employee or any other person any legal or equitable right against any officer, director, employee, or agent of the Bank or the Company in his or her individual capacity, and in no event shall the terms and conditions of employment of any employee of the Bank be modified or affected in any way by the terms of the Plan.

9.5Records.

The records of the Bank with respect to employment history, salary and all other relevant matters shall be conclusive for all purposes of this Plan.

9.6Not a Contract of Employment.

Nothing contained in the Plan shall be held or construed to impose any obligation on the Bank to retain any Participant or Eligible Employee in its service or be deemed to give any Participant the right to remain employed by the Bank or to interfere with the rights of the Bank to terminate the employment of any Participant at any time, with or without Cause. All Participants shall remain subject to discharge or discipline by the Bank to the same extent as if the Plan had not been put into effect.

9.7Severability.

If any provision of the Plan is deemed or held to be unlawful or invalid for any reason, that fact will not adversely affect the other provisions of the Plan unless such determination

Page 12 – Amended and REstated Executive Severance and Change in Control Plan

renders the functioning of the Plan impossible or impracticable, and in that case an appropriate provision or provisions shall be adopted so that the Plan may continue to function properly.

9.8Incompetence.

In the event the Administrator finds that a Participant who is eligible to receive benefits under the Plan is unable to care for his or her affairs because of illness or accident, then all benefits not yet paid to that Participant under the Plan may be paid in such manner as the Administrator shall determine, unless a claim has been made therefore by a duly appointed guardian, committee, or other legal representative, and such payment shall be a complete discharge of all liability for any payments or benefits to which that Participant was or would otherwise have been entitled under the Plan.

9.9Transfer and Assignment.

Neither a Participant nor any other person shall have any right to sell, assign, transfer, pledge, anticipate or otherwise encumber, transfer, hypothecate or convey any amounts payable under the Plan prior to the date that such amounts are paid, except that, in the case of a Participant’s death, such amounts shall be paid to the Participant’s beneficiaries.

9.10Governing Law.

To the extent no preempted by ERISA or other applicable federal law, the Plan shall be construed according to the laws of the State of Washington, without regard to conflicts of law principles.

9.11Section 409A of the Code.

(a)The Plan is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and administered in accordance with Section 409A of the Code. Notwithstanding any other provision of the Plan, payments provided under the Plan may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. Any payments under the Plan that may be excluded from Section 409A of the Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible. For purposes of Section 409A of the Code, each installment payment provided under the Plan shall be treated as a separate payment. Any payments to be made under the Plan upon a termination of employment shall only be made upon a “separation from service” under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under the Plan comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by a Participant on account of any failure or alleged failure to comply with, or be exempt from, Section 409A of the Code.

(b)Notwithstanding any other provision of the Plan, if any payment or benefit provided to a Participant in connection with the Participant’s Qualifying Termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the Participant is determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i) of the Code, then such payment or benefit shall not be paid until the first payroll date to occur following the six (6)-month anniversary of the Qualifying Termination or, if earlier, on the Participant’s death (the “Specified Employee Payment Date”). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date shall be paid to the Participant in a lump sum on the Specified Employee Payment

Page 13 – Amended and REstated Executive Severance and Change in Control Plan

Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. Notwithstanding any other provision of the Plan, if any payment or benefit is conditioned on the Participant’s execution of a Severance Agreement, the first payment shall include all amounts that would otherwise have been paid to the Participant during the period beginning on the date of the Qualifying Termination and ending on the payment date if no delay had been imposed. Notwithstanding any other provision of the Plan, if a Qualifying Termination occurs during the six (6)-month period before the first occurrence of a Change in Control, payment of the CIC Severance shall not commence and payment of the CIC Benefit Reimbursement shall not begin until after the Change in Control occurs and the first CIC Severance payment and the first CIC Benefit Reimbursement shall include all amounts that would otherwise have been paid to the Participant during the period beginning on the date the Participant’s employment with the Company terminates and ending on the payment date if no delay had been imposed.

(c)To the extent required by Section 409A of the Code, each reimbursement or in-kind benefit provided under the Plan shall be provided in accordance with the following: (i) no reimbursement of such expenses incurred by a Participant during any taxable year of the Participant shall be made after the last day of the following taxable year; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (iii) any right to reimbursements or in-kind benefits under the Plan shall not be subject to liquidation or exchange for another benefit.

(d)In the event that Involuntary Termination payment(s) made on account of a Change in Control pursuant to Section 4.2 should be determined to be an alternative form of payment on account of a Separation from Service, then payments under Section 4.2 shall be permitted in accordance with its terms if the event constituting a Change in Control (as defined under this Agreement) either: (i) qualifies as one of the change in control events within the meaning of Code Section 409A(a)(2)(A)(v) and the regulations thereunder (a “Section 409A Change in Control Event”), (ii) qualifies as a short-term deferral that is exempt from the application of Section 409A of the Code, or (iii) is otherwise exempt from the application of Section 409A of the Code. If neither (i), (ii) or (iii) is applicable, then that portion of the payment that does not qualify as made under a “separation pay plan” (within the meaning of Treasury Regulations Section 1.409A-1(b)(9)(iii)) shall be paid as if such involuntary termination payments were not made in connection with a Change in Control (i.e., as if such payments were made pursuant to Section 4.1) commencing on the earliest date that such payments could have been made had the involuntary termination payments not been made on account of a Section 409A Change in Control Event, taking into account the other requirements of Section 409A of the Code (e.g., the six-month payment delay rule for specified employees).

9.12Headings.

The headings of sections herein are included solely for convenience and shall not affect the meaning of any of the provisions of the Plan.

Section 10.ERISA Rights and Information.

10.1Participant’s Rights under ERISA.

Participants are entitled to certain rights and protections under ERISA. ERISA provides that all Participants in the Plan are entitled to (1) examine, without charge, at the Plan Administrator’s office, and at other specified locations, all Plan documents; and (2) obtain copies

Page 14 – Amended and REstated Executive Severance and Change in Control Plan

of all Plan documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may impose a reasonable charge for the copies.

In addition to creating rights for Participants, ERISA imposes duties upon the people who are responsible for the operation of employee welfare benefits plans such as the Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of Participants and beneficiaries. No one, including the employer or any other person, may fire or otherwise discriminate against an employee in any way to prevent an employee from obtaining a benefit under the Plan or for exercising rights under ERISA.

If a claim for benefits under the Plan is denied in whole or in part, a written explanation of the reason for the denial is required. Individuals dissatisfied with this decision have the right to have the Plan review and reconsider the claim. Under ERISA, there are steps an individual can take to enforce the above rights.

For instance, if a Participant requests materials from the Plan and does not receive them within thirty (30) days, the Participant may file suit in federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay up to $110 a day until the materials are received, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.

If a Participant has a claim for benefits under the Plan which is denied or ignored, in whole or in part, the Participant may file suit in state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if a Participant is discriminated against for asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in federal court. The court will decide who should pay court costs and legal fees. If the Participant is successful, the court may order the person sued to pay these costs and fees. If the Participant loses, the court may order the Participant to pay these costs and fees, for example, if it finds that the claim was frivolous. If an individual has any questions about the Plan, he or she should contact the Plan Administrator. Any questions about this statement or about rights under ERISA should be directed to the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

10.2Other Important Facts.

•The name of the Plan is the Banner Bank Executive Severance and Change in Control Plan.

•The Plan is sponsored by Banner Bank.

•The Employer Identification Number assigned by the Internal Revenue Service to Banner Bank is 91-1645638.

•The Plan was established as of January 1, 2018. The effective date of the amended and restated Plan, as described in this document, is July 1, 2023.

•The name of the Administrator is the Compensation and Human Capital Committee of the Board of Directors of Banner Bank. The address and telephone number of the Administrator is:

Page 15 – Amended and REstated Executive Severance and Change in Control Plan

Kayleen Kohler

Executive Vice President, Chief Human Resources and Diversity Officer

3001 112th Ave NE, Suite 200

Bellevue, WA 98004

Telephone: 425-576-4392

E-mail: kayleen.kohler@bannerbank.com

•The Plan is a welfare severance benefit plan.

•The Plan is an employer-administered plan.

•The Administrator keeps records of the Plan on a plan-year basis. The plan year is the calendar year. The Administrator also will answer any questions about the Plan you may have.

•Service of legal process may be made upon the Administrator at the address set forth above.

•The Plan is not funded and has no assets.

Page 16 – Amended and REstated Executive Severance and Change in Control Plan

This Amended and Restated Executive Severance and Change in Control Plan is hereby adopted by Banner Bank as of July 1, 2023. 

BANNER BANK

By: _______________________________

Name: Kayleen Kohler            

Title: EVP, Chief Human Resources and Diversity Officer

[Signature Page to
Amended and Restated Executive Severance and Change in Control Plan]

APPENDIX A

Participants

Name	Applicable Severance Multiplier	Applicable CIC Multiplier
Direct Reports of CEO	1x Base Salary	2x Base Salary and 2x Annual Cash Incentive
Executive Officer Level 1 (reports to an Executive)	1x Base Salary	1x Base Salary and 1x Annual Cash Incentive

APPENDIX B

Post-Termination Obligations

Confidential Information

The Participant acknowledges that, in the course of employment, the Participant has access to confidential information and trade secrets relating to the business of the Company, the Bank and their affiliates. Except as required in the course of employment by the Company and the Bank, the Participant shall not, without the prior written consent of the Board, directly or indirectly before or after a Termination of Employment, disclose to anyone any confidential information relating to the Bank, the Company or any of their Affiliates, or any financial information, trade secrets or “know-how” that is germane to the Bank’s, the Company’s or any of their affiliates’ business and operations. The Participant also recognizes and acknowledges that any financial information concerning any of the customers of the Bank, the Company or any of their affiliates, as may exist from time to time, is strictly confidential and is a valuable, special and unique asset of their businesses. The Participant shall not, either before or after a Termination of Employment, disclose to anyone this financial information, or any part thereof, for any reason or purposes whatsoever.

Nothing in the Plan or the Severance Agreement shall be construed to prevent disclosure of confidential information as may be required by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the disclosure does not exceed the extent of disclosure required by such law, regulation, or order. In the event the Participant is requested, or required by judicial or other governmental order, to disclose confidential information about the Bank, the Company or their affiliates, to the extent allowed by law the Participant agrees the Participant will promptly notify an authorized officer of the Bank so that it may seek a protective order or other remedy. The Participant will cooperate with the Bank on a reasonable basis in connection with any effort to obtain a protective order or other remedy, including seeking a protective order himself or herself, if necessary.

Non-Solicitation

Participant agrees that during the period of the Participant’s employment and for a further period of two (2) years after the Participant’s Termination of Employment, the Participant will not, without the prior written consent of the Bank, directly or indirectly solicit, influence, or assist anyone in the solicitation or influencing of (i) any customer or depositor of the Bank, the Company or any of their affiliates for the purpose of causing, encouraging, or attempting to cause or encourage such customer to divert its current, ongoing, or future business from the Bank, the Company or any of their affiliates to another financial institution or (ii) any other employee of the Bank, the Company or any of their affiliates for the purpose of causing, encouraging, or attempting to cause or encourage such other employee to leave the employment of the Company, the Bank or any of their affiliates.

Non-Disparagement

The Participant agrees and covenants that the Participant will not at any time make, publish, or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Bank, Company, or their affiliates or their businesses, or any of their employees, officers, and existing and prospective customers, suppliers, investors, and other associated third parties.

The preceding sentence does not, in any way, restrict or impede the Participant from exercising protected rights to the extent that such rights cannot be waived by agreement, including but not limited to the Participant’s Section 7 rights under the NLRA or rights to communicate with any other administrative or regulatory agency to report suspected unlawful conduct or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided further that such compliance does not exceed that required by the law, regulation, or order. The Participant shall promptly provide written notice of any such order to an authorized officer of the Bank.

APPENDIX C

Non-Competition Obligations

Upon a Qualifying Termination, for a period of one (1) year from the Participant’s Qualifying Termination, the Participant shall not be a director, officer or employee of or consultant to any bank, savings bank, savings and loan association, credit union or similar financial institution or holding company of any such entity that maintains a full service branch office or lending center in any county in which the Bank, the Company or any of their affiliates operates a full service branch office or lending center on the date of the Qualifying Termination.

The preceding sentence shall not, in any way (a) prohibit the Participant from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and that the Participant is not a controlling person of, or a member of a group that controls, such corporation; or (b) restrict or impede the Participant from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Participant shall promptly provide written notice of any such order to an authorized officer of the Bank.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF BANNER CORPORATION

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES ACT OF 1934

I, Mark J. Grescovich, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 of Banner Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2023		/s/Mark J. Grescovich
	Mark J. Grescovich
	Chief Executive Officer

73

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER OF BANNER CORPORATION

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES ACT OF 1934

I, Peter J. Conner, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 of Banner Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 3, 2023		/s/ Peter J. Conner
	Peter J. Conner
	Chief Financial Officer

74

EX-32

EXHIBIT 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

OF BANNER CORPORATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify in his capacity as an officer of Banner Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, that:

•the report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, and

•the information contained in the report fairly presents, in all material respects, the Company’s financial condition and results of operations as of the dates and for the periods presented in the financial statements included in such report.

August 3, 2023	/s/ Mark J. Grescovich
	Mark J. Grescovich
	Chief Executive Officer
August 3, 2023	/s/ Peter J. Conner
	Peter J. Conner
	Chief Financial Officer

75

XML

Document and Entity Information Document - shares	6 Months Ended
	Jun. 30, 2023	Jul. 31, 2023
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	000-26584
Entity Registrant Name	BANNER CORPORATION
Entity Incorporation, State or Country Code	WA
Entity Tax Identification Number	91-1691604
Entity Address, Address Line One	10 South First Avenue
Entity Address, City or Town	Walla Walla
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	99362
City Area Code	509
Local Phone Number	527-3636
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	BANR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		34,345,210
Amendment Flag	false
Entity Central Index Key	0000946673
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Cash and due from banks	$ 229,918	$ 198,154
Interest bearing deposits	51,407	44,908
Total cash and cash equivalents	281,325	243,062
Securities—trading	25,659	28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Securities—held-to-maturity, net of allowance for credit losses of $355 and $379, respectively	1,098,570	1,117,588
Total securities	3,590,189	3,935,313
Federal Home Loan Bank (FHLB) stock	20,800	12,000
Securities purchased under agreements to resell	0	300,000
Loans held for sale (includes $59,336 and $51,779, at fair value, respectively)	60,612	56,857
Loans and Leases Receivable, Gross	10,472,407	10,146,724
Allowance for credit losses – loans	144,680	141,465
Net loans receivable	10,327,727	10,005,259
Accrued interest receivable	57,007	57,284
Property and equipment, net	135,414	138,754
Goodwill	373,121	373,121
Other intangibles, net	7,399	9,440
Bank-owned life insurance (BOLI)	301,260	297,565
Deferred tax assets, net	167,993	178,131
Operating lease right-of-use assets	45,812	49,283
Other assets	216,077	177,362
Total assets	15,584,736	15,833,431
Deposits:
Non-interest-bearing	5,369,187	6,176,998
Interest-bearing transaction and savings accounts	6,373,269	6,719,531
Interest-bearing certificates	1,356,600	723,530
Total deposits	13,099,056	13,620,059
Advances from FHLB	270,000	50,000
Other borrowings	193,019	232,799
Subordinated notes, net	92,646	98,947
Junior subordinated debentures at fair value (issued in connection with Trust Preferred Securities)	67,237	74,857
Operating lease liabilities	51,234	55,205
Accrued expenses and other liabilities	223,565	200,839
Deferred compensation	45,466	44,293
Total liabilities	14,042,223	14,376,999
COMMITMENTS AND CONTINGENCIES (Note 12)
SHAREHOLDERS’ EQUITY
Preferred stock - $0.01 par value per share, 500,000 shares authorized; no shares outstanding at June 30, 2023 and December 31, 2022	0	0
Retained earnings	587,027	525,242
Carrying value of shares held in trust for stock-based compensation plans	(6,702)	(6,905)
Liability for common stock issued to stock related compensation plans	6,702	6,905
Accumulated other comprehensive loss	(339,448)	(362,769)
Total shareholders’ equity	1,542,513	1,456,432
Total liabilities and shareholders’ equity	15,584,736	15,833,431
Voting Common Stock [Member]
SHAREHOLDERS’ EQUITY
Common stock and paid in capital	1,294,934	1,293,959
Nonvoting Common Stock [Member]
SHAREHOLDERS’ EQUITY
Common stock and paid in capital	$ 0	$ 0

XML

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
ASSETS
Debt Securities, Available-for-sale, Allowance for Credit Loss	$ (2,000)	$ 0
Debt Securities, Available-for-sale, Amortized Cost	2,879,179	3,218,777
Allowance for Credit Losses	$ (355)	$ (379)
SHAREHOLDERS’ EQUITY
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	500,000	500,000
Preferred Stock, Shares Outstanding	0	0
Voting Common Stock [Member]
SHAREHOLDERS’ EQUITY
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	34,344,627	34,194,018
Common Stock, Shares, Outstanding	34,344,627	34,194,018
Nonvoting Common Stock [Member]
SHAREHOLDERS’ EQUITY
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	5,000,000	5,000,000
Common Stock, Shares, Issued	0	0
Common Stock, Shares, Outstanding	0	0
Loans [Member]
ASSETS
Loans Held-for-sale, Fair Value Disclosure	$ 59,336	$ 51,779

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
INTEREST INCOME:
Loans receivable	$ 140,848	$ 104,506	$ 274,105	$ 204,856
Mortgage-backed securities	18,285	16,819	37,263	30,928
Securities and cash equivalents	12,676	11,676	27,402	20,108
Total interest income	171,809	133,001	338,770	255,892
INTEREST EXPENSE:
Deposits	20,539	2,008	29,783	4,094
FHLB advances	5,157	0	6,421	291
Other borrowings	771	80	1,152	164
Subordinated debt	2,824	1,902	5,584	3,678
Total interest expense	29,291	3,990	42,940	8,227
Net interest income	142,518	129,011	295,830	247,665
Provision for Loan, Lease, and Other Losses	6,764	4,534	6,240	(2,427)
Net interest income after provision (recapture) for credit losses	135,754	124,477	289,590	250,092
NON-INTEREST INCOME:
Deposit fees and other service charges	10,600	11,000	21,162	22,189
Mortgage banking operations	1,686	3,978	4,377	8,418
BOLI	2,386	2,239	4,574	3,870
Miscellaneous	1,428	2,051	3,068	3,734
Other operating income	16,100	19,268	33,181	38,211
Net (loss) gain on sale of securities	(4,527)	32	(11,779)	467
Net change in valuation of financial instruments carried at fair value	(3,151)	69	(3,703)	118
Gain on sale of branches, including related deposits	0	7,804	0	7,804
Total non-interest income	8,422	27,173	17,699	46,600
NON-INTEREST EXPENSE:
Salary and employee benefits	61,972	60,832	123,361	120,318
Less capitalized loan origination costs	(4,457)	(7,222)	(7,888)	(13,452)
Occupancy and equipment	11,994	13,284	23,964	26,504
Information and computer data services	7,082	5,997	14,229	12,648
Payment and card processing services	4,669	5,682	9,287	10,578
Professional and legal expenses	2,400	2,878	4,521	5,058
Advertising and marketing	940	822	1,746	1,283
Deposit insurance	2,839	1,440	4,729	2,964
State and municipal business and use taxes	1,229	1,004	2,529	2,166
Real estate operations, net	75	(121)	(202)	(200)
Amortization of core deposit intangibles	991	1,425	2,041	2,849
Loss on extinguishment of debt	0	0	0	793
Miscellaneous	5,671	6,032	11,709	11,739
Total non-interest expense	95,405	92,053	190,026	183,248
Income before provision for income taxes	48,771	59,597	117,263	113,444
PROVISION FOR INCOME TAXES	9,180	11,632	22,117	21,516
NET INCOME	$ 39,591	$ 47,965	$ 95,146	$ 91,928
Earnings per common share:
Basic	$ 1.15	$ 1.40	$ 2.77	$ 2.68
Diluted	1.15	1.39	2.76	2.66
Common Stock, Dividends, Per Share, Declared	$ 0.48	$ 0.44	$ 0.96	$ 0.88
Weighted average number of common shares outstanding, Basic	34,373,434	34,307,001	34,306,853	34,303,889
Weighted average number of common shares outstanding, Diluted	34,409,024	34,451,740	34,435,221	34,532,935

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net Income (Loss) Attributable to Parent	$ 39,591	$ 47,965	$ 95,146	$ 91,928
Other Comprehensive Income (Loss), Net of Tax [Abstract]
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment and Tax	(31,395)	(129,352)	4,748	(282,416)
OCI, Debt Securities, Available-for-Sale, Unrealized Holding Gain (Loss), before Adjustment, Tax	7,535	31,044	(1,140)	67,780
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax	4,527	(32)	11,779	(467)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax	(1,087)	8	(2,827)	112
Other Comprehensive Income (Loss), Reclassification of provision for credit losses on securities—available-for-sale realized in earnings	2,000	0	2,000	0
Other Comprehensive Income (Loss), Income tax expense related to the reclassification of provision for credit losses on securities—available-for-sale realized in earnings	(480)	0	(480)	0
OCI, Debt Securities, Unrealized Gain (Loss) on Securities Transferred from Available-for-Sale to Held-to-Maturity, Before Tax	0	0	0	34,596
OCI, Debt Securities, Unrealized Gain (Loss) on Securities Transferred from Available-for-Sale to Held-to-Maturity, Tax	0	0	0	8,303
OCI, Debt Securities, Available-for-Sale, Transfer to Held-to-Maturity, Adjustment from AOCI for Amortization of Gain (Loss), before Tax	584	904	1,156	1,228
OCI, Debt Securities, Available-for-Sale, Transfer to Held-to-Maturity, Adjustment from AOCI for Amortization of Gain (Loss), Tax	(139)	(218)	(276)	(295)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, before Tax	(1,356)	(3,779)	3,382	(18,554)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax	325	907	(812)	4,453
Other Comprehensive Income (Loss), Financial Liability, Fair Value Option, before Tax, after Reclassification Adjustment	7,466	(1,719)	7,620	(2,932)
Other Comprehensive Income (Loss), Change in Fair Value of Junior Subordinated Debentures, Tax	(1,792)	413	(1,829)	704
Reclassification of fair value of junior subordinated debentures redeemed	0	0	0	765
Other Comprehensive Income (Loss), Reclassification of Fair Value, Junior Subordinated Debentures Redeemed, Tax	0	0	0	(184)
Other Comprehensive Income (Loss), Net of Tax, Total	(13,812)	(101,824)	23,321	(256,099)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total	$ 25,779	$ (53,859)	$ 118,467	$ (164,171)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Common Stock and Paid in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance, beginning of the period (in shares) at Dec. 31, 2021		34,252,632
Balance, beginning of the period at Dec. 31, 2021	$ 1,690,327		$ 1,299,381	$ 390,762	$ 184
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	43,963			43,963
Other Comprehensive Income (Loss), Net of Tax	(154,275)				(154,275)
Accrual of dividends on common stock	(15,066)			(15,066)
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		120,152
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	(1,169)		(1,169)
Balance, end of the period (in shares) at Mar. 31, 2022		34,372,784
Balance, end of the period at Mar. 31, 2022	$ 1,563,780		1,298,212	419,659	(154,091)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.44
Balance, beginning of the period (in shares) at Dec. 31, 2021		34,252,632
Balance, beginning of the period at Dec. 31, 2021	$ 1,690,327		1,299,381	390,762	184
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	91,928
Other Comprehensive Income (Loss), Net of Tax	(256,099)
Balance, end of the period (in shares) at Jun. 30, 2022		34,191,330
Balance, end of the period at Jun. 30, 2022	$ 1,485,830		1,289,499	452,246	(255,915)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.88
Balance, beginning of the period (in shares) at Mar. 31, 2022		34,372,784
Balance, beginning of the period at Mar. 31, 2022	$ 1,563,780		1,298,212	419,659	(154,091)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	47,965			47,965
Other Comprehensive Income (Loss), Net of Tax	(101,824)				(101,824)
Accrual of dividends on common stock	(15,378)			(15,378)
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		18,546
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	2,247		2,247
Repurchase of common stock (in shares)		(200,000)
Repurchase of common stock	(10,960)		(10,960)
Balance, end of the period (in shares) at Jun. 30, 2022		34,191,330
Balance, end of the period at Jun. 30, 2022	$ 1,485,830		1,289,499	452,246	(255,915)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.44
Net Income (Loss) Attributable to Parent	$ 49,070			49,070
Other Comprehensive Income (Loss), Net of Tax	(113,275)				(113,275)
Accrual of dividends on common stock	(15,208)			(15,208)
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		429
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	2,242		2,242
Balance, end of the period (in shares) at Sep. 30, 2022		34,191,759
Balance, end of the period at Sep. 30, 2022	$ 1,408,659		1,291,741	486,108	(369,190)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.44
Net Income (Loss) Attributable to Parent	$ 54,380			54,380
Other Comprehensive Income (Loss), Net of Tax	6,421				6,421
Accrual of dividends on common stock	(15,246)			(15,246)
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		2,259
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	2,218		2,218
Balance, end of the period (in shares) at Dec. 31, 2022		34,194,018
Balance, end of the period at Dec. 31, 2022	$ 1,456,432		1,293,959	525,242	(362,769)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.44
Net Income (Loss) Attributable to Parent	$ 55,555			55,555
Other Comprehensive Income (Loss), Net of Tax	37,133				37,133
Accrual of dividends on common stock	(16,691)			(16,691)
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		114,522
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	(734)		(734)
Balance, end of the period (in shares) at Mar. 31, 2023		34,308,540
Balance, end of the period at Mar. 31, 2023	$ 1,531,695		1,293,225	564,106	(325,636)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.48
Balance, beginning of the period (in shares) at Dec. 31, 2022		34,194,018
Balance, beginning of the period at Dec. 31, 2022	$ 1,456,432		1,293,959	525,242	(362,769)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	95,146
Other Comprehensive Income (Loss), Net of Tax	23,321
Balance, end of the period (in shares) at Jun. 30, 2023		34,344,627
Balance, end of the period at Jun. 30, 2023	$ 1,542,513		1,294,934	587,027	(339,448)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.96
Balance, beginning of the period (in shares) at Mar. 31, 2023		34,308,540
Balance, beginning of the period at Mar. 31, 2023	$ 1,531,695		1,293,225	564,106	(325,636)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	39,591			39,591
Other Comprehensive Income (Loss), Net of Tax	(13,812)
Accrual of dividends on common stock	(16,670)			(16,670)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	1,709		1,709
Balance, end of the period (in shares) at Jun. 30, 2023		34,344,627
Balance, end of the period at Jun. 30, 2023	$ 1,542,513		$ 1,294,934	$ 587,027	(339,448)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock, Dividends, Per Share, Declared	$ 0.48
OCI, Debt Securities, Available-for-Sale, Gain (Loss), after Adjustment and Tax	$ (13,812)				$ (13,812)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered (in shares)		36,087

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2021
Statement of Stockholders' Equity [Abstract]
Common Stock, Dividends, Per Share, Declared	$ 0.48	$ 0.48	$ 0.44	$ 0.44	$ 0.44	$ 0.44	$ 0.96	$ 0.88
Net Income (Loss) Attributable to Parent	$ 39,591	$ 55,555	$ 54,380	$ 49,070	$ 47,965	$ 43,963	$ 95,146	$ 91,928
Other Comprehensive Income (Loss), Net of Tax	(13,812)	37,133	6,421	(113,275)	(101,824)	(154,275)	23,321	(256,099)
Accrual of dividends on common stock	(16,670)	(16,691)	(15,246)	(15,208)	(15,378)	(15,066)
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	1,709	(734)	2,218	2,242	2,247	(1,169)
Repurchase of common stock					(10,960)
Equity, Attributable to Parent	$ 1,542,513	$ 1,531,695	$ 1,456,432	$ 1,408,659	$ 1,485,830	$ 1,563,780	$ 1,542,513	$ 1,485,830	$ 1,690,327
Common Stock, Dividends, Per Share, Declared	$ 0.48	$ 0.48	$ 0.44	$ 0.44	$ 0.44	$ 0.44	$ 0.96	$ 0.88
Common Stock [Member]
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture		114,522	2,259	429	18,546	120,152
Stock Repurchased and Retired During Period, Shares					(200,000)
Shares, Outstanding	34,344,627	34,308,540	34,194,018	34,191,759	34,191,330	34,372,784	34,344,627	34,191,330	34,252,632
Common Stock and Paid in Capital [Member]
Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered	$ 1,709	$ (734)	$ 2,218	$ 2,242	$ 2,247	$ (1,169)
Repurchase of common stock					(10,960)
Equity, Attributable to Parent	1,294,934	1,293,225	1,293,959	1,291,741	1,289,499	1,298,212	$ 1,294,934	$ 1,289,499	$ 1,299,381
Retained Earnings [Member]
Net Income (Loss) Attributable to Parent	39,591	55,555	54,380	49,070	47,965	43,963
Accrual of dividends on common stock	(16,670)	(16,691)	(15,246)	(15,208)	(15,378)	(15,066)
Equity, Attributable to Parent	587,027	564,106	525,242	486,108	452,246	419,659	587,027	452,246	390,762
Accumulated Other Comprehensive Income (Loss) [Member]
Other Comprehensive Income (Loss), Net of Tax		37,133	6,421	(113,275)	(101,824)	(154,275)
Equity, Attributable to Parent	$ (339,448)	$ (325,636)	$ (362,769)	$ (369,190)	$ (255,915)	$ (154,091)	$ (339,448)	$ (255,915)	$ 184

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
OPERATING ACTIVITIES:
Net Income (Loss) Attributable to Parent	$ 95,146,000	$ 91,928,000
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation	8,815,000	8,304,000
Deferred income and expense, net of amortization	(1,560,000)	(3,422,000)
Capitalized loan servicing rights, net of amortization	1,179,000	(282,000)
Amortization of core deposit intangibles	2,041,000	2,849,000
Loss (gain) on sale of securities, net	11,779,000	(467,000)
Net change in valuation of financial instruments carried at fair value	3,703,000	(118,000)
Gain on sale of branches, including related deposits	0	(7,804,000)
Decrease in deferred taxes	(2,774,000)	(5,469,000)
(Decrease) increase in current taxes payable	(4,836,000)	11,935,000
Stock-based compensation	4,393,000	4,417,000
Net change in cash surrender value of BOLI	(4,295,000)	(3,176,000)
Gain on sale of loans, excluding capitalized servicing rights	(1,815,000)	(4,370,000)
Gain on disposal of real estate held for sale and property and equipment, net	(311,000)	(65,000)
Provision for Loan, Lease, and Other Losses	6,240,000	(2,427,000)
Loss on extinguishment of debt	0	765,000
Origination of loans held for sale	(110,364,000)	(299,105,000)
Proceeds from sales of loans held for sale	112,388,000	314,427,000
Net change in:
Other assets	(22,636,000)	(22,956,000)
Other liabilities	15,314,000	19,475,000
Net cash provided from operating activities	117,955,000	115,377,000
INVESTING ACTIVITIES:
Purchases of securities—available-for-sale	52,791,000	469,135,000
Principal repayments and maturities of securities—available-for-sale	93,897,000	204,222,000
Proceeds from sales of securities—available-for-sale	277,610,000	24,491,000
Purchases of securities—held-to-maturity	0	(194,897,000)
Principal repayments and maturities of securities—held-to-maturity	18,915,000	26,052,000
Loan originations, net of repayments	(327,402,000)	(279,298,000)
Purchases of loans and participating interest in loans	0	(75,919,000)
Proceeds from sales of other loans	1,519,000	9,962,000
Net cash received (paid) related to branch divestitures	0	(168,137,000)
Purchases of property and equipment	(5,505,000)	(7,414,000)
Proceeds from sale of real estate held for sale and sale of other property	358,000	5,870,000
Proceeds from FHLB stock repurchase program	79,040,000	2,000,000
Purchase of FHLB stock	87,840,000	0
Proceeds from maturity of securities purchased under agreements to resell	300,000,000	0
Investment in bank-owned life insurance	(41,000)	(50,043,000)
Other	517,000	3,601,000
Net cash provided from (used by) investing activities	298,277,000	(968,645,000)
FINANCING ACTIVITIES:
(Decrease) increase in deposits, net	(521,003,000)	63,833,000
Repayment of long term FHLB advances	0	50,000,000
Advances of overnight and short term FHLB advances, net	220,000,000	0
Decrease in other borrowings, net	(39,780,000)	(29,752,000)
Repayment of junior subordinated debentures	0	(50,518,000)
Proceeds from redemption of trust preferred securities related to junior subordinated debentures	0	1,518,000
Cash dividends paid	(33,768,000)	(30,967,000)
Cash paid for repurchase of common stock	0	10,960,000
Taxes paid related to net share settlement of equity awards	(3,418,000)	(3,339,000)
Net Cash Provided by (Used in) Financing Activities, Total	(377,969,000)	(110,185,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS	38,263,000	(963,453,000)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	243,062,000	2,134,300,000
CASH AND CASH EQUIVALENTS, END OF PERIOD	281,325,000	1,170,847,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid in cash	34,698,000	8,704,000
Tax paid	20,735,000	1,540,000
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Dividends Payable	751,000	816,000
Loans, held-for-sale, transferred (from) to portfolio	(3,964,000)	(13,420,000)
Securities, available-for-sale, transferred to held-to-maturity	0	462,159,000
Fair Value of Assets Acquired	0	(1,539,000)
Liabilities Assumed	$ 0	$ (178,209,000)

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements include the accounts of Banner Corporation (the Company or Banner), a bank holding company incorporated in the State of Washington and its wholly-owned subsidiary, Banner Bank (the Bank).

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). In preparing these financial statements, the Company has evaluated events and transactions subsequent to June 30, 2023, for potential recognition or disclosure. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. Certain reclassifications have been made to the 2022 Consolidated Financial Statements and/or schedules to conform to the 2023 presentation. These reclassifications may have affected certain ratios for the prior periods. The effect of these reclassifications is considered immaterial. All significant intercompany transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.

The information included in this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Interim results are not necessarily indicative of results for a full year or any other interim period.

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ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED

Financial Instruments – Credit Losses (Topic 326)

On January 1, 2023, the Company adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The ASU eliminated the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that a creditor evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan. The ASU also introduced new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. In addition, the ASU requires vintage disclosures including current-period gross write-offs by year of origination for financing receivables. The Company applied the ASU prospectively and new disclosures have been added when applicable.

Reference Rate Reform (Topic 848)

In March 2020, the FASB issued guidance within ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, in response to the scheduled discontinuation of LIBOR on December 31, 2021. The amendments in this ASU provide optional guidance designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform. Since the issuance of this guidance, the publication cessation of U.S. dollar LIBOR was extended to June 30, 2023.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of Sunset Date of Topic 848. This ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. This deferral of the sunset date is in response to the extension of the publication cessation date. The amendments in this ASU are effective upon the issuance date of December 2022.

The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: 1) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; 2) modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts; 3) modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract; and 4) the amendments in this ASU also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. This ASU clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU also amends the expedients and exceptions to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this ASUs are effective upon the issuance date of March 12, 2020, and applies to contract modifications made and new hedging relationships entered into through December 31, 2022.

The Company used the expedients in the Reference Rate Reform guidance to manage through the transition from LIBOR, specifically as they relate to loans, leases and hedging relationships. The adoption of this accounting guidance did not have a material impact on the Company’s Consolidated Financial Statements.

Fair Value Measurement (Topic 820)

In June 2022, the FASB issued guidance within ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The ASU affects all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction. These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The ASU is effective for fiscal years, beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

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SECURITIES

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):

	June 30, 2023
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	25,659
	$	27,203	$	25,659

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	49,471	$	14	$	(1,123)	$	—	$	48,362
Municipal bonds	194,660		181		(34,073)		—		160,768
Corporate bonds	118,160		—		(16,372)		(2,000)		99,788
Mortgage-backed or related securities	2,294,371		275		(352,248)		—		1,942,398
Asset-backed securities	222,517		63		(7,936)		—		214,644
	$	2,879,179	$	533	$	(411,752)	$	(2,000)	$	2,465,960

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	309	$	—	$	(7)	$	302	$	—
Municipal bonds	497,546		105		(62,883)		434,598		(170)
Corporate bonds	2,844		—		(24)		2,635		(185)
Mortgage-backed or related securities	598,226		—		(102,645)		495,581		—
	$	1,098,925	$	105	$	(165,559)	$	933,116	$	(355)

	December 31, 2022
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	28,694
	$	27,203	$	28,694

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	56,344	$	8	$	(1,244)	$	55,108
Municipal bonds	301,449		530		(40,770)		261,209
Corporate bonds	133,334		—		(11,481)		121,853
Mortgage-backed or related securities	2,505,172		885		(366,721)		2,139,336
Asset-backed securities	222,478		40		(10,993)		211,525
	$	3,218,777	$	1,463	$	(431,209)	$	2,789,031

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	312	$	—	$	(7)	$	305	$	—
Municipal bonds	503,117		109		(70,907)		432,319		(183)
Corporate bonds	2,961		—		(16)		2,945		(196)
Mortgage-backed or related securities	611,577		—		(104,966)		506,611		—
	$	1,117,967	$	109	$	(175,896)	$	942,180	$	(379)

Accrued interest receivable on held-to-maturity debt securities was $4.7 million and $4.8 million as of June 30, 2023 and December 31, 2022, respectively, and was $11.1 million and $12.4 million on available-for-sale debt securities at June 30, 2023 and December 31, 2022, respectively. Accrued interest receivable on securities is reported in accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the calculation of the allowance for credit losses.

At June 30, 2023 and December 31, 2022, the gross unrealized losses and the fair value for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):

	June 30, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	—	$	—	$	45,207	$	(1,123)	$	45,207	$	(1,123)
Municipal bonds	34,744		(559)		119,287		(33,514)		154,031		(34,073)
Corporate bonds	9,599		(314)		95,502		(16,058)		105,101		(16,372)
Mortgage-backed or related securities	259,765		(9,381)		1,635,349		(342,867)		1,895,114		(352,248)
Asset-backed securities	121,210		(4,603)		83,292		(3,333)		204,502		(7,936)
	$	425,318	$	(14,857)	$	1,978,637	$	(396,895)	$	2,403,955	$	(411,752)

	December 31, 2022
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	33,407	$	(882)	$	16,732	$	(362)	$	50,139	$	(1,244)
Municipal bonds	188,920		(25,592)		33,907		(15,178)		222,827		(40,770)
Corporate bonds	108,187		(9,547)		13,066		(1,934)		121,253		(11,481)
Mortgage-backed or related securities	930,566		(90,537)		1,159,110		(276,184)		2,089,676		(366,721)
Asset-backed securities	201,437		(10,993)		—		—		201,437		(10,993)
	$	1,462,517	$	(137,551)	$	1,222,815	$	(293,658)	$	2,685,332	$	(431,209)

At June 30, 2023, there were 245 securities—available-for-sale with unrealized losses, compared to 298 at December 31, 2022. As of June 30, 2023, we have an allowance for credit losses of $2.0 million related to the estimated credit loss on one security.  Management does not believe that any remaining individual unrealized loss as of June 30, 2023 or December 31, 2022 resulted from credit loss.  The decline in fair market value of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase.

There were no sales of securities—trading during the six months ended June 30, 2023 or 2022. There were no securities—trading in a nonaccrual status at June 30, 2023 or December 31, 2022.  Net unrealized holding losses of $3.0 million were recognized during the six months ended June 30, 2023, compared to $905,000 of net unrealized holding gains recognized during the six months ended June 30, 2022.

The following table presents gross gains and losses on sales and partial calls of securities available-for-sale (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Available-for-Sale:
Gross Gains	$	145	$	81	$	377	$	516
Gross Losses	(4,672)		(49)		(12,156)		(49)
Balance, end of the period	$	(4,527)	$	32	$	(11,779)	$	467

There were no securities—available-for-sale in a nonaccrual status at June 30, 2023 or December 31, 2022.

The following table presents the amortized cost and estimated fair value of securities at June 30, 2023, by contractual maturity and does not reflect any required periodic payments (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.

	June 30, 2023
	Trading				Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturing within one year	$	—	$	—	$	719	$	716	$	21,769	$	21,243
Maturing after one year through five years	—		—		158,285		143,916		21,090		20,352
Maturing after five years through ten years	—		—		416,915		364,317		26,732		25,554
Maturing after ten years	27,203		25,659		2,303,260		1,957,011		1,029,334		865,967
	$	27,203	$	25,659	$	2,879,179	$	2,465,960	$	1,098,925	$	933,116

The following table presents, as of June 30, 2023, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):

	June 30, 2023
	Carrying Value		Amortized Cost		Fair Value
Purpose or beneficiary:
State and local governments public deposits	$	248,951	$	256,711	$	224,566
Federal Reserve	118,643		118,643		100,314
Interest rate swap counterparties	3,039		3,249		2,865
Repurchase transaction accounts	273,613		273,613		225,628
Other	4,779		4,779		4,558
Total pledged securities	$	649,025	$	656,995	$	557,931

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings which are reviewed and updated quarterly. The Company’s non-rated held-to-maturity debt securities are primarily United States government sponsored enterprise debentures carrying minimal to no credit risk. The non-rated corporate bonds primarily consist of Community Reinvestment Act related bonds secured by loan instruments from low to moderate income borrowers. The remaining non-rated held-to-maturity debt securities balance is comprised of local municipal debt from within the Company’s geographic footprint and is monitored through quarterly or annual financial review. This municipal debt is predominately essential service or unlimited general obligation backed debt. The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	487,763	$	500	$	16,574	$	504,837
Not Rated	309		9,783		2,344		581,652		594,088
	$	309	$	497,546	$	2,844	$	598,226	$	1,098,925

	December 31, 2022
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	492,105	$	500	$	16,681	$	509,286
Not Rated	312		11,012		2,461		594,896		608,681
	$	312	$	503,117	$	2,961	$	611,577	$	1,117,967

The following tables present the activity in the allowance for credit losses for securities available-for-sale by major type for the three and six months ended June 30, 2023 (in thousands). We had no allowance for credit losses for securities available-for-sale during three and six months ended June 30, 2022.

	For the Three Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000
	For the Six Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000

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LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES

The following table presents the loans receivable at June 30, 2023 and December 31, 2022 by class (dollars in thousands).

	June 30, 2023				December 31, 2022
	Amount		Percent of Total		Amount		Percent of Total
Commercial real estate:
Owner-occupied	$	894,876	8.5	%	$	845,320	8.3	%
Investment properties	1,558,176		14.9		1,589,975		15.7
Small balance CRE	1,172,825		11.2		1,200,251		11.8
Multifamily real estate	699,830		6.7		645,071		6.4
Construction, land and land development:
Commercial construction	183,765		1.8		184,876		1.8
Multifamily construction	433,868		4.1		325,816		3.2
One- to four-family construction	547,200		5.2		647,329		6.4
Land and land development	345,053		3.3		328,475		3.2
Commercial business:
Commercial business (1)	1,313,226		12.5		1,283,407		12.7
Small business scored	982,283		9.4		947,092		9.3
Agricultural business, including secured by farmland (2)	310,120		3.0		295,077		2.9
One- to four-family residential	1,340,126		12.8		1,173,112		11.6
Consumer:
Consumer—home equity revolving lines of credit	577,725		5.5		566,291		5.6
Consumer—other	113,334		1.1		114,632		1.1
Total loans	10,472,407		100.0	%	10,146,724		100.0	%
Less allowance for credit losses – loans	(144,680)				(141,465)
Net loans	$	10,327,727			$	10,005,259

(1)    Includes $4.5 million and $7.6 million of U.S. Small Business Administration (SBA) Paycheck Protection Program (PPP) loans as of June 30, 2023 and December 31, 2022, respectively.

(2)    Includes $20,000 of SBA PPP loans as of June 30, 2023, and $334,000 as of December 31, 2022.

Loan amounts are net of unearned loan fees in excess of unamortized costs of $9.4 million as of June 30, 2023, and $8.1 million as of December 31, 2022. Net loans include net discounts on acquired loans of $5.5 million and $6.6 million as of June 30, 2023 and December 31, 2022, respectively. Net loans does not include accrued interest receivable. Accrued interest receivable on loans was $40.9 million as of June 30, 2023, and $39.8 million as of December 31, 2022 and was reported in accrued interest receivable on the Consolidated Statements of Financial Condition.

The Company had pledged $6.5 billion of loans as collateral for FHLB and other borrowings at both June 30, 2023 and December 31, 2022, respectively.

Purchased credit-deteriorated and purchased non-credit-deteriorated loans. Loans acquired in business combinations are recorded at their fair value at the acquisition date. Acquired loans are evaluated upon acquisition and classified as either purchased credit-deteriorated (PCD) or purchased non-credit-deteriorated. There were no PCD loans acquired during the six months ended June 30, 2023 or June 30, 2022.

Troubled Loan Modifications. Occasionally, the Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or any combination of these. When principal forgiveness is provided, the amount of the forgiveness is charged-off against the allowance for credit losses - loans. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses - loans is adjusted by the same amount.

The following tables present the Company’s portfolio of risk-rated loans by class and by grade as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	68,946	$	168,118	$	171,741	$	142,543	$	69,567	$	183,759	$	31,381	$	836,055
Special Mention	—		—		—		—		—		—		—		—
Substandard	1,771		13,209		12,248		11,909		19,279		205		200		58,821
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	70,717	$	181,327	$	183,989	$	154,452	$	88,846	$	183,964	$	31,581	$	894,876
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - investment properties
Risk Rating
Pass	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	662,188	$	38,699	$	1,554,025
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,955		1,196		4,151
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	665,143	$	39,895	$	1,558,176
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily real estate
Risk Rating
Pass	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial construction
Risk Rating
Pass	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily construction
Risk Rating
Pass	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
One- to four- family construction
Risk Rating
Pass	$	275,674	$	241,523	$	17,924	$	—	$	332	$	—	$	616	$	536,069
Special Mention	—		—		—		—		—		—		—		—
Substandard	7,070		—		4,061		—		—		—		—		11,131
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	282,744	$	241,523	$	21,985	$	—	$	332	$	—	$	616	$	547,200
Current period gross charge-offs	$	136	$	—	$	—	$	—	$	—	$	—	$	—	$	136

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Land and land development
Risk Rating
Pass	$	138,821	$	116,643	$	54,314	$	14,000	$	9,160	$	11,545	$	1	$	344,484
Special Mention	—		—		—		—		—		—		—		—
Substandard	499		—		—		—		—		70		—		569
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	139,320	$	116,643	$	54,314	$	14,000	$	9,160	$	11,615	$	1	$	345,053
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	20	$	—	$	20
Commercial business
Risk Rating
Pass	$	103,662	$	246,605	$	134,384	$	139,435	$	112,084	$	155,259	$	386,683	$	1,278,112
Special Mention	—		—		—		3,277		—		—		898		4,175
Substandard	26		330		11,523		2,839		1,612		5,640		8,969		30,939
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	103,688	$	246,935	$	145,907	$	145,551	$	113,696	$	160,899	$	396,550	$	1,313,226
Current period gross charge-offs	$	—	$	—	$	700	$	—	$	—	$	27	$	133	$	860
Agricultural business, including secured by farmland
Risk Rating
Pass	$	23,165	$	36,514	$	26,739	$	18,500	$	25,586	$	44,985	$	113,594	$	289,083
Special Mention	550		—		652		—		1,690		401		2,541		5,834
Substandard	1,631		3,528		970		—		6,566		2,508		—		15,203
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	25,346	$	40,042	$	28,361	$	18,500	$	33,842	$	47,894	$	116,135	$	310,120
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	167,150	$	198,787	$	150,272	$	74,171	$	57,095	$	148,902	$	10,833	$	807,210
Special Mention	—		—		—		2,829		—		42		201		3,072
Substandard	13,756		—		7,211		13,564		—		307		200		35,038
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	180,906	$	198,787	$	157,483	$	90,564	$	57,095	$	149,251	$	11,234	$	845,320
Commercial real estate - investment properties
Risk Rating
Pass	$	190,627	$	323,160	$	142,476	$	182,853	$	169,667	$	547,899	$	25,691	$	1,582,373
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		3,283		—		3,007		1,312		7,602
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	190,627	$	323,160	$	142,476	$	186,136	$	169,667	$	550,906	$	27,003	$	1,589,975
Multifamily real estate
Risk Rating
Pass	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial construction
Risk Rating
Pass	$	112,229	$	46,679	$	12,952	$	4,260	$	1,107	$	—	$	—	$	177,227
Special Mention	—		—		—		—		—		—		—		—
Substandard	2,931		1		—		—		4,717		—		—		7,649
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	115,160	$	46,680	$	12,952	$	4,260	$	5,824	$	—	$	—	$	184,876
Multifamily construction
Risk Rating
Pass	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
One- to four- family construction
Risk Rating
Pass	$	572,701	$	56,530	$	677	$	331	$	—	$	—	$	711	$	630,950
Special Mention	—		—		—		—		—		—		—		—
Substandard	13,473		2,906		—		—		—		—		—		16,379
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	586,174	$	59,436	$	677	$	331	$	—	$	—	$	711	$	647,329

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Land and land development
Risk Rating
Pass	$	199,339	$	88,066	$	16,278	$	11,866	$	6,242	$	6,164	$	339	$	328,294
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		97		84		—		181
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	199,339	$	88,066	$	16,278	$	11,866	$	6,339	$	6,248	$	339	$	328,475
Commercial business
Risk Rating
Pass	$	249,609	$	149,140	$	161,494	$	126,416	$	86,712	$	85,386	$	391,852	$	1,250,609
Special Mention	74		26		3,467		—		—		—		200		3,767
Substandard	464		12,599		1,956		1,161		5,954		796		6,101		29,031
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	250,147	$	161,765	$	166,917	$	127,577	$	92,666	$	86,182	$	398,153	$	1,283,407
Agricultural business, including secured by farmland
Risk Rating
Pass	$	36,848	$	35,440	$	18,946	$	28,354	$	24,710	$	27,063	$	109,606	$	280,967
Special Mention	—		336		271		—		—		—		357		964
Substandard	2,015		970		—		6,565		—		2,599		997		13,146
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	38,863	$	36,746	$	19,217	$	34,919	$	24,710	$	29,662	$	110,960	$	295,077

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Small balance CRE
Past Due Category
Current	$	48,371	$	173,212	$	219,220	$	169,205	$	123,643	$	437,208	$	404	$	1,171,263
30-59 Days Past Due	599		—		—		—		—		961		—		1,560
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	48,970	$	173,212	$	219,220	$	169,205	$	123,643	$	438,171	$	404	$	1,172,825
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Small business scored
Past Due Category
Current	$	98,904	$	290,943	$	186,977	$	92,432	$	70,196	$	114,229	$	126,832	$	980,513
30-59 Days Past Due	—		198		46		123		23		14		134		538
60-89 Days Past Due	—		25		20		17		—		—		20		82
90 Days + Past Due	—		35		177		93		460		219		166		1,150
Total Small business scored	$	98,904	$	291,201	$	187,220	$	92,665	$	70,679	$	114,462	$	127,152	$	982,283
Current period gross charge-offs	$	—	$	175	$	84	$	162	$	262	$	181	$	—	$	864
One- to four- family residential
Past Due Category
Current	$	163,136	$	588,388	$	270,567	$	58,947	$	32,763	$	217,977	$	234	$	1,332,012
30-59 Days Past Due	—		100		—		78		—		437		—		615
60-89 Days Past Due	—		—		—		393		377		228		—		998
90 Days + Past Due	1,060		—		1,632		753		1,160		1,896		—		6,501
Total One- to four- family residential	$	164,196	$	588,488	$	272,199	$	60,171	$	34,300	$	220,538	$	234	$	1,340,126
Current period gross charge-offs	$	—	$	—	$	—	$	4	$	—	$	30	$	—	$	34

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	5,397	$	2,932	$	2,683	$	1,446	$	1,391	$	5,354	$	554,579	$	573,782
30-59 Days Past Due	72		101		—		—		52		165		741		1,131
60-89 Days Past Due	—		—		—		—		—		241		217		458
90 Days + Past Due	—		—		49		1,043		311		854		97		2,354
Total Consumer—home equity revolving lines of credit	$	5,469	$	3,033	$	2,732	$	2,489	$	1,754	$	6,614	$	555,634	$	577,725
Current period gross charge-offs	$	—	$	—	$	13	$	73	$	—	$	20	$	(4)	$	102
Consumer-other
Past Due Category
Current	$	6,093	$	35,734	$	11,076	$	7,880	$	4,843	$	19,880	$	27,527	$	113,033
30-59 Days Past Due	—		53		14		39		1		48		86		241
60-89 Days Past Due	—		—		—		—		4		—		52		56
90 Days + Past Due	—		—		—		4		—		—		—		4
Total Consumer-other	$	6,093	$	35,787	$	11,090	$	7,923	$	4,848	$	19,928	$	27,665	$	113,334
Current period gross charge-offs	$	—	$	19	$	44	$	15	$	34	$	64	$	377	$	553

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Small balance CRE
Past Due Category
Current	$	177,605	$	215,801	$	172,286	$	134,552	$	142,592	$	354,924	$	630	$	1,198,390
30-59 Days Past Due	—		—		460		—		—		1,399		—		1,859
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	177,605	$	215,801	$	172,746	$	134,552	$	142,592	$	356,325	$	630	$	1,200,251
Small business scored
Past Due Category
Current	$	307,109	$	201,628	$	99,867	$	81,603	$	56,420	$	78,025	$	119,281	$	943,933
30-59 Days Past Due	146		518		54		262		46		280		173		1,479
60-89 Days Past Due	—		54		—		275		149		7		176		661
90 Days + Past Due	—		—		26		157		70		305		461		1,019
Total Small business scored	$	307,255	$	202,200	$	99,947	$	82,297	$	56,685	$	78,617	$	120,091	$	947,092
One- to four- family residential
Past Due Category
Current	$	555,833	$	279,331	$	59,672	$	34,607	$	37,740	$	191,890	$	1,335	$	1,160,408
30-59 Days Past Due	2,030		846		755		—		116		1,462		78		5,287
60-89 Days Past Due	1,060		—		—		—		115		1,067		—		2,242
90 Days + Past Due	—		1,819		973		712		94		1,577		—		5,175
Total One- to four- family residential	$	558,923	$	281,996	$	61,400	$	35,319	$	38,065	$	195,996	$	1,413	$	1,173,112

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	7,442	$	1,089	$	329	$	1,355	$	1,611	$	3,788	$	547,068	$	562,682
30-59 Days Past Due	49		40		75		—		74		214		1,372		1,824
60-89 Days Past Due	—		50		—		—		49		45		59		203
90 Days + Past Due	—		14		73		476		64		675		280		1,582
Total Consumer—home equity revolving lines of credit	$	7,491	$	1,193	$	477	$	1,831	$	1,798	$	4,722	$	548,779	$	566,291
Consumer-other
Past Due Category
Current	$	39,740	$	12,138	$	9,334	$	5,695	$	5,384	$	16,675	$	25,219	$	114,185
30-59 Days Past Due	49		—		16		5		2		67		120		259
60-89 Days Past Due	41		9		29		24		—		13		62		178
90 Days + Past Due	—		10		—		—		—		—		—		10
Total Consumer-other	$	39,830	$	12,157	$	9,379	$	5,724	$	5,386	$	16,755	$	25,401	$	114,632

The following tables provide the amortized cost basis of collateral-dependent loans as of June 30, 2023 and December 31, 2022 (in thousands). Our collateral dependent loans presented in the tables below have no significant concentrations by property type or location.

	June 30, 2023
	Real Estate		Equipment		Inventory		Total
Small balance CRE	$	1,865	$	—	$	—	$	1,865
Construction, land and land development:
One- to four-family construction	8,072		—		—		8,072
Land and land development	499		—		—		499
Commercial business
Commercial business	94		4,023		9		4,126
Small business scored	—		288		—		288
Agricultural business, including secured by farmland	3,175		89		139		3,403
One- to four-family residential	3,541		—		—		3,541
Consumer—home equity revolving lines of credit	821		—		—		821
Total	$	18,067	$	4,400	$	148	$	22,615

	December 31, 2022
	Real Estate		Equipment		Total
Small balance CRE	$	2,953	$	—	$	2,953
Commercial business
Commercial business	—		4,537		4,537
Small business scored	—		307		307
One- to four-family residential	1,622		—		1,622
Total	$	4,575	$	4,844	$	9,419

The following tables provide additional detail on the age analysis of the Company’s past due loans as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	894,876	$	894,876	$	—	$	66	$	—
Investment properties	—		—		—		—		1,558,176		1,558,176		—		—		—
Small balance CRE	1,560		—		2		1,562		1,171,263		1,172,825		1,865		2,412		—
Multifamily real estate	—		—		—		—		699,830		699,830		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		183,765		183,765		—		—		—
Multifamily construction	—		—		—		—		433,868		433,868		—		—		—
One- to four-family construction	—		1,255		709		1,964		545,236		547,200		1,711		1,711		—
Land and land development	—		498		—		498		344,555		345,053		499		569		—
Commercial business:
Commercial business	17		—		6,290		6,307		1,306,919		1,313,226		5,979		6,397		—
Small business scored	538		82		1,150		1,770		980,513		982,283		284		2,042		—
Agricultural business, including secured by farmland	1,724		—		2,952		4,676		305,444		310,120		3,997		3,997		—
One- to four-family residential	615		998		6,501		8,114		1,332,012		1,340,126		3,479		7,605		60
Consumer:
Consumer—home equity revolving lines of credit	1,131		458		2,354		3,943		573,782		577,725		821		3,258		49
Consumer—other	241		56		4		301		113,033		113,334		—		14		—
Total	$	5,826	$	3,347	$	19,962	$	29,135	$	10,443,272	$	10,472,407	$	18,635	$	28,071	$	109

	December 31, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	845,320	$	845,320	$	—	$	143	$	—
Investment properties	—		—		—		—		1,589,975		1,589,975		—		—		—
Small balance CRE	1,859		—		2		1,861		1,198,390		1,200,251		2,927		3,540		—
Multifamily real estate	—		—		—		—		645,071		645,071		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		184,876		184,876		—		—		—
Multifamily construction	—		—		—		—		325,816		325,816		—		—		—
One- to four-family construction	900		—		—		900		646,429		647,329		—		—		—
Land and land development	921		—		97		1,018		327,457		328,475		—		181		—
Commercial business:
Commercial business	2,100		4,145		649		6,894		1,276,513		1,283,407		6,998		7,356		—
Small business scored	1,479		661		1,019		3,159		943,933		947,092		303		2,530		—
Agricultural business, including secured by farmland	1,185		—		594		1,779		293,298		295,077		594		594		—
One-to four-family residential	5,287		2,242		5,175		12,704		1,160,408		1,173,112		1,569		5,236		1,023
Consumer:
Consumer—home equity revolving lines of credit	1,824		203		1,582		3,609		562,682		566,291		—		2,124		254
Consumer—other	259		178		10		447		114,185		114,632		—		2		10
Total	$	15,814	$	7,429	$	9,128	$	32,371	$	10,114,353	$	10,146,724	$	12,391	$	21,706	$	1,287

(1)     The Company did not recognize any interest income on non-accrual loans during the six months ended June 30, 2023, or the year ended December 31, 2022.

The following tables provide the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	42,975	$	8,475	$	28,433	$	33,735	$	3,094	$	15,736	$	9,009	$	141,457
Provision/(recapture) for credit losses	587		(436)		1,567		187		477		969		208		3,559
Recoveries	74		—		—		524		2		36		117		753
Charge-offs	—		—		(156)		(566)		—		(4)		(363)		(1,089)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680
	For the Six Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	44,086	$	7,734	$	29,171	$	33,299	$	3,475	$	14,729	$	8,971	$	141,465
(Recapture)/provision for credit losses	(708)		305		829		1,662		(13)		1,889		369		4,333
Recoveries	258		—		—		643		111		153		286		1,451
Charge-offs	—		—		(156)		(1,724)		—		(34)		(655)		(2,569)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680

	For the Three Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	47,264	$	7,183	$	26,679	$	26,655	$	2,586	$	8,109	$	6,995	$	125,471
(Recapture)/provision for credit losses	(1,020)		(277)		260		2,032		402		1,366		381		3,144
Recoveries	129		—		—		234		14		98		112		587
Charge-offs	—		—		—		(248)		—		—		(252)		(500)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702
	For the Six Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for loan losses:
Beginning balance	$	52,995	$	7,043	$	27,294	$	26,421	$	3,190	$	8,205	$	6,951	$	132,099
(Recapture)/provision for credit losses	(6,836)		(137)		(734)		2,199		(320)		1,230		366		(4,232)
Recoveries	216		—		384		383		132		138		328		1,581
Charge-offs	(2)		—		(5)		(330)		—		—		(409)		(746)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702

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GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS

Goodwill and Other Intangible Assets:  At June 30, 2023, intangible assets are comprised of goodwill and core deposit intangibles (CDI) acquired in business combinations. Goodwill represents the excess of the purchase consideration paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in a business combination, and is not amortized but is reviewed at least annually for impairment. The Company has identified one reporting unit for the purpose of evaluating goodwill for impairment. The Company completed an assessment of qualitative factors as of December 31, 2022 and concluded that no further analysis was required as it is more likely than not that the fair value of Banner Bank, the reporting unit, exceeds the carrying value.

CDI represents the value of transaction-related deposits and the value of the client relationships associated with the deposits. The Company amortizes CDI assets over their estimated useful lives and reviews them at least annually for events or circumstances that could impair their value. 

The following table summarizes the changes in the Company’s goodwill and other intangibles for the six months ended June 30, 2023, and the year ended December 31, 2022 (in thousands):

	Goodwill		CDI		Total
Balance, December 31, 2021	$	373,121	$	14,855	$	387,976
Amortization	—		(5,279)		(5,279)
Other changes(1)	—		(136)		(136)
Balance, December 31, 2022	373,121		9,440		382,561
Amortization	—		(2,041)		(2,041)
Balance, June 30, 2023	$	373,121	$	7,399	$	380,520

(1)    Acquired CDI was adjusted for the sale of branches in 2022.

The following table presents the estimated amortization expense with respect to CDI as of June 30, 2023, for the periods indicated (in thousands):

	Estimated Amortization
Remainder of 2023	$	1,715
2024	2,626
2025	1,567
2026	904
2027	426
Thereafter	161
	$	7,399

Mortgage Servicing Rights:  Mortgage and SBA servicing rights are reported in other assets.  SBA servicing rights are initially recorded and carried at fair value. Mortgage servicing rights are initially recognized at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.  Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value).  If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income.  However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value.  During the three and six months ended June 30, 2023 and 2022, the Company did not record any impairment charges or recoveries against mortgage servicing rights. The unpaid principal balance of loans for which mortgage and SBA servicing rights have been recognized totaled $2.74 billion and $2.77 billion at June 30, 2023 and December 31, 2022, respectively.  Custodial accounts maintained in connection with this servicing totaled $17.7 million and $11.2 million at June 30, 2023 and December 31, 2022, respectively.

An analysis of the mortgage and SBA servicing rights for the three and six months ended June 30, 2023 and 2022 is presented below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Balance, beginning of the period	$	15,613	$	18,008	$	16,166	$	17,206
Additions—amounts capitalized	349		804		485		2,757
Additions—through purchase	85		83		124		145
Amortization (1)	(827)		(1,115)		(1,674)		(2,346)
Fair value adjustments (3)	(109)		(147)		10		(129)
Balance, end of the period (2)	$	15,111	$	17,633	$	15,111	$	17,633

(1)    Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.

(2)    There was no valuation allowance on mortgage servicing rights as of both June 30, 2023 and 2022.

(3)    Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

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DEPOSITS

6 Months Ended

Jun. 30, 2023

Banking and Thrift, Other Disclosure [Abstract]

DEPOSITS

Deposits consisted of the following at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Non-interest-bearing accounts	$	5,369,187	$	6,176,998
Interest-bearing checking	1,908,402		1,811,153
Regular savings accounts	2,588,298		2,710,090
Money market accounts	1,876,569		2,198,288
Total interest-bearing transaction and savings accounts	6,373,269		6,719,531
Certificates of deposit:
Certificates of deposit greater than or equal to $250,000	397,784		178,324
Certificates of deposit less than $250,000	958,816		545,206
Total certificates of deposit	1,356,600		723,530
Total deposits	$	13,099,056	$	13,620,059
Included in total deposits:
Public fund transaction and savings accounts	$	380,731	$	392,859
Public fund interest-bearing certificates	45,840		26,810
Total public deposits	$	426,571	$	419,669
Total brokered certificates of deposit	$	203,649	$	—

Scheduled maturities and weighted average interest rates of certificates of deposit at June 30, 2023 are as follows (dollars in thousands):

	June 30, 2023
	Amount		Weighted Average Rate
Maturing in one year or less	$	1,259,221	3.20	%
Maturing after one year through two years	60,692		1.15
Maturing after two years through three years	24,503		0.66
Maturing after three years through four years	6,572		0.35
Maturing after four years through five years	4,686		0.57
Maturing after five years	926		0.86
Total certificates of deposit	$	1,356,600	3.04	%

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FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE ACCOUNTING AND MEASUREMENT

The following table presents estimated fair values of the Company’s financial instruments as of June 30, 2023 and December 31, 2022, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (dollars in thousands):

		June 30, 2023				December 31, 2022
	Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Cash and cash equivalents	1	$	281,325	$	281,325	$	243,062	$	243,062
Securities—trading	3	25,659		25,659		28,694		28,694
Securities—available-for-sale	2	2,465,960		2,465,960		2,789,031		2,789,031
Securities—held-to-maturity	2	1,090,949		925,485		1,109,319		933,513
Securities—held-to-maturity	3	7,621		7,631		8,648		8,667
Securities purchased under agreements to resell	2	—		—		300,000		300,000
Loans held for sale	2	60,612		60,645		56,857		56,948
Loans receivable, net	3	10,327,727		9,895,896		10,005,259		9,810,965
Equity securities	1	547		547		553		553
FHLB stock	3	20,800		20,800		12,000		12,000
Bank-owned life insurance	1	301,260		301,260		297,565		297,565
Mortgage servicing rights	3	14,266		35,185		15,331		35,148
SBA servicing rights	3	845		845		835		835
Investments in limited partnerships	3	12,776		12,776		12,427		12,427
Derivatives:
Interest rate swaps	2	18,996		18,996		19,339		19,339
Interest rate lock and forward sales commitments	2,3	349		349		142		142
Liabilities:
Demand, interest checking and money market accounts	2	9,154,158		9,154,158		10,186,439		10,186,439
Regular savings	2	2,588,298		2,588,298		2,710,090		2,710,090
Certificates of deposit	2	1,356,600		1,335,503		723,530		702,581
FHLB advances	2	270,000		270,000		50,000		50,000
Other borrowings	2	193,019		193,019		232,799		232,799
Subordinated notes, net	2	92,646		90,163		98,947		96,718
Junior subordinated debentures	3	67,237		67,237		74,857		74,857
Derivatives:
Interest rate swaps	2	36,777		36,777		37,150		37,150
Interest rate lock and forward sales commitments	2,3	2		2		118		118
Risk participation agreement	2	52		52		67		67

The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). When measuring fair value, management will maximize the use of observable inputs and minimize the use of unobservable inputs whenever possible. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions.

The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies.  However, considerable judgment is required to interpret data to develop the estimates of fair value.  Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date.  The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.  In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for many of the financial instruments.  This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

Items Measured at Fair Value on a Recurring Basis:

The following tables present financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets and liabilities as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	25,659	$	25,659
Securities—available-for-sale
U.S. Government and agency obligations	—		48,362		—		48,362
Municipal bonds	—		160,768		—		160,768
Corporate bonds	—		99,788		—		99,788
Mortgage-backed or related securities	—		1,942,398		—		1,942,398
Asset-backed securities	—		214,644		—		214,644
	—		2,465,960		—		2,465,960
Loans held for sale(1)	—		17,201		—		17,201
Equity securities	547		—		—		547
SBA servicing rights	—		—		845		845
Investment in limited partnerships	—		—		12,776		12,776
Derivatives
Interest rate swaps	—		18,996		—		18,996
Interest rate lock and forward sales commitments	—		79		270		349
	$	547	$	2,502,236	$	39,550	$	2,542,333
Liabilities:
Junior subordinated debentures	$	—	$	—	$	67,237	$	67,237
Derivatives
Interest rate swaps	—		36,777		—		36,777
Interest rate lock and forward sales commitments	—		—		2		2
Risk participation agreement	—		52		—		52
	$	—	$	36,829	$	67,239	$	104,068

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	28,694	$	28,694
Securities—available-for-sale
U.S. Government and agency obligations	—		55,108		—		55,108
Municipal bonds	—		261,209		—		261,209
Corporate bonds	—		121,853		—		121,853
Mortgage-backed or related securities	—		2,139,336		—		2,139,336
Asset-backed securities	—		211,525		—		211,525
	—		2,789,031		—		2,789,031
Loans held for sale(1)	—		2,305		—		2,305
Equity securities	553		—		—		553
SBA servicing rights	—		—		835		835
Investment in limited partnerships	—		—		12,427		12,427
Derivatives
Interest rate swaps	—		19,339		—		19,339
Interest rate lock and forward sales commitments	—		61		81		142
	$	553	$	2,810,736	$	42,037	$	2,853,326
Liabilities:
Junior subordinated debentures	$	—	$	—	$	74,857	$	74,857
Derivatives
Interest rate swaps	—		37,150		—		37,150
Interest rate lock and forward sales commitments	—		76		42		118
Risk participation agreement	—		67		—		67
	$	—	$	37,293	$	74,899	$	112,192

(1)    The unpaid principal balance of residential mortgage loans held for sale carried at fair value on a recurring basis was $16.8 million and $2.2 million at June 30, 2023 and December 31, 2022, respectively.

The following methods were used to estimate the fair value of each class of financial instruments above:

Securities:  The estimated fair values of investment securities and mortgaged-backed securities are priced using current active market quotes, if available, which are considered Level 1 measurements.  For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value.  These measurements are considered Level 2.  Due to the continued limited activity in the trust preferred markets that have limited the observability of market spreads for some of the Company’s trust preferred securities (TPS), management has classified these securities as a Level 3 fair value measure. Management periodically reviews the pricing information received from third-party pricing services and tests those prices against other sources to validate the reported fair values.

Loans Held for Sale: Fair values for residential mortgage loans held for sale are determined by comparing actual loan rates to current secondary market prices for similar loans.

Equity Securities: Equity securities are invested in a publicly traded stock. The fair value of these securities is based on daily quoted market prices.

SBA Servicing Rights: Fair values are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing. The evaluation utilizes assumptions market participants would use in determining fair value including prepayment speeds, delinquency and foreclosure rates, the discount rate, servicing costs, and the timing of cash flows.  The SBA servicing portfolio is stratified by loan type and fair value estimates are adjusted up or down based on the serviced loan interest rates versus current rates on new loan originations since the most recent independent analysis.

Junior Subordinated Debentures:  The fair value of junior subordinated debentures is estimated using an income approach technique. The significant inputs included in the estimation of fair value are the credit risk adjusted spread and three month LIBOR. The credit risk adjusted spread represents the nonperformance risk of the liability. The Company utilizes an external valuation firm to validate the reasonableness of the credit risk adjusted spread used to determine the fair value. The junior subordinated debentures are carried at fair value which represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants. Due to inactivity in the trust preferred markets that have limited the observability of market spreads, management has classified this as a Level 3 fair value measurement.

Derivatives: Derivatives include interest rate swap agreements, interest rate lock commitments to originate loans held for sale, forward sales contracts to sell loans and securities related to mortgage banking activities and risk participation agreements. Fair values for these instruments, which generally change as a result of changes in the level of market interest rates, are estimated based on dealer quotes and secondary market sources. As the interest rate lock commitments use a pull-through rate that is considered an unobservable input, these derivatives are classified as a level 3 fair value measurement.

Off-Balance Sheet Items: Off-balance sheet financial instruments include unfunded commitments to extend credit, including standby letters of credit, and commitments to purchase investment securities. The fair value of these instruments is not considered to be material.

Limitations: The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2023 and December 31, 2022.  The factors used in the fair value estimates are subject to change subsequent to the dates the fair value estimates are completed, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3):

The following table provides a description of the valuation technique, unobservable inputs, and quantitative and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and non-recurring basis at June 30, 2023 and December 31, 2022:

			Weighted Average Rate
Financial Instruments	Valuation Technique	Unobservable Inputs	June 30, 2023		December 31, 2022
Corporate bonds (TPS)	Discounted cash flows	Discount rate	10.55	%	8.27	%
Junior subordinated debentures	Discounted cash flows	Discount rate	10.55	%	8.27	%
Loans individually evaluated	Collateral valuations	Discount to appraised value	n/a		n/a
REO	Appraisals	Discount to appraised value	58.18	%	68.35	%
Interest rate lock commitments	Pricing model	Pull-through rate	87.76	%	78.65	%
SBA servicing rights	Discounted cash flows	Constant prepayment rate	14.61	%	14.10	%

Trust preferred securities: Management believes that the credit risk-adjusted spread used to develop the discount rate utilized in the fair value measurement of TPS is indicative of the risk premium a willing market participant would require under current market conditions for instruments with similar contractual rates and terms and conditions and issuers with similar credit risk profiles and with similar expected probability of default. Management attributes the change in fair value of these instruments, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of assets subsequent to their issuance.

Junior subordinated debentures: Similar to the TPS discussed above, management believes that the credit risk-adjusted spread utilized in the fair value measurement of the junior subordinated debentures is indicative of the risk premium a willing market participant would require under current market conditions for an issuer with Banner’s credit risk profile. Management attributes the change in fair value of the junior subordinated debentures, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of liabilities subsequent to their issuance. Future contractions in the risk adjusted spread relative to the spread currently utilized to measure the Company’s junior subordinated debentures at fair value as of June 30, 2023, or the passage of time, will result in negative fair value adjustments. At June 30, 2023, the discount rate utilized was based on a credit spread of 500 basis points and three-month LIBOR of 555 basis points.

Interest rate lock commitments: The fair value of the interest rate lock commitments is based on secondary market sources adjusted for an estimated pull-through rate. The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments. An increase or decrease in the pull-through rate would have a corresponding, positive or negative fair value adjustment.

SBA servicing asset: The constant prepayment rate (CPR) is set based on industry data. An increase in the CPR would result in a negative fair value adjustment, where a decrease in CPR would result in a positive fair value adjustment.

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,591	$	74,703	$	480	$	12,394	$	954
Net change recognized in earnings	(2,932)		—		(212)		(142)		(109)
Net change recognized in accumulated other comprehensive income (AOCI)	—		(7,466)		—		—		—
Purchases, issuances and settlements	—		—		—		524		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Six Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,694	$	74,857	$	39	$	12,427	$	835
Net change recognized in earnings	(3,035)				229		(662)		10
Net change recognized in AOCI			(7,620)		—		—		—
Purchases, issuances and settlements	—		—		—		1,011		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Three Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	27,354	$	70,510	$	(66)	$	10,982	$	1,162
Net change recognized in earnings	532		—		423		(155)		(147)
Net change recognized in AOCI	—		1,719		—		—		—
Purchases, issuances and settlements	—		—		—		1,054		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015
	Six Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	26,981	$	119,815	$	1,467	$	10,257	$	1,161
Net change recognized in earnings	905		—		(1,110)		(372)		(146)
Net change recognized in AOCI	—		2,932		—		—		—
Purchases, issuances and settlements	—		—		—		1,996		—
Redemptions	—		(50,518)		—		—		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015

Interest income and dividends from TPS are recorded as a component of interest income. Interest expense related to the junior subordinated debentures is measured based on contractual interest rates and reported in interest expense.  The change in fair value of the junior subordinated debentures, which represents changes in instrument specific credit risk, is recorded in other comprehensive income. The change in fair value of TPS securities, investments in limited partnerships and the SBA servicing asset are recorded as a component of non-interest income. The change in fair value of the interest rate lock and forward sales commitments are included in mortgage banking operations in non-interest income.

Items Measured at Fair Value on a Non-recurring Basis:

The following tables present financial assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
REO	—		—		546		546
Loans held for sale	—		42,134		—		42,134
	December 31, 2022
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	1,883	$	1,883
REO	—		—		340		340
Loans held for sale	—		49,474		—		49,474

The following table presents the gains and losses resulting from non-recurring fair value adjustments for the three and six months ended June 30, 2023 and June 30, 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REO	—		—		—		—
Loans held for sale	(757)		(458)		(463)		(1,061)
Total loss from non-recurring measurements	$	(757)	$	(458)	$	(463)	$	(1,061)

Loans individually evaluated: Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or when the Bank determines that foreclosure is probable, the expected credit loss is measured based on the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. As a practical expedient, the Bank measures the expected credit loss for a loan using the fair value of the collateral, if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Bank’s assessment as of the reporting date. In both cases, if the fair value of the collateral is less than the amortized cost basis of the loan, the Bank will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off. Subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported.

REO: The Company records REO (acquired through a lending relationship) at fair value on a non-recurring basis. Fair value adjustments on REO are based on updated real estate appraisals which are based on current market conditions. All REO properties are recorded at the lower of the estimated fair value of the real estate, less expected selling costs, or the carrying amount of the defaulted loans. From time to time, non-recurring fair value adjustments to REO are recorded to reflect partial write-downs based on an observable market price or current appraised value of property. Banner considers any valuation inputs related to REO to be Level 3 inputs. The individual carrying values of these assets are reviewed for impairment at least annually and any additional impairment charges are expensed.

Loans held for sale: The multifamily held for sale loans are carried at the lower of cost or market value. Lower of cost or market adjustments for multifamily loans held for sale are calculated based on discounted cash flows using a discount rate that is a combination of market spreads for similar loan types added to selected index rates. If the fair value of the multifamily held for sale loans is lower than the amortized cost basis of the loans, a net unrealized loss is recognized through the valuation allowance as a charge against income.

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INCOME TAXES AND DEFERRED TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES AND DEFERRED TAXES

The Company files a consolidated income tax return including all of its wholly-owned subsidiaries on a calendar year basis. Income taxes are accounted for using the asset and liability method. Under this method, a deferred tax asset or liability is determined based on the enacted tax rates which will be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company’s income tax returns. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is recognized as a reduction to deferred tax assets when management determines it is more likely than not that deferred tax assets will not be available to offset future income tax liabilities.

Accounting standards for income taxes prescribe a recognition threshold and measurement process for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return, and also provide guidance on the de-recognition of previously recorded benefits and their classification, as well as the proper recording of interest and penalties, accounting in interim periods, disclosures and transition. The Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

As of June 30, 2023, the Company has recognized $1.6 million of unrecognized tax benefits for uncertain tax positions. The Company does not anticipate that there are additional uncertain tax positions or that any uncertain tax position which has not been recognized would materially affect the effective tax rate if recognized. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense. The Company files consolidated income tax returns in the U.S. federal jurisdiction and in the Oregon, California, Utah, Idaho and Montana state jurisdictions.

Tax credit investments: The Company invests in low income housing tax credit funds that are designed to generate a return primarily through the realization of federal tax credits. The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and tax credit investment amortization expense is a component of the provision for income taxes.

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Tax credit investments	$	106,486	$	71,430
Unfunded commitments—tax credit investments	74,299		44,563

The following table presents other information related to the Company’s tax credit investments for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Tax credits and other tax benefits recognized	$	2,134	$	1,486	$	4,269	$	2,972
Tax credit amortization expense included in provision for income taxes	1,722		1,263		3,444		2,571

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CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER SHARE (EPS)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER SHARE (EPS)

The following table reconciles basic to diluted weighted average shares outstanding used to calculate earnings per share data for the three and six months ended June 30, 2023 and 2022 (in thousands, except shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	39,591	$	47,965	$	95,146	$	91,928
Basic weighted average shares outstanding	34,373,434		34,307,001		34,306,853		34,303,889
Dilutive effect of unvested restricted stock	35,590		144,739		128,368		229,046
Diluted weighted shares outstanding	34,409,024		34,451,740		34,435,221		34,532,935
Earnings per common share
Basic	$	1.15	$	1.40	$	2.77	$	2.68
Diluted	$	1.15	$	1.39	$	2.76	$	2.66

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STOCK-BASED COMPENSATION PLANS

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION PLANS AND STOCK OPTIONS

The Company operates the 2014 Omnibus Incentive Plan (the 2014 Plan), the 2018 Omnibus Incentive Plan (the 2018 Plan) and the 2023 Omnibus Incentive Plan (the 2023 Plan), all of which were approved by its shareholders. The 2023 Plan was approved by shareholders on May 24, 2023. The purpose of these plans is to promote the success and enhance the value of the Company by providing a means for attracting and retaining highly skilled employees, officers and directors of the Company and linking their personal interests with those of the Company’s shareholders. Under these plans, the Company currently has outstanding awards of restricted stock shares and restricted stock units.

The Company reserved 900,000 shares of its common stock for issuance under the 2014 Plan in connection with the exercise of awards. As of June 30, 2023, 276,904 restricted stock shares and 440,336 restricted stock units have been granted under the 2014 Plan of which 4,409 restricted stock shares and 22,626 restricted stock units were unvested.

The Company reserved 900,000 shares of common stock for issuance under the 2018 Plan in connection with the exercise of awards. As of June 30, 2023, 741,429 restricted stock units have been granted under the 2018 Plan of which 343,033 restricted stock units were unvested.

The Company reserved 625,000 shares of common stock for issuance under the 2023 Plan in connection with the exercise of awards. As of June 30, 2023, no shares had been granted under the 2023 Plan.

The expense associated with all restricted stock grants (including restricted stock shares and restricted stock units) was $2.3 million and $4.4 million for the three and six month periods ended June 30, 2023, and was $2.3 million and $4.3 million for the three and six month periods ended June 30, 2022, respectively. Unrecognized compensation expense for these awards as of June 30, 2023, was $16.7 million and will be recognized over a weighted average period of 13 months.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance-Sheet Risk — The Company has financial instruments with off-balance-sheet risk generated in the normal course of business to meet the financing needs of our clients.  These financial instruments include commitments to extend credit, commitments related to standby letters of credit, commitments to originate loans, commitments to sell loans and commitments to buy or sell securities.  These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved in on-balance-sheet items.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument from commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments.  We use the same credit policies in making commitments and conditional obligations as for on-balance-sheet instruments.

Outstanding commitments for which no asset or liability for the notional amount has been recorded consisted of the following at the dates indicated (in thousands):

	Contract or Notional Amount
	June 30, 2023		December 31, 2022
Commitments to extend credit	$	3,911,428	$	4,031,954
Standby letters of credit and financial guarantees	33,534		26,119
Commitments to originate loans	47,601		53,266
Risk participation agreements	47,146		48,566
Derivatives also included in Note 13:
Commitments to originate loans held for sale	24,671		10,525
Commitments to sell loans secured by one- to four-family residential properties	13,063		12,568
Commitments to sell securities related to mortgage banking activities	22,500		7,000

In addition to the commitments disclosed in the table above, the Company is committed to funding its’ unfunded tax credit investments. The Company has also entered into agreements to invest in several limited partnerships. As of June 30, 2023 and December 31, 2022, the funded balances and remaining outstanding commitments of these limited partnership investments were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Funded Balance		Unfunded Balance		Funded Balance		Unfunded Balance
Limited partnerships investments	$	11,283	$	11,217	$	10,272	$	12,228

Commitments to extend credit are agreements to lend to a client, as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Many of the commitments may expire without being drawn upon; therefore, the total commitment amounts do not necessarily represent future cash requirements. Each client’s creditworthiness is evaluated on a case-by-case basis.  The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the client. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income producing commercial properties. The Company’s allowance for credit losses - unfunded loan commitments at both June 30, 2023 and December 31, 2022 was $14.7 million.

Standby letters of credit are conditional commitments issued to guarantee a client’s performance or payment to a third party.  The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients. Under a risk participation agreement, the Bank guarantees the financial performance of a borrower on the participated portion of an interest rate swap on a loan.

Interest rates on residential one- to four-family mortgage loan applications are typically rate locked (committed) to clients during the application stage for periods ranging from 30 to 60 days, the most typical period being 45 days. Traditionally, these loan applications with rate lock commitments had the pricing for the sale of these loans locked with various qualified investors under a best-efforts delivery program at or near the time the interest rate is locked with the client. The Bank then attempts to deliver these loans before their rate locks expired. This arrangement generally required delivery of the loans prior to the expiration of the rate lock. Delays in funding the loans would require a lock extension. The cost of a lock extension at times was borne by the client and at times by the Bank. These lock extension costs have not had a material impact to the Company’s operations. For mandatory delivery commitments the Company enters into forward commitments at specific prices and settlement dates to deliver either: (1) residential mortgage loans for purchase by secondary market investors (i.e., Freddie Mac or Fannie Mae), or (2) mortgage-backed securities to broker/dealers. The purpose of these forward commitments is to offset the movement in interest rates between the execution of its residential mortgage rate lock commitments with borrowers and the sale of those loans to the secondary market investor. There were no counterparty default losses on forward contracts during the three and six months ended June 30, 2023 or June 30, 2022. Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates. The Company limits its exposure to market risk by monitoring differences between commitments to clients and forward contracts with market investors and securities broker/dealers. In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the transaction is completed by either paying or receiving a fee to or from the investor or broker/dealer equal to the increase or decrease in the market value of the forward contract.

In the normal course of business, the Company and/or its subsidiaries have various legal proceedings and other contingent matters outstanding.  These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable.  These claims and counter-claims typically arise during the course of collection efforts on problem loans or with respect to action to enforce liens on properties in which the Bank holds a security interest.   Based upon the information known to management at this time, the Company has accrued $14.8 million related to outstanding legal proceedings. There are no other legal proceedings that management believes would have a material adverse effect on the results of operations or consolidated financial position at June 30, 2023.

In connection with certain asset sales, the Bank typically makes representations and warranties about the underlying assets conforming to specified guidelines.  If the underlying assets do not conform to the specifications, the Bank may have an obligation to repurchase the assets or indemnify the purchaser against any loss.  The Bank believes that the potential for material loss under these arrangements is remote.  Accordingly, the fair value of such obligations is not material.

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DERIVATIVES AND HEDGING

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING

Banner Bank is party to various derivative instruments that are used for asset and liability management and client financing needs. Derivative instruments are contracts between two or more parties that have a notional amount and an underlying variable, require no net investment and allow for the net settlement of positions. The notional amount serves as the basis for the payment provision of the contract and takes the form of units, such as shares or dollars. The underlying variable represents a specified interest rate, index, or other component. The interaction between the notional amount and the underlying variable determines the number of units to be exchanged between the parties and influences the market value of the derivative contract.

The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain term loans and forward sales contracts associated with mortgage banking activities. Generally, these instruments help the Company manage exposure to market risk and meet client financing needs. Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors.

As of June 30, 2023 and December 31, 2022, the notional values or contractual amounts and fair values of the Company’s derivatives were as follows (in thousands):

	Asset Derivatives								Liability Derivatives
	June 30, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value
Hedged interest rate swaps	$	—	$	—	$	—	$	—	$	400,000	$	24,198	$	400,000	$	26,485
Interest rate swaps not designated in hedge relationships	426,710		35,660		440,731		37,119		426,710		35,682		440,731		37,150
Less: Master netting agreements			(16,664)				(17,780)				(16,664)				(17,780)
Less: Cash settlements			—				—				(6,439)				(8,705)
Net interest rate swaps			18,996				19,339				36,777				37,150
Risk participation agreements	1,167		—		1,283		—		45,979		52		47,283		67
Mortgage loan commitments	24,671		270		15,920		81		—		—		12,367		42
Forward sales contracts	32,010		79		16,568		61		2,276		2		3,000		76
Total	$	484,558	$	19,345	$	474,502	$	19,481	$	474,965	$	36,831	$	503,381	$	37,335

The Company’s asset derivatives are included in other assets, while the liability derivatives are included in accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

Interest Rate Swaps used in Cash Flow Hedges: The Company’s floating rate loans result in exposure to losses in value or net interest income as interest rates change. The risk management objectives in using interest rate derivatives are to reduce volatility in net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. During the fourth quarter of 2021, the Company entered into interest rate swaps designated as cash flow hedges to hedge the variable cash flows associated with existing floating rate loans. These hedge contracts involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making floating-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are made on the Company’s variable-rate assets. During the next 12 months, the Company estimates that an additional $17.5 million will be reclassified as a decrease to interest income.

The following table presents the effect of cash flow hedge accounting on AOCI for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(5,514)	$	(5,514)	$	—	Interest Income	$	(4,159)	$	(4,159)	$	—
	For the Six Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(4,390)	$	(4,390)	$	—	Interest Income	$	(7,772)	$	(7,772)	$	—

	For the Three Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(3,617)	$	(3,617)	$	—	Interest Income	$	161	$	161	$	—
	For the Six Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(17,642)	$	(17,642)	$	—	Interest Income	$	912	$	912	$	—

At June 30, 2023 and December 31, 2022, we recorded total net unrealized losses on cash flow hedges in AOCI of $17.6 million and $20.1 million, respectively.

Interest Rate Swaps: The Bank uses an interest rate swap program for commercial loan clients, that provides the client with a variable-rate loan and enters into an interest rate swap in which the client receives a variable-rate payment in exchange for a fixed-rate payment. The Bank offsets its risk exposure by entering into an offsetting interest rate swap with a dealer counterparty for the same notional amount and length of term as the client interest rate swap providing the dealer counterparty with a fixed-rate payment in exchange for a variable-rate payment. These swaps do not qualify as designated hedges; therefore, each swap is accounted for as a freestanding derivative.

Risk Participation Agreements: In conjunction with the purchase or sale of participating interests in loans, the Company also participates in related swaps through risk participation agreements. The existing credit derivatives resulting from these participations are not designated as hedges as they are not used to manage interest rate risk in the Company’s assets or liabilities and are not speculative.

Mortgage Loan Commitments: The Company sells originated one- to four-family mortgage loans into the secondary mortgage loan markets. During the period of loan origination and prior to the sale of the loans in the secondary market, the Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one- to four-family loans that are intended to be sold and for closed one- to four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market. The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one- to four-family mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates.

Gains (losses) recognized in income within mortgage banking operations on non-designated hedging instruments for the three and six months ended June 30, 2023 and 2022, were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Mortgage loan commitments	$	(210)	$	1,889	$	230	$	(1,110)
Forward sales contracts	(221)		(2,287)		79		(1)
	$	(431)	$	(398)	$	309	$	(1,111)

The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk of the financial contract is controlled through the credit approval, limits, and monitoring procedures and management does not expect the counterparties to fail their obligations.

In connection with the interest rate swaps between the Bank and the dealer counterparties, the agreements contain a provision where if the Bank fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations. Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as a publicly issued prompt corrective action directive, cease and desist order, or a capital maintenance agreement that required the Bank to maintain a specific capital level. If the Bank had breached any of these provisions at June 30, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value. As of June 30, 2023 and December 31, 2022, the Company had no obligations to dealer counterparties related to these agreements. The Company generally posts collateral against derivative liabilities in the form of cash, government agency-issued bonds, mortgage-backed securities, or commercial mortgage-backed securities. Collateral posted against derivative liabilities was $17.1 million and $22.2 million as of June 30, 2023 and December 31, 2022, respectively. The collateral posted included restricted cash of $14.1 million and $15.9 million as of June 30, 2023 and 2022, respectively.

Derivative assets and liabilities are recorded at fair value on the balance sheet. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis and to offset net derivative positions with related collateral where applicable. In addition, some of interest rate swap derivatives between the Company and the dealer counterparties are cleared through central clearing houses. These clearing houses characterize the variation margin payments as settlements of the derivative’s market exposure and not as collateral. The variation margin is treated as an adjustment to our cash collateral, as well as a corresponding adjustment to our derivative liability. As of June 30, 2023 and December 31, 2022, the variation margin adjustment was a negative adjustment of $6.4 million and $8.7 million, respectively.

The following tables present additional information related to the Company’s derivative contracts, by type of financial instrument, as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
Derivative liabilities
Interest rate swaps	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	December 31, 2022
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
Derivative liabilities
Interest rate swaps	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178
	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting

The accompanying unaudited condensed consolidated financial statements include the accounts of Banner Corporation (the Company or Banner), a bank holding company incorporated in the State of Washington and its wholly-owned subsidiary, Banner Bank (the Bank).

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). In preparing these financial statements, the Company has evaluated events and transactions subsequent to June 30, 2023, for potential recognition or disclosure. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. Certain information and note disclosures have been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. Certain reclassifications have been made to the 2022 Consolidated Financial Statements and/or schedules to conform to the 2023 presentation. These reclassifications may have affected certain ratios for the prior periods. The effect of these reclassifications is considered immaterial. All significant intercompany transactions and balances have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements. Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.

The information included in this Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Interim results are not necessarily indicative of results for a full year or any other interim period.

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SECURITIES (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Securities

The amortized cost, gross unrealized gains and losses and estimated fair value of securities at June 30, 2023 and December 31, 2022 are summarized as follows (in thousands):

	June 30, 2023
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	25,659
	$	27,203	$	25,659

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	49,471	$	14	$	(1,123)	$	—	$	48,362
Municipal bonds	194,660		181		(34,073)		—		160,768
Corporate bonds	118,160		—		(16,372)		(2,000)		99,788
Mortgage-backed or related securities	2,294,371		275		(352,248)		—		1,942,398
Asset-backed securities	222,517		63		(7,936)		—		214,644
	$	2,879,179	$	533	$	(411,752)	$	(2,000)	$	2,465,960

	June 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	309	$	—	$	(7)	$	302	$	—
Municipal bonds	497,546		105		(62,883)		434,598		(170)
Corporate bonds	2,844		—		(24)		2,635		(185)
Mortgage-backed or related securities	598,226		—		(102,645)		495,581		—
	$	1,098,925	$	105	$	(165,559)	$	933,116	$	(355)

	December 31, 2022
	Amortized Cost		Fair Value
Trading:
Corporate bonds	$	27,203	$	28,694
	$	27,203	$	28,694

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-Sale:
U.S. Government and agency obligations	$	56,344	$	8	$	(1,244)	$	55,108
Municipal bonds	301,449		530		(40,770)		261,209
Corporate bonds	133,334		—		(11,481)		121,853
Mortgage-backed or related securities	2,505,172		885		(366,721)		2,139,336
Asset-backed securities	222,478		40		(10,993)		211,525
	$	3,218,777	$	1,463	$	(431,209)	$	2,789,031

	December 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance for Credit Losses
Held-to-Maturity:
U.S. Government and agency obligations	$	312	$	—	$	(7)	$	305	$	—
Municipal bonds	503,117		109		(70,907)		432,319		(183)
Corporate bonds	2,961		—		(16)		2,945		(196)
Mortgage-backed or related securities	611,577		—		(104,966)		506,611		—
	$	1,117,967	$	109	$	(175,896)	$	942,180	$	(379)

Schedule of Securities with Continuous Loss Position

At June 30, 2023 and December 31, 2022, the gross unrealized losses and the fair value for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):

	June 30, 2023
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	—	$	—	$	45,207	$	(1,123)	$	45,207	$	(1,123)
Municipal bonds	34,744		(559)		119,287		(33,514)		154,031		(34,073)
Corporate bonds	9,599		(314)		95,502		(16,058)		105,101		(16,372)
Mortgage-backed or related securities	259,765		(9,381)		1,635,349		(342,867)		1,895,114		(352,248)
Asset-backed securities	121,210		(4,603)		83,292		(3,333)		204,502		(7,936)
	$	425,318	$	(14,857)	$	1,978,637	$	(396,895)	$	2,403,955	$	(411,752)

	December 31, 2022
	Less Than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-Sale:
U.S. Government and agency obligations	$	33,407	$	(882)	$	16,732	$	(362)	$	50,139	$	(1,244)
Municipal bonds	188,920		(25,592)		33,907		(15,178)		222,827		(40,770)
Corporate bonds	108,187		(9,547)		13,066		(1,934)		121,253		(11,481)
Mortgage-backed or related securities	930,566		(90,537)		1,159,110		(276,184)		2,089,676		(366,721)
Asset-backed securities	201,437		(10,993)		—		—		201,437		(10,993)
	$	1,462,517	$	(137,551)	$	1,222,815	$	(293,658)	$	2,685,332	$	(431,209)

Schedule of Realized Gain (Loss)

The following table presents gross gains and losses on sales and partial calls of securities available-for-sale (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Available-for-Sale:
Gross Gains	$	145	$	81	$	377	$	516
Gross Losses	(4,672)		(49)		(12,156)		(49)
Balance, end of the period	$	(4,527)	$	32	$	(11,779)	$	467

Schedule of Securities by Contractual Maturity Date

The following table presents the amortized cost and estimated fair value of securities at June 30, 2023, by contractual maturity and does not reflect any required periodic payments (in thousands). Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.

	June 30, 2023
	Trading				Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Maturing within one year	$	—	$	—	$	719	$	716	$	21,769	$	21,243
Maturing after one year through five years	—		—		158,285		143,916		21,090		20,352
Maturing after five years through ten years	—		—		416,915		364,317		26,732		25,554
Maturing after ten years	27,203		25,659		2,303,260		1,957,011		1,029,334		865,967
	$	27,203	$	25,659	$	2,879,179	$	2,465,960	$	1,098,925	$	933,116

Schedule of Pledged Securities

The following table presents, as of June 30, 2023, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):

	June 30, 2023
	Carrying Value		Amortized Cost		Fair Value
Purpose or beneficiary:
State and local governments public deposits	$	248,951	$	256,711	$	224,566
Federal Reserve	118,643		118,643		100,314
Interest rate swap counterparties	3,039		3,249		2,865
Repurchase transaction accounts	273,613		273,613		225,628
Other	4,779		4,779		4,558
Total pledged securities	$	649,025	$	656,995	$	557,931

Debt Instrument, Credit Rating

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings which are reviewed and updated quarterly. The Company’s non-rated held-to-maturity debt securities are primarily United States government sponsored enterprise debentures carrying minimal to no credit risk. The non-rated corporate bonds primarily consist of Community Reinvestment Act related bonds secured by loan instruments from low to moderate income borrowers. The remaining non-rated held-to-maturity debt securities balance is comprised of local municipal debt from within the Company’s geographic footprint and is monitored through quarterly or annual financial review. This municipal debt is predominately essential service or unlimited general obligation backed debt. The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	487,763	$	500	$	16,574	$	504,837
Not Rated	309		9,783		2,344		581,652		594,088
	$	309	$	497,546	$	2,844	$	598,226	$	1,098,925

	December 31, 2022
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
AAA/AA/A	$	—	$	492,105	$	500	$	16,681	$	509,286
Not Rated	312		11,012		2,461		594,896		608,681
	$	312	$	503,117	$	2,961	$	611,577	$	1,117,967

The following tables present the activity in the allowance for credit losses for securities available-for-sale by major type for the three and six months ended June 30, 2023 (in thousands). We had no allowance for credit losses for securities available-for-sale during three and six months ended June 30, 2022.

	For the Three Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000
	For the Six Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000

Debt Securities, Available-for-Sale, Allowance for Credit Loss

The following tables present the activity in the allowance for credit losses for securities available-for-sale by major type for the three and six months ended June 30, 2023 (in thousands). We had no allowance for credit losses for securities available-for-sale during three and six months ended June 30, 2022.

	For the Three Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000
	For the Six Months Ended June 30, 2023
	U.S. Government and agency obligations		Municipal bonds		Corporate bonds		Mortgage-backed or related securities		Total
Allowance for credit losses – securities available-for-sale
Beginning balance	$	—	$	—	$	—	$	—	$	—
Provision for credit losses	—		—		2,000		—		2,000
Ending balance	$	—	$	—	$	2,000	$	—	$	2,000

XML

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2023

Jun. 30, 2023

Receivables [Abstract]

Schedule of Loans Receivable, Including Loans Held for Sale

The following table presents the loans receivable at June 30, 2023 and December 31, 2022 by class (dollars in thousands).

	June 30, 2023				December 31, 2022
	Amount		Percent of Total		Amount		Percent of Total
Commercial real estate:
Owner-occupied	$	894,876	8.5	%	$	845,320	8.3	%
Investment properties	1,558,176		14.9		1,589,975		15.7
Small balance CRE	1,172,825		11.2		1,200,251		11.8
Multifamily real estate	699,830		6.7		645,071		6.4
Construction, land and land development:
Commercial construction	183,765		1.8		184,876		1.8
Multifamily construction	433,868		4.1		325,816		3.2
One- to four-family construction	547,200		5.2		647,329		6.4
Land and land development	345,053		3.3		328,475		3.2
Commercial business:
Commercial business (1)	1,313,226		12.5		1,283,407		12.7
Small business scored	982,283		9.4		947,092		9.3
Agricultural business, including secured by farmland (2)	310,120		3.0		295,077		2.9
One- to four-family residential	1,340,126		12.8		1,173,112		11.6
Consumer:
Consumer—home equity revolving lines of credit	577,725		5.5		566,291		5.6
Consumer—other	113,334		1.1		114,632		1.1
Total loans	10,472,407		100.0	%	10,146,724		100.0	%
Less allowance for credit losses – loans	(144,680)				(141,465)
Net loans	$	10,327,727			$	10,005,259

Schedule of Troubled Debt Restructurings

The following table presents the amortized cost basis and financial effect of loans at June 30, 2023, that were both experiencing financial difficulty and modified during the six months ended June 30, 2023 (in thousands):

	June 30, 2023
	Term Extension		Weighted-Average Term Extension (in months)
One- to four-family construction	$	6,361	7
Total	$	6,361	7

The Company has committed to lend additional amounts totaling $250,000 to the borrowers included in the previous table. The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

Schedule of Risk-Rated Loans and Non-Risk Rated Loans by Grade and Other Characteristics

The following tables present the Company’s portfolio of risk-rated loans by class and by grade as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	68,946	$	168,118	$	171,741	$	142,543	$	69,567	$	183,759	$	31,381	$	836,055
Special Mention	—		—		—		—		—		—		—		—
Substandard	1,771		13,209		12,248		11,909		19,279		205		200		58,821
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	70,717	$	181,327	$	183,989	$	154,452	$	88,846	$	183,964	$	31,581	$	894,876
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate - investment properties
Risk Rating
Pass	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	662,188	$	38,699	$	1,554,025
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,955		1,196		4,151
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	101,956	$	171,321	$	285,785	$	127,071	$	167,005	$	665,143	$	39,895	$	1,558,176
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily real estate
Risk Rating
Pass	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	52,714	$	148,947	$	176,208	$	99,694	$	45,969	$	174,623	$	1,675	$	699,830
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Commercial construction
Risk Rating
Pass	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	73,851	$	69,935	$	17,897	$	12,829	$	3,537	$	5,716	$	—	$	183,765
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multifamily construction
Risk Rating
Pass	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	64,851	$	197,242	$	165,364	$	4,998	$	1,413	$	—	$	—	$	433,868
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
One- to four- family construction
Risk Rating
Pass	$	275,674	$	241,523	$	17,924	$	—	$	332	$	—	$	616	$	536,069
Special Mention	—		—		—		—		—		—		—		—
Substandard	7,070		—		4,061		—		—		—		—		11,131
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	282,744	$	241,523	$	21,985	$	—	$	332	$	—	$	616	$	547,200
Current period gross charge-offs	$	136	$	—	$	—	$	—	$	—	$	—	$	—	$	136

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Land and land development
Risk Rating
Pass	$	138,821	$	116,643	$	54,314	$	14,000	$	9,160	$	11,545	$	1	$	344,484
Special Mention	—		—		—		—		—		—		—		—
Substandard	499		—		—		—		—		70		—		569
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	139,320	$	116,643	$	54,314	$	14,000	$	9,160	$	11,615	$	1	$	345,053
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	20	$	—	$	20
Commercial business
Risk Rating
Pass	$	103,662	$	246,605	$	134,384	$	139,435	$	112,084	$	155,259	$	386,683	$	1,278,112
Special Mention	—		—		—		3,277		—		—		898		4,175
Substandard	26		330		11,523		2,839		1,612		5,640		8,969		30,939
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	103,688	$	246,935	$	145,907	$	145,551	$	113,696	$	160,899	$	396,550	$	1,313,226
Current period gross charge-offs	$	—	$	—	$	700	$	—	$	—	$	27	$	133	$	860
Agricultural business, including secured by farmland
Risk Rating
Pass	$	23,165	$	36,514	$	26,739	$	18,500	$	25,586	$	44,985	$	113,594	$	289,083
Special Mention	550		—		652		—		1,690		401		2,541		5,834
Substandard	1,631		3,528		970		—		6,566		2,508		—		15,203
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	25,346	$	40,042	$	28,361	$	18,500	$	33,842	$	47,894	$	116,135	$	310,120
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial real estate - owner occupied
Risk Rating
Pass	$	167,150	$	198,787	$	150,272	$	74,171	$	57,095	$	148,902	$	10,833	$	807,210
Special Mention	—		—		—		2,829		—		42		201		3,072
Substandard	13,756		—		7,211		13,564		—		307		200		35,038
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - owner occupied	$	180,906	$	198,787	$	157,483	$	90,564	$	57,095	$	149,251	$	11,234	$	845,320
Commercial real estate - investment properties
Risk Rating
Pass	$	190,627	$	323,160	$	142,476	$	182,853	$	169,667	$	547,899	$	25,691	$	1,582,373
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		3,283		—		3,007		1,312		7,602
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial real estate - investment properties	$	190,627	$	323,160	$	142,476	$	186,136	$	169,667	$	550,906	$	27,003	$	1,589,975
Multifamily real estate
Risk Rating
Pass	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily real estate	$	139,383	$	177,784	$	93,961	$	46,460	$	29,665	$	156,140	$	1,678	$	645,071

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Commercial construction
Risk Rating
Pass	$	112,229	$	46,679	$	12,952	$	4,260	$	1,107	$	—	$	—	$	177,227
Special Mention	—		—		—		—		—		—		—		—
Substandard	2,931		1		—		—		4,717		—		—		7,649
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial construction	$	115,160	$	46,680	$	12,952	$	4,260	$	5,824	$	—	$	—	$	184,876
Multifamily construction
Risk Rating
Pass	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multifamily construction	$	142,680	$	161,066	$	20,622	$	1,448	$	—	$	—	$	—	$	325,816
One- to four- family construction
Risk Rating
Pass	$	572,701	$	56,530	$	677	$	331	$	—	$	—	$	711	$	630,950
Special Mention	—		—		—		—		—		—		—		—
Substandard	13,473		2,906		—		—		—		—		—		16,379
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total One- to four- family construction	$	586,174	$	59,436	$	677	$	331	$	—	$	—	$	711	$	647,329

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Land and land development
Risk Rating
Pass	$	199,339	$	88,066	$	16,278	$	11,866	$	6,242	$	6,164	$	339	$	328,294
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		97		84		—		181
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Land and land development	$	199,339	$	88,066	$	16,278	$	11,866	$	6,339	$	6,248	$	339	$	328,475
Commercial business
Risk Rating
Pass	$	249,609	$	149,140	$	161,494	$	126,416	$	86,712	$	85,386	$	391,852	$	1,250,609
Special Mention	74		26		3,467		—		—		—		200		3,767
Substandard	464		12,599		1,956		1,161		5,954		796		6,101		29,031
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Commercial business	$	250,147	$	161,765	$	166,917	$	127,577	$	92,666	$	86,182	$	398,153	$	1,283,407
Agricultural business, including secured by farmland
Risk Rating
Pass	$	36,848	$	35,440	$	18,946	$	28,354	$	24,710	$	27,063	$	109,606	$	280,967
Special Mention	—		336		271		—		—		—		357		964
Substandard	2,015		970		—		6,565		—		2,599		997		13,146
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Agricultural business, including secured by farmland	$	38,863	$	36,746	$	19,217	$	34,919	$	24,710	$	29,662	$	110,960	$	295,077

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Small balance CRE
Past Due Category
Current	$	48,371	$	173,212	$	219,220	$	169,205	$	123,643	$	437,208	$	404	$	1,171,263
30-59 Days Past Due	599		—		—		—		—		961		—		1,560
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	48,970	$	173,212	$	219,220	$	169,205	$	123,643	$	438,171	$	404	$	1,172,825
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Small business scored
Past Due Category
Current	$	98,904	$	290,943	$	186,977	$	92,432	$	70,196	$	114,229	$	126,832	$	980,513
30-59 Days Past Due	—		198		46		123		23		14		134		538
60-89 Days Past Due	—		25		20		17		—		—		20		82
90 Days + Past Due	—		35		177		93		460		219		166		1,150
Total Small business scored	$	98,904	$	291,201	$	187,220	$	92,665	$	70,679	$	114,462	$	127,152	$	982,283
Current period gross charge-offs	$	—	$	175	$	84	$	162	$	262	$	181	$	—	$	864
One- to four- family residential
Past Due Category
Current	$	163,136	$	588,388	$	270,567	$	58,947	$	32,763	$	217,977	$	234	$	1,332,012
30-59 Days Past Due	—		100		—		78		—		437		—		615
60-89 Days Past Due	—		—		—		393		377		228		—		998
90 Days + Past Due	1,060		—		1,632		753		1,160		1,896		—		6,501
Total One- to four- family residential	$	164,196	$	588,488	$	272,199	$	60,171	$	34,300	$	220,538	$	234	$	1,340,126
Current period gross charge-offs	$	—	$	—	$	—	$	4	$	—	$	30	$	—	$	34

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	5,397	$	2,932	$	2,683	$	1,446	$	1,391	$	5,354	$	554,579	$	573,782
30-59 Days Past Due	72		101		—		—		52		165		741		1,131
60-89 Days Past Due	—		—		—		—		—		241		217		458
90 Days + Past Due	—		—		49		1,043		311		854		97		2,354
Total Consumer—home equity revolving lines of credit	$	5,469	$	3,033	$	2,732	$	2,489	$	1,754	$	6,614	$	555,634	$	577,725
Current period gross charge-offs	$	—	$	—	$	13	$	73	$	—	$	20	$	(4)	$	102
Consumer-other
Past Due Category
Current	$	6,093	$	35,734	$	11,076	$	7,880	$	4,843	$	19,880	$	27,527	$	113,033
30-59 Days Past Due	—		53		14		39		1		48		86		241
60-89 Days Past Due	—		—		—		—		4		—		52		56
90 Days + Past Due	—		—		—		4		—		—		—		4
Total Consumer-other	$	6,093	$	35,787	$	11,090	$	7,923	$	4,848	$	19,928	$	27,665	$	113,334
Current period gross charge-offs	$	—	$	19	$	44	$	15	$	34	$	64	$	377	$	553

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Small balance CRE
Past Due Category
Current	$	177,605	$	215,801	$	172,286	$	134,552	$	142,592	$	354,924	$	630	$	1,198,390
30-59 Days Past Due	—		—		460		—		—		1,399		—		1,859
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	177,605	$	215,801	$	172,746	$	134,552	$	142,592	$	356,325	$	630	$	1,200,251
Small business scored
Past Due Category
Current	$	307,109	$	201,628	$	99,867	$	81,603	$	56,420	$	78,025	$	119,281	$	943,933
30-59 Days Past Due	146		518		54		262		46		280		173		1,479
60-89 Days Past Due	—		54		—		275		149		7		176		661
90 Days + Past Due	—		—		26		157		70		305		461		1,019
Total Small business scored	$	307,255	$	202,200	$	99,947	$	82,297	$	56,685	$	78,617	$	120,091	$	947,092
One- to four- family residential
Past Due Category
Current	$	555,833	$	279,331	$	59,672	$	34,607	$	37,740	$	191,890	$	1,335	$	1,160,408
30-59 Days Past Due	2,030		846		755		—		116		1,462		78		5,287
60-89 Days Past Due	1,060		—		—		—		115		1,067		—		2,242
90 Days + Past Due	—		1,819		973		712		94		1,577		—		5,175
Total One- to four- family residential	$	558,923	$	281,996	$	61,400	$	35,319	$	38,065	$	195,996	$	1,413	$	1,173,112

	December 31, 2022
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2022		2021		2020		2019		2018		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	7,442	$	1,089	$	329	$	1,355	$	1,611	$	3,788	$	547,068	$	562,682
30-59 Days Past Due	49		40		75		—		74		214		1,372		1,824
60-89 Days Past Due	—		50		—		—		49		45		59		203
90 Days + Past Due	—		14		73		476		64		675		280		1,582
Total Consumer—home equity revolving lines of credit	$	7,491	$	1,193	$	477	$	1,831	$	1,798	$	4,722	$	548,779	$	566,291
Consumer-other
Past Due Category
Current	$	39,740	$	12,138	$	9,334	$	5,695	$	5,384	$	16,675	$	25,219	$	114,185
30-59 Days Past Due	49		—		16		5		2		67		120		259
60-89 Days Past Due	41		9		29		24		—		13		62		178
90 Days + Past Due	—		10		—		—		—		—		—		10
Total Consumer-other	$	39,830	$	12,157	$	9,379	$	5,724	$	5,386	$	16,755	$	25,401	$	114,632

Loans, Collateral Dependent [Table Text Block]

The following tables provide the amortized cost basis of collateral-dependent loans as of June 30, 2023 and December 31, 2022 (in thousands). Our collateral dependent loans presented in the tables below have no significant concentrations by property type or location.

	June 30, 2023
	Real Estate		Equipment		Inventory		Total
Small balance CRE	$	1,865	$	—	$	—	$	1,865
Construction, land and land development:
One- to four-family construction	8,072		—		—		8,072
Land and land development	499		—		—		499
Commercial business
Commercial business	94		4,023		9		4,126
Small business scored	—		288		—		288
Agricultural business, including secured by farmland	3,175		89		139		3,403
One- to four-family residential	3,541		—		—		3,541
Consumer—home equity revolving lines of credit	821		—		—		821
Total	$	18,067	$	4,400	$	148	$	22,615

	December 31, 2022
	Real Estate		Equipment		Total
Small balance CRE	$	2,953	$	—	$	2,953
Commercial business
Commercial business	—		4,537		4,537
Small business scored	—		307		307
One- to four-family residential	1,622		—		1,622
Total	$	4,575	$	4,844	$	9,419

Schedule of Age Analysis of the Company's Past Due Loans

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of June 30, 2023 and December 31, 2022 (in thousands). In addition, the tables include the gross charge-offs for the six months ended June 30, 2023. Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination. Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Small balance CRE
Past Due Category
Current	$	48,371	$	173,212	$	219,220	$	169,205	$	123,643	$	437,208	$	404	$	1,171,263
30-59 Days Past Due	599		—		—		—		—		961		—		1,560
60-89 Days Past Due	—		—		—		—		—		—		—		—
90 Days + Past Due	—		—		—		—		—		2		—		2
Total Small balance CRE	$	48,970	$	173,212	$	219,220	$	169,205	$	123,643	$	438,171	$	404	$	1,172,825
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Small business scored
Past Due Category
Current	$	98,904	$	290,943	$	186,977	$	92,432	$	70,196	$	114,229	$	126,832	$	980,513
30-59 Days Past Due	—		198		46		123		23		14		134		538
60-89 Days Past Due	—		25		20		17		—		—		20		82
90 Days + Past Due	—		35		177		93		460		219		166		1,150
Total Small business scored	$	98,904	$	291,201	$	187,220	$	92,665	$	70,679	$	114,462	$	127,152	$	982,283
Current period gross charge-offs	$	—	$	175	$	84	$	162	$	262	$	181	$	—	$	864
One- to four- family residential
Past Due Category
Current	$	163,136	$	588,388	$	270,567	$	58,947	$	32,763	$	217,977	$	234	$	1,332,012
30-59 Days Past Due	—		100		—		78		—		437		—		615
60-89 Days Past Due	—		—		—		393		377		228		—		998
90 Days + Past Due	1,060		—		1,632		753		1,160		1,896		—		6,501
Total One- to four- family residential	$	164,196	$	588,488	$	272,199	$	60,171	$	34,300	$	220,538	$	234	$	1,340,126
Current period gross charge-offs	$	—	$	—	$	—	$	4	$	—	$	30	$	—	$	34

	June 30, 2023
	Term Loans by Year of Origination												Revolving Loans		Total Loans
By class:	2023		2022		2021		2020		2019		Prior
Consumer—home equity revolving lines of credit
Past Due Category
Current	$	5,397	$	2,932	$	2,683	$	1,446	$	1,391	$	5,354	$	554,579	$	573,782
30-59 Days Past Due	72		101		—		—		52		165		741		1,131
60-89 Days Past Due	—		—		—		—		—		241		217		458
90 Days + Past Due	—		—		49		1,043		311		854		97		2,354
Total Consumer—home equity revolving lines of credit	$	5,469	$	3,033	$	2,732	$	2,489	$	1,754	$	6,614	$	555,634	$	577,725
Current period gross charge-offs	$	—	$	—	$	13	$	73	$	—	$	20	$	(4)	$	102
Consumer-other
Past Due Category
Current	$	6,093	$	35,734	$	11,076	$	7,880	$	4,843	$	19,880	$	27,527	$	113,033
30-59 Days Past Due	—		53		14		39		1		48		86		241
60-89 Days Past Due	—		—		—		—		4		—		52		56
90 Days + Past Due	—		—		—		4		—		—		—		4
Total Consumer-other	$	6,093	$	35,787	$	11,090	$	7,923	$	4,848	$	19,928	$	27,665	$	113,334
Current period gross charge-offs	$	—	$	19	$	44	$	15	$	34	$	64	$	377	$	553

The following tables provide additional detail on the age analysis of the Company’s past due loans as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	894,876	$	894,876	$	—	$	66	$	—
Investment properties	—		—		—		—		1,558,176		1,558,176		—		—		—
Small balance CRE	1,560		—		2		1,562		1,171,263		1,172,825		1,865		2,412		—
Multifamily real estate	—		—		—		—		699,830		699,830		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		183,765		183,765		—		—		—
Multifamily construction	—		—		—		—		433,868		433,868		—		—		—
One- to four-family construction	—		1,255		709		1,964		545,236		547,200		1,711		1,711		—
Land and land development	—		498		—		498		344,555		345,053		499		569		—
Commercial business:
Commercial business	17		—		6,290		6,307		1,306,919		1,313,226		5,979		6,397		—
Small business scored	538		82		1,150		1,770		980,513		982,283		284		2,042		—
Agricultural business, including secured by farmland	1,724		—		2,952		4,676		305,444		310,120		3,997		3,997		—
One- to four-family residential	615		998		6,501		8,114		1,332,012		1,340,126		3,479		7,605		60
Consumer:
Consumer—home equity revolving lines of credit	1,131		458		2,354		3,943		573,782		577,725		821		3,258		49
Consumer—other	241		56		4		301		113,033		113,334		—		14		—
Total	$	5,826	$	3,347	$	19,962	$	29,135	$	10,443,272	$	10,472,407	$	18,635	$	28,071	$	109

	December 31, 2022
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		Non-accrual with no Allowance		Total Non-accrual (1)		Loans 90 Days or More Past Due and Accruing
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	—	$	845,320	$	845,320	$	—	$	143	$	—
Investment properties	—		—		—		—		1,589,975		1,589,975		—		—		—
Small balance CRE	1,859		—		2		1,861		1,198,390		1,200,251		2,927		3,540		—
Multifamily real estate	—		—		—		—		645,071		645,071		—		—		—
Construction, land and land development:
Commercial construction	—		—		—		—		184,876		184,876		—		—		—
Multifamily construction	—		—		—		—		325,816		325,816		—		—		—
One- to four-family construction	900		—		—		900		646,429		647,329		—		—		—
Land and land development	921		—		97		1,018		327,457		328,475		—		181		—
Commercial business:
Commercial business	2,100		4,145		649		6,894		1,276,513		1,283,407		6,998		7,356		—
Small business scored	1,479		661		1,019		3,159		943,933		947,092		303		2,530		—
Agricultural business, including secured by farmland	1,185		—		594		1,779		293,298		295,077		594		594		—
One-to four-family residential	5,287		2,242		5,175		12,704		1,160,408		1,173,112		1,569		5,236		1,023
Consumer:
Consumer—home equity revolving lines of credit	1,824		203		1,582		3,609		562,682		566,291		—		2,124		254
Consumer—other	259		178		10		447		114,185		114,632		—		2		10
Total	$	15,814	$	7,429	$	9,128	$	32,371	$	10,114,353	$	10,146,724	$	12,391	$	21,706	$	1,287

Allowance for Credit Losses on Financing Receivables

The following tables provide the activity in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	42,975	$	8,475	$	28,433	$	33,735	$	3,094	$	15,736	$	9,009	$	141,457
Provision/(recapture) for credit losses	587		(436)		1,567		187		477		969		208		3,559
Recoveries	74		—		—		524		2		36		117		753
Charge-offs	—		—		(156)		(566)		—		(4)		(363)		(1,089)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680
	For the Six Months Ended June 30, 2023
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	44,086	$	7,734	$	29,171	$	33,299	$	3,475	$	14,729	$	8,971	$	141,465
(Recapture)/provision for credit losses	(708)		305		829		1,662		(13)		1,889		369		4,333
Recoveries	258		—		—		643		111		153		286		1,451
Charge-offs	—		—		(156)		(1,724)		—		(34)		(655)		(2,569)
Ending balance	$	43,636	$	8,039	$	29,844	$	33,880	$	3,573	$	16,737	$	8,971	$	144,680

	For the Three Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for credit losses:
Beginning balance	$	47,264	$	7,183	$	26,679	$	26,655	$	2,586	$	8,109	$	6,995	$	125,471
(Recapture)/provision for credit losses	(1,020)		(277)		260		2,032		402		1,366		381		3,144
Recoveries	129		—		—		234		14		98		112		587
Charge-offs	—		—		—		(248)		—		—		(252)		(500)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702
	For the Six Months Ended June 30, 2022
	Commercial Real Estate		Multifamily Real Estate		Construction and Land		Commercial Business		Agricultural Business		One- to Four-Family Residential		Consumer		Total
Allowance for loan losses:
Beginning balance	$	52,995	$	7,043	$	27,294	$	26,421	$	3,190	$	8,205	$	6,951	$	132,099
(Recapture)/provision for credit losses	(6,836)		(137)		(734)		2,199		(320)		1,230		366		(4,232)
Recoveries	216		—		384		383		132		138		328		1,581
Charge-offs	(2)		—		(5)		(330)		—		—		(409)		(746)
Ending balance	$	46,373	$	6,906	$	26,939	$	28,673	$	3,002	$	9,573	$	7,236	$	128,702

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GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Goodwill and Intangible Assets

The following table summarizes the changes in the Company’s goodwill and other intangibles for the six months ended June 30, 2023, and the year ended December 31, 2022 (in thousands):

	Goodwill		CDI		Total
Balance, December 31, 2021	$	373,121	$	14,855	$	387,976
Amortization	—		(5,279)		(5,279)
Other changes(1)	—		(136)		(136)
Balance, December 31, 2022	373,121		9,440		382,561
Amortization	—		(2,041)		(2,041)
Balance, June 30, 2023	$	373,121	$	7,399	$	380,520

Schedule of Estimated Annual Amortization Expense

The following table presents the estimated amortization expense with respect to CDI as of June 30, 2023, for the periods indicated (in thousands):

	Estimated Amortization
Remainder of 2023	$	1,715
2024	2,626
2025	1,567
2026	904
2027	426
Thereafter	161
	$	7,399

Schedule of Servicing Assets at Amortized Value

An analysis of the mortgage and SBA servicing rights for the three and six months ended June 30, 2023 and 2022 is presented below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Balance, beginning of the period	$	15,613	$	18,008	$	16,166	$	17,206
Additions—amounts capitalized	349		804		485		2,757
Additions—through purchase	85		83		124		145
Amortization (1)	(827)		(1,115)		(1,674)		(2,346)
Fair value adjustments (3)	(109)		(147)		10		(129)
Balance, end of the period (2)	$	15,111	$	17,633	$	15,111	$	17,633

(1)    Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.

(2)    There was no valuation allowance on mortgage servicing rights as of both June 30, 2023 and 2022.

(3)    Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

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DEPOSITS (Tables)

6 Months Ended

Jun. 30, 2023

Banking and Thrift, Other Disclosure [Abstract]

Schedule of Deposit Liabilities

Deposits consisted of the following at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Non-interest-bearing accounts	$	5,369,187	$	6,176,998
Interest-bearing checking	1,908,402		1,811,153
Regular savings accounts	2,588,298		2,710,090
Money market accounts	1,876,569		2,198,288
Total interest-bearing transaction and savings accounts	6,373,269		6,719,531
Certificates of deposit:
Certificates of deposit greater than or equal to $250,000	397,784		178,324
Certificates of deposit less than $250,000	958,816		545,206
Total certificates of deposit	1,356,600		723,530
Total deposits	$	13,099,056	$	13,620,059
Included in total deposits:
Public fund transaction and savings accounts	$	380,731	$	392,859
Public fund interest-bearing certificates	45,840		26,810
Total public deposits	$	426,571	$	419,669
Total brokered certificates of deposit	$	203,649	$	—

Maturities of Certificates of Deposit

Scheduled maturities and weighted average interest rates of certificates of deposit at June 30, 2023 are as follows (dollars in thousands):

	June 30, 2023
	Amount		Weighted Average Rate
Maturing in one year or less	$	1,259,221	3.20	%
Maturing after one year through two years	60,692		1.15
Maturing after two years through three years	24,503		0.66
Maturing after three years through four years	6,572		0.35
Maturing after four years through five years	4,686		0.57
Maturing after five years	926		0.86
Total certificates of deposit	$	1,356,600	3.04	%

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Financial Instruments, by Balance Sheet Grouping

The following table presents estimated fair values of the Company’s financial instruments as of June 30, 2023 and December 31, 2022, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (dollars in thousands):

		June 30, 2023				December 31, 2022
	Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Cash and cash equivalents	1	$	281,325	$	281,325	$	243,062	$	243,062
Securities—trading	3	25,659		25,659		28,694		28,694
Securities—available-for-sale	2	2,465,960		2,465,960		2,789,031		2,789,031
Securities—held-to-maturity	2	1,090,949		925,485		1,109,319		933,513
Securities—held-to-maturity	3	7,621		7,631		8,648		8,667
Securities purchased under agreements to resell	2	—		—		300,000		300,000
Loans held for sale	2	60,612		60,645		56,857		56,948
Loans receivable, net	3	10,327,727		9,895,896		10,005,259		9,810,965
Equity securities	1	547		547		553		553
FHLB stock	3	20,800		20,800		12,000		12,000
Bank-owned life insurance	1	301,260		301,260		297,565		297,565
Mortgage servicing rights	3	14,266		35,185		15,331		35,148
SBA servicing rights	3	845		845		835		835
Investments in limited partnerships	3	12,776		12,776		12,427		12,427
Derivatives:
Interest rate swaps	2	18,996		18,996		19,339		19,339
Interest rate lock and forward sales commitments	2,3	349		349		142		142
Liabilities:
Demand, interest checking and money market accounts	2	9,154,158		9,154,158		10,186,439		10,186,439
Regular savings	2	2,588,298		2,588,298		2,710,090		2,710,090
Certificates of deposit	2	1,356,600		1,335,503		723,530		702,581
FHLB advances	2	270,000		270,000		50,000		50,000
Other borrowings	2	193,019		193,019		232,799		232,799
Subordinated notes, net	2	92,646		90,163		98,947		96,718
Junior subordinated debentures	3	67,237		67,237		74,857		74,857
Derivatives:
Interest rate swaps	2	36,777		36,777		37,150		37,150
Interest rate lock and forward sales commitments	2,3	2		2		118		118
Risk participation agreement	2	52		52		67		67

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets and liabilities as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	25,659	$	25,659
Securities—available-for-sale
U.S. Government and agency obligations	—		48,362		—		48,362
Municipal bonds	—		160,768		—		160,768
Corporate bonds	—		99,788		—		99,788
Mortgage-backed or related securities	—		1,942,398		—		1,942,398
Asset-backed securities	—		214,644		—		214,644
	—		2,465,960		—		2,465,960
Loans held for sale(1)	—		17,201		—		17,201
Equity securities	547		—		—		547
SBA servicing rights	—		—		845		845
Investment in limited partnerships	—		—		12,776		12,776
Derivatives
Interest rate swaps	—		18,996		—		18,996
Interest rate lock and forward sales commitments	—		79		270		349
	$	547	$	2,502,236	$	39,550	$	2,542,333
Liabilities:
Junior subordinated debentures	$	—	$	—	$	67,237	$	67,237
Derivatives
Interest rate swaps	—		36,777		—		36,777
Interest rate lock and forward sales commitments	—		—		2		2
Risk participation agreement	—		52		—		52
	$	—	$	36,829	$	67,239	$	104,068

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading
Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	28,694	$	28,694
Securities—available-for-sale
U.S. Government and agency obligations	—		55,108		—		55,108
Municipal bonds	—		261,209		—		261,209
Corporate bonds	—		121,853		—		121,853
Mortgage-backed or related securities	—		2,139,336		—		2,139,336
Asset-backed securities	—		211,525		—		211,525
	—		2,789,031		—		2,789,031
Loans held for sale(1)	—		2,305		—		2,305
Equity securities	553		—		—		553
SBA servicing rights	—		—		835		835
Investment in limited partnerships	—		—		12,427		12,427
Derivatives
Interest rate swaps	—		19,339		—		19,339
Interest rate lock and forward sales commitments	—		61		81		142
	$	553	$	2,810,736	$	42,037	$	2,853,326
Liabilities:
Junior subordinated debentures	$	—	$	—	$	74,857	$	74,857
Derivatives
Interest rate swaps	—		37,150		—		37,150
Interest rate lock and forward sales commitments	—		76		42		118
Risk participation agreement	—		67		—		67
	$	—	$	37,293	$	74,899	$	112,192

Schedule of Valuation Technique, Unobservable Input, and Qualitative Information for Unobservable Inputs

The following table provides a description of the valuation technique, unobservable inputs, and quantitative and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and non-recurring basis at June 30, 2023 and December 31, 2022:

			Weighted Average Rate
Financial Instruments	Valuation Technique	Unobservable Inputs	June 30, 2023		December 31, 2022
Corporate bonds (TPS)	Discounted cash flows	Discount rate	10.55	%	8.27	%
Junior subordinated debentures	Discounted cash flows	Discount rate	10.55	%	8.27	%
Loans individually evaluated	Collateral valuations	Discount to appraised value	n/a		n/a
REO	Appraisals	Discount to appraised value	58.18	%	68.35	%
Interest rate lock commitments	Pricing model	Pull-through rate	87.76	%	78.65	%
SBA servicing rights	Discounted cash flows	Constant prepayment rate	14.61	%	14.10	%

Schedule of Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,591	$	74,703	$	480	$	12,394	$	954
Net change recognized in earnings	(2,932)		—		(212)		(142)		(109)
Net change recognized in accumulated other comprehensive income (AOCI)	—		(7,466)		—		—		—
Purchases, issuances and settlements	—		—		—		524		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Six Months Ended
	June 30, 2023
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	28,694	$	74,857	$	39	$	12,427	$	835
Net change recognized in earnings	(3,035)				229		(662)		10
Net change recognized in AOCI			(7,620)		—		—		—
Purchases, issuances and settlements	—		—		—		1,011		—
Ending balance at June 30, 2023	$	25,659	$	67,237	$	268	$	12,776	$	845
	Three Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	27,354	$	70,510	$	(66)	$	10,982	$	1,162
Net change recognized in earnings	532		—		423		(155)		(147)
Net change recognized in AOCI	—		1,719		—		—		—
Purchases, issuances and settlements	—		—		—		1,054		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015
	Six Months Ended
	June 30, 2022
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	26,981	$	119,815	$	1,467	$	10,257	$	1,161
Net change recognized in earnings	905		—		(1,110)		(372)		(146)
Net change recognized in AOCI	—		2,932		—		—		—
Purchases, issuances and settlements	—		—		—		1,996		—
Redemptions	—		(50,518)		—		—		—
Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015

Schedule of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following tables present financial assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
	Level 1		Level 2		Level 3		Total
REO	—		—		546		546
Loans held for sale	—		42,134		—		42,134
	December 31, 2022
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	1,883	$	1,883
REO	—		—		340		340
Loans held for sale	—		49,474		—		49,474

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INCOME TAXES AND DEFERRED TAXES INCOME TAXES AND DEFERRED TAXES (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023		December 31, 2022
Tax credit investments	$	106,486	$	71,430
Unfunded commitments—tax credit investments	74,299		44,563

The following table presents other information related to the Company’s tax credit investments for the three and six months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Tax credits and other tax benefits recognized	$	2,134	$	1,486	$	4,269	$	2,972
Tax credit amortization expense included in provision for income taxes	1,722		1,263		3,444		2,571

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CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER SHARE (EPS) (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Weighted Shares Outstanding

The following table reconciles basic to diluted weighted average shares outstanding used to calculate earnings per share data for the three and six months ended June 30, 2023 and 2022 (in thousands, except shares and per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	39,591	$	47,965	$	95,146	$	91,928
Basic weighted average shares outstanding	34,373,434		34,307,001		34,306,853		34,303,889
Dilutive effect of unvested restricted stock	35,590		144,739		128,368		229,046
Diluted weighted shares outstanding	34,409,024		34,451,740		34,435,221		34,532,935
Earnings per common share
Basic	$	1.15	$	1.40	$	2.77	$	2.68
Diluted	$	1.15	$	1.39	$	2.76	$	2.66

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2023

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Financial Instruments With Off-Balance-Sheet Risks

Outstanding commitments for which no asset or liability for the notional amount has been recorded consisted of the following at the dates indicated (in thousands):

	Contract or Notional Amount
	June 30, 2023		December 31, 2022
Commitments to extend credit	$	3,911,428	$	4,031,954
Standby letters of credit and financial guarantees	33,534		26,119
Commitments to originate loans	47,601		53,266
Risk participation agreements	47,146		48,566
Derivatives also included in Note 13:
Commitments to originate loans held for sale	24,671		10,525
Commitments to sell loans secured by one- to four-family residential properties	13,063		12,568
Commitments to sell securities related to mortgage banking activities	22,500		7,000

Schedule of fair value, off balance sheet risks, limited partnerships, commitment

As of June 30, 2023 and December 31, 2022, the funded balances and remaining outstanding commitments of these limited partnership investments were as follows (in thousands):

	June 30, 2023				December 31, 2022
	Funded Balance		Unfunded Balance		Funded Balance		Unfunded Balance
Limited partnerships investments	$	11,283	$	11,217	$	10,272	$	12,228

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DERIVATIVES AND HEDGING (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2023

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Designated in Hedge Relationships

	Asset Derivatives								Liability Derivatives
	June 30, 2023				December 31, 2022				June 30, 2023				December 31, 2022
	Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value		Notional/ Contract Amount		Fair Value
Hedged interest rate swaps	$	—	$	—	$	—	$	—	$	400,000	$	24,198	$	400,000	$	26,485
Interest rate swaps not designated in hedge relationships	426,710		35,660		440,731		37,119		426,710		35,682		440,731		37,150
Less: Master netting agreements			(16,664)				(17,780)				(16,664)				(17,780)
Less: Cash settlements			—				—				(6,439)				(8,705)
Net interest rate swaps			18,996				19,339				36,777				37,150
Risk participation agreements	1,167		—		1,283		—		45,979		52		47,283		67
Mortgage loan commitments	24,671		270		15,920		81		—		—		12,367		42
Forward sales contracts	32,010		79		16,568		61		2,276		2		3,000		76
Total	$	484,558	$	19,345	$	474,502	$	19,481	$	474,965	$	36,831	$	503,381	$	37,335

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)

The following table presents the effect of cash flow hedge accounting on AOCI for the three and six months ended June 30, 2023 and 2022 (in thousands):

	For the Three Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(5,514)	$	(5,514)	$	—	Interest Income	$	(4,159)	$	(4,159)	$	—
	For the Six Months Ended June 30, 2023
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(4,390)	$	(4,390)	$	—	Interest Income	$	(7,772)	$	(7,772)	$	—

	For the Three Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(3,617)	$	(3,617)	$	—	Interest Income	$	161	$	161	$	—
	For the Six Months Ended June 30, 2022
	Amount of Gain or (Loss) Recognized in AOCI on Derivative		Amount of Gain or (Loss) Recognized in AOCI Included Component		Amount of Gain or (Loss) Recognized in AOCI Excluded Component		Location of Gain or (Loss) Recognized from AOCI into Income	Amount of Gain or (Loss) Reclassified from AOCI into Income		Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component		Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest rate swaps	$	(17,642)	$	(17,642)	$	—	Interest Income	$	912	$	912	$	—

Schedule of Fair Value, Measured on Nonrecurring Basis, Gains (Losses) From Fair Value Adjustments [Table Text Block]

Gains (losses) recognized in income within mortgage banking operations on non-designated hedging instruments for the three and six months ended June 30, 2023 and 2022, were as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Mortgage loan commitments	$	(210)	$	1,889	$	230	$	(1,110)
Forward sales contracts	(221)		(2,287)		79		(1)
	$	(431)	$	(398)	$	309	$	(1,111)

Offsetting Assets and Liabilities

as of June 30, 2023 and December 31, 2022 (in thousands):

	June 30, 2023
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
	$	35,660	$	(16,664)	$	18,996	$	—	$	—	$	18,996
Derivative liabilities
Interest rate swaps	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	$	59,880	$	(23,103)	$	36,777	$	—	$	(13,195)	$	23,582
	December 31, 2022
							Gross Amounts of Financial Instruments Not Offset in the Consolidated Statements of Financial Condition
	Gross Amounts Recognized		Amounts offset in the Statement of Financial Condition		Net Amounts in the Statement of Financial Condition		Netting Adjustment Per Applicable Master Netting Agreements		Fair Value of Financial Collateral in the Statement of Financial Condition		Net Amount
Derivative assets
Interest rate swaps	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
	$	37,119	$	(17,780)	$	19,339	$	—	$	—	$	19,339
Derivative liabilities
Interest rate swaps	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178
	$	63,634	$	(26,484)	$	37,150	$	—	$	(14,972)	$	22,178

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SECURITIES (Schedule of Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Securities [Line Items]
Debt Securities, Trading, Amortized Cost	$ 27,203	$ 27,203
Securities—trading	25,659	28,694
Debt Securities, Available-for-sale, Amortized Cost, Total	2,879,179	3,218,777
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	533	1,463
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	411,752	431,209
Debt Securities, Available-for-sale, Allowance for Credit Loss	(2,000)	0
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Held-to-maturity Securities, Gross Unrealized Gains	105	109
Held-to-maturity Securities, Gross Unrealized Losses	165,559	175,896
Securities—held-to-maturity	933,116	942,180
Allowance for Credit Losses	(355)	(379)
debt securities, held-to-maturity, accrued interest receivable	4,700	4,800
Debt Securities, Available-for-Sale, Accrued Interest Receivable	11,100	12,400
Debt Securities, Held-to-Maturity, Amortized Cost, Gross		1,117,967
Debt Securities, Held-to-Maturity, Amortized Cost, Net	1,098,925
U.S. Government and agency obligations
Schedule of Securities [Line Items]
Debt Securities, Available-for-sale, Amortized Cost, Total	49,471	56,344
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	14	8
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	1,123	1,244
Debt Securities, Available-for-sale, Allowance for Credit Loss	0
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	48,362	55,108
Held-to-maturity Securities, Gross Unrealized Gains	0	0
Held-to-maturity Securities, Gross Unrealized Losses	7	7
Securities—held-to-maturity	302	305
Allowance for Credit Losses	0	0
Debt Securities, Held-to-Maturity, Amortized Cost, Gross		312
Debt Securities, Held-to-Maturity, Amortized Cost, Net	309
Municipal bonds
Schedule of Securities [Line Items]
Debt Securities, Available-for-sale, Amortized Cost, Total	194,660	301,449
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	181	530
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	34,073	40,770
Debt Securities, Available-for-sale, Allowance for Credit Loss	0
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	160,768	261,209
Held-to-maturity Securities, Gross Unrealized Gains	105	109
Held-to-maturity Securities, Gross Unrealized Losses	62,883	70,907
Securities—held-to-maturity	434,598	432,319
Allowance for Credit Losses	(170)	183
Debt Securities, Held-to-Maturity, Amortized Cost, Gross		503,117
Debt Securities, Held-to-Maturity, Amortized Cost, Net	497,546
Corporate bonds
Schedule of Securities [Line Items]
Debt Securities, Trading, Amortized Cost	27,203	27,203
Securities—trading	25,659	28,694
Debt Securities, Available-for-sale, Amortized Cost, Total	118,160	133,334
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	0	0
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	16,372	11,481
Debt Securities, Available-for-sale, Allowance for Credit Loss	(2,000)
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	99,788	121,853
Held-to-maturity Securities, Gross Unrealized Gains	0	0
Held-to-maturity Securities, Gross Unrealized Losses	24	16
Securities—held-to-maturity	2,635	2,945
Allowance for Credit Losses	(185)	196
Debt Securities, Held-to-Maturity, Amortized Cost, Gross		2,961
Debt Securities, Held-to-Maturity, Amortized Cost, Net	2,844
Mortgage-backed or related securities
Schedule of Securities [Line Items]
Debt Securities, Available-for-sale, Amortized Cost, Total	2,294,371	2,505,172
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	275	885
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	352,248	366,721
Debt Securities, Available-for-sale, Allowance for Credit Loss	0
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	1,942,398	2,139,336
Held-to-maturity Securities, Gross Unrealized Gains	0	0
Held-to-maturity Securities, Gross Unrealized Losses	102,645	104,966
Securities—held-to-maturity	495,581	506,611
Allowance for Credit Losses	0	0
Debt Securities, Held-to-Maturity, Amortized Cost, Gross		611,577
Debt Securities, Held-to-Maturity, Amortized Cost, Net	598,226
Asset-backed securities
Schedule of Securities [Line Items]
Debt Securities, Available-for-sale, Amortized Cost, Total	222,517	222,478
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Gain, before Tax	63	40
Debt Securities, Available-for-sale, Accumulated Gross Unrealized Loss, before Tax	7,936	10,993
Debt Securities, Available-for-sale, Allowance for Credit Loss	0
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	$ 214,644	$ 211,525

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SECURITIES (Securities with Continuous Loss Position) (Details) $ in Thousands	Jun. 30, 2023 USD ($) numberOfSecurities	Dec. 31, 2022 USD ($) numberOfSecurities
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 425,318	$ 1,462,517
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	1,978,637	1,222,815
Debt Securities, Available-for-sale, Unrealized Loss Position	2,403,955	2,685,332
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	14,857	137,551
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	396,895	293,658
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 411,752	$ 431,209
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions | numberOfSecurities	245	298
U.S. Government and agency obligations
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ 0	$ 33,407
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	45,207	16,732
Debt Securities, Available-for-sale, Unrealized Loss Position	45,207	50,139
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	0	882
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	1,123	362
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	1,123	1,244
Municipal bonds
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	34,744	188,920
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	119,287	33,907
Debt Securities, Available-for-sale, Unrealized Loss Position	154,031	222,827
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	559	25,592
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	33,514	15,178
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	34,073	40,770
Corporate bonds
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	9,599	108,187
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	95,502	13,066
Debt Securities, Available-for-sale, Unrealized Loss Position	105,101	121,253
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	314	9,547
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	16,058	1,934
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	16,372	11,481
Mortgage-backed or related securities
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	259,765	930,566
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	1,635,349	1,159,110
Debt Securities, Available-for-sale, Unrealized Loss Position	1,895,114	2,089,676
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	9,381	90,537
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	342,867	276,184
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	352,248	366,721
Asset-backed securities
Schedule of Held-to-maturity Securities [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	121,210	201,437
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	83,292	0
Debt Securities, Available-for-sale, Unrealized Loss Position	204,502	201,437
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	4,603	10,993
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	3,333	0
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss	$ 7,936	$ 10,993

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SECURITIES (Available-for-Sale Securities, Gross Gains and Losses on Sale) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Gain (Loss) on Securities [Line Items]
Debt Securities, Available-for-sale, Realized Gain	$ 145	$ 81	$ 377	$ 516
Debt Securities, Available-for-sale, Realized Loss	4,672	49	12,156	49
Debt Securities, Available-for-sale, Realized Gain (Loss)	$ (4,527)	$ 32	$ (11,779)	$ 467

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SECURITIES (Securities Debt Maturities) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Trading Securities, Amortized Cost, Maturing in one year or less	$ 0
Trading Securities, Amortized Cost, Maturing after one year through five years	0
Trading Securities, Amortized Cost, Maturing after five years through ten years	0
Debt Securities, Trading, Debt Maturities, After Year Ten, Amortized Cost Basis	27,203
Debt Securities, Trading, Amortized Cost	27,203	$ 27,203
Trading Securities, Fair Value, Maturing in one year or less	0
Trading Securities, Fair Value, Maturing after one year through five years	0
Trading Securities, Fair Value, Maturing after five years through ten years	0
Debt Securities, Trading, Debt Maturities, After Year Ten, Fair Value	25,659
Trading Securities, Fair Value	25,659	28,694
Available-for-sale Securities, Amortized Cost, Maturing in one year or less	719
Available-for-sale Securities, Amortized Cost, Maturing after one year through five years	158,285
Available-for-sale Securities, Amortized Cost, Maturing after five years through ten years	416,915
Debt Securities, Available-for-Sale, Amortized Cost, Maturity, Allocated and Single Maturity Date, after Year 10	2,303,260
Debt Securities, Available-for-sale, Amortized Cost	2,879,179	3,218,777
Available-for-sale Securities, Fair Value, Maturing in one year or less	716
Available-for-sale Securities, Fair Value, Maturing after one year through five years	143,916
Available-for-sale Securities, Fair Value, Maturing after five years through ten years	364,317
Debt Securities, Available-for-Sale, Fair Value, Maturity, Allocated and Single Maturity Date, after Year 10	1,957,011
Debt Securities, Available-for-sale	2,465,960
Held-to-maturity Securities, Amortized Cost, Maturing in one year or less	21,769
Held-to-maturity Securities, Amortized Cost, Maturing after one year through five years	21,090
Held-to-maturity Securities, Amortized Cost, Maturing after five years through ten years	26,732
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity, Allocated and Single Maturity Date, after Year 10	1,029,334
Held-to-maturity Securities, Amortized Cost	1,098,925	1,117,967
Held-to-maturity Securities, Fair Value, Maturing in one year or less	21,243
Held-to-maturity Securities, Fair Value, Maturing after one year through five years	20,352
Held-to-maturity Securities, Fair Value, Maturing after five years through ten years	25,554
Debt Securities, Held-to-Maturity, Fair Value, Maturity, Allocated and Single Maturity Date, after Year 10	865,967
Debt Securities, Held-to-maturity, Fair Value	$ 933,116	$ 942,180

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SECURITIES (Securities Pledged) (Details) $ in Thousands	Jun. 30, 2023 USD ($)
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	$ 649,025
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	656,995
Pledged Financial Instruments, Not Separately Reported, Fair Value	557,931
Asset Pledged as Collateral without Right | Securities For State and Local Government Public Deposits
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	248,951
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	256,711
Pledged Financial Instruments, Not Separately Reported, Fair Value	224,566
Asset Pledged as Collateral without Right | Securities For Federal Reserve
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	118,643
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	118,643
Pledged Financial Instruments, Not Separately Reported, Fair Value	100,314
Asset Pledged as Collateral without Right | Securities for Interest Rate Swap Counterparties
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	3,039
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	3,249
Pledged Financial Instruments, Not Separately Reported, Fair Value	2,865
Asset Pledged as Collateral without Right | Securities Sold under Agreements to Repurchase
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	273,613
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	273,613
Pledged Financial Instruments, Not Separately Reported, Fair Value	225,628
Asset Pledged as Collateral without Right | Interest Bearing Deposits for Other Debt Facilities
Schedule of Pledged Financial Instruments, Not Separately Reported [Line Items]
Pledged Financial Instruments, Not Separately Reported, Carrying Value	4,779
Securities pledged for Interest Rate Swap Counterparties, Amortized Cost	4,779
Pledged Financial Instruments, Not Separately Reported, Fair Value	$ 4,558

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SECURITIES (Textual) (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2023 USD ($) numberOfSecurities	Jun. 30, 2023 numberOfSecurities	Jun. 30, 2022 USD ($) numberOfSecurities	Dec. 31, 2022 numberOfSecurities
Investments, Debt and Equity Securities [Abstract]
Trading Securities, Number of Securities on Nonaccrual Status	0	0		0
Debt Securities, Available-for-sale [Abstract]
Debt Securities, Available-for-sale, Unrealized Loss Position, Number of Positions	245	245		298
Available-for-sale Securities, Number of Securities in Nonaccrual Status	0	0		0
Held-to-maturity Securities [Abstract]
Trading Securities, Number of Securities Sold		0	0
Debt Securities, Trading, Unrealized Gain | $			$ 905,000
Debt Securities, Trading, Unrealized Loss | $	$ (3,000,000)

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SECURITIES (Debt Securities, Held-to-Maturity, Credit Rating) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	$ 1,098,925	$ 1,117,967
Credit Rating, Not Credit Rated
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	594,088	608,681
U.S. Government and agency obligations
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	309	312
U.S. Government and agency obligations | Credit Rating, Not Credit Rated
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	309	312
Municipal bonds
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	497,546	503,117
Municipal bonds | Credit Rating, Not Credit Rated
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	9,783	11,012
Corporate bonds
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	2,844	2,961
Corporate bonds | Credit Rating, Not Credit Rated
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	2,344	2,461
Mortgage-backed or related securities
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	598,226	611,577
Mortgage-backed or related securities | Credit Rating, Not Credit Rated
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	581,652	594,896
Standard & Poor's, AAA to A Rating
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	504,837	509,286
Standard & Poor's, AAA to A Rating | U.S. Government and agency obligations
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	0	0
Standard & Poor's, AAA to A Rating | Municipal bonds
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	487,763	492,105
Standard & Poor's, AAA to A Rating | Corporate bonds
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	500	500
Standard & Poor's, AAA to A Rating | Mortgage-backed or related securities
Financing Receivable, Credit Quality Indicator [Line Items]
Debt securities, held-to-maturity	$ 16,574	$ 16,681

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SECURITIES (Debt Securities, Available-for-Sale, Allowance for Credit Loss) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Debt Securities, Available-for-Sale, Allowance for Credit Loss [Line Items]
Provision for Other Credit Losses	$ 2,000	$ 2,000
Debt Securities, Available-for-Sale, Allowance for Credit Loss, Total	2,000	2,000	$ 0	$ 0
U.S. Government and agency obligations
Debt Securities, Available-for-Sale, Allowance for Credit Loss [Line Items]
Provision for Other Credit Losses	0	0
Debt Securities, Available-for-Sale, Allowance for Credit Loss, Total	0	0	0	0
Corporate bonds
Debt Securities, Available-for-Sale, Allowance for Credit Loss [Line Items]
Provision for Other Credit Losses	2,000	2,000
Debt Securities, Available-for-Sale, Allowance for Credit Loss, Total	2,000	2,000	0	0
Municipal bonds
Debt Securities, Available-for-Sale, Allowance for Credit Loss [Line Items]
Provision for Other Credit Losses	0	0
Debt Securities, Available-for-Sale, Allowance for Credit Loss, Total	0	0	0	0
Mortgage-backed or related securities
Debt Securities, Available-for-Sale, Allowance for Credit Loss [Line Items]
Provision for Other Credit Losses	0	0
Debt Securities, Available-for-Sale, Allowance for Credit Loss, Total	$ 0	$ 0	$ 0	$ 0

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LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Loans by Type) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 10,472,407		$ 10,146,724
Allowance for credit losses - loans	(144,680)	$ (141,457)	(141,465)	$ (128,702)	$ (125,471)	$ (132,099)
Net loans	$ 10,327,727		$ 10,005,259
Percent of total loans	100.00%		100.00%
Unearned loan fees in excess of unamortized costs	$ 9,400		$ 8,100
Discount on acquired loans, net	5,500		6,600
Financing Receivable, Accrued Interest, before Allowance for Credit Loss	40,900		39,800
Financing Receivable, Loans Held as Collateral, FHLB and Other Borrowings	6,500,000
Commerical real estate - owner-occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 894,876		$ 845,320
Percent of total loans	8.50%		8.30%
Commercial real estate - investment properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 1,558,176		$ 1,589,975
Percent of total loans	14.90%		15.70%
Small Balance Commercial Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 1,172,825		$ 1,200,251
Percent of total loans	11.20%		11.80%
Multifamily Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 699,830		$ 645,071
Allowance for credit losses - loans	$ (8,039)	(8,475)	$ (7,734)	(6,906)	(7,183)	(7,043)
Percent of total loans	6.70%		6.40%
Commercial construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 183,765		$ 184,876
Percent of total loans	1.80%		1.80%
Multifamily construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 433,868		$ 325,816
Percent of total loans	4.10%		3.20%
One- to four- family construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 547,200		$ 647,329
Percent of total loans	5.20%		6.40%
Land and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 345,053		$ 328,475
Percent of total loans	3.30%		3.20%
Commercial Business
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 1,313,226		$ 1,283,407
Percent of total loans	12.50%		12.70%
Loans And LeasesReceivable Gross Carrying Amount, SBA Paycheck Protection Program	$ 4,500		$ 7,600
Small business scored
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 982,283		$ 947,092
Percent of total loans	9.40%		9.30%
Agricultural business, including secured by farmland
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 310,120		$ 295,077
Allowance for credit losses - loans	$ (3,573)	(3,094)	$ (3,475)	(3,002)	(2,586)	(3,190)
Percent of total loans	3.00%		2.90%
Loans And LeasesReceivable Gross Carrying Amount, SBA Paycheck Protection Program	$ 20		$ 334
One- to four-family residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	1,340,126		1,173,112
Allowance for credit losses - loans	$ (16,737)	(15,736)	$ (14,729)	(9,573)	(8,109)	(8,205)
Percent of total loans	12.80%		11.60%
Consumer—home equity revolving lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 577,725		$ 566,291
Percent of total loans	5.50%		5.60%
Consumer-other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross	$ 113,334		$ 114,632
Allowance for credit losses - loans	$ (8,971)	$ (9,009)	$ (8,971)	$ (7,236)	$ (6,995)	$ (6,951)
Percent of total loans	1.10%		1.10%

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LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Troubled Debt Restructuring) (Details)	Jun. 30, 2023 USD ($) Months
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Modified, Commitment to Lend	$ 250,000
Extended Maturity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring	$ 6,361,000
Financing Receivable, Modified, Weighted Average Term Increase in Months | Months	(7)
One- to four- family construction | Extended Maturity
Financing Receivable, Troubled Debt Restructuring [Line Items]
Financing Receivable, Troubled Debt Restructuring	$ 6,361,000
Financing Receivable, Modified, Weighted Average Term Increase in Months | Months	(7)

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LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Risk-Rated and Non-Risk Rated Loans by Grade and Other Characteristic) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Financing Receivable, Credit Quality Indicator [Line Items]
Charge-offs	$ 1,089	$ 500	$ 2,569	$ 746
Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	70,717		70,717		$ 180,906
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	181,327		181,327		198,787
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	183,989		183,989		157,483
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	154,452		154,452		90,564
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	88,846		88,846		57,095
Prior	183,964		183,964		149,251
Revolving Loans	31,581		31,581		11,234
Total Loans	894,876		894,876		845,320
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			0
Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	101,956		101,956		190,627
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	171,321		171,321		323,160
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	285,785		285,785		142,476
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	127,071		127,071		186,136
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	167,005		167,005		169,667
Prior	665,143		665,143		550,906
Revolving Loans	39,895		39,895		27,003
Total Loans	1,558,176		1,558,176		1,589,975
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			0
Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	52,714		52,714		139,383
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	148,947		148,947		177,784
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	176,208		176,208		93,961
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	99,694		99,694		46,460
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	45,969		45,969		29,665
Prior	174,623		174,623		156,140
Revolving Loans	1,675		1,675		1,678
Total Loans	699,830		699,830		645,071
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs	0	0	0	0
Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	73,851		73,851		115,160
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	69,935		69,935		46,680
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	17,897		17,897		12,952
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	12,829		12,829		4,260
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	3,537		3,537		5,824
Prior	5,716		5,716		0
Revolving Loans	0		0		0
Total Loans	183,765		183,765		184,876
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			0
Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	64,851		64,851		142,680
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	197,242		197,242		161,066
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	165,364		165,364		20,622
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	4,998		4,998		1,448
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,413		1,413		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	433,868		433,868		325,816
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			0
One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	282,744		282,744		586,174
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	241,523		241,523		59,436
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	21,985		21,985		677
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		331
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	332		332		0
Prior	0		0		0
Revolving Loans	616		616		711
Total Loans	547,200		547,200		647,329
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			136
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			136
Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	139,320		139,320		199,339
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	116,643		116,643		88,066
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	54,314		54,314		16,278
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	14,000		14,000		11,866
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	9,160		9,160		6,339
Prior	11,615		11,615		6,248
Revolving Loans	1		1		339
Total Loans	345,053		345,053		328,475
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			20
Financing Receivable, Revolving, Writeoff			0
Charge-offs			20
Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	103,688		103,688		250,147
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	246,935		246,935		161,765
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	145,907		145,907		166,917
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	145,551		145,551		127,577
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	113,696		113,696		92,666
Prior	160,899		160,899		86,182
Revolving Loans	396,550		396,550		398,153
Total Loans	1,313,226		1,313,226		1,283,407
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			700
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			27
Financing Receivable, Revolving, Writeoff			(133)
Charge-offs			860
Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	25,346		25,346		38,863
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	40,042		40,042		36,746
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	28,361		28,361		19,217
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	18,500		18,500		34,919
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	33,842		33,842		24,710
Prior	47,894		47,894		29,662
Revolving Loans	116,135		116,135		110,960
Total Loans	310,120		310,120		295,077
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs	0	0	0	0
Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	48,970		48,970		177,605
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	173,212		173,212		215,801
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	219,220		219,220		172,746
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	169,205		169,205		134,552
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	123,643		123,643		142,592
Prior	438,171		438,171		356,325
Revolving Loans	404		404		630
Total Loans	1,172,825		1,172,825		1,200,251
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Revolving, Writeoff			0
Charge-offs			0
Small business scored
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	98,904		98,904		307,255
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	291,201		291,201		202,200
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	187,220		187,220		99,947
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	92,665		92,665		82,297
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	70,679		70,679		56,685
Prior	114,462		114,462		78,617
Revolving Loans	127,152		127,152		120,091
Total Loans	982,283		982,283		947,092
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			175
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			84
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			162
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			262
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			181
Financing Receivable, Revolving, Writeoff			0
Charge-offs			864
One- to four- family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	164,196		164,196		558,923
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	588,488		588,488		281,996
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	272,199		272,199		61,400
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	60,171		60,171		35,319
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	34,300		34,300		38,065
Prior	220,538		220,538		195,996
Revolving Loans	234		234		1,413
Total Loans	1,340,126		1,340,126		1,173,112
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			4
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			30
Financing Receivable, Revolving, Writeoff			0
Charge-offs	4	0	34	0
Consumer—home equity revolving lines of credit
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	5,469		5,469		7,491
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	3,033		3,033		1,193
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	2,732		2,732		477
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	2,489		2,489		1,831
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,754		1,754		1,798
Prior	6,614		6,614		4,722
Revolving Loans	555,634		555,634		548,779
Total Loans	577,725		577,725		566,291
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			13
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			73
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			0
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			20
Financing Receivable, Revolving, Writeoff			(4)
Charge-offs			102
Consumer-other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,093		6,093		39,830
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	35,787		35,787		12,157
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	11,090		11,090		9,379
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	7,923		7,923		5,724
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	4,848		4,848		5,386
Prior	19,928		19,928		16,755
Revolving Loans	27,665		27,665		25,401
Total Loans	113,334		113,334		114,632
Financing Receivable, Year One, Originated, Current Fiscal Year, Writeoff			0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year, Writeoff			19
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year, Writeoff			44
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year, Writeoff			15
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year, Writeoff			34
Financing Receivable, Originated, More than Five Years before Current Fiscal Year, Writeoff			64
Financing Receivable, Revolving, Writeoff			(377)
Charge-offs	363	$ 252	655	$ 409
Total Consumer [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Charge-offs			553
Pass | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	68,946		68,946		167,150
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	168,118		168,118		198,787
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	171,741		171,741		150,272
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	142,543		142,543		74,171
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	69,567		69,567		57,095
Prior	183,759		183,759		148,902
Revolving Loans	31,381		31,381		10,833
Total Loans	836,055		836,055		807,210
Pass | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	101,956		101,956		190,627
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	171,321		171,321		323,160
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	285,785		285,785		142,476
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	127,071		127,071		182,853
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	167,005		167,005		169,667
Prior	662,188		662,188		547,899
Revolving Loans	38,699		38,699		25,691
Total Loans	1,554,025		1,554,025		1,582,373
Pass | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	52,714		52,714		139,383
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	148,947		148,947		177,784
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	176,208		176,208		93,961
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	99,694		99,694		46,460
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	45,969		45,969		29,665
Prior	174,623		174,623		156,140
Revolving Loans	1,675		1,675		1,678
Total Loans	699,830		699,830		645,071
Pass | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	73,851		73,851		112,229
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	69,935		69,935		46,679
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	17,897		17,897		12,952
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	12,829		12,829		4,260
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	3,537		3,537		1,107
Prior	5,716		5,716		0
Revolving Loans	0		0		0
Total Loans	183,765		183,765		177,227
Pass | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	64,851		64,851		142,680
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	197,242		197,242		161,066
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	165,364		165,364		20,622
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	4,998		4,998		1,448
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,413		1,413		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	433,868		433,868		325,816
Pass | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	275,674		275,674		572,701
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	241,523		241,523		56,530
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	17,924		17,924		677
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		331
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	332		332		0
Prior	0		0		0
Revolving Loans	616		616		711
Total Loans	536,069		536,069		630,950
Pass | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	138,821		138,821		199,339
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	116,643		116,643		88,066
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	54,314		54,314		16,278
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	14,000		14,000		11,866
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	9,160		9,160		6,242
Prior	11,545		11,545		6,164
Revolving Loans	1		1		339
Total Loans	344,484		344,484		328,294
Pass | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	103,662		103,662		249,609
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	246,605		246,605		149,140
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	134,384		134,384		161,494
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	139,435		139,435		126,416
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	112,084		112,084		86,712
Prior	155,259		155,259		85,386
Revolving Loans	386,683		386,683		391,852
Total Loans	1,278,112		1,278,112		1,250,609
Pass | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	23,165		23,165		36,848
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	36,514		36,514		35,440
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	26,739		26,739		18,946
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	18,500		18,500		28,354
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	25,586		25,586		24,710
Prior	44,985		44,985		27,063
Revolving Loans	113,594		113,594		109,606
Total Loans	289,083		289,083		280,967
Special Mention | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		2,829
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		42
Revolving Loans	0		0		201
Total Loans	0		0		3,072
Special Mention | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Special Mention | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		74
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		26
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		3,467
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	3,277		3,277		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	898		898		200
Total Loans	4,175		4,175		3,767
Special Mention | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	550		550		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		336
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	652		652		271
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,690		1,690		0
Prior	401		401		0
Revolving Loans	2,541		2,541		357
Total Loans	5,834		5,834		964
Substandard | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	1,771		1,771		13,756
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	13,209		13,209		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	12,248		12,248		7,211
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	11,909		11,909		13,564
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	19,279		19,279		0
Prior	205		205		307
Revolving Loans	200		200		200
Total Loans	58,821		58,821		35,038
Substandard | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		3,283
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	2,955		2,955		3,007
Revolving Loans	1,196		1,196		1,312
Total Loans	4,151		4,151		7,602
Substandard | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Substandard | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		2,931
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		1
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		4,717
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		7,649
Substandard | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Substandard | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	7,070		7,070		13,473
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		2,906
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	4,061		4,061		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	11,131		11,131		16,379
Substandard | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	499		499		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		97
Prior	70		70		84
Revolving Loans	0		0		0
Total Loans	569		569		181
Substandard | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	26		26		464
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	330		330		12,599
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	11,523		11,523		1,956
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	2,839		2,839		1,161
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,612		1,612		5,954
Prior	5,640		5,640		796
Revolving Loans	8,969		8,969		6,101
Total Loans	30,939		30,939		29,031
Substandard | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	1,631		1,631		2,015
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	3,528		3,528		970
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	970		970		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		6,565
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	6,566		6,566		0
Prior	2,508		2,508		2,599
Revolving Loans	0		0		997
Total Loans	15,203		15,203		13,146
Doubtful | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Doubtful | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Loss | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
Current | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	48,371		48,371		177,605
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	173,212		173,212		215,801
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	219,220		219,220		172,286
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	169,205		169,205		134,552
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	123,643		123,643		142,592
Prior	437,208		437,208		354,924
Revolving Loans	404		404		630
Total Loans	1,171,263		1,171,263		1,198,390
Current | Small business scored
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	98,904		98,904		307,109
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	290,943		290,943		201,628
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	186,977		186,977		99,867
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	92,432		92,432		81,603
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	70,196		70,196		56,420
Prior	114,229		114,229		78,025
Revolving Loans	126,832		126,832		119,281
Total Loans	980,513		980,513		943,933
Current | One- to four- family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	163,136		163,136		555,833
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	588,388		588,388		279,331
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	270,567		270,567		59,672
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	58,947		58,947		34,607
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	32,763		32,763		37,740
Prior	217,977		217,977		191,890
Revolving Loans	234		234		1,335
Total Loans	1,332,012		1,332,012		1,160,408
Current | Consumer—home equity revolving lines of credit
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	5,397		5,397		7,442
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	2,932		2,932		1,089
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	2,683		2,683		329
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,446		1,446		1,355
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,391		1,391		1,611
Prior	5,354		5,354		3,788
Revolving Loans	554,579		554,579		547,068
Total Loans	573,782		573,782		562,682
Current | Consumer-other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	6,093		6,093		39,740
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	35,734		35,734		12,138
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	11,076		11,076		9,334
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	7,880		7,880		5,695
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	4,843		4,843		5,384
Prior	19,880		19,880		16,675
Revolving Loans	27,527		27,527		25,219
Total Loans	113,033		113,033		114,185
30-59 Days Past Due
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	5,826		5,826		15,814
30-59 Days Past Due | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
30-59 Days Past Due | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
30-59 Days Past Due | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
30-59 Days Past Due | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
30-59 Days Past Due | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
30-59 Days Past Due | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		900
30-59 Days Past Due | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		921
30-59 Days Past Due | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	17		17		2,100
30-59 Days Past Due | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,724		1,724		1,185
30-59 Days Past Due | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	599		599		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		460
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	961		961		1,399
Revolving Loans	0		0		0
Total Loans	1,560		1,560		1,859
30-59 Days Past Due | Small business scored
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		146
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	198		198		518
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	46		46		54
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	123		123		262
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	23		23		46
Prior	14		14		280
Revolving Loans	134		134		173
Total Loans	538		538		1,479
30-59 Days Past Due | One- to four- family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		2,030
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	100		100		846
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		755
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	78		78		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		116
Prior	437		437		1,462
Revolving Loans	0		0		78
Total Loans	615		615		5,287
30-59 Days Past Due | Consumer—home equity revolving lines of credit
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	72		72		49
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	101		101		40
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		75
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	52		52		74
Prior	165		165		214
Revolving Loans	741		741		1,372
Total Loans	1,131		1,131		1,824
30-59 Days Past Due | Consumer-other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		49
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	53		53		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	14		14		16
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	39		39		5
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1		1		2
Prior	48		48		67
Revolving Loans	86		86		120
Total Loans	241		241		259
60-89 Days Past Due
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	3,347		3,347		7,429
60-89 Days Past Due | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	1,255		1,255		0
60-89 Days Past Due | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	498		498		0
60-89 Days Past Due | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		4,145
60-89 Days Past Due | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
60-89 Days Past Due | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	0		0		0
60-89 Days Past Due | Small business scored
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	25		25		54
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	20		20		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	17		17		275
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		149
Prior	0		0		7
Revolving Loans	20		20		176
Total Loans	82		82		661
60-89 Days Past Due | One- to four- family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		1,060
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	393		393		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	377		377		115
Prior	228		228		1,067
Revolving Loans	0		0		0
Total Loans	998		998		2,242
60-89 Days Past Due | Consumer—home equity revolving lines of credit
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		50
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		49
Prior	241		241		45
Revolving Loans	217		217		59
Total Loans	458		458		203
60-89 Days Past Due | Consumer-other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		41
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		9
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		29
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		24
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	4		4		0
Prior	0		0		13
Revolving Loans	52		52		62
Total Loans	56		56		178
90 Days Past Due
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	19,962		19,962		9,128
90 Days Past Due | Owner-occupied
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
90 Days Past Due | Commercial real estate - investment properties
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
90 Days Past Due | Multifamily Real Estate
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
90 Days Past Due | Commercial construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
90 Days Past Due | Multifamily construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		0
90 Days Past Due | One- to four- family construction
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	709		709		0
90 Days Past Due | Land and land development
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	0		0		97
90 Days Past Due | Commercial Business
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	6,290		6,290		649
90 Days Past Due | Agricultural business, including secured by farmland
Financing Receivable, Credit Quality Indicator [Line Items]
Total Loans	2,952		2,952		594
90 Days Past Due | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	2		2		2
Revolving Loans	0		0		0
Total Loans	2		2		2
90 Days Past Due | Small business scored
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	35		35		0
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	177		177		26
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	93		93		157
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	460		460		70
Prior	219		219		305
Revolving Loans	166		166		461
Total Loans	1,150		1,150		1,019
90 Days Past Due | One- to four- family residential
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	1,060		1,060		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		1,819
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	1,632		1,632		973
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	753		753		712
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	1,160		1,160		94
Prior	1,896		1,896		1,577
Revolving Loans	0		0		0
Total Loans	6,501		6,501		5,175
90 Days Past Due | Consumer—home equity revolving lines of credit
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		14
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	49		49		73
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	1,043		1,043		476
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	311		311		64
Prior	854		854		675
Revolving Loans	97		97		280
Total Loans	2,354		2,354		1,582
90 Days Past Due | Consumer-other
Financing Receivable, Credit Quality Indicator [Line Items]
Financing Receivable, Year One, Originated, Current Fiscal Year	0		0		0
Financing Receivable, Year Two, Originated, Fiscal Year before Current Fiscal Year	0		0		10
Financing Receivable, Year Three, Originated, Two Years before Current Fiscal Year	0		0		0
Financing Receivable, Year Four, Originated, Three Years before Current Fiscal Year	4		4		0
Financing Receivable, Year Five, Originated, Four Years before Current Fiscal Year	0		0		0
Prior	0		0		0
Revolving Loans	0		0		0
Total Loans	$ 4		$ 4		$ 10

XML

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Collateral Secured) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	$ 22,615	$ 9,419
Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	18,067	4,575
Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	4,400	4,844
Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	148
Small Balance Commercial Real Estate Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	1,865	2,953
Small Balance Commercial Real Estate Loans [Member] | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	1,865	2,953
Small Balance Commercial Real Estate Loans [Member] | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0	0
Small Balance Commercial Real Estate Loans [Member] | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
One- to four- family construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	8,072
One- to four- family construction | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	8,072
One- to four- family construction | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Land and land development - residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	499
Land and land development - residential [Member] | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	499
Land and land development - residential [Member] | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Land and land development - residential [Member] | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Commercial Business
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	4,126	4,537
Commercial Business | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	94	0
Commercial Business | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	4,023	4,537
Commercial Business | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	9
Small business scored
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	288	307
Small business scored | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0	0
Small business scored | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	288	307
Small business scored | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Agricultural Business
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	3,403
Agricultural Business | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	3,175
Agricultural Business | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	89
Agricultural Business | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	139
One- to Four-Family Residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	3,541	1,622
One- to Four-Family Residential | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	3,541	1,622
One- to Four-Family Residential | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0	$ 0
One- to Four-Family Residential | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Consumer—home equity revolving lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	821
Consumer—home equity revolving lines of credit | Real Estate Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	821
Consumer—home equity revolving lines of credit | Equipment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	0
Consumer—home equity revolving lines of credit | Inventories
Accounts, Notes, Loans and Financing Receivable [Line Items]
Collateral Dependent Loans, Amortized Cost	$ 0

XML

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Age Analysis of Company's Past Due Loans) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total loans	$ 10,472,407	$ 10,146,724
Non-accrual with no Allowance	18,635	12,391
Nonaccrual loans	28,071	21,706
Loans 90 days or more past due and still accruing	109	1,287
Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Total loans	894,876	845,320
Non-accrual with no Allowance	0	0
Nonaccrual loans	66	143
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	894,876	845,320
Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Total loans	1,558,176	1,589,975
Non-accrual with no Allowance	0	0
Nonaccrual loans	0	0
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	1,558,176	1,589,975
Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Total loans	1,172,825	1,200,251
Non-accrual with no Allowance	1,865	2,927
Nonaccrual loans	2,412	3,540
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	1,172,825	1,200,251
Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Total loans	699,830	645,071
Non-accrual with no Allowance	0	0
Nonaccrual loans	0	0
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	699,830	645,071
Commercial construction
Financing Receivable, Past Due [Line Items]
Total loans	183,765	184,876
Non-accrual with no Allowance	0	0
Nonaccrual loans	0	0
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	183,765	184,876
Multifamily construction
Financing Receivable, Past Due [Line Items]
Total loans	433,868	325,816
Non-accrual with no Allowance	0	0
Nonaccrual loans	0	0
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	433,868	325,816
One- to four- family construction
Financing Receivable, Past Due [Line Items]
Total loans	547,200	647,329
Non-accrual with no Allowance	1,711	0
Nonaccrual loans	1,711	0
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	547,200	647,329
Land and land development
Financing Receivable, Past Due [Line Items]
Total loans	345,053	328,475
Non-accrual with no Allowance	499	0
Nonaccrual loans	569	181
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	345,053	328,475
Commercial Business
Financing Receivable, Past Due [Line Items]
Total loans	1,313,226	1,283,407
Non-accrual with no Allowance	5,979	6,998
Nonaccrual loans	6,397	7,356
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	1,313,226	1,283,407
Small business scored
Financing Receivable, Past Due [Line Items]
Total loans	982,283	947,092
Non-accrual with no Allowance	284	303
Nonaccrual loans	2,042	2,530
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	982,283	947,092
Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Total loans	310,120	295,077
Non-accrual with no Allowance	3,997	594
Nonaccrual loans	3,997	594
Loans 90 days or more past due and still accruing	0	0
Financing Receivable, before Allowance for Credit Loss	310,120	295,077
One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Total loans	1,340,126	1,173,112
Non-accrual with no Allowance	3,479	1,569
Nonaccrual loans	7,605	5,236
Loans 90 days or more past due and still accruing	60	1,023
Financing Receivable, before Allowance for Credit Loss	1,340,126	1,173,112
Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Total loans	577,725	566,291
Non-accrual with no Allowance	821	0
Nonaccrual loans	3,258	2,124
Loans 90 days or more past due and still accruing	49	254
Financing Receivable, before Allowance for Credit Loss	577,725	566,291
Consumer-other
Financing Receivable, Past Due [Line Items]
Total loans	113,334	114,632
Non-accrual with no Allowance	0	0
Nonaccrual loans	14	2
Loans 90 days or more past due and still accruing	0	10
Financing Receivable, before Allowance for Credit Loss	113,334	114,632
30 to 59 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	5,826	15,814
30 to 59 Days Past Due [Member] | Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
30 to 59 Days Past Due [Member] | Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
30 to 59 Days Past Due [Member] | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,560	1,859
30 to 59 Days Past Due [Member] | Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
30 to 59 Days Past Due [Member] | Commercial construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
30 to 59 Days Past Due [Member] | Multifamily construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
30 to 59 Days Past Due [Member] | One- to four- family construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	900
30 to 59 Days Past Due [Member] | Land and land development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	921
30 to 59 Days Past Due [Member] | Commercial Business
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	17	2,100
30 to 59 Days Past Due [Member] | Small business scored
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	538	1,479
30 to 59 Days Past Due [Member] | Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,724	1,185
30 to 59 Days Past Due [Member] | One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	615	5,287
30 to 59 Days Past Due [Member] | Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,131	1,824
30 to 59 Days Past Due [Member] | Consumer-other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	241	259
60 to 89 Days Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	3,347	7,429
60 to 89 Days Past Due [Member] | Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | Commercial construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | Multifamily construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | One- to four- family construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,255	0
60 to 89 Days Past Due [Member] | Land and land development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	498	0
60 to 89 Days Past Due [Member] | Commercial Business
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	4,145
60 to 89 Days Past Due [Member] | Small business scored
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	82	661
60 to 89 Days Past Due [Member] | Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
60 to 89 Days Past Due [Member] | One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	998	2,242
60 to 89 Days Past Due [Member] | Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	458	203
60 to 89 Days Past Due [Member] | Consumer-other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	56	178
90 Days or More Past Due [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	19,962	9,128
90 Days or More Past Due [Member] | Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
90 Days or More Past Due [Member] | Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
90 Days or More Past Due [Member] | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	2	2
90 Days or More Past Due [Member] | Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
90 Days or More Past Due [Member] | Commercial construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
90 Days or More Past Due [Member] | Multifamily construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
90 Days or More Past Due [Member] | One- to four- family construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	709	0
90 Days or More Past Due [Member] | Land and land development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	97
90 Days or More Past Due [Member] | Commercial Business
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	6,290	649
90 Days or More Past Due [Member] | Small business scored
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,150	1,019
90 Days or More Past Due [Member] | Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	2,952	594
90 Days or More Past Due [Member] | One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	6,501	5,175
90 Days or More Past Due [Member] | Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	2,354	1,582
90 Days or More Past Due [Member] | Consumer-other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	4	10
Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	29,135	32,371
Financial Asset, Past Due | Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
Financial Asset, Past Due | Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
Financial Asset, Past Due | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,562	1,861
Financial Asset, Past Due | Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
Financial Asset, Past Due | Commercial construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
Financial Asset, Past Due | Multifamily construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	0	0
Financial Asset, Past Due | One- to four- family construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,964	900
Financial Asset, Past Due | Land and land development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	498	1,018
Financial Asset, Past Due | Commercial Business
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	6,307	6,894
Financial Asset, Past Due | Small business scored
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,770	3,159
Financial Asset, Past Due | Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	4,676	1,779
Financial Asset, Past Due | One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	8,114	12,704
Financial Asset, Past Due | Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	3,943	3,609
Financial Asset, Past Due | Consumer-other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	301	447
Financial Asset, Not Past Due
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	10,443,272	10,114,353
Financial Asset, Not Past Due | Commerical real estate - owner-occupied [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	894,876	845,320
Financial Asset, Not Past Due | Commercial real estate - investment properties
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,558,176	1,589,975
Financial Asset, Not Past Due | Small Balance Commercial Real Estate Loans [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,171,263	1,198,390
Financial Asset, Not Past Due | Multifamily Real Estate
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	699,830	645,071
Financial Asset, Not Past Due | Commercial construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	183,765	184,876
Financial Asset, Not Past Due | Multifamily construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	433,868	325,816
Financial Asset, Not Past Due | One- to four- family construction
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	545,236	646,429
Financial Asset, Not Past Due | Land and land development
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	344,555	327,457
Financial Asset, Not Past Due | Commercial Business
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,306,919	1,276,513
Financial Asset, Not Past Due | Small business scored
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	980,513	943,933
Financial Asset, Not Past Due | Agricultural business, including secured by farmland
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	305,444	293,298
Financial Asset, Not Past Due | One- to four-family residential [Member]
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	1,332,012	1,160,408
Financial Asset, Not Past Due | Consumer—home equity revolving lines of credit
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	573,782	562,682
Financial Asset, Not Past Due | Consumer-other
Financing Receivable, Past Due [Line Items]
Financing Receivable, before Allowance for Credit Loss	$ 113,033	$ 114,185

XML

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES (Allowance for Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	$ 141,457	$ 125,471	$ 141,465	$ 132,099
Provision (recapture) for credit losses	3,559	3,144	4,333	(4,232)
Recoveries	753	587	1,451	1,581
Charge-offs	(1,089)	(500)	(2,569)	(746)
Allowance for loan losses, Ending balance	144,680	128,702	144,680	128,702
Commercial Real Estate
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	42,975	47,264	44,086	52,995
Provision (recapture) for credit losses	587	(1,020)	(708)	(6,836)
Recoveries	74	129	258	216
Charge-offs	0	0	0	(2)
Allowance for loan losses, Ending balance	43,636	46,373	43,636	46,373
Multifamily Real Estate
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	8,475	7,183	7,734	7,043
Provision (recapture) for credit losses	(436)	(277)	305	(137)
Recoveries	0	0	0	0
Charge-offs	0	0	0	0
Allowance for loan losses, Ending balance	8,039	6,906	8,039	6,906
Construction and Land
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	28,433	26,679	29,171	27,294
Provision (recapture) for credit losses	1,567	260	829	(734)
Recoveries	0	0	0	384
Charge-offs	(156)	0	(156)	(5)
Allowance for loan losses, Ending balance	29,844	26,939	29,844	26,939
Commercial Business and Small Business Scored
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	33,735	26,655	33,299	26,421
Provision (recapture) for credit losses	187	2,032	1,662	2,199
Recoveries	524	234	643	383
Charge-offs	(566)	(248)	(1,724)	(330)
Allowance for loan losses, Ending balance	33,880	28,673	33,880	28,673
Agricultural Business
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	3,094	2,586	3,475	3,190
Provision (recapture) for credit losses	477	402	(13)	(320)
Recoveries	2	14	111	132
Charge-offs	0	0	0	0
Allowance for loan losses, Ending balance	3,573	3,002	3,573	3,002
One- to Four-Family Residential
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	15,736	8,109	14,729	8,205
Provision (recapture) for credit losses	969	1,366	1,889	1,230
Recoveries	36	98	153	138
Charge-offs	(4)	0	(34)	0
Allowance for loan losses, Ending balance	16,737	9,573	16,737	9,573
Consumer-other
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Allowance for loan losses, Beginning balance	9,009	6,995	8,971	6,951
Provision (recapture) for credit losses	208	381	369	366
Recoveries	117	112	286	328
Charge-offs	(363)	(252)	(655)	(409)
Allowance for loan losses, Ending balance	$ 8,971	$ 7,236	8,971	$ 7,236
Commercial Business
Financing Receivable, Allowance for Loan Losses [Roll Forward]
Charge-offs			$ (860)

XML

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS (Finite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 373,121	$ 373,121
Goodwill, end of period		373,121
Finite-lived Intangible Assets [Roll Forward]
Intangible Assets, Net (Including Goodwill)		380,520	$ 382,561	$ 387,976
Amortization	(5,279)	(2,041)
Core Deposit Intangibles [Member]
Finite-lived Intangible Assets [Roll Forward]
Finite-Lived Intangible Assets, Net		7,399	$ 9,440	$ 14,855
finite-lived intangible assets, other changes	136
Amortization	$ (5,279)	$ (2,041)

XML

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS (Estimated Annual Amortization Expense) (Details) - Core Deposit Intangibles [Member] - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year	$ 1,715
Finite-Lived Intangible Asset, Expected Amortization, Year One	2,626
Finite-Lived Intangible Asset, Expected Amortization, Year Two	1,567
Finite-Lived Intangible Asset, Expected Amortization, Year Three	904
Finite-Lived Intangible Asset, Expected Amortization, Year Four	426
Thereafter	161
Finite lived assets, net	$ 7,399	$ 9,440	$ 14,855

XML

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS (Mortgage Servicing Rights) (Details) - USD ($) $ in Thousands		3 Months Ended				6 Months Ended
		Jun. 30, 2023		Jun. 30, 2022		Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Servicing Asset at Amortized Value, Balance [Roll Forward]
Additions—through purchase						$ 124	$ 145
Servicing Contracts [Member]
Morgage Servicing Rights at Amortized Value [Line Items]
Loans Serviced For Others		$ 2,740,000				2,740,000		$ 2,770,000
Custodial Accounts		17,700				17,700		$ 11,200
Servicing Asset at Amortized Value, Balance [Roll Forward]
Balance, net of valuation allowance, beginning of the period		15,613		$ 18,008		16,166	17,206
Additions—amounts capitalized		349		804		485	2,757
Additions—through purchase		85		83
Amortization (1)		(827)	[1]	(1,115)	[1]	(1,674)	(2,346)
Servicing Asset at Fair Value, Other Changes in Fair Value		109		147		(10)	129
Balance, net of valuation allowance, end of the period	[2]	15,111		$ 17,633		15,111	$ 17,633
Valuation allowance, end of period		$ 0				$ 0

[1] Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.

[2] There was no valuation allowance on mortgage servicing rights as of both June 30, 2023 and 2022.(3)    Fair value adjustments relate to SBA servicing rights. These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

XML

DEPOSITS (Deposit Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Deposits:
Non-interest-bearing accounts	$ 5,369,187	$ 6,176,998
Interest-bearing checking	1,908,402	1,811,153
Regular savings accounts	2,588,298	2,710,090
Money market accounts	1,876,569	2,198,288
Total interest-bearing transaction and savings accounts	6,373,269	6,719,531
Certificates of Deposit Greater Than or Equal to $250,000	397,784	178,324
Certificates of Deposit Less Than $250,000	958,816	545,206
Total certificates of deposit	1,356,600	723,530
Total deposits	13,099,056	13,620,059
Included in total deposits:
Public fund transaction and savings accounts	380,731	392,859
Public fund interest-bearing certificates	45,840	26,810
Total public deposits	426,571	419,669
Total brokered certificates of deposit	$ 203,649	$ 0

XML

DEPOSITS DEPOSITS (Maturities and Weighted Average Interest Rates of Certificates of Deposit) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Maturities of Time Deposits [Abstract]
Maturing in one year or less	$ 1,259,221
Maturing after one year through two years	60,692
Maturing after two years through three years	24,503
Maturing after three years through four years	6,572
Maturing after four years through five years	4,686
Maturing after five years	926
Total certificates of deposit	$ 1,356,600	$ 723,530
Weighted Average Rate [Abstract]
Maturing in one year or less	3.20%
Maturing after one year through two years	1.15%
Maturing after two years through three years	0.66%
Maturing after three years through four years	0.35%
Maturing after four years through five years	0.57%
Maturing after five years	0.86%
Total certificates of deposit	3.04%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value By Balance Sheet Location) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets:
Securities—trading	$ 25,659	$ 28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Securities—held-to-maturity	933,116	942,180
Securities purchased under agreements to resell	0	300,000
Liabilities:
FHLB advances at fair value	270,000	50,000
Subordinated notes, net	92,646	98,947
Reported Value Measurement [Member]
Assets:
Cash and cash equivalents	281,325	243,062
Securities—trading	25,659	28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Securities purchased under agreements to resell	0	300,000
Loans receivable held for sale	60,612	56,857
Loans receivable	10,327,727	10,005,259
Equity securities	547	553
FHLB stock	20,800	12,000
Bank-owned life insurance	301,260	297,565
Mortgage servicing rights	14,266	15,331
SBA servicing asset	845	835
Investments in limited partnerships	12,776	12,427
Liabilities:
Demand, interest checking and money market accounts	9,154,158	10,186,439
Regular savings	2,588,298	2,710,090
Certificates of deposit	1,356,600	723,530
FHLB advances at fair value	270,000	50,000
Other borrowings	193,019	232,799
Junior subordinated debentures at fair value	67,237	74,857
Estimate of Fair Value Measurement [Member]
Assets:
Cash and cash equivalents	281,325	243,062
Securities—trading	25,659	28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Securities purchased under agreements to resell	0	300,000
Loans receivable held for sale	60,645	56,948
Loans receivable	9,895,896	9,810,965
Equity securities	547	553
FHLB stock	20,800	12,000
Bank-owned life insurance	301,260	297,565
Mortgage servicing rights	35,185	35,148
SBA servicing asset	845	835
Investments in limited partnerships	12,776	12,427
Liabilities:
Demand, interest checking and money market accounts	9,154,158	10,186,439
Regular savings	2,588,298	2,710,090
Certificates of deposit	1,335,503	702,581
FHLB advances at fair value	270,000	50,000
Other borrowings	193,019	232,799
Subordinated notes, net	90,163	96,718
Junior subordinated debentures at fair value	67,237	74,857
Interest rate swaps [Member] | Reported Value Measurement [Member]
Assets:
Derivatives:	18,996	19,339
Liabilities:
Derivatives:	36,777	37,150
Interest rate swaps [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Derivatives:	18,996	19,339
Liabilities:
Derivatives:	36,777	37,150
Interest Rate Forward Sales Commitments [Member] | Reported Value Measurement [Member]
Assets:
Derivatives:	349	142
Liabilities:
Derivatives:	2	118
Interest Rate Forward Sales Commitments [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Derivatives:	349	142
Liabilities:
Derivatives:	2	118
Loan Participations and Assignments | Reported Value Measurement [Member]
Liabilities:
Derivatives:	52	67
Loan Participations and Assignments | Estimate of Fair Value Measurement [Member]
Liabilities:
Derivatives:	52	67
Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member]
Assets:
Securities—held-to-maturity	1,090,949	1,109,319
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Securities—held-to-maturity	925,485	933,513
Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member]
Assets:
Securities—held-to-maturity	7,621	8,648
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Securities—held-to-maturity	$ 7,631	$ 8,667

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Assets and Liabilities Measured on a Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—trading	$ 25,659	$ 28,694
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-for-sale, Fair Value Disclosure	59,336	51,779
Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Total assets	2,542,333	2,853,326
Junior subordinated debentures net of unamortized deferred issuance costs at fair value	67,237	74,857
Total liabilities	104,068	112,192
Recurring [Member] | Interest rate swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	18,996	19,339
Derivative liabilities	36,777	37,150
Recurring [Member] | Interest rate lock and forward sale commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	349	142
Derivative liabilities	2	118
Recurring [Member] | Loan Participations and Assignments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	52	67
Recurring [Member] | Trust Preferred Securities Subject to Mandatory Redemption
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—trading	25,659	28,694
Recurring [Member] | U.S. Government and agency obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	48,362	55,108
Recurring [Member] | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	160,768	261,209
Recurring [Member] | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	99,788	121,853
Recurring [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	1,942,398	2,139,336
Recurring [Member] | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	214,644	211,525
Recurring [Member] | Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-for-sale, Fair Value Disclosure	17,201	2,305
Recurring [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	547	553
Recurring [Member] | SBA Servicing Asset
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
SBA servicing asset	845	835
Recurring [Member] | Investment in Limited Partnerships
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in limited partnerships	12,776	12,427
Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Total assets	547	553
Junior subordinated debentures net of unamortized deferred issuance costs at fair value	0	0
Total liabilities	0	0
Recurring [Member] | Level 1 [Member] | Interest rate swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Recurring [Member] | Level 1 [Member] | Interest rate lock and forward sale commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Recurring [Member] | Level 1 [Member] | Loan Participations and Assignments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	0	0
Recurring [Member] | Level 1 [Member] | Trust Preferred Securities Subject to Mandatory Redemption
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—trading	0	0
Recurring [Member] | Level 1 [Member] | U.S. Government and agency obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Level 1 [Member] | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Level 1 [Member] | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Level 1 [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Level 1 [Member] | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Level 1 [Member] | Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-for-sale, Fair Value Disclosure	0	0
Recurring [Member] | Level 1 [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	547	553
Recurring [Member] | Level 1 [Member] | SBA Servicing Asset
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
SBA servicing asset	0	0
Recurring [Member] | Level 1 [Member] | Investment in Limited Partnerships
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in limited partnerships	0	0
Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	2,465,960	2,789,031
Total assets	2,502,236	2,810,736
Junior subordinated debentures net of unamortized deferred issuance costs at fair value	0	0
Total liabilities	36,829	37,293
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest rate swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	18,996	19,339
Derivative liabilities	36,777	37,150
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest rate lock and forward sale commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	79	61
Derivative liabilities	0	76
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Loan Participations and Assignments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	52	67
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Trust Preferred Securities Subject to Mandatory Redemption
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—trading	0	0
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | U.S. Government and agency obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	48,362	55,108
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	160,768	261,209
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	99,788	121,853
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	1,942,398	2,139,336
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	214,644	211,525
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-for-sale, Fair Value Disclosure	17,201	2,305
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | SBA Servicing Asset
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
SBA servicing asset	0	0
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Investment in Limited Partnerships
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in limited partnerships	0	0
Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Residential Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-For-Sale, Fair Value Disclosure, Unpaid Principal Balance	16,800	2,200
Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Total assets	39,550	42,037
Junior subordinated debentures net of unamortized deferred issuance costs at fair value	67,237	74,857
Total liabilities	67,239	74,899
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest rate swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest rate lock and forward sale commitments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	270
Derivative liabilities	2	42
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Loan Participations and Assignments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Trust Preferred Securities Subject to Mandatory Redemption
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—trading	25,659	28,694
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | U.S. Government and agency obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Mortgage-backed securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities—available-for-sale, net of allowance for credit losses of $2,000 and none, respectively; amortized cost $2,879,179 and $3,218,777, respectively	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Loans Held-for-sale, Fair Value Disclosure	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities	0	0
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | SBA Servicing Asset
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
SBA servicing asset	845	835
Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Investment in Limited Partnerships
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in limited partnerships	$ 12,776	$ 12,427

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Valuation Technique) (Details) - Weighted Average [Member] - Fair Value, Inputs, Level 3 [Member]	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2023
Junior Subordinated Debt [Member] | Discounted cash flows [Member]
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Input, Discount Rate		8.27%	10.55%
Corporate Bonds (TPS securities) [Member] | Discounted cash flows [Member]
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Input, Discount Rate		8.27%	10.55%
Real Estate Owned [Member] | discount to appraised value [Member]
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
fair value inputs, discount to appraised value		68.35%	58.18%
Interest Rate Lock Commitments [Member] | Valuation, Pricing Model [Member]
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Input, Pull-Through Rate		78.65%	87.76%
SBA Servicing Rights | Discounted cash flows [Member]
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items]
Fair Value Input, Constant Prepayment Rate	14.61%	14.10%

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Unobservable Inputs Reconciliation) (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Interest Rate Lock Commitments [Member] | Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Derivative assets	$ (268)	$ 357	$ (268)	$ 357		$ 81		$ 1,467
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	(212)	423	229	(1,110)
Derivative Asset, Net	(268)	357	(268)	357	$ 480		$ (66)
Junior Subordinated Debt [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Other Comprehensive Income (Loss)	(7,466)	1,719	(7,620)	2,932
Junior Subordinated Debt [Member] | Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	0	0		0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value	67,237	72,229	67,237	72,229	$ 74,703	$ 74,857	$ 70,510	$ 119,815
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)	0	0	0	0
TPS Securities [Member] | Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	28,591	27,354	28,694	26,981
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	(2,932)	532	(3,035)	905
Ending balance	25,659	27,886	25,659	27,886
Investment in Limited Partnerships | Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	12,394	10,982	12,427	10,257
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	(142)	(155)	(662)	(372)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements)	524	1,054	1,011	1,996
Ending balance	12,776	11,881	12,776	11,881
SBA Servicing Rights | Recurring [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	954	1,162	835	1,161
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	(109)	(147)	10	(146)
Ending balance	$ 845	$ 1,015	$ 845	$ 1,015

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Assets Measured on Nonrecurring Basis) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		$ (1,883)
REO	$ 546	340
Loans receivable held for sale	42,134	49,474
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		0
REO	0	0
Loans receivable held for sale	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		0
REO	0	0
Loans receivable held for sale	42,134	49,474
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		(1,883)
REO	546	340
Loans receivable held for sale	$ 0	$ 0

XML

FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value, Measured on Nonrecurring Basis, Gains (Losses) From Fair Value Adjustments) (Details) - Nonrecurring [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Schedule of Fair Value, Measured on Nonrecurring Basis, Gains (Losses) From Fair Value Adjustments [Line Items]
Fair Value Disclosure, Gain (Loss) from Nonrecurring Fair Value Adjustments	$ (757)	$ (458)		$ (1,061)
fair value, net derivative asset (liability) measured on non-recurring basis, unobservable inputs reconciliation, gain (loss) included in earnings			$ (463)
Real Estate [Member] | Fair Value, Inputs, Level 3 [Member]
Schedule of Fair Value, Measured on Nonrecurring Basis, Gains (Losses) From Fair Value Adjustments [Line Items]
Real Estate Owned, Fair Value Disclosure, Gain (Loss) from Nonrecurring Fair Value Adjustments	0	0	0
loans held for sale | Fair Value, Inputs, Level 2 [Member]
Schedule of Fair Value, Measured on Nonrecurring Basis, Gains (Losses) From Fair Value Adjustments [Line Items]
Loans Held for Sale, Fair Value Disclosure, Gain (Loss) from Nonrecurring Fair Value Adjustments	$ (757)	$ (458)	$ (463)	$ (1,061)

XML

INCOME TAXES AND DEFERRED TAXES INCOME TAXES AND DEFERRED TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Tax credit investments	$ 106,486		$ 106,486		$ 71,430
Unfunded commitments—tax credit investments	74,299		74,299		$ 44,563
Tax credits and other tax benefits recognized	2,134	$ 1,486	4,269	$ 2,972
Tax credit amortization expense included in provision for income taxes	1,722	$ 1,263	3,444	$ 2,571
Unrecognized Tax Benefits	$ 1,600		$ 1,600

XML

CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING FOR EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net Income (Loss) Attributable to Parent	$ 39,591	$ 55,555	$ 54,380	$ 49,070	$ 47,965	$ 43,963	$ 95,146	$ 91,928
Basic weighted average shares outstanding	34,373,434				34,307,001		34,306,853	34,303,889
Dilutive effect of unvested restricted stock	35,590				144,739		128,368	229,046
Diluted weighted shares outstanding	34,409,024				34,451,740		34,435,221	34,532,935
Earnings per common share
Basic	$ 1.15				$ 1.40		$ 2.77	$ 2.68
Diluted	$ 1.15				$ 1.39		$ 2.76	$ 2.66

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STOCK-BASED COMPENSATION PLANS (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended		59 Months Ended	107 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2023	Mar. 31, 2023	May 24, 2023	Apr. 24, 2018	Apr. 22, 2014
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Expense		$ 2.3	$ 2.3	$ 4.4	$ 4.3
Compensation Cost Not yet Recognized	$ 16.7	$ 16.7		$ 16.7
Compensation Cost Not yet Recognized, Period for Recognition				13 months
2014 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Authorized										900,000
2014 Omnibus Incentive Plan [Member] | Restricted Stock Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period							276,904
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	4,409	4,409		4,409
2014 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period							440,336
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	22,626	22,626		22,626
2018 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Authorized									900,000
2018 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period						741,429
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	343,033	343,033		343,033
Two Thousand Twenty Three Omnibus Incentive Plan 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares Authorized								625,000
Two Thousand Twenty Three Omnibus Incentive Plan 2023 | Restricted Stock Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	0

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COMMITMENTS AND CONTINGENCIES (Fair value, off balance sheet risks, limited partnerships, commitment) (Details) - Limited Partner - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Schedule of Fair Value, Off-Balance Sheet Risks, Limited Partnerships, Commitment) [Line Items]
Fair Value Disclosure, Off Balance Sheet Risk, Amount Funded, Commitment	$ 11,283	$ 10,272
Fair Value Disclosure, Off Balance Sheet Risk, Unfunded Amount, Commitment	$ 11,217	$ 12,228

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COMMITMENTS AND CONTINGENCIES (Commitments Without Recorded Liability) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Reserve for Unfunded Loan Commitments	$ 14,700,000	$ 14,700,000
Mortgage loan applications, day interest rate is locked		45 days
Minimum [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Mortgage loan applications, day interest rate is locked		30 days
Maximum [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Mortgage loan applications, day interest rate is locked		60 days
Commitments to Extend Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	3,911,428,000	$ 3,911,428,000		$ 4,031,954,000
Financial Standby Letter of Credit [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	33,534,000	33,534,000		26,119,000
Loan Origination Commitments [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	47,601,000	47,601,000		53,266,000
Risk Participation Agreement [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	47,146,000	47,146,000		48,566,000
Loans Held for Sale Origination Commitments [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	24,671,000	24,671,000		10,525,000
Commitments to Sell Loans Secured by one to four Residential Properties [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	13,063,000	13,063,000		12,568,000
Counterparty default losses on forward contracts	0		$ 0
Commitments to Sell Mortgage Backed Securities [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contract or Notional Amount	$ 22,500,000	$ 22,500,000		$ 7,000,000

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DERIVATIVES AND HEDGING (Derivatives Designated as Hedging, by Balance Sheet Location) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	$ 35,660	$ 37,119
Liability Derivatives, Fair Value	59,880	63,634
Derivative Assets, Amounts offsett in the Statement of Financial Condition	(16,664)	(17,780)
Derivative Asset, Subject to Master Netting Arrangement, Collateral, Obligation to Return Cash, Offset Against Derivative Asset	0	0
Derivative Liability, Subject to Master Netting Arrangement, Collateral, Right to Reclaim Cash Offset	$ (6,439)	$ (8,705)
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Accrued expenses and other liabilities	Accrued expenses and other liabilities
Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	$ 484,558	$ 474,502
Liability Derivatives, Notional/Contract Amount	474,965	503,381
Not Designated as Hedging Instrument [Member] | Other assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	19,345	19,481
Not Designated as Hedging Instrument [Member] | Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	36,831	37,335
Interest rate swaps [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	35,660	37,119
Liability Derivatives, Fair Value	59,880	63,634
Derivative Assets, Amounts offsett in the Statement of Financial Condition	(16,664)	(17,780)
Interest rate swaps [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	0	0
Liability Derivatives, Notional/Contract Amount	400,000	400,000
Interest rate swaps [Member] | Designated as Hedging Instrument [Member] | Other assets [Member] | Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	0	0
Interest rate swaps [Member] | Designated as Hedging Instrument [Member] | Other liabilities [Member] | Cash Flow Hedging
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	24,198	26,485
Interest rate swaps [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	426,710	440,731
Liability Derivatives, Notional/Contract Amount	426,710	440,731
Interest rate swaps [Member] | Not Designated as Hedging Instrument [Member] | Other assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	35,660	37,119
Interest rate swaps [Member] | Not Designated as Hedging Instrument [Member] | Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	35,682	37,150
Loan Participations and Assignments | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	1,167	1,283
Liability Derivatives, Notional/Contract Amount	45,979	47,283
Loan Participations and Assignments | Not Designated as Hedging Instrument [Member] | Other assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	0	0
Loan Participations and Assignments | Not Designated as Hedging Instrument [Member] | Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	52	67
Mortgage loan commitments [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	24,671	15,920
Liability Derivatives, Notional/Contract Amount	0	12,367
Mortgage loan commitments [Member] | Not Designated as Hedging Instrument [Member] | Other assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	270	81
Mortgage loan commitments [Member] | Not Designated as Hedging Instrument [Member] | Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	0	42
Forward Contracts [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Notional/Contract Amount	32,010	16,568
Liability Derivatives, Notional/Contract Amount	2,276	3,000
Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	79	61
Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value	$ 2	$ 76

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DERIVATIVES AND HEDGING (effect of cash flow hedge accounting on AOCI) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Cash Flow Hedging Impact on AOCI [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, before Tax	$ (1,356)	$ (3,779)	$ 3,382	$ (18,554)
Interest rate swaps [Member] | Cash Flow Hedging | Designated as Hedging Instrument [Member]
Cash Flow Hedging Impact on AOCI [Line Items]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, before Tax	(5,514)		(4,390)	(3,617)
Other Comprehensive Income (Loss), Derivative, Included Component, Increase (Decrease), before Adjustments, after	(5,514)		(4,390)	(3,617)
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), after Adjustments, before Tax	0		0	0
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	(4,159)		(7,772)	161
Other Comprehensive Income (Loss), Derivative, Included Component, Increase (Decrease), Adjustments, after Tax	(4,159)		(7,772)	161
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), Adjustments, after Tax	$ 0		$ 0	$ 0

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DERIVATIVES AND HEDGING (Gain (Loss) On Derivatives Not Designated in Hedging Relationship) (Details) - Not Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income, net	$ (431)	$ (398)	$ 309	$ (1,111)
Mortgage loan commitments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income, net	(210)	1,889	230	(1,110)
Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in income, net	$ (221)	$ (2,287)	$ 79	$ (1)

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DERIVATIVES AND HEDGING (Narrative) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Offsetting Assets and Liabilities [Line Items]
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net	$ 17,500
AOCI, Cash Flow Hedge, Cumulative Gain (Loss), after Tax	17,600	$ 20,100
Derivative net liability position	0
Collateral posted	17,100	22,200
Derivative Liability, Collateral Posted, Restricted Cash	14,100		$ 15,900
Interest rate swaps [Member]
Offsetting Assets and Liabilities [Line Items]
Variation Margin Adjustment, Derivative Liability	$ 6,400	$ 8,700

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DERIVATIVES AND HEDGING (Derivative Offsetting) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Offsetting Derivative Assets [Abstract]
Derivative Assets, Gross Amounts Recognized	$ 35,660	$ 37,119
Derivative Assets, Amounts offsett in the Statement of Financial Condition	(16,664)	(17,780)
Derivative Assets, Net Amounts in the Statement of Financial Condition	18,996	19,339
Derivative Assets, Netting Adjustment Per Applicable Master Netting Agreements	0	0
Derivative Assets, Fair Value of Financial Collateral in the Statement of Financial Condiation	0	0
Derivative Assets, Net Amount	18,996	19,339
Offsetting Derivative Liabilities [Abstract]
Derivative Liabilities, Gross Amounts Recognized	59,880	63,634
Derivative Liabilities, Amounts offset in the Statement of Financial Condition	(23,103)	(26,484)
Derivative Liabilities, Net Amounts of the Statement of Financial Condition	36,777	37,150
Derivative Liabilities, Net Adjustment Per Applicable Master Netting Agreements	0	0
Derivative Liabilities, Fair Value of Financial Collateral in the Statement of Financial Condition	(13,195)	(14,972)
Derivative Liabilities, Net Amount	23,582	22,178
Interest rate swaps [Member]
Offsetting Derivative Assets [Abstract]
Derivative Assets, Gross Amounts Recognized	35,660	37,119
Derivative Assets, Amounts offsett in the Statement of Financial Condition	(16,664)	(17,780)
Derivative Assets, Net Amounts in the Statement of Financial Condition	18,996	19,339
Derivative Assets, Netting Adjustment Per Applicable Master Netting Agreements	0	0
Derivative Assets, Fair Value of Financial Collateral in the Statement of Financial Condiation	0	0
Derivative Assets, Net Amount	18,996	19,339
Offsetting Derivative Liabilities [Abstract]
Derivative Liabilities, Gross Amounts Recognized	59,880	63,634
Derivative Liabilities, Amounts offset in the Statement of Financial Condition	(23,103)	(26,484)
Derivative Liabilities, Net Amounts of the Statement of Financial Condition	36,777	37,150
Derivative Liabilities, Net Adjustment Per Applicable Master Netting Agreements	0	0
Derivative Liabilities, Fair Value of Financial Collateral in the Statement of Financial Condition	(13,195)	(14,972)
Derivative Liabilities, Net Amount	$ 23,582	$ 22,178