The Window http://thewindow.net/ Wed, 11 May 2022 11:40:33 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://thewindow.net/wp-content/uploads/2021/03/thewindow-icon-150x150.png The Window http://thewindow.net/ 32 32 Chicago Bears have a “big plan” for Velus Jones Jr., whose speed and versatility are key assets – Chicago Bears Blog https://thewindow.net/chicago-bears-have-a-big-plan-for-velus-jones-jr-whose-speed-and-versatility-are-key-assets-chicago-bears-blog/ Wed, 11 May 2022 11:31:02 +0000 https://thewindow.net/chicago-bears-have-a-big-plan-for-velus-jones-jr-whose-speed-and-versatility-are-key-assets-chicago-bears-blog/

LAKE FOREST, Ill. — Velus Jones Jr. walked into Halas Hall for his first day on the job and left a strong impression on his new coaches.

The wide receiver, who the Chicago Bears drafted 71st overall, wore a suit and brought his own whiteboard to meetings. He came on prepared, aiming to prove his all-round approach and age, as a rookie soon to be 25 will be an asset to a group of slim positions.

“I’m all about my business,” Jones said. “I was young, but now that I’m older I realize what’s at stake, and it’s the best job in the world.

“They have a guy who is mature. Partying doesn’t interest me much. … My mind is screwed, and so they definitely have a mature guy minding his business and going to help this team any way he can.

Jones was Chicago’s only receiver drafted with his 11 picks last month, which was somewhat surprising given the focus on surrounding sophomore quarterback Justin Fields with as many guns as possible. Jones edged several wides with considerably more offensive production, such as Khalil Shakir, Jalen Tolbert and Calvin Austin III.

During a six-year college career — the NCAA granted an extra year during the pandemic — that began at USC in 2016 before Jones moved to Tennessee to play a bigger role as a wide receiver over his past two seasons, the 6-foot, 200-pound receiver/returner has become an all-around weapon for offensive and special teams. According to ESPN Stats & Information, Jones was the only FBS player with more than 800 receiving yards, 600 kickoff return yards and 200 kickoff return yards in 2021. He also had seven receiving touchdowns and returned a kick off for a score. It was by far his best year in terms of offensive production having totaled 627 receiving yards and four combined touchdowns in his previous five seasons.

Bears general manager Ryan Poles stopped short of comparing the rookie to San Francisco do-it-all Deebo Samuel, but he’s considering the possibility of lining up Jones “anywhere” to pay dividends. This was reflected during rookie minicamp when Jones was moved from the backfield to the outside slot.

“I was talking to [Bears offensive coordinator] Luke [Getsy] the other day about the special attributes that [Jones] a, and he has a big plan for him,” coach Matt Eberflus said. “Let’s start with the receiver and then see what he can do, moving him to different places and giving him the ball, because he’s an explosive athlete.”

Chicago will continue to sort out its wide receiver depth chart when the full team begins OTAs next week. While trying to figure out where to line up Darnell Mooney and recent free agent signings Byron Pringle and Equanimeous St. Brown, Jones’ speed could be a factor in determining if his best fit is as an X receiver. .31 seconds for 40 yards was fourth-fastest in the NFL combine.

“I mean he can handle this league, you can see that already,” Getsy said. “Then the speed jumped out at you on the tape. When this guy takes the ball in his hands, he looks like 4.3 on the field. Few guys can do that, and I think that’s what comes out of this guy. He has a chance to score every time he touches the ball.

As a plan for Jones begins to take shape on offense, his impact on special teams looks imminent. Jones won SEC Co-Special Teams Player of the Year after averaging 132.5 all-purpose yards per game in 2021, including 27.3 yards per kick return and 15.1 yards by punt return. Chicago special teams coordinator Richard Hightower said he expects Jones to compete for both jobs this offseason. And for Jones, honing his craft as a returner is what he believes will help him in his development as a receiver.

Finding dynamic return specialists has become a priority for Chicago after parting ways with wide receiver Jakeem Grant and running back Tarik Cohen this offseason. The Bears have prioritized players who aren’t restricted to the positions they play on offense or defense. And for Jones, honing his craft as a returner is what he believes will help him in his development as a receiver.

“I would say it’s truly a blessing,” Jones said. “I want to win games, and I want to help this coaching staff win games… in any way that I can affect the game, certainly in the second leg and as a receiver. . I have the chance to being able to do both because I can impact the game in different ways, so I’m really excited about that.”

]]>
BANNER CORP Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q) https://thewindow.net/banner-corp-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/ Mon, 09 May 2022 19:08:04 +0000 https://thewindow.net/banner-corp-managements-discussion-and-analysis-of-financial-condition-and-results-of-operations-form-10-q/

Executive Overview


We are a bank holding company incorporated in the State of Washington which owns
one subsidiary bank, Banner Bank. Banner Bank is a Washington-chartered
commercial bank that conducts business from its main office in Walla Walla,
Washington and, as of March 31, 2022, it had 141 full service branch offices and
18 loan production offices located in Washington, Oregon, California, Idaho and
Utah. Banner Corporation is subject to regulation by the Federal Reserve. Banner
Bank is subject to regulation by the Washington DFI and the FDIC. As of
March 31, 2022, we had total consolidated assets of $16.78 billion, total loans
of $9.15 billion, total deposits of $14.52 billion and total shareholders'
equity of $1.56 billion.

Banner 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 their offices in Washington, Oregon, California and
Idaho. Banner 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
                                       50
--------------------------------------------------------------------------------

business loans, construction and land development loans, one- to four-family and multi-family residential loans, SBA loans and consumer loans.


Banner Corporation'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.

For the quarter ended March 31, 2022, our net income was $44.0 million, or $1.27
per diluted share, compared to $49.9 million, or $1.44 per diluted share, for
the preceding quarter and compared to $46.9 million, or $1.33 per diluted share,
for the quarter ended March 31, 2021. The current quarter was positively
impacted by the recapture of provision for credit losses, decreased funding
costs and decreased non-interest expense, offset by decreased mortgage banking
income and reduced interest income due to lower yields on total interest earning
assets and a decline in the acceleration of the recognition of deferred loan fee
income due to loan repayments from SBA PPP loan forgiveness compared to both the
preceding and prior year quarters.

Our adjusted earnings (a non-GAAP financial measure), which excludes net gain or
loss on sales of securities, changes in the valuation of financial instruments
carried at fair value, merger and acquisition-related expenses, COVID-19
expenses, Banner Forward expenses, loss on extinguishment of debt and related
tax expenses or benefits, were $46.1 million, or $1.33 per diluted share, for
the quarter ended March 31, 2022, compared to $50.7 million, or $1.47 per
diluted share, for the preceding quarter and compared to $47.7 million, or $1.35
per diluted share, for the quarter ended March 31, 2021.

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

Our operating results depend primarily on our net interest income, which is the
difference between interest income on interest-earning assets, consisting
primarily of loans and investment securities, and interest expense on
interest-bearing liabilities, composed primarily of client deposits, FHLB
advances, other borrowings, subordinated notes, and junior subordinated
debentures. Net interest income is primarily a function of our interest rate
spread, which is the difference between the yield earned on interest-earning
assets and the rate paid on interest-bearing liabilities, as well as a function
of the average balances of interest-earning assets, interest-bearing liabilities
and non-interest-bearing funding sources including non-interest-bearing
deposits. Our net interest income decreased $2.9 million, or 2% to $118.7
million, compared to $121.5 million in the preceding quarter and increased $1.0
million, or 1%, compared to $117.7 million for the same quarter one year
earlier. The lower net interest income during the quarter compared to the
preceding quarter was primarily due to a decline in the acceleration of the
recognition of deferred loan fee income due to loan repayments from SBA PPP loan
forgiveness and a decrease in average interest-earning assets, partially offset
by decreases in the cost of funding liabilities. The increase in net interest
income during the current quarter compared to the prior year quarter was
primarily due to decreases in the cost of funding liabilities as well as an
increase in the average balance of interest-earning assets, partially offset by
a decline in the acceleration of the recognition of deferred loan fee income due
to loan repayments from SBA PPP loan forgiveness and lower yields on average
interest-earning assets.

Our net income is also affected by the level of our non-interest income,
including deposit fees and other service charges, results of mortgage banking
operations, which includes gains and losses on the sale of loans and servicing
fees, gains and losses on the sale of securities, as well as our non-interest
expenses and provisions for credit losses and income taxes. In addition, our net
income is affected by the net change in the value of certain financial
instruments carried at fair value.

Our total revenues (net interest income plus total non-interest income) for the
first quarter of 2022 decreased 5% to $138.1 million, compared to $146.0 million
in the preceding quarter, and decreased $3.9 million, or 3%, compared to $141.9
million for the same period a year earlier, primarily due to a decline in the
acceleration of the recognition of deferred loan fee income due to loan
repayments from SBA PPP loan forgiveness as well as lower income from mortgage
banking operations. Our total non-interest income, which is a component of total
revenue and includes the net gain on sale of securities and changes in the value
of financial instruments carried at fair value, was $19.4 million for the
quarter ended March 31, 2022, compared to $24.5 million in the preceding quarter
and $24.3 million for the quarter ended March 31, 2021, primarily due to the
decrease in mortgage banking income and the preceding quarter including some
positive fair value gains, partially offset by an increase in deposit fees and
other services charges. The decrease in mortgage banking income for the current
quarter compared to both the preceding and prior year quarters was primarily due
to a decrease in the gain on sale margin on one- to four-family held-for-sale
loans as well as a reduction in the volume of one- to four-family sold. The
lower mortgage banking revenue for the current quarter compared to both the
preceding and prior year quarters is also due in part to a downward fair value
adjustment recorded on multifamily held for sale loans at quarter end due to
increases in market interest rates.

Non-interest expense was $91.2 million in the first quarter of 2022, compared to
$91.8 million in the preceding quarter and $93.5 million in the first quarter of
2021. Our non-interest expense decreased in the first quarter of 2022, compared
to the preceding quarter largely as a result of decreases in occupancy and
equipment expenses, advertising and marketing expenses and loss on
extinguishment of debt, partially offset by an increase in salary and employee
benefits expenses primarily due to severance costs and typical higher payroll
taxes in the first quarter of
                                       51
--------------------------------------------------------------------------------

a year partially offset by lower salary expense and a decrease in capitalized
loan origination costs. The decrease in non-interest expense during the first
quarter of 2022, compared to the same quarter a year ago was largely as a result
of decreases in salary and employee benefits expense, primarily due to a
reduction in staffing, and professional and legal expenses, primarily due to a
reduction in consultant expense, partially offset by a decrease in capitalized
loan origination costs and the loss on extinguishment of debt.

We recorded a $7.0 million recapture of provision for credit losses in the
quarter ended March 31, 2022, compared to a $5.2 million recapture of provision
for credit losses in the prior quarter and a $9.3 million provision for credit
losses for the quarter ended March 31, 2021. The recapture of provision for
credit losses for the current and preceding quarters primarily reflects
improvement in the level of adversely classified loans as well as in the
economic indicators utilized to calculate credit losses. The allowance for
credit losses - loans at March 31, 2022 was $125.5 million, representing 674% of
non-performing loans, compared to $132.1 million, or 578% of non-performing
loans at December 31, 2021. In addition to the allowance for credit losses -
loans, Banner maintains an allowance for credit losses - unfunded loan
commitments which was $12.9 million at March 31, 2022, compared to $12.4 million
at December 31, 2021. Non-performing loans were $18.6 million at March 31, 2022,
compared to $22.8 million at December 31, 2021 and $36.6 million a year earlier.
(See Note 4, Loans Receivable and the Allowance for Credit Losses, as well as
"Asset Quality" below in this Form 10-Q.)

*Non-GAAP financial measures: Net income, revenues and other earnings and
expense information excluding fair value adjustments, gains or losses on the
sale of securities, merger and acquisition-related expenses, loss on
extinguishment of debt, COVID-19 expenses, Banner Forward expenses, amortization
of CDI, REO operations, state/municipal tax expense and the related tax benefit,
are non-GAAP financial measures. Management has presented these and other
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. See "Comparison of Results of Operations for the
Three Months Ended March 31, 2022 and 2021" for more detailed information about
our financial performance.

The following tables provide reconciliations of the non-GAAP financial measures discussed in this report (in thousands of dollars, except per share data):


                                                                                 Quarters Ended
                                                           Mar 31, 2022           Dec 31, 2021           Mar 31, 2021
ADJUSTED REVENUE
Net interest income (GAAP)                               $     118,654          $     121,530          $     117,661
Total non-interest income                                       19,427                 24,474                 24,272
Total revenue (GAAP)                                           138,081                146,004                141,933
Exclude net (gain) loss on sale of securities                     (435)                   136                   (485)

Exclude the change in valuation of financial instruments recognized at fair value

                                              (49)                (2,721)                   (59)

Adjusted Revenue (non-GAAP)                              $     137,597          $     143,419          $     141,389


                                                                                        Quarters Ended
                                                                  Mar 31, 2022           Dec 31, 2021           Mar 31, 2021
ADJUSTED EARNINGS
Net income (GAAP)                                               $      

43,963 $49,927 $46,855
Exclude net (gain) loss on sale of securities

                            (435)                   136                   (485)

Exclude net change in measurement of financial instruments carried at fair value

                                                     (49)                (2,721)                   (59)
Exclude merger and acquisition-related expenses                             -                      -                    571
Exclude COVID-19 expenses                                                   -                    127                    148

Exclude Banner Forward expenses                                         2,465                  1,157                    950
Exclude loss on extinguishment of debt                                    793                  2,284                      -
Exclude related net tax benefit                                          (666)                  (236)                  (270)
Total adjusted earnings (non-GAAP)                              $      

46,071 $50,674 $47,710
Diluted earnings per share (GAAP)

                               $        

1.27 $1.44 $1.33
Adjusted diluted earnings per share (non-GAAP)

                  $        

1.33 $1.47 $1.35

                                       52
--------------------------------------------------------------------------------
                                                                                     Quarters Ended
                                                                Mar 31, 2022          Dec 31, 2021          Mar 31, 2021
ADJUSTED EFFICIENCY RATIO
Non-interest expense (GAAP)                                    $     91,195          $     91,805          $     93,527
Exclude merger and acquisition-related expenses                           -                     -                  (571)
Exclude COVID-19 expenses                                                 -                  (127)                 (148)
Exclude Banner Forward expenses                                      (2,465)               (1,157)                 (950)
Exclude CDI amortization                                             (1,424)               (1,574)               (1,711)
Exclude state/municipal tax expense                                  (1,162)                 (976)               (1,065)
Exclude REO operations                                                   79                   (49)                  242
Exclude loss on extinguishment of debt                                 (793)               (2,284)                    -
Adjusted non-interest expense (non-GAAP)                       $     85,430          $     85,638          $     89,324

Net interest income (GAAP)                                     $    118,654          $    121,530          $    117,661
Non-interest income (GAAP)                                           19,427                24,474                24,272
Total revenue                                                       138,081               146,004               141,933
Exclude net (gain) loss on sale of securities                          (435)                  136                  (485)
Exclude net change in valuation of financial instruments
carried at fair value                                                   (49)               (2,721)                  (59)
Adjusted revenue (non-GAAP)                                    $    137,597          $    143,419          $    141,389

Efficiency ratio (GAAP)                                               66.04  %              62.88  %              65.90  %
Adjusted efficiency ratio (non-GAAP)                                  62.09  %              59.71  %              63.18  %





                                       53
--------------------------------------------------------------------------------

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                                            March 31, 2022         December 31, 2021          March 31, 2021
Shareholders' equity (GAAP)                      $   1,563,780          $   

1,690,327 $1,618,817

  Exclude goodwill and other intangible assets,
net                                                    386,552                    387,976                392,836

Tangible equity (non-GAAP) $1,177,228 $

     1,302,351          $   1,225,981
Total assets (GAAP)                              $  16,776,171          $   

16,804,872 $16,119,792

  Exclude goodwill and other intangible assets,
net                                                    386,552                    387,976                392,836
Total tangible assets (non-GAAP)                 $  16,389,619          $      16,416,896          $  15,726,956
Common shareholders' equity to total assets
(GAAP)                                                    9.32  %                   10.06  %               10.04  %
Tangible common shareholders' equity to tangible
assets (non-GAAP)                                         7.18  %                    7.93  %                7.80  %

TANGIBLE COMMON SHAREHOLDERS' EQUITY PER SHARE
Tangible common shareholders' equity (non-GAAP)  $   1,177,228          $       1,302,351          $   1,225,981
Common shares outstanding at end of period          34,372,784                 34,252,632             34,735,343
Common shareholders' equity (book value) per
share (GAAP)                                     $       45.49          $           49.35          $       46.60
Tangible common shareholders' equity (tangible
book value) per share (non-GAAP)                 $       34.25          $   

38.02 $35.29




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 Significant Accounting Policies and Estimates


Various elements of our accounting policies, by their nature, are inherently
subject to estimation techniques, valuation assumptions and other subjective
assessments. In particular, management has identified certain accounting
policies that, due to the judgments, estimates and assumptions inherent in those
policies, are critical to an understanding of our financial
statements. Management believes the judgments, estimates and assumptions used in
the preparation of the financial statements are appropriate based on the factual
circumstances at the time. However, given the sensitivity of the financial
statements to these critical accounting policies, the use of other judgments,
estimates and assumptions could result in material differences in our results of
operations or financial condition. Further, subsequent changes in economic or
market conditions could have a material impact on these estimates and our
financial condition and operating results in future periods. There have been no
significant changes in our application of accounting policies since December 31,
2021. For additional information concerning critical accounting policies, see
the Selected Notes to the Consolidated Financial Statements and the following:

Provision and Allowance for Credit Losses - Loans: (Note 4) The methodology for
determining the allowance for credit losses - loans is considered a critical
accounting policy by management because of the high degree of judgment involved,
the subjectivity of the assumptions used, and the potential for changes in the
economic environment that could result in changes to the amount of the recorded
allowance for credit losses. Among the material estimates required to establish
the allowance for credit losses - loans are: a reasonable and supportable
forecast; a reasonable and supportable forecast period and the reversion period;
value of collateral; strength of guarantors; the amount and timing of future
cash flows for loans individually evaluated; and determination of the
qualitative loss factors. All of these estimates are susceptible to significant
change. The allowance for credit losses - loans is a valuation account that is
deducted from the amortized cost basis of loans to present the net amount
expected to be collected on the loans. The Bank has elected to exclude accrued
interest receivable from the amortized cost basis in their estimate of the
allowance for credit losses. The provision for credit losses reflects the amount
required to maintain the allowance for credit losses at an appropriate level
based upon management's evaluation of the adequacy of collective and individual
loss reserves. The Company has established systematic methodologies for the
determination of the adequacy of the Company's allowance for credit losses. The
methodologies are set forth in a formal policy and take into consideration the
need for a valuation allowance for loans evaluated on a collective (pool) basis
which have similar risk characteristics as well as allowances that are tied to
individual loans
                                       54
--------------------------------------------------------------------------------

that do not share risk characteristics. The Company increases its allowance for
credit losses by charging provisions for credit losses on its Consolidated
Statement of Operations. Losses related to specific assets are applied as a
reduction of the carrying value of the assets and charged against the allowance
for credit loss reserve when management believes the uncollectibility of a loan
balance is confirmed. Recoveries on previously charged off loans are credited to
the allowance for credit losses.

Management estimates the allowance for credit losses - loans using relevant
information, from internal and external sources, relating to past events,
current conditions, and reasonable and supportable forecasts. The allowance for
credit losses - loans 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 allowance for credit losses - loans is measured on a collective (pool) basis
when similar risk characteristics exist. In estimating the component of the
allowance for credit losses for loans that share common risk characteristics,
loans are pooled based on loan type and areas of risk concentration. For loans
evaluated collectively, the allowance for credit losses - loans is calculated
using life of loan historical losses adjusted for economic forecasts and current
conditions.

For commercial real estate, multifamily real estate, construction and land,
commercial business and agricultural loans with risk rating segmentation,
historical credit loss assumptions are estimated using a model that categorizes
loan pools based on loan type and risk rating. For one- to four- family
residential loans, consumer loans, home equity lines of credit, small business
loans, and small balance commercial real estate loans, historical credit loss
assumptions are estimated using a model that categorizes loan pools based on
loan type and delinquency status. These models calculate an expected
life-of-loan loss percentage for each loan category by calculating the
probability of default, based on the migration of loans from performing to loss
by risk rating or delinquency categories using historical life-of-loan analysis
and the severity of loss, based on the aggregate net lifetime losses incurred
for each loan pool. For credit cards, historical credit loss assumptions are
estimated using a model that calculates an expected life-of-loan loss percentage
for each loan category by considering the historical cumulative losses based on
the aggregate net lifetime losses incurred for each loan pool. The model
captures historical loss data commencing with the first quarter of 2008. For
loans evaluated collectively, management uses economic indicators to adjust the
historical loss rates so that they better reflect management's expectations of
future conditions over the remaining lives of the loans in the portfolio based
on reasonable and supportable forecasts. These economic indicators are selected
based on correlation to the Company's historical credit loss experience and are
evaluated for each loan category. The economic indicators evaluated include the
unemployment rate, gross domestic product, real estate price indices and growth,
industrial employment, corporate profits, the household consumer debt service
ratio, the household mortgage debt service ratio, and single family median home
price growth. Management considers various economic scenarios and forecasts when
evaluating the economic indicators and probability weights the various scenarios
to arrive at the forecast that most reflects management's expectations of future
conditions. The selection of a more optimistic or pessimistic economic forecast
would result in a lower or higher allowance for credit losses. The use of a
protracted slump economic forecast would have increased the allowance for credit
losses - loans by approximately 6% as of March 31, 2022, where the use of a
stronger near-term growth economic forecast would result in a negligible
decrease in the allowance for credit losses - loans as of March 31, 2022. The
allowance for credit losses - loans is then adjusted for the period in which
those forecasts are considered to be reasonable and supportable. To the extent
the lives of the loans in the portfolio extend beyond the period for which a
reasonable and supportable forecast can be made, the adjustments discontinue to
be applied so that the model reverts back to the historical loss rates using a
straight line reversion method. Management selected a reasonable and supportable
forecast period of 12 months with a reversion period of 12 months. Both the
reasonable and supportable forecast period and the reversion period are
periodically reviewed by management.

Further, for loans evaluated collectively, management also considers qualitative
and environmental (QE) factors for each loan category to adjust for differences
between the historical periods used to calculate historical loss rates and
expected conditions over the remaining lives of the loans in the portfolio. In
determining the aggregate adjustment needed management considers the financial
condition of the borrowers, the nature and volume of the loans, the remaining
terms and the extent of prepayments on the loans, the volume and severity of
past due and classified loans as well as the value of the underlying collateral
on loans in which the collateral dependent practical expedient has not been
used. Management also considers the Company's lending policies, the quality of
the Company's credit review system, the quality of the Company's management and
lending staff, and the regulatory and economic environments in the areas in
which the Company's lending activities are concentrated. Management uses a scale
to assign QE factor adjustments based on the level of estimated impact which
requires a significant amount of judgment. Generally, adjustments to QE factors
are made in five basis-point increments. Some QE factors impact all loan
segments equally while others may impact some loan segments more or less than
others. If management's judgment were different for a QE factor that impacts all
loan segments equally, a five basis-point change in this QE factor would
increase or decrease the allowance for credit losses by 3.6% as of March 31,
2022.

Fair Value Accounting and Measurement: (Note 8) We use fair value measurements
to record fair value adjustments to certain financial assets and liabilities. A
hierarchical disclosure framework associated with the level of pricing
observability is utilized in measuring financial instruments at fair value. The
degree of judgment utilized in measuring the fair value of financial instruments
generally correlates to the level of pricing observability. Financial
instruments with readily available active quoted prices or for which fair value
can be measured from actively quoted prices generally will have a higher degree
of pricing observability and a lesser degree of judgment utilized in measuring
fair value. Conversely, financial instruments rarely traded or not quoted will
generally have little or no pricing observability and a higher degree of
judgment utilized in measuring fair value. Determining the fair value of
financial instruments with unobservable inputs requires a significant amount of
judgment. This includes the discount rate used to fair value our trust preferred
securities and junior subordinated debentures. A 25 basis-point increase or
decrease in the discount rate used to calculate the fair value of our trust
preferred securities would
                                       55
--------------------------------------------------------------------------------

result in a $832,000 decrease or increase in the reported fair value as of
March 31, 2022, with an offsetting adjustment to our non-interest income. A 25
basis-point increase or decrease in the discount rate used to calculate the fair
value of our junior subordinated debentures would result in a $2.1 million
decrease or increase in the reported fair value as of March 31, 2022, with an
offsetting adjustment to our accumulated other comprehensive income.

Goodwill: (Note 6) 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 annually, or more frequently as current circumstances and conditions
warrant, for impairment. An assessment of qualitative factors is completed to
determine if it is more likely than not that the fair value of a reporting unit
is less than its carrying amount. The qualitative assessment involves judgment
by management on determining whether there have been any triggering events that
have occurred which would indicate potential impairment. Such trigger events
considered by management could include: a) macroeconomic conditions such as a
deterioration in general economic conditions, limitations on accessing capital,
or other developments in equity and credit markets; b) industry and market
considerations such as a deterioration in the environment in which an entity
operates, an increased competitive environment, a decline in market-dependent
multiples or metrics (consider in both absolute terms and relative to peers), a
change in the market for an entity's products or services, or a regulatory or
political development; c) cost factors such as increases in labor, or other
costs that have a negative effect on earnings and cash flows; d) overall
financial performance such as negative or declining cash flows or a decline in
actual or planned revenue or earnings compared with actual and projected results
of relevant prior periods; e) other relevant entity-specific events such as
changes in management, key personnel, strategy, or clients; or litigation; f)
events affecting a reporting unit such as a change in the composition or
carrying amount of its net assets, a more-likely-than-not expectation of selling
or disposing of all, or a portion, of a reporting unit, the testing for
recoverability of a significant asset group within a reporting unit; g) if
applicable, a sustained decrease in share price (consider in both absolute terms
and relative to peers). If the qualitative analysis concludes that further
analysis is required, then a quantitative impairment test would be completed.
The quantitative goodwill impairment test is used to identify the existence of
impairment and the amount of impairment loss and compares the reporting unit's
estimated fair values, including goodwill, to its carrying amount. If a
quantitative goodwill impairment test is required, management would engage a
third-party valuation firm to estimate the fair value of the reporting unit.
Various valuation methodologies are considered when estimating the reporting
unit's fair value. These methodologies could include a comparable transaction
approach, a control premium approach and a discounted cash flow approach, as
well as others. The specific factors used in these various valuation
methodologies that require judgment include the selection of comparable market
transactions, discount rates, earnings capitalization rates and the future
projected earnings of the reporting unit. Changes in these assumptions could
result in changes to the estimated fair value of the reporting unit. If the fair
value exceeds the carry amount, then goodwill is not considered impaired. If the
carrying amount exceeds its fair value, an impairment loss would be recognized
equal to the amount of excess, limited to the amount of total goodwill allocated
to the reporting unit. The impairment loss would be recognized as a charge to
earnings. The Company completed an assessment of qualitative factors and the
potential triggering events noted above as of March 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.

Income Taxes and Deferred Taxes: (Note 9) The Company and its wholly-owned
subsidiaries file consolidated U.S. federal income tax returns, as well as state
income tax returns in Oregon, California, Utah, Idaho and Montana. 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 are expected to 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
that includes the enactment date. A 1% change in tax rates would result in a
$3.6 million increase or decrease in our net deferred tax asset as of March 31,
2022. We assess the appropriate tax treatment of transactions and filing
positions after considering statutes, regulations, judicial precedent and other
pertinent information and maintain tax accruals consistent with our evaluation.
Changes in the estimate of accrued taxes occur periodically due to changes in
tax rates, interpretations of tax laws, the status of examinations by the tax
authorities and newly enacted statutory, judicial and regulatory guidance that
could impact the relative merits of tax positions. These changes, when they
occur, impact accrued taxes and can materially affect our operating results. A
valuation allowance is required to be recognized if it is more likely than not
that all or a portion of our deferred tax assets will not be realized. The
evaluation pertaining to the tax expense and related deferred tax asset and
liability balances involves a high degree of judgment and subjectivity around
the measurement and resolution of these matters. This includes an evaluation of
our ability to use our net operating loss carryforwards. The ultimate
realization of the deferred tax assets is dependent upon the existence, or
generation, of taxable income in the periods when those temporary differences
and net operating loss and credit carryforwards are deductible.

Legal Contingencies: In the normal course of our business, we have various legal
proceedings and other contingent matters pending. We determine whether an
estimated loss from a contingency should be accrued by assessing whether a loss
is deemed probable and can be reasonably estimated. We assess our potential
liability by analyzing our litigation and regulatory matters using available
information. We develop our views on estimated losses in consultation with
outside counsel handling our defense in these matters, which involves an
analysis of potential results, assuming a combination of litigation and
settlement strategies. The estimated losses often involve a level of
subjectivity and usually are a range of reasonable losses and not an exact
number, in those situations we accrue the best estimate within the range or the
low end of the range if no estimate within the range is better than another.
                                       56
--------------------------------------------------------------------------------

Comparison of the financial situation at March 31, 2022 and December 31, 2021


General:  Total assets decreased $28.7 million, to $16.78 billion at March 31,
2022, from $16.80 billion at December 31, 2021. The decrease was largely the
result of a decrease in interest bearing deposits, partially offset by loan
growth and an increase in bank-owned life insurance.
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 March 31, 2022 was 63%, which
reflects the unprecedented level of market liquidity and decrease in business
activity due to the impacts of the COVID-19 pandemic. We expect our loan to
deposit ratio to remain below historical levels for the foreseeable future. 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 increased $61.9 million during the
three months ended March 31, 2022, primarily reflecting increased multifamily
real estate, commercial construction, multifamily construction, one- to
four-family construction, land and land development, one-to-four family
residential and consumer loan balances, partially offset by decreased commercial
real estate, and commercial business loan balances due to SBA PPP loan
forgiveness repayments, as well as decreased agricultural business loan
balances. Excluding SBA PPP loans, total loans receivable increased $137.2
million during the three months ended March 31, 2022. At March 31, 2022, our
loans receivable totaled $9.15 billion compared to $9.08 billion at December 31,
2021 and $9.95 billion at March 31, 2021.

During the first quarter of 2022, the Company changed the segmentation of its
Small Balance CRE loan category based on the common risk characteristics used to
measure the allowance for credit losses. The presentation of loans receivable at
December 31, 2021 and March 31, 2021 has been revised to match the segmentation
used in the current period presentation. 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
                                           Mar 31, 2022          Dec 31, 2021          Mar 31, 2021          Prior Year End             Prior Year
Commercial real estate:
Owner-occupied                            $    872,801          $    831,623          $    759,490                     5.0  %                  14.9  %
Investment properties                        1,670,896            
1,674,027             1,616,795                    (0.2)                     3.3
Small balance CRE                            1,162,164             1,281,863             1,315,435                    (9.3)                   (11.7)
Multifamily real estate                        598,588               530,885               394,787                    12.8                     

51.6

Construction, land and land development:
Commercial construction                        179,796               167,998               197,476                     7.0                     (9.0)
Multifamily construction                       274,015               259,116               305,694                     5.7                    (10.4)
One- to four-family construction               582,800               568,753               542,840                     2.5                      7.4
Land and land development                      317,560               313,454               266,730                     1.3                     19.1
Commercial business:
Commercial business                          1,081,847             1,038,206             1,094,952                     4.2                     (1.2)
SBA PPP                                         57,854               132,574             1,280,291                   (56.4)                   (95.5)
Small business scored                          817,065               792,310               717,502                     3.1                     

13.9

Agricultural business, including secured
by farmland:
Agricultural business, including secured
by farmland                                    244,580               279,224               219,335                   (12.4)                    11.5
SBA PPP                                            708                 1,354                36,316                   (47.7)                   (98.1)
One- to four-family residential                718,403               657,474               629,357                     9.3                     

14.1

Consumer:

Consumer-home equity revolving lines of
credit                                         470,485               458,533               466,132                     2.6                      0.9
Consumer-other                                  97,067                97,369               104,565                    (0.3)                    (7.2)
Total loans receivable                    $  9,146,629          $  9,084,763          $  9,947,697                     0.7  %                  (8.1) %



Our commercial real estate loans for owner-occupied, investment properties, and
small balance CRE totaled $3.71 billion, or 41% of our loan portfolio at
March 31, 2022. In addition, multifamily residential real estate loans totaled
$598.6 million and comprised 7% of our loan portfolio. Commercial real estate
loans decreased by $81.7 million during the first three months of 2022 while
multifamily real estate loans increased by $67.7 million.

We also originate commercial, multifamily, and one- to four-family construction,
land and land development loans, which totaled $1.35 billion, or 15% of our loan
portfolio at March 31, 2022, compared to $1.31 billion at both December 31, 2021
and March 31, 2021. One- to
                                       57
--------------------------------------------------------------------------------

four-family construction balances increased $14.0 million, or 2%, to $582.8
million at March 31, 2022 compared to $568.8 million at December 31, 2021 and
increased $40.0 million, or 7%, compared to $542.8 million at March 31, 2021.
One- to four-family construction loans represented approximately 6% of our total
loan portfolio at March 31, 2022, and includes both speculative construction and
one- to four-family all-in-one construction loans made to owner occupants that
convert to permanent loans upon completion of the homes and are often 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
business lending, to a lesser extent, includes participation in certain
syndicated loans, including shared national credits, which totaled $190.1
million at March 31, 2022. Our commercial and agricultural business loans
decreased $41.6 million to $2.20 billion at March 31, 2022, compared to $2.24
billion at December 31, 2021, and decreased $1.15 billion, or 34%, compared to
$3.35 billion at March 31, 2021. The decrease reflects SBA PPP loan repayments
from SBA loan forgiveness during 2022. SBA PPP loans decreased 56% to $58.6
million at March 31, 2022, compared to $133.9 million at December 31, 2021, and
decreased 96% when compared to $1.32 billion at March 31, 2021. Commercial and
agricultural business loans represented approximately 24% of our portfolio at
March 31, 2022.

We are active originators of one- to four-family residential loans in most
communities where we have established offices in Washington, Oregon, California
and Idaho. Most of the one- to four-family residential loans that we originate
are sold in secondary markets with net gains on sales and loan servicing fees
reflected in our revenues from mortgage banking. Our one- to four-family
residential loan originations have recently been strong, as interest rates
remained low during 2021, however, the volume of one- to four-family residential
loan originations began to decline during the current quarter due to the shift
to a rising rate environment. At March 31, 2022, our outstanding balance of one-
to four-family residential loans retained in our portfolio increased $60.9
million, to $718.4 million, compared to $657.5 million at December 31, 2021, and
increased $89.0 million, or 14%, compared to $629.4 million at March 31, 2021.
One- to four-family residential loans represented 8% of our loan portfolio at
March 31, 2022.

Our consumer credit activity is primarily aimed at meeting the demand of our existing depository customers. To March 31, 2022consumer loans, including home equity revolving lines of credit, increased $11.7 million for $567.6 millioncompared to $555.9 million to December 31, 2021and decreased $3.1 million
compared to $570.7 million to March 31, 2021.

The following table shows the amount of commitment for loan origination activity (excluding loans held for sale) for the three months ended March 31, 2022 and
March 31, 2021 (in thousands):

                                                                  Three Months Ended
                                                            Mar 31, 2022      Mar 31, 2021
Commercial real estate                                     $     87,421      $     91,217
Multifamily real estate                                          21,169            12,878
Construction and land                                           545,475           447,369
Commercial business:
Commercial business                                             272,513           115,911
SBA PPP                                                               -           428,180
Agricultural business                                            28,676            27,167
One-to four- family residential                                  55,821     

57,731

Consumer                                                        121,959     

87,322

Total commitment amount for loan originations (excluding
loans held for sale)                                       $  1,133,034      $  1,267,775



Loans held for sale decreased to $64.2 million at March 31, 2022, compared to
$96.5 million at December 31, 2021, as the sales of held-for-sale loans exceeded
originations of held-for-sale loans during the three months ended March 31,
2022. Loans held for sale were $135.3 million at March 31, 2021. Originations of
loans held for sale increased to $208.3 million for the three months ended
March 31, 2022 compared to $190.2 million in the preceding quarter and decreased
when compared to $301.4 million for the same period last year, primarily due to
decreased refinance activity for one- to four-family residential mortgage loans
due to the increase in interest rates during the current quarter. The volume of
one- to four-family residential mortgage loans sold was $210.4 million during
the three months ended March 31, 2022, compared to $245.9 million in the
preceding quarter and $300.3 million in the same period a year ago. During the
three months ended March 31, 2022, we sold $15.8 million in multifamily loans,
compared to none in the preceding quarter and $107.7 million for the same period
a year ago. Loans held for sale at March 31, 2022 included $44.9 million of
multifamily loans and $56.1 million of one- to four-family residential mortgage
loans compared to $54.5 million of multifamily loans and $80.8 million of one-
to four-family residential mortgage loans at March 31, 2021.

                                       58
--------------------------------------------------------------------------------

The following table presents loans by geographical concentration at March 31, 2022, December 31, 2021 and March 31, 2021 (dollars in thousands):

                                                 Mar 31, 2022                      Dec 31, 2021          Mar 31, 2021                   Percentage Change
                                        Amount               Percentage               Amount                Amount             Prior Year End        Prior Year Qtr
Washington                          $ 4,254,748                     46.6  %       $  4,264,590          $  4,683,600                   (0.2) %              (9.2) %
California                            2,195,904                     24.0             2,138,340             2,320,384                    2.7                 (5.4)
Oregon                                1,629,281                     17.8             1,652,364             1,801,104                   (1.4)                (9.5)
Idaho                                   541,706                      5.9               525,141               539,061                    3.2                  0.5
Utah                                     84,720                      0.9                74,913                92,399                   13.1                 (8.3)
Other                                   440,270                      4.8               429,415               511,149                    2.5                (13.9)
Total loans receivable              $ 9,146,629                    100.0  %       $  9,084,763          $  9,947,697                    0.7  %              (8.1) %



Investment Securities: Our total investment in securities increased $3.5 million
to $4.19 billion at March 31, 2022 from December 31, 2021. Securities purchased
exceeded sales, paydowns and maturities during the three-month period ended
March 31, 2022, as we continued to deploy excess balance sheet liquidity at a
measured pace. Purchases were primarily in mortgage-backed securities. The
average effective duration of Banner's securities portfolio was approximately
6.2 years at March 31, 2022. During the current quarter, $458.6 million of
securities were transferred from available for sale to securities held to
maturity to limit the impact that potential future interest rates changes would
have on our AOCI. Net fair value adjustments to the portfolio of securities held
for trading, which were included in net income, were an increase of $373,000 in
the three months ended March 31, 2022. In addition, fair value adjustments for
securities designated as available-for-sale reflected a decrease of $153.1
million for the three months ended March 31, 2022, which was included net of the
associated tax benefit of $36.7 million as a component of other comprehensive
income, and largely occurred as a result of increases in market interest rates
during the quarter. (See Note 3 of the Selected Notes to the Consolidated
Financial Statements in this Form 10-Q.) The Company held $300.0 million of
securities purchased under resell agreements at both March 31, 2022 and
December 31, 2021.

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. Increasing core deposits (non-interest-bearing and interest-bearing
transaction and savings accounts) is a fundamental element of our business
strategy. Much of the focus of our branch strategy and current marketing efforts
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. The long-term success of our deposit gathering activities is reflected
not only in the growth of core deposit balances, but also in the level of
deposit fees, service charges and other payment processing revenues compared to
prior periods.

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

                                                                                                                          Percentage Change
                                                                                                                                         Prior Year
                                              Mar 31, 2022          Dec 31, 2021          Mar 31, 2021          Prior Year End             Quarter
Non-interest-bearing                         $  6,494,852          $  6,385,177          $  5,994,693                     1.7  %                8.3  %
Interest-bearing checking                       1,971,936             1,947,414             1,722,085                     1.3                  

14.5

Regular savings accounts                        2,853,891             2,784,716             2,597,731                     2.5                   

9.9

Money market accounts                           2,402,731             2,370,995             2,327,380                     1.3                   

3.2

Interest-bearing transaction & savings
accounts                                        7,228,558             7,103,125             6,647,196                     1.8                   8.7
Total core deposits                            13,723,410            13,488,302            12,641,889                     1.7                   8.6
Interest-bearing certificates                     800,364               838,631               906,978                    (4.6)                (11.8)
Total deposits                               $ 14,523,774          $ 14,326,933          $ 13,548,867                     1.4  %                7.2  %



Total deposits were $14.52 billion at March 31, 2022, compared to $14.33 billion
at December 31, 2021 and $13.55 billion a year ago. The $196.8 million increase
in total deposits compared to December 31, 2021 reflects a $235.1 million
increase in core deposits, partially offset by a decrease in certificates of
deposit. The increase in total deposits from year end was due primarily to an
increase in client deposit accounts due to reduced business investment and
changes in consumer spending habits. Non-interest-bearing account balances
increased 2% to $6.49 billion at March 31, 2022, compared to $6.39 billion at
December 31, 2021, and increased 8% compared to $5.99 billion a year ago.
Interest-bearing transaction and savings accounts increased 2% to $7.23 billion
at March 31, 2022, compared to $7.10 billion at December 31, 2021,
                                       59
--------------------------------------------------------------------------------

and increased 9% compared to $6.65 billion a year ago. Certificates of deposit
decreased 5% to $800.4 million at March 31, 2022, compared to $838.6 million at
December 31, 2021 and decreased 12% compared to $907.0 million a year ago. We
had no brokered deposits at March 31, 2022 or December 31, 2021. Core deposits
represented 94% of total deposits at both March 31, 2022 and December 31, 2021.

The following table presents the deposits by geographic concentration in March 31, 2022, December 31, 2021 and March 31, 2021 (dollars in thousands):

                                             Mar 31, 2022                      Dec 31, 2021          Mar 31, 2021                   Percentage Change
                                                                                                                                                   Prior Year
                                   Amount                Percentage               Amount                Amount             Prior Year End           Quarter
Washington                     $  8,067,253                     55.5  %       $  7,952,376          $  7,504,389                    1.4  %               7.5  %
Oregon                            3,140,393                     21.6             3,067,054             2,929,027                    2.4                  7.2
California                        2,520,655                     17.4             2,524,296             2,401,299                   (0.1)                 5.0
Idaho                               795,473                      5.5               783,207               714,152                    1.6                 11.4

Total deposits                 $ 14,523,774                    100.0  %       $ 14,326,933          $ 13,548,867                    1.4  %               7.2  %



Borrowings: We had no FHLB advances at March 31, 2022, compared to $50.0 million
at December 31, 2021 as increased core deposits was a sufficient source of
funding. Other borrowings, consisting of retail repurchase agreements primarily
related to client cash management accounts, increased $2.3 million, or 1%, to
$266.8 million at March 31, 2022, compared to $264.5 million at December 31,
2021. Junior subordinated debentures totaled $70.5 million at March 31, 2022
compared to $119.8 million at December 31, 2021, as Banner redeemed
$50.5 million of junior subordinated debentures during the current quarter.
Subordinated notes, net of issuance costs were $98.7 million at March 31, 2022
compared to $98.6 million at December 31, 2021.

Shareholders' Equity: Total shareholders' equity decreased $126.5 million to
$1.56 billion at March 31, 2022. The decrease in shareholders' equity is
primarily due to the $154.3 million decrease in AOCI, primarily representing the
unrealized loss and related decrease in the fair value of securities
available-for-sale, net of tax and the accrual of $15.1 million of cash
dividends to common shareholders, partially offset by the $44.0 million of
year-to-date net income During the three months ended March 31, 2022, no shares
of restricted stock were forfeited and no shares of our common stock were
purchased other than 52,706 shares surrendered by employees to satisfy tax
withholding obligations upon the vesting of restricted stock grants. (See Part
II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" in
this Form 10-Q.) Tangible common shareholders' equity, which excludes goodwill
and other intangible assets, decreased $125.1 million to $1.18 billion, or 7.18%
of tangible assets at March 31, 2022, compared to $1.30 billion, or 7.93% of
tangible assets at December 31, 2021. The decrease in tangible common
shareholders' equity as a percentage of tangible assets was primarily due to the
decrease in tangible common shareholders' equity primarily due to the previously
mentioned decrease in accumulated other comprehensive income.


Comparison of operating results for the three months ended March 31, 2022,
December 31, 2021 and March 31, 2021


For the quarter ended March 31, 2022, our net income was $44.0 million, or $1.27
per diluted share, compared to $49.9 million, or $1.44 per diluted share, for
the preceding quarter and $46.9 million, or $1.33 per diluted share, for the
quarter ended March 31, 2021. Our net income for the current quarter included a
recapture of provision for credit losses of $7.0 million as well as decreased
funding costs, partially offset by decreased mortgage banking income and a
decline in the acceleration of the recognition of deferred loan fee income due
to loan repayments from SBA PPP loan forgiveness compared to both the preceding
and prior year quarters. Our results for the quarter ended March 31, 2022
included no COVID-19 related expenses or acquisition-related expenses. This
compares to $127,000 of COVID-19 related expenses and no acquisition-related
expenses for the preceding quarter and $148,000 of COVID-19 related expenses and
$571,000 of acquisition-related expenses for the quarter ended March 31, 2021.

A decline in the acceleration of deferred loan fee income due to SBA PPP loan
repayments from SBA loan forgiveness coupled with fewer days in the current
quarter, partially offset by decreased funding costs, produced decreased net
interest income for the quarter compared to the preceding quarter. Growth in the
balance of average interest-earning assets and decreased funding costs,
partially offset by a decline in the acceleration of deferred loan fee income
due to SBA PPP loan repayments from SBA loan forgiveness and the decline in the
average yield on interest-earning assets, produced increased net interest income
for the quarter compared to the same period a year earlier. The decreases in net
interest income and mortgage banking income resulted in revenues decreasing for
the quarter ended March 31, 2022, compared to the preceding quarter. The
increase in net interest income was offset by decreased mortgage banking income,
resulting in revenues decreasing for the quarter ended March 31, 2022, compared
to the same period a year earlier. Banner recorded a $7.0 million recapture of
provision for credit losses for the quarter ended March 31, 2022, compared to a
$5.2 million recapture of provision for credit losses in the prior quarter and a
$9.3 million recapture of provision for credit losses in the same quarter a year
ago. The recapture of provision for credit losses for the current and preceding
quarters primarily reflects an improvement in economic conditions and a decrease
in adversely classified loans. Non-interest expenses decreased in the quarter
ended March 31, 2022 compared to the prior quarter and same quarter a year ago.

The decrease in non-interest expense for the current quarter compared to the
prior quarter reflects decreases in occupancy and equipment expenses,
advertising and marketing expenses and loss on extinguishment of debt, partially
offset an increase in salary and employee benefits expenses primarily due to
severance costs and typical higher payroll taxes in the first quarter of a year
partially offset by lower salary expense and a decrease in capitalized loan
origination costs. Banner recorded a $793,000 loss on extinguishment of debt as
a result of the redemption of $50.5 million of junior subordinated debentures
during the first quarter of 2022, compared to a $2.3 million loss as a result of
the redemption of $8.2 million of junior subordinated debentures during the
prior quarter. The year-over-year quarterly decrease in non-interest
                                       60
--------------------------------------------------------------------------------

expense primarily reflects decreases in salary and employee benefits expense,
primarily due to a reduction in staffing, and professional and legal expenses,
primarily due to a reduction in consultant expense. The year-over-year quarterly
decreases in non-interest expense were partially offset by a decrease in
capitalized loan origination costs and the previously mentioned loss on
extinguishment of debt.

OPERATING DATA:

For completed quarters

                                                                                     December 31,
(In thousands)                                                March 31, 2022             2021              March 31, 2021
Interest income                                             $       122,891          $  126,546          $       124,521
Interest expense                                                      4,237               5,016                    6,860
Net interest income                                                 118,654             121,530                  117,661
Recapture of provision for credit losses                             (6,961)             (5,243)                  (9,251)
Net interest income after provision for credit losses               125,615             126,773                  126,912
Deposit fees and other service charges                               11,189              10,341                    8,939
Mortgage banking operations revenue                                   4,440               5,643                   11,347
Net change in valuation of financial instruments carried at
fair value                                                               49               2,721                       59
All other non-interest income                                         3,749               5,769                    3,927
Total non-interest income                                            19,427              24,474                   24,272

Salary and employee benefits                                         59,486              57,798                   64,819
All other non-interest expenses                                      31,709              34,007                   28,708
Total non-interest expense                                           91,195              91,805                   93,527
Income before provision for income tax expense                       53,847              59,442                   57,657
Provision for income tax expense                                      9,884               9,515                   10,802
Net income                                                  $        43,963          $   49,927          $        46,855



PER COMMON SHARE DATA:
                                              For the Quarters Ended
                            March 31, 2022      December 31, 2021       March 31, 2021
Net income:
Basic                      $     1.28          $             1.46      $          1.34
Diluted                          1.27                        1.44                 1.33



Net Interest Income. Net interest income decreased by $2.9 million, or 2%, to
$118.7 million for the quarter ended March 31, 2022, compared to $121.5 million
for the preceding quarter, and increased by $1.0 million, or 1%, compared to
$117.7 million for the same quarter one year earlier. The lower net interest
income during the quarter compared to the preceding quarter was primarily due to
a decline in the acceleration of the recognition of deferred loan fee income due
to loan repayments from SBA PPP loan forgiveness and fewer days in the current
quarter, partially offset by decreases in the cost of funding liabilities. The
increase in net interest income during the current quarter compared to the prior
year quarter was primarily due to decreases in the cost of funding liabilities
as well as an increase of $1.28 billion in the average balance of
interest-earning assets, partially offset by a decline in the acceleration of
the recognition of deferred loan fee income due to loan repayments from SBA PPP
loan forgiveness and lower yields on average interest-earning assets. The lower
yields for the current quarter compared to the same quarter a year ago reflect
the low interest rate environment during 2021. The lower yields year-over-year
also reflect the growth in the average balance of interest-earning assets
primarily being invested in short term investments including interest bearing
deposits and securities available for sale.

The net interest margin on a tax equivalent basis of 3.18% for the quarter ended
March 31, 2022 was enhanced by three basis points as a result of acquisition
accounting adjustments. This compares to a net interest margin on a tax
equivalent basis of 3.17% for the preceding quarter and 3.44% for the quarter
ended March 31, 2021. Both the previous and prior year quarters included five
basis points from acquisition accounting adjustments. The increase in net
interest margin compared to the preceding quarter was primarily due to higher
core deposit balances and lower borrowings, resulting in a decrease in the cost
of funding liabilities. This decrease was partially offset by lower interest
income during the quarter, primarily as a result of a decline in the
acceleration of the recognition of deferred loan fee income due to loan
repayments from SBA PPP loan forgiveness. In March 2022, in response to
inflation, the Federal Open Market Committee ("FOMC") of the Federal Reserve
System commenced increasing the target range for the federal funds rate by
implementing a 25 basis point increase to a range of 0.25% to 0.50%. The FOMC
has indicated further increases are to be expected this year. This recent
increase, however, had limited impact on the current quarter's net interest
margin as the change in rate occurred towards the end of the quarter. The
decrease in net interest margin compared to a year earlier reflects lower yields
on average interest-earning assets, due to declines in market rates during 2021,
and a larger percentage of interest-earning assets being invested in short term
investments, partially offset by decreases in the cost of funding liabilities.

                                       61
--------------------------------------------------------------------------------

Interest Income. Interest income for the quarter ended March 31, 2022 was $122.9
million, compared to $126.5 million for the preceding quarter and $124.5 million
for the same quarter in the prior year. The decreases in interest income during
the current quarter compared to both the preceding and prior year quarters
occurred primarily as a result of a decline in the acceleration of deferred loan
fee income due to SBA PPP loan repayments from SBA loan forgiveness. Lower
yields on average interest-earning assets also contributed to the decrease in
interest income compared to the prior year, partially offset by an increase in
the average balance of interest-earning assets. The average balance of
interest-earning assets was $15.42 billion for the quarter ended March 31, 2022,
compared to $15.53 billion for the preceding quarter and $14.14 billion for the
same quarter a year earlier. The average yield on total interest-earning assets
was 3.29% for both the quarter ended March 31, 2022 and the preceding quarter,
and was 3.64% for the same quarter one year earlier. The decrease in average
yield between the current quarter and prior year quarter reflects a 13
basis-point decrease in the average yield on investment securities, as a larger
percentage of interest earning assets were invested in low yielding short term
investments, partially offset by a seven basis-point increase in the average
yield on loans, reflecting the acceleration of the recognition of deferred loan
fee income upon SBA repayment and forgiveness of low yielding SBA PPP loans.
Average loans receivable for the quarter ended March 31, 2022 decreased $63.7
million, or 1%, to $9.16 billion, compared to $9.23 billion for the preceding
quarter and decreased $921.4 million, or 9% compared to $10.08 billion for the
same quarter in the prior year, reflecting the forgiveness of SBA PPP loans.
Interest income on loans decreased by $4.6 million to $100.4 million for the
current quarter from $104.9 million for the preceding quarter and $8.6 million
from $108.9 million for the quarter ended March 31, 2021, reflecting the impact
of the previously mentioned decrease in the average balance of loans receivable
and a decline in the acceleration of the recognition of deferred loan fee income
due to loan repayments from SBA PPP loan forgiveness.  The average yield on
total loans decreased to 4.50% for the quarter ended March 31, 2022, from 4.57%
in the preceding quarter and increased from 4.43% for the same quarter one year
earlier. The decrease from the preceding quarter reflects the decrease in SBA
PPP deferred loan fee income, while the increase compared to the year ago
quarter reflects the lower yields on SBA PPP loans prior to the acceleration of
deferred loan fee income as a result of SBA loan forgiveness. The acquisition
accounting loan discount accretion and the related balance sheet impact added
five basis points to the current quarter's average loan yield, compared to eight
basis points in the preceding quarter and seven basis points for the same
quarter one year earlier.

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 $6.26 billion for the
quarter ended March 31, 2022 (excluding the effect of fair value adjustments),
compared to $6.30 billion for the preceding quarter and increased compared to
$4.05 billion for the quarter ended March 31, 2021. The interest and dividend
income from those investments increased by $924,000 compared to the preceding
quarter and $6.9 million compared to the same quarter in the prior year. The
average yield on the combined portfolio increased to 1.53% for the quarter ended
March 31, 2022, from 1.43% in the preceding quarter and decreased from 1.66% for
the same quarter one year earlier. The increase in average yield for the current
quarter compared to the preceding quarter reflects an increase in the yield on
mortgage-backed securities as well as a smaller percentage of interest earning
assets being invested in interest-bearing deposits. The decrease in average
yield for the current quarter compared to the prior year quarter reflects the
overall decline in market interest rates during 2021 as well as the investment
of excess liquidity in short term investments.

Interest Expense. Interest expense for the quarter ended March 31, 2022 was $4.2
million, compared to $5.0 million for the preceding quarter and compared to $6.9
million for the same quarter in the prior year. The interest expense decrease
between the current quarter and preceding quarter reflects the decrease in total
borrowings and a slight decrease in the average cost of total funding
liabilities. The interest expense decrease between the current quarter and prior
year quarter reflects a nine basis-point decrease in the average cost of all
funding liabilities, partially offset by a $1.39 billion, or 10%, increase in
the average balance of funding liabilities.

Deposit interest expense decreased $298,000, or 13%, to $2.1 million for the
quarter ended March 31, 2022, compared to $2.4 million for the preceding quarter
and $1.5 million, or 42%, compared to $3.6 million for the same quarter in the
prior year, primarily as a result of a decrease in the cost of deposits,
partially offset by an increase in the average balances. The average rate paid
on total deposits decreased to 0.06% in the first quarter of 2022 from 0.07% for
the preceding quarter and from 0.11% for the quarter ended March 31, 2021. The
decrease in costs compared to the prior year also reflected an increase in the
percentage of non-interest bearing deposits to total deposits. The cost of
interest-bearing deposits decreased by one basis-point to 0.11% for the quarter
ended March 31, 2022, compared to 0.12% in the preceding quarter and by nine
basis points compared to 0.20% in the same quarter a year earlier. Average
deposit balances increased to $14.41 billion for the quarter ended March 31,
2022, from $14.38 billion for the preceding quarter and from $12.92 billion for
the quarter ended March 31, 2021.

The decrease in the cost of interest-bearing deposits during 2021 reflects the
lag effect of the decreases in the target Fed Funds Rate during the first
quarter of 2020 as well as a higher percentage of our interest-bearing deposits
comprised of lower cost core deposits.

Interest expense on total borrowings decreased to $2.2 million for the quarter
ended March 31, 2022 from $2.6 million for the preceding quarter and from $3.3
million for the quarter ended March 31, 2021. The decrease was primarily due to
decreases in the average rate paid on total borrowings and in the average
balance of the junior subordinated debentures. The average rate paid on total
borrowings for the quarter ended March 31, 2022 decreased to 1.74% from 1.85%
for the preceding quarter and from 2.21% for the same quarter one year earlier.
Average total borrowings were $500.4 million for the quarter ended March 31,
2022, compared to $563.1 million for the preceding quarter and $595.3 million
for the same quarter one 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):
                                       62
--------------------------------------------------------------------------------

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD                                                                                                            Quarters Ended
                                                                        Mar 31, 2022                                                        Dec 31, 2021                                                        Mar 31, 2021
                                                                           Interest and           Yield /                                      Interest and           Yield /                                      Interest and           Yield /
                                                  Average Balance           Dividends             Cost(3)             Average Balance           Dividends             Cost(3)             Average Balance           Dividends             Cost(3)
Interest-earning assets:
Held for sale loans                             $        130,221          $     1,115                 3.47  %       $         73,101          $       601                 3.26  %       $        119,341          $       925                 3.14  %
Mortgage loans                                         7,347,662               81,032                 4.47  %              7,362,363               83,059                 4.48  %              7,144,770               80,580                 4.57  %
Commercial/agricultural loans                          1,479,216               15,011                 4.12  %              1,460,486               14,966                 4.07  %              1,519,062               15,919                 4.25  %
SBA PPP loans                                             88,720                2,784                12.73  %                209,776                5,845                11.05  %              1,172,492               10,792                 3.73  %
Consumer and other loans                                 115,881                1,700                 5.95  %                119,658                1,749                 5.80  %                127,469                1,947                 6.19  %
Total loans(1)                                         9,161,700              101,642                 4.50  %              9,225,384              106,220                 4.57  %             10,083,134              110,163                 4.43  %
Mortgage-backed securities                             2,975,263               14,235                 1.94  %              2,838,759               13,344                 1.86  %              1,953,820                9,472                 1.97  %
Other securities                                       1,573,834                8,429                 2.17  %              1,550,383                8,466                 2.17  %              1,048,856                6,687                 2.59  %
Equity securities                                              -                    -                    -  %                      -                    -                    -  %                  1,742                    -                    -  %
Interest-bearing deposits with banks                   1,697,545                  820                 0.20  %              1,901,165                  731                 0.15  %              1,032,138                  262                 0.10  %
FHLB stock                                                11,756                  106                 3.66  %                 12,000                  135                 4.46  %                 15,952                  161                 4.09  %
Total investment securities                            6,258,398               23,590                 1.53  %              6,302,307               22,676                 1.43  %              4,052,508               16,582                 1.66  %
Total interest-earning assets                         15,420,098              125,232                 3.29  %             15,527,691              128,896                 3.29  %             14,135,642              126,745                 3.64  %
Non-interest-earning assets                            1,372,182                                                           1,306,437                                                           1,237,281
Total assets                                    $     16,792,280                                                    $     16,834,128                                                    $     15,372,923
Deposits:
Interest-bearing checking accounts              $      1,958,824                  273                 0.06  %       $      1,875,097                  289                 0.06  %       $      1,616,824                  315                 0.08  %
Savings accounts                                       2,816,774                  354                 0.05  %              2,773,597                  400                 0.06  %              2,486,820                  521                 0.08  %
Money market accounts                                  2,390,621                  506                 0.09  %              2,367,861                  559                 0.09  %              2,242,748                  775                 0.14  %
Certificates of deposit                                  825,028                  953                 0.47  %                840,920                1,136                 0.54  %                913,053                1,998                 0.89  %
Total interest-bearing deposits                        7,991,247                2,086                 0.11  %              7,857,475                2,384                 0.12  %              7,259,445                3,609                 0.20  %
Non-interest-bearing deposits                          6,421,143                    -                    -  %              6,523,149                    -                    -  %              5,663,820                    -                    -  %
Total deposits                                        14,412,390                2,086                 0.06  %             14,380,624                2,384                 0.07  %             12,923,265                3,609                 0.11  %
Other interest-bearing liabilities:
FHLB advances                                             42,222                  291                 2.80  %                 50,000                  348                 2.76  %                144,444                  934                 2.62  %
Other borrowings                                         266,148                   84                 0.13  %                266,559                  109                 0.16  %                202,930                  109                 0.22  %
Junior subordinated debentures and subordinated
notes                                                    191,985                1,776                 3.75  %                246,510                2,175                 3.50  %                247,944                2,208                 3.61  %
Total borrowings                                         500,355                2,151                 1.74  %                563,069                2,632                 1.85  %                595,318                3,251                 2.21  %
Total funding liabilities                             14,912,745                4,237                 0.12  %             14,943,693                5,016                 0.13  %             13,518,583                6,860                 0.21  %
Other non-interest-bearing liabilities(2)                225,953                                                             216,940                                                             207,560
Total liabilities                                     15,138,698                                                          15,160,633                                                          13,726,143
Shareholders' equity                                   1,653,582                                                           1,673,495                                                           1,646,780
Total liabilities and shareholders' equity      $     16,792,280                                                    $     16,834,128                                                    $     15,372,923
Net interest income/rate spread (tax
equivalent)                                                               $   120,995                 3.17  %                                 $   123,880                 3.16  %                                 $   119,885                 3.43  %
Net interest margin (tax equivalent)                                                                  3.18  %                                                             3.17  %                                                             3.44  %
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis                                       (2,341)                                                             (2,350)                                                             (2,224)
Net interest income and margin, as reported                               $   118,654                 3.12  %                                 $   121,530                 3.11  %                                 $   117,661                 3.38  %
Additional Key Financial Ratios:
Return on average assets                                                                              1.06  %                                                             1.18  %                                                             1.24  %
Return on average equity                                                                             10.78  %                                                            11.84  %                                                            11.54  %
Average equity/average assets                                                                         9.85  %                                                             9.94  %                                                            10.71  %
Average interest-earning assets/average
interest-bearing liabilities                                                                        181.59  %                                                           184.40  %                                                           179.96  %
Average interest-earning assets/average funding
liabilities                                                                                         103.40  %                                                           103.91  %                                                           104.56  %
Non-interest income/average assets                                                                    0.47  %                                                             0.58  %                                                             0.64  %
Non-interest expense/average assets                                                                   2.20  %                                                             2.16  %                                                             2.47  %
Efficiency ratio(4)                                                                                  66.04  %                                                            62.88  %                                                            65.90  %
Adjusted efficiency ratio(5)                                                                         62.09  %                                                            59.71  %                                                            63.18  %


(1)Average balances include loans accounted for on a nonaccrual basis and loans
90 days or more past due. Amortization of net deferred loan fees/costs is
included with interest on loans.
(2)Average other non-interest-bearing liabilities include fair value adjustments
related to junior subordinated debentures.
(3)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent
yield adjustment to interest earned on loans was $1.3 million for both the three
months ended March 31, 2022 and December 31, 2021 and $1.2 million for the three
months ended March 31, 2021. The tax equivalent yield adjustment to interest
earned on tax exempt securities was $1.0 million, $1.1 million and $1.0 million
for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021,
respectively.
(4)Non-interest expense divided by the total of net interest income and
non-interest income.
(5)Adjusted non-interest expense divided by adjusted revenue. These represent
non-GAAP financial measures. See the discussion and reconciliation of non-GAAP
financial information in the Executive Overview section of Management's
Discussion and Analysis of Financial Condition and Results of Operation in this
Form 10-Q for more detailed information with respect to the efficiency ratio.
                                       63
--------------------------------------------------------------------------------



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):
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
                                                                                        Quarters Ended
CHANGE IN THE                                                     Mar 31, 2022          Dec 31, 2021          Mar 31, 2021
ALLOWANCE FOR CREDIT LOSSES - LOANS
Balance, beginning of period                                     $    

132,099 $139,915 $167,279


Recapture of provision for credit losses - loans                       (7,376)               (8,127)               (8,035)
Recoveries of loans previously charged off:
Commercial real estate                                                     87                   635                    24

Construction and land                                                     384                     -                   100
One- to four-family residential                                            40                    47                   113
Commercial business                                                       149                   267                   979
Agricultural business, including secured by farmland                      118                     5                     -
Consumer                                                                  216                   140                   296
                                                                          994                 1,094                 1,512
Loans charged off:
Commercial real estate                                                     (2)                   (1)               (3,763)
Multifamily real estate                                                     -                   (59)                    -
Construction and land                                                      (5)                    -                     -

Commercial business                                                       (82)                 (488)                 (789)

Consumer                                                                 (157)                 (235)                 (150)
                                                                         (246)                 (783)               (4,702)
Net recoveries (charge-offs)                                              748                   311                (3,190)
Balance, end of period                                           $    

125,471 $132,099 $156,054
Net recoveries (write-offs) / Average loans receivable

                 0.008  %              0.003  %             (0.032) %



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 March 31, 2022, we recorded a recapture of
provision for credit losses - loans of $7.4 million, compared to a recapture of
provision for credit losses - loans of $8.1 million during the prior quarter and
a recapture of provision for credit losses - loans of $8.0 million during the
same quarter a year ago. The recapture of provision for credit losses - loans
for the current quarter and prior quarters primarily reflects improvement in the
economic indicators and a decrease in adversely classified loans. In addition,
management has updated its assessment of qualitative factors including assessing
the current conditions within the specific markets we serve compared to the
national economic indicators. Future assessments of the expected credit losses
will not only be impacted by changes 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. No allowance for credit losses-loans was recorded on the $58.6
million balance of SBA PPP loans at March 31, 2022 as these loans are fully
guaranteed by the SBA.

Net loan recoveries were $748,000 for the quarter ended March 31, 2022 compared
to net recoveries of $311,000 in the preceding quarter and net loan charge-offs
of $3.2 million for the same quarter in the prior year. The allowance for credit
losses - loans was $125.5 million at March 31, 2022 compared to $132.1 million
at December 31, 2021 and $156.1 million at March 31, 2021. The allowance for
credit losses - loans as a percentage of total loans (loans receivable excluding
allowance for credit losses) was 1.37% at March 31, 2022 as compared to 1.45% at
December 31, 2021 and 1.57% at March 31, 2021. The decrease in the allowance for
credit losses - loans as a percentage of loans at March 31, 2022 compared to
March 31, 2021 reflects the recapture of provision for credit losses - loans
recorded during 2022, primarily as the result of the improvement in the
forecasted economic indicators as well as the decrease in adversely classified
loans.

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):
                                       64
--------------------------------------------------------------------------------

                                                                                                      Quarters Ended
CHANGE IN THE                                                                  Mar 31, 2022           Dec 31, 2021           Mar 31, 2021

PROVISION FOR CREDIT LOSSES – UNFUNDED LOAN COMMITMENTS Balance at beginning of period

$12,432 $10,127 $13,297

Allowance/(recapture) for credit losses – unfunded loan commitments

           428                  2,305                 (1,220)

Balance, end of period                                                       $      12,860          $      12,432          $      12,077



The allowance for credit losses - unfunded loan commitments was $12.9 million at
March 31, 2022, compared to $12.4 million at December 31, 2021 and compared to
$12.1 million at March 31, 2021. The increase in the allowance for credit losses
- unfunded loan commitments reflects the provision for credit losses - unfunded
loan commitments recorded during the current quarter. During the quarter ended
March 31, 2022, we recorded a provision for credit losses - unfunded loan
commitments of $428,000, compared to a $2.3 million provision for loan losses -
unfunded loan commitments during the preceding quarter and compared to a $1.2
million recapture of provision for loan losses - unfunded loan commitments
during the comparable quarter a year ago. The provision for credit losses -
unfunded loan commitments during the current and preceding quarters was
primarily the result of increases in unfunded loan commitments.

Non-interest Income. The following table presents the key components of
non-interest income for the three months ended March 31, 2022 and 2021 (dollars
in thousands):

                                                            Quarters Ended                                              Change                              Percentage Change
                                                                                                                                   Prior Yr                                Prior Yr
                                      Mar 31, 2022           Dec 31, 2021           Mar 31, 2021           Prior Quarter           Quarter          Prior Quarter          Quarter
Deposit fees and other service
charges                             $      11,189          $      10,341          $       8,939          $          848          $   2,250                  8.2  %            25.2  %
Mortgage banking operations                 4,440                  5,643                 11,347                  (1,203)            (6,907)               (21.3)             (60.9)
Bank owned life insurance                   1,631                  1,203                  1,307                     428                324                 35.6               24.8
Miscellaneous                               1,683                  4,702                  2,135                  (3,019)              (452)               (64.2)             (21.2)
                                           18,943                 21,889                 23,728                  (2,946)            (4,785)               (13.5)             (20.2)
Net gain on sale of securities                435                   (136)                   485                     571                (50)              (419.9)             (10.3)

Net change in valuation of
financial instruments carried at
fair value                                     49                  2,721                     59                  (2,672)               (10)               (98.2)             (16.9)
Total non-interest income           $      19,427          $      24,474          $      24,272          $       (5,047)         $  (4,845)               (20.6)             (20.0)



Non-interest income was $19.4 million for the quarter ended March 31, 2022,
compared to $24.5 million for the preceding quarter and compared to $24.3
million for the same quarter in the prior year. Our non-interest income for the
quarter ended March 31, 2022 included a $49,000 net gain for fair value
adjustments and a net gain of $435,000 on sales of securities. For the quarter
ended December 31, 2021, fair value adjustments resulted in a net gain of $2.7
million and we had a net loss of $136,000 on sale of securities. For the quarter
ended March 31, 2021, fair value adjustments resulted in a net gain of $59,000
and we had a net gain of $485,000 on sale of securities. For a more detailed
discussion of our fair value adjustments, please refer to Note 8 in the Selected
Notes to the Consolidated Financial Statements in this Form 10-Q.

Deposit fees and other service charges increased by $848,000, or 8%, for the
quarter ended March 31, 2022, compared to the preceding quarter and $2.3
million, or 25%, compared to the same quarter a year ago. The increase in
deposit fees and other service charges from the first quarter a year ago is
primarily a result of increased deposit transaction account activity. Mortgage
banking operations, including gains on one- to four-family and multifamily loan
sales and loan servicing fees, decreased $1.2 million for the quarter ended
March 31, 2022, compared to the preceding quarter and $6.9 million for the same
quarter a year ago. Gains on sales of multifamily loans in the current quarter
resulted in income of $340,000 for the quarter ended March 31, 2022, compared to
none for the preceding quarter and compared to $1.7 million for the same period
a year ago. Gains on sales of one- to four-family loans resulted in income of
$4.1 million for the quarter ended March 31, 2022, compared to $6.5 million in
the preceding quarter and compared to $9.8 million in the same period a year
ago. The decrease in mortgage banking operations from the prior quarter and from
the first quarter of 2021 primarily reflects a reduction in the volume of one-
to four-family loans sold, as well as a decrease in the gain on sale margin on
one- to four-family held-for-sale loans. The reduction in volumes reflects a
reduction in refinancing activity as interest rates increased during the current
quarter. Home purchase activity accounted for 64% of one- to four-family
mortgage loan originations in both the first quarter of 2022 and in the prior
quarter and was 54% in the first quarter of 2021. The lower mortgage banking
revenue for the current quarter compared to the prior quarter is also due in
part to a $603,000 lower of cost or market downward adjustment recorded on
multifamily held for sale loans due to increases in market interest rates. The
decrease in miscellaneous non-interest income from the prior quarter is
primarily a result of a valuation adjustment on the SBA servicing asset and
higher gains recognized in the prior quarter related to both SBA loans sold and
the disposition of closed branch locations.

                                       65
--------------------------------------------------------------------------------

Non-interest Expense. The following table represents key elements of
non-interest expense for the three months ended March 31, 2022 and 2021 (dollars
in thousands):

                                                               Quarters Ended                                           Change                            Percentage Change
                                                                                                               Prior            Prior Yr                                  Prior Yr
                                         Mar 31, 2022           Dec 31, 2021           Mar 31, 2021           Quarter           Quarter           Prior Quarter           Quarter

Salaries and benefits $59,486 $57,798

          $      64,819          $  1,688          $  (5,333)                  2.9  %              (8.2) %
Less capitalized loan origination
costs                                         (6,230)                (7,647)                (9,696)            1,417              3,466                 (18.5)               (35.7)
Occupancy and equipment                       13,220                 13,885                 12,989              (665)               231                  (4.8)                 1.8
Information/computer data services             6,651                  6,441                  6,203               210                448                   3.3                  7.2
Payment and card processing expenses           4,896                  5,062                  4,326              (166)               570                  (3.3)                13.2
Professional and legal expenses                2,180                  2,251                  3,328               (71)            (1,148)                 (3.2)               (34.5)
Advertising and marketing                        461                  2,071                  1,263            (1,610)              (802)                (77.7)               (63.5)
Deposit insurance expense                      1,524                  1,340                  1,533               184                 (9)                 13.7                 (0.6)
State/municipal business and use taxes         1,162                    976                  1,065               186                 97                  19.1                  9.1
REO operations                                   (79)                    49                   (242)             (128)               163                (261.2)               (67.4)
Amortization of core deposit
intangibles                                    1,424                  1,574                  1,711              (150)              (287)                 (9.5)               (16.8)
Loss on extinguishment of debt                   793                  2,284                      -            (1,491)               793                 (65.3)                     nm
Miscellaneous                                  5,707                  5,594                  5,509               113                198                   2.0                  3.6
                                              91,195                 91,678                 92,808              (483)            (1,613)                 (0.5)                (1.7)
COVID-19 expenses                                  -                    127                    148              (127)              (148)               (100.0)              (100.0)
Merger and acquisition-related
expenses                                           -                      -                    571                 -               (571)                      nm            (100.0)
Total non-interest expense             $      91,195          $      91,805          $      93,527          $   (610)         $  (2,332)                 (0.7) %              (2.5) %



Non-interest expenses were $91.2 million for the quarter ended March 31, 2022,
compared to $91.8 million for the preceding quarter and $93.5 million for the
quarter ended March 31, 2021. The current quarter non-interest expense includes
decreases in occupancy and equipment expenses, advertising and marketing
expenses and loss on extinguishment of debt, partially offset an increase in
salary and employee benefits expenses. The year-over-year quarterly decrease in
non-interest expense primarily reflects decreases in salary and employee
benefits expense and professional and legal expenses, partially offset by a
decrease in capitalized loan origination costs and the loss on extinguishment of
debt. In addition, the quarter ended March 31, 2022 included no COVID-19
expenses, compared to $127,000 for the preceding quarter and $148,000 for the
quarter ended March 31, 2021.

Salary and employee benefits expenses increased $1.7 million to $59.5 million
for the quarter ended March 31, 2022, compared to $57.8 million for the
preceding quarter, primarily due to severance costs and typical higher payroll
taxes in the first quarter of a year partially offset by lower salary expense,
and decreased $5.3 million, compared to $64.8 million for the quarter ended
March 31, 2021, primarily reflecting a reduction in staffing. Capitalized loan
origination costs decreased $1.4 million for the quarter ended March 31, 2022,
compared to the preceding quarter and $3.5 million, compared to the same quarter
in the prior year, primarily related to the origination of SBA PPP loans during
the first quarter of 2021. Professional and legal expenses decreased $71,000 for
the quarter ended March 31, 2022, compared to the preceding quarter and $1.1
million compared to the same quarter in the prior year, primarily due to a
decrease in consulting expense. Advertising and marketing expenses decreased
$1.6 million for the quarter ended March 31, 2021, compared to the preceding
quarter and $802,000, compared to the same quarter in the prior year, primarily
due to a reduction in direct mail marketing expenses. In addition, Banner
recorded a $793,000 loss on extinguishment of debt as a result of the redemption
of $50.5 million of junior subordinated debentures during the first quarter of
2022, compared to a $2.3 million loss as a result of the redemption of
$8.2 million of junior subordinated debentures during the prior quarter.

Banner's efficiency ratio was 66.04% for the current quarter, compared to 62.88%
in the preceding quarter and 65.90% in the year ago quarter. Banner's adjusted
efficiency ratio was 62.09% for the current quarter, compared to 59.71% in the
preceding quarter and to 63.18% in the year ago quarter. See the discussion and
reconciliation of non-GAAP financial information in the Executive Overview
section of Management's Discussion and Analysis of Financial Condition and
Results of Operation in this Form 10-Q for more detailed information with
respect to the efficiency ratio.

Income Taxes. For the quarter ended March 31, 2022, we recognized $9.9 million
in income tax expense for an effective tax rate of 18.4%, which reflects our
normal 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 23.6%, 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 December 31, 2021, we recognized $9.5 million in income tax
expense for an effective tax rate of 16.0%. For the quarter ended March 31,
2021, we recognized $10.8 million in income tax expense for an effective tax
rate of 18.7%. For more discussion on our income taxes, please refer to Note 9
in the Selected Notes to the Consolidated Financial Statements in this report on
Form 10-Q.

                                       66
--------------------------------------------------------------------------------

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 our borrowers to resolve classified loans, problem assets and
effectively manage REO as a result of foreclosures.

Non-Performing Assets: Non-performing assets decreased to $19.1 million, or
0.11% of total assets, at March 31, 2022, from $23.7 million, or 0.14% of total
assets, at December 31, 2021, and from $37.0 million, or 0.23% of total assets,
at March 31, 2021. Our allowance for credit losses - loans was $125.5 million,
or 674% of non-performing loans at March 31, 2022 compared to $132.1 million, or
578% of non-performing loans at December 31, 2021 and $156.1 million, or 426% of
non-performing loans at March 31, 2021.  In addition to the allowance for credit
losses - loans, the Company maintains an allowance for credit losses - unfunded
loan commitments which was $12.9 million at March 31, 2022, compared to $12.4
million at December 31, 2021 and $12.1 million at March 31, 2021. We believe our
level of non-performing loans and assets continues to be manageable at March 31,
2022. The primary components of the $19.1 million in non-performing assets were
$17.9 million in nonaccrual loans, $682,000 in loans more than 90 days
delinquent and still accruing interest, and $446,000 in REO and other
repossessed assets.

Loans are reported as TDRs when we grant concessions to a borrower experiencing
financial difficulties that we would not otherwise consider.  If any TDR loan
becomes delinquent or other matters call into question the borrower's ability to
repay full interest and principal in accordance with the restructured terms, the
TDR loan would be reclassified as nonaccrual. At March 31, 2022, we had $5.3
million of restructured loans performing under their restructured repayment
terms.

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

                                                        March 31, 2022         December 31, 2021         March 31, 2021
Nonaccrual Loans: (1)
Secured by real estate:
Commercial                                             $      10,618          $         14,159          $      21,615

Construction and land                                            119                       479                    986
One- to four-family                                            2,199                     2,711                  4,456
Commercial business                                            1,845                     2,156                  4,194
Agricultural business, including secured by farmland           1,021                     1,022                  1,536
Consumer                                                       2,123                     1,754                  2,244
                                                              17,925                    22,281                 35,031
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:

One- to four-family                                              210                       436                  1,524
Commercial business                                              351                         2                     37

Consumer                                                         121                       117                      -
                                                                 682                       555                  1,561
Total non-performing loans                                    18,607                    22,836                 36,592

REO, net                                                         429                       852                    340
Other repossessed assets held for sale                            17                        17                     37
Total non-performing assets                            $      19,053        

$23,705 $36,969


Total non-performing assets to total assets                     0.11  %                   0.14  %                0.23  %

Total unaccrued loans to loans before provision for credit losses

                                                   0.20  %                   0.25  %                0.35  %

Performing restructured loans according to their restructured conditions (2)

                                              $       5,279        

$5,309 $6,424


Loans 30-89 days past due and on accrual               $       9,611        

$11,558 $19,233




(1)Includes $221,000 of nonaccrual TDR loans at March 31, 2022. For the three
months ended March 31, 2022, we recognized interest income of $68,000 as a
result of nonaccrual loan recovery activity, which includes the reversal of
$43,000 of accrued interest as of the date the loan was placed on nonaccrual.
There was no interest income recognized on nonaccrual loans for the three months
ended March 31, 2022.
(2)These loans were performing under their restructured repayment terms at the
dates indicated.

In addition to the non-performing loans as of March 31, 2022, we had other
classified loans with an aggregate outstanding balance of $158.4 million that
are not on nonaccrual status, with respect to which known information concerning
possible credit problems with the borrowers or
                                       67
--------------------------------------------------------------------------------

the cash flows of the properties securing the respective loans has caused
management to be concerned about the ability of the borrowers to comply with
present loan repayment terms. This may result in the future inclusion of such
loans in the nonaccrual loan category.

The following table presents the Corporation’s portfolio of risk-free loans and risk-free loans by category at the dates indicated (in thousands):

                           March 31, 2022       December 31, 2021       March 31, 2021

        Pass              $     8,961,358      $        8,874,468      $     9,584,429
        Special Mention             6,908                  11,932               51,692
        Substandard               178,363                 198,363              311,576

        Total             $     9,146,629      $        9,084,763      $     9,947,697


The decrease in non-conforming loans during the quarter ended March 31, 2022
primarily reflects repayment of substandard loans as well as risk rating upgrades.

REO: REO was $429,000 to March 31, 2022 compared to $852,000 to December 31, 2021. The following table shows REO activity for the three months ended
March 31, 2022, December 31, 2021 and March 31, 2021 (in thousands):


                                                         Three Months Ended
                                         Mar 31, 2022      Dec 31, 2021     

March 31, 2021

    Balance, beginning of period        $     852         $         852      $         816

    Proceeds from dispositions of REO        (607)                    -               (783)
    Gain on sale of REO                       184                     -                307

    Balance, end of period              $     429         $         852      $         340



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. The individual carrying values of these assets are reviewed for
impairment at least annually and any additional impairment charges are expensed
to operations.

Cash 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 three months ended
March 31, 2022 and March 31, 2021, our loan originations, including originations
of loans held for sale, exceeded our loan repayments by $176.9 million and
$379.2 million, respectively. There were $75.6 million of loan purchases during
the three months ended March 31, 2022 and no loan purchases during the three
months ended March 31, 2021. This activity was funded primarily by increased
core deposits and the sale of loans in 2022. During the three months ended
March 31, 2022 and March 31, 2021, we received proceeds of $231.1 million and
$427.8 million, respectively, from the sale of loans. Securities purchased
during the three months ended March 31, 2022 and March 31, 2021 totaled $321.7
million and $1.26 billion, respectively, and securities repayments, maturities
and sales in those periods were $127.3 million and $493.4 million, respectively.

Our primary financing activity is gathering deposits. Total deposits increased
by $196.8 million during the first three months of 2022, as core deposits
increased by $235.1 million, partially offset by a $38.3 million decrease in
certificates of deposits. The increase in total deposits during the first three
months of 2022 was due primarily to an increase in general client liquidity due
to reduced business investment and consumer spending. 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 March 31,
2022, certificates of deposit totaled $800.4 million, or 6% of our total
deposits, including $626.9 million which were scheduled to mature within one
year. 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.

We had no FHLB advances to March 31, 2022compared to $50.0 million to
December 31, 2021. Other borrowings increased $2.3 million for $266.8 million to
March 31, 2022 from $264.5 million to December 31, 2021.


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 three months ended March 31, 2022 and 2021, we used our sources of
funds primarily to fund loan commitments and purchase securities. At March 31,
2022, we had outstanding loan commitments totaling $4.17 billion, primarily
relating to undisbursed loans in process and unused credit lines. While
                                       68
--------------------------------------------------------------------------------

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. We
maintain credit facilities with the FHLB-Des Moines, which provided for advances
that in the aggregate would equal the lesser of 45% of Banner Bank's assets or
adjusted qualifying collateral (subject to a sufficient level of ownership of
FHLB stock). At March 31, 2022, under these credit facilities based on pledged
collateral, Banner Bank had $2.37 billion of available credit capacity. We had
no advances under these credit facilities at March 31, 2022. In addition, Banner
Bank has been approved for participation in the Borrower-In-Custody (BIC)
program by the Federal Reserve Bank of San Francisco (FRBSF). Under this
program, based on pledged collateral, Banner Bank had available lines of credit
of approximately $969.7 million as of March 31, 2022. We had no funds borrowed
from the FRBSF at March 31, 2022 or December 31, 2021. At March 31, 2022, Banner
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 March 31, 2022 or December 31, 2021. 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.

Banner Corporation 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 Corporation'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 $0.44
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 payment during 2022 at this rate of $0.44
per share, our average total dividend paid each quarter would be approximately
$15.1 million based on the number of outstanding shares at March 31, 2022. At
March 31, 2022, the Company on an unconsolidated basis had liquid assets of
$64.3 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 three
months ended March 31, 2022, total shareholders' equity decreased $126.5
million, to $1.56 billion. At March 31, 2022, tangible common shareholders'
equity, which excludes goodwill and other intangible assets, was $1.18 billion,
or 7.18% of tangible assets. See the discussion and reconciliation of non-GAAP
financial information in the Executive Overview section of Management's
Discussion and Analysis of Financial Condition and Results of Operation in this
Form 10-Q for more detailed information with respect to tangible common
shareholders' equity. Also, see the capital requirements discussion and table
below with respect to our regulatory capital positions.

Capital requirements


Banner Corporation 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
(BHCA), and the regulations of the Federal Reserve. Banner 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 Corporation and the Bank to maintain minimum
amounts and ratios of capital. The Federal Reserve requires Banner Corporation
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, both Banner Corporation and the Bank are required to maintain a capital
conservation buffer consisting of additional Common Equity Tier 1 Capital of
more 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 March 31, 2022, Banner Corporation and the
Bank each exceeded all regulatory capital requirements. (See Item 1,
"Business-Regulation," and Note 14 of the Notes to the Consolidated Financial
Statements included in the 2021 Form 10-K for additional information regarding
regulatory capital requirements for Banner Corporation and the Bank.)
                                       69
--------------------------------------------------------------------------------

The actual regulatory capital ratios calculated for Banner company and
Banner bank from March 31, 2022as well as minimum capital amounts and ratios, were as follows (in thousands of dollars):


                                                                                                       Minimum to be Categorized as                    Minimum to be Categorized as
                                                                      Actual                             "Adequately Capitalized"                           "Well-Capitalized"
                                                            Amount         
     Ratio                  Amount                  Ratio                   Amount                   Amount
Banner Corporation-consolidated
Total capital to risk-weighted assets                   $ 1,635,268                14.04  %       $        931,972                8.00  %       $         1,164,964                10.00  %
Tier 1 capital to risk-weighted assets                    1,411,733                12.12                   698,979                6.00                      698,979                 6.00
Tier 1 leverage capital to average assets                 1,411,733                 8.58                   658,314                4.00                             n/a                  n/a
Common equity tier 1 capital                              1,325,233                11.38                   524,234                4.50                             n/a                  n/a
Banner Bank
Total capital to risk-weighted assets                     1,566,752                13.46                   931,257                8.00                    1,164,071                10.00
Tier 1 capital to risk-weighted assets                    1,443,217                12.40                   698,442                6.00                      931,257                 8.00
Tier 1 leverage capital to average assets                 1,443,217                 8.77                   658,008                4.00                      822,510                 5.00
Common equity tier 1 capital                              1,443,217                12.40                   523,832                4.50                      756,646                 6.50



                                       70

————————————————– ——————————

© Edgar Online, source Previews

]]>
Refining, Tesla’s next frontier – CleanTechnica https://thewindow.net/refining-teslas-next-frontier-cleantechnica/ Mon, 09 May 2022 02:25:54 +0000 https://thewindow.net/refining-teslas-next-frontier-cleantechnica/

In this article, I’m going to highlight a truly outstanding YouTube channel, “The Limiting Factor”, and in particular a recent video summarizing battery news from Tesla’s recent Q1 earnings call. This 80 minute video contains enough material to do about 10 articles, but I will highlight 3 related points that I hope will add value to Jordan Giesige’s already excellent analysis.

    • Lithium supply is the material that Tesla is most worried about in the medium to long term (4 to 10 years).
    • Refining lithium is more likely to be a problem than extracting the raw material.
    • Tesla pressures its suppliers and analyzes their operations (from a battery perspective).

Why lithium, not cobalt, nickel, iron, phosphate, manganese is the biggest problem

Source: The Limiting Factor

The reasons are different for each mineral.

  • Cobalt is a problem because it is rare, not widely available, expensive, and its extraction has been linked to poor labor practices in Africa. The good news is that the industry has been working for years on ways to reduce its use and many new batteries, including white-heated lithium-iron-phosphate batteries (on the market, not at actual temperature), n do not use cobalt. Cobalt costs $82,000 per ton and the price has gone up 82% this year!
  • Lithium Iron Phosphate (LFP) batteries will solve nickel, cobalt and manganese supply problems for products that use them, but not all products can perform well with its lower energy density by weight and volume . But won’t he just trade one supply problem for another? The answer is mostly no. Even if Iron and Phosphate were as rare and limited as Cobalt, Nickel and Manganese (and they are not), this would be a big win, as it would allow you to double production. But Tesla knows we don’t need to double battery production, we need to scale it 100 times. Fortunately, we mine 1000 times more iron than nickel, so while we may need to change iron refinement, we probably don’t need to increase iron ore mining to make a lot of batteries. Similarly, phosphate is already widely mined for fertilizers, but some expansion might be needed as we don’t want to jeopardize the fertilizer we use in our food production (although I think we will need less food production as we learn to produce more protein efficiently than using cows and chickens). Iron ore prices are down 24% last year and are cheap at $142 a ton, while phosphate prices are up 86% but still cheap at $178 a ton.
  • Nickel will be a problem, but not as big a problem as lithium because it has better substitutes. The price was up 70% from a year ago to $32,000 a ton, but down from the peak caused by the start of the Russian invasion of Ukraine.
  • Demand for manganese appears to be skyrocketing, but since it is widely used in steel production, the market can absorb some of the increased demand without the price spikes we see for nickel and lithium. The price is up 9% from a year ago, but is only around $5 a tonne for raw ore. However, refined metal is of course more expensive and can go up to $4,000 per ton.
  • Lithium is the biggest problem because we don’t have a good off-the-shelf substitute. Although there are only 5 to 10 kilograms of lithium in an electric vehicle, the problem is that we have substitutes for cobalt and nickel and we do not need substitutes for the others, because they are not not so rare or in serious shortage. The main alternative which is experiencing a certain commercial momentum is sodium. Sodium is super cheap and common. The problem with sodium batteries is the same as with all batteries, not enough density and it’s not quite ready for commercial deployment. The world’s largest battery manufacturer, CATL, unveiled a product last year, but I’ve yet to see a vehicle using it. Lithium prices have soared 414% over the past year and cost around $70,000 a ton!

The shortest history of Tesla in the world

  • First, Tesla built the motors and batteries and bought the car body from Lotus. Tesla just bought batteries designed for laptops and battery modules and packs designed to cool them and put them in cars.
  • Then Tesla decided to make the whole car, the Model S.
  • Tesla had a hard time convincing its suppliers to take it seriously until around 2018. That would require battery makers to massively ramp up production, but they just didn’t believe electric cars were going to succeed and Tesla didn’t have enough cash to secure its orders. These successful battery companies had seen many companies come and go and could not spend billions of valuable capital if the market did not materialize.
  • Finally, in 2014, following the unexpected success of the Model S, which won an incredible number of Car of the Year awards, especially significant for Tesla’s first ground vehicle design, Tesla announced that it would build a gigafactory to build as many batteries as possible. everyone else in the world together (with a partner). It was a very bold move 8 years ago, but if Tesla hadn’t taken that risk, it wouldn’t have been able to grow as quickly as it did.
  • Even though battery manufacturers have dramatically increased production, they still don’t seem to realize the size of the market or have the courage to take advantage of the opportunity. In 2020, Tesla had the resources to take the next step. He’s bought a few battery technology startups and announced he’ll start making 4680 batteries. He doesn’t want to replace existing manufacturers – he just wants to supplement whatever he can get from others with his own production.
  • So now Tesla intends to make 20 million cars and plenty of stationary batteries to support the 20 TWh per year of batteries needed to transition the world to clean energy. This is an increase in production of about 200 times over the 10 years from 2020 to 2030.
  • Now that Tesla has spent 2 years producing the 4680 battery and paid off almost all of its debt, it’s time for Tesla to make another BIG bet. Many think it will be mining, but that’s two steps backwards. There are many large mining companies and Tesla can negotiate contracts with them to get the raw materials it needs. The conversation with a typical miner would go like this: Let’s say the miner produces one million tons a year of the raw ore that Tesla planned and sells half to others and the other half to Tesla’s suppliers. Tesla would read their financial statements and find that they have proven reserves of 100 million tons of materials and probable amounts of another billion tons of unproven reserves. But the company has only a thousand employees and would need at least 10,000 employees and $100 million in capital to expand 100 times and produce 100 million tons a year instead of 1 million. tons per year. Can the current management handle such growth? Can they raise that much money from their investors? Tesla would likely loan them money and provide them with a long-term contract that they could use to invest in the mining equipment they need. Then Tesla would also start buying back mining rights to expand in about 5 years when they realize that miners are unwilling or unable to change their processes fast enough to meet industry needs. [Editor’s note: This idea to help finance the mining was put out there about a year ago on CleanTech Talk, and probably well before that elsewhere. It still seems like a critical step toward Tesla’s goals. —Zach Shahan]

Refine the conclusion

Source: The Limiting Factor

Now, for refining the many materials needed to manufacture the vast number of batteries, this is the exciting expansion that Tesla will soon announce. Tesla realizes that the refining industry is technical and complex and could greatly benefit from Tesla’s first-principles engineering talent and money to fund whatever needs to be done. I doubt Tesla is refining all battery materials, probably only those they think are at risk. But even huge markets like iron do not refine enough battery-grade iron, even though there is a lot of raw iron produced.

What benefits is Tesla looking for?

  1. Controlling its supply is its first objective.
  2. Cut costs to make its products more affordable.
  3. Ensure that the environment is protected.
  4. Application of first principles of engineering.
  5. Locate refining near giga-factories or mines, preferably near both to reduce transportation costs.

I look forward to Tesla’s next move!

Disclosure: I am a shareholder of Tesla [TSLA]BYD [BYDDY]Nio [NIO]XPeng [XPEV] and Hertz [HTZ]. But I am not offering investment advice of any kind here.


 


Advertisement




Do you appreciate the originality of CleanTechnica? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador – or a patron on Patreon.


 

Have a tip for CleanTechnica, want to advertise or suggest a guest for our CleanTech Talk podcast? Contact us here.

]]>
What is the impact of rising Rbi rates on your mutual fund investments https://thewindow.net/what-is-the-impact-of-rising-rbi-rates-on-your-mutual-fund-investments/ Sun, 08 May 2022 02:11:34 +0000 https://thewindow.net/what-is-the-impact-of-rising-rbi-rates-on-your-mutual-fund-investments/

“Small and medium businesses, consumers and loan seekers will be significantly impacted by the RBI rate hike as it will result in higher interest rates being charged on loans. Small cap funds will also see a disappointing response from loan takers. The overall budgets and savings of an average investor will be crisscrossed as they will be forced to pay a higher interest rate on a home loan or personal loan,” said Pramod Chandrayan, Co-Founder and CPO, FinMapp.

How RBI Rate Rise Will Affect Mutual Fund Investments?

Anand Dalmia – Co-founder and Chief Commercial Officer – Fisdom said the main implication of the rate hike is a tighter monetary environment where liquidity is not as buoyant and borrowing is no longer cheap. In most cases, companies with highly leveraged balance sheets will experience pressure on earnings as interest charges soar. This, combined with further discounting of future cash flows, can be expected to affect valuations for many. Equity mutual funds with exposures to these sensitive companies will experience a negative impact on net asset values.

“On the fixed-income mutual fund side, funds with long-term securities and long-term golden funds will be negatively affected. Even if the market adjusts to the policy reversal, managing the debt portfolio towards the shorter end of the curve and staggering the rollout should be an ideal approach in most cases,” he said. added.

“The mutual fund industry will also be in deep water as investors will be demotivated to seal new money into mutual funds,” said Pramod Chandrayan.

Under such conditions, very large companies with very little debt should do well. This means that your large cap mutual funds are likely to perform better in the near future.

“If you have investments in small-cap companies, be prepared to face some volatility and losses. If your mid-cap plan may also face harsh weather conditions. Unfortunately, most of these companies are also facing corporate governance issues in these trying times, so be very careful,” said Amit Gupta, MD, SAG Infotech.

What will happen to mutual funds?

“With increased volatility across the curve, it is recommended to steer debt fund investments towards the shorter end with an average maturity in the 2.5-year range,” Anand Dalmia said.

Select Banking and PSU Debt Funds offer a strong blend of high credit quality and a portfolio optimized for duration risk. A short-term portfolio with a phased rollout approach provides the investor with the ability to continually invest and reinvest at higher rates, he added.

For investors seeking a strategic debt allocation for a relatively definitive horizon, target maturity funds with a hold-to-maturity approach should offer strong after-tax returns over time. Again, a staggered rollout in sync with scheduled monetary policy meetings and rate hikes will help lock in better rates, he said.

Pramod Chandrayan said losses will be incurred in overall returns by investors invested in debt funds due to falling bond prices in the markets.

Investors in existing debt funds should avoid knee-jerk reactions at this stage. It is suggested to continue to hold the investments until the investment horizon. Investors in target-maturity funds that hold to maturity don’t need to worry because they’re locked in to the return at the time of investment anyway, Gupta said.

How will long-term mutual funds benefit?

Pramod Chandrayan said the least suffering would befall those invested in large-cap funds, as these funds are invested in cash-rich companies that are able to get by without borrowing at higher interest rates.

Anand Dalmia said that assuming long-term mutual fund refers to a long-term debt mutual fund, we expect higher rates to spread effectively and contribute to overall returns for the wallet. However, the percolation can be expected to occur at a gradual pace as more clarity emerges thanks to the central bank’s reading of the path of inflation and consequent communication of its position on the topic.

Amit Gupta suggested staying away from long-term debt funds and gold funds. If you have investments, stay invested throughout the rate cycle. Otherwise, you will have to recognize the losses.

What about the short term and the medium term?

Short- and medium-term debt mutual funds will be relatively less affected than longer-term debt mutual funds given their limited exposure to interest rate risk, Anand Dalmia said.

Short-term funds will also suffer when rates rise, but to a limited extent. They will help you from high rates in the short term as they can also support reports with high rates. These funds invest in reports with maturities between one and three years. If you fund occasional years, this is a good option, said Amit Gupta.

Should you reduce your investments in equity funds?

Anand Dalmia said that unless there is a change in his investment profile warranting a change in his strategic asset allocation, there is no need to deviate from the determined asset allocation. . For dynamically managed tactical portfolios, we can expect the rising rate regime to stimulate enough volatility to provide investors with the opportunity to buy strong companies at reasonable prices.

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

]]>
Canada’s share drops at the close of trading; S&P/TSX Composite Index down 0.30% https://thewindow.net/canadas-share-drops-at-the-close-of-trading-sp-tsx-composite-index-down-0-30/ Fri, 06 May 2022 20:25:28 +0000 https://thewindow.net/canadas-share-drops-at-the-close-of-trading-sp-tsx-composite-index-down-0-30/

Investing.com – Canadian stocks were down at Friday’s close as losses in the , and , sectors pushed stocks lower.

At the close in Toronto, the fell 0.30% to a new 3-month low.

The biggest winners from the session on the were Martinrea International Inc. . (TSX:), which rose 14.61% or 1.11 points to trade at 8.71 at the close. Trisura Group Ltd. (TSX:) added 10.75% or 3.43 points to end at 35.34 and Kinaxis Inc. (TSX:) rose 7.10% or 9.18 points to end trading at 138.39.

The biggest losers were Shopify Inc (TSX:), which fell 8.22% or 43.56 points to trade at 486.07 late in the session. Aritzia Inc. (TSX:) lost 6.70% or 2.86 points to end at 39.80 and IGM Financial Inc. . (TSX:) fell 6.36% or 2.54 points to 37.42.

Declining stocks outnumbered rising stocks by 689 to 338 and 106 remained unchanged on the Toronto Stock Exchange.

The , which measures the implied volatility of S&P/TSX compound options, fell 10.29% to 23.10.

In commodities trading, gold futures for June delivery rose 0.35% or 6.50 to $1,882.20 per troy ounce. Meanwhile, crude oil for June delivery rose 2.19% or 2.37 to $110.63 a barrel, while the July Brent oil contract rose 2.04% or 2, 26 to trade at $113.16 a barrel.

CAD/USD was unchanged 0.53% to 0.77, while CAD/EUR was unchanged 0.53% to 0.74.

US dollar index futures fell 0.09% to 103.71.

]]>
Global markets rattled by Wall Street and China’s zero Covid pledge https://thewindow.net/global-markets-rattled-by-wall-street-and-chinas-zero-covid-pledge/ Fri, 06 May 2022 09:34:00 +0000 https://thewindow.net/global-markets-rattled-by-wall-street-and-chinas-zero-covid-pledge/ The main European indices fell at the start of the session. They followed stocks in Asia, which sold off as China pledged to meet its zero covid policy fueled concerns about the world’s second largest economy.
that of Hong Kong Hang Seng Index (HSI) fell 3.8%, leading to losses in Asian markets and recording its worst daily decline in more than a month. Tech stocks have seen a strong sell-off, with the Hang Seng Tech index down 5.2%.
The reference in mainland China Shanghai Composite Index (SHCOMP) and its high-tech peer Shenzhen Component Index both slipped more than 2%. from Japan Nikkei (N225) opened lower, but reversed losses later in the day. It ended up increasing by 0.7%.

In the foreign exchange markets, the Chinese yuan depreciated against the US dollar, reaching its lowest level in a year and a half years. It pared some losses in the afternoon to settle at 6.71 to the US dollar.

In Europe, London FTSE100 (UKX)the index fell more than 1%. germany DAX (DAX)and that of France CAC 40 (CAC40) fell 1.4% and 1.6%, respectively. The pound, which lost 2% against the dollar on Thursday after the Bank of England predicted a hard landing for the British economy, slipped to $1.23.

The losses came after the Dow fell more than 1,100 points and the S&P 500 fell 3.7% on Thursday, wiping out Wednesday’s gains as investors worried about the impact of the rise US interest rates and the risk of recession.

Investors in Asia are also nervous after the latest comments from senior Chinese leaders on its efforts to stop the spread of the coronavirus.

President Xi Jinping said all levels of government should “resolutely” adhere to the country’s zero-Covid policy. He made the remarks during a meeting Thursday with the Communist Party’s Politburo Standing Committee – the country’s top decision-making body.

Officials at all levels of government must “resolutely struggle with all words and deeds distorting, doubting and denying China’s Covid control policy”, Xi said.

“This could serve to dampen some hopes of any policy shifts from Covid-19, suggesting that the economic recovery will remain protracted and uneven,” Yeap Jun Rong, market strategist at financial services firm IG, wrote on Friday. Group.

China’s zero Covid policy has weighed heavily on the country’s economy. In April, the gigantic service sector contracted at the second fastest rate on record as Covid lockdowns hit businesses hard. China’s manufacturing sector also contracted last month, dragging down the economy.

— Nicole Goodkind contributed to this report.

]]>
The boss of the ICPC advocates the recovery without condemnation of the looted goods https://thewindow.net/the-boss-of-the-icpc-advocates-the-recovery-without-condemnation-of-the-looted-goods/ Thu, 05 May 2022 19:26:38 +0000 https://thewindow.net/the-boss-of-the-icpc-advocates-the-recovery-without-condemnation-of-the-looted-goods/

Non-conviction-based asset recovery is a powerful tool for recovering illicit wealth, says the president of the Independent Corrupt Practices and Related Offenses Commission (ICPC)said Bolaji Owasanoye.

Mr Owasanoye said it also helped deprive looters “of the fruits of wrongdoing”.

The approach is to recover the proceeds of crimes through court orders without necessarily securing the conviction or establishing the guilt of the looters or anyone associated with the crime in court.

He said this at the ongoing 12th Commonwealth Regional Conference for Heads of Anti-Corruption Agencies in Africa, in Kigali, Rwanda.

The theme of the conference is “Combating Corruption for Good Governance and Sustainable Development in Africa,” according to a statement released Thursday by ICPC spokesperson Azuka Ogugwa.

According to the chairman of the ICPC, confiscating assets without conviction would deprive corrupt people of the use of anything they have stolen from public coffers.

In his presentation entitled “The Effects of Non-Conviction Asset Recovery in the Fight against Corruption”, M. indicated that civil forfeiture was a viable alternative to criminal forfeiture.

“Anti-Corruption Agencies (ACAs) need to improve their investigative capacity, particularly asset tracing, to ensure maximum impact from asset forfeiture without conviction.

“Serious efforts must be made to address the dysfunctional criminal justice system while better public education is needed on the usefulness of civil forfeiture for anti-corruption efforts,” said Professor Owasanoye, former Executive Secretary of the Presidential Advisory Committee. against corruption (PACAC).

He listed the benefits of non-conviction-based asset forfeiture, including the ability to conclude proceedings quickly, the liberty of the person in possession of the asset not being an issue as it does not violate fundamental rights or constitutional guarantees, and the procedure being against property rather than persons.

The ICPC Chairman further stated that stripping criminals of their ill-gotten wealth is adequate punishment to deter others, as recognized and encouraged by the United Nations Convention Against Corruption (UNCAC).

Despite its many benefits, Mr. Owasanoye acknowledged that asset recovery has limitations in the fight against corruption.

Nigeria is probably one of the most politically active states on the issue of asset recoveries, with the government able to confiscate, freeze and recover large amounts of assets over the past three years, with officials claiming to have recovered million.

Still, the success was better despite the lack of data transparency around recovered assets.

The ICPC and the Economic and Financial Crimes Commission (EFCC) have carried out significant recovery of looted assets through non-conviction proceedings, particularly since 2015.

But many observers have expressed concerns about the lack of data transparency around recovered assets.

The Attorney General of the Federation (AGF), Abubakar Malami, issued a regulation in 2019 giving his office the power to manage assets recovered by all relevant federal government agencies.

In November 2020, the federal government, also through the AGF office, established a 22-member committee to dispose of all assets forfeited to the federal government within six months.

These efforts were aimed at ensuring transparency and effective coordination in the management of the recovered assets, but have not achieved the intended goal, as the activities of the relevant committees and departments continue to be shrouded in secrecy.

Limitations on Non-Conviction Asset Recovery

Mr. Owasanoye, a professor and senior lawyer, also identified some limitations of non-conviction asset recovery as an anti-corruption measure.

One of them, he says, is the public perception that it is not a deterrent without imprisonment.

He said: “limit the usefulness of non-conviction asset recovery when the offender remains in public service to accumulate other illicit assets; withholding other assets undermines public confidence when not all illicit assets are found, and asset recovery without conviction and imprisonment is not perceived by the public as a complete deterrent to illicit behavior .

The anti-corruption boss also outlined three activities that member countries of the African Union should undertake in the fight against corruption and ensuring effective asset recovery.

Actions, according to him, include: “Enforcing the standards of the Common African Position on Asset Recovery (CAPAR), implementing the recommendations of the Thabo Mbeki report and lobbying for a model asset recovery model are part of the initiatives.

“The African Union Heads of Government should implement the low-hanging fruits of the Mbeki Group recommendations, namely: establish specialized units for confiscation/asset recovery at the local level and within the the AU; and comply with Article 4 (1) and Article 20 (1) of the AUCPCC, by providing the information required in accordance with the decision of the Executive Council of the AU by designating a national authority and criminalizing the corrupt acts.

“African Union Heads of Government should combine diplomatic, civil and criminal confiscation mechanisms for asset recovery and not just diplomatic measures, as well as establish transparent mechanisms for the management and use of returned assets .

“They should also demand transparent parameters and a timeline for the return of assets to Africa, including stolen items.

“It’s about eliminating ‘musical chairs’ in asset returns. In additionAU Heads of Government should advocate for the application of common governance standards on the use of returned assets.


Support the integrity and credibility journalism of PREMIUM TIMES

Good journalism costs a lot of money. Yet only good journalism can guarantee the possibility of a good society, an accountable democracy and a transparent government.

For free and continued access to the best investigative journalism in the country, we ask that you consider providing modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you help sustain relevant journalism and keep it free and accessible to everyone.

To give



ANNOUNCEMENT TEXT: To post an ad here . Call Willie – +2348098788999







Announcement of the PT Mag campaign

]]>
US stocks rise, Treasury yields mixed ahead of Fed move https://thewindow.net/us-stocks-rise-treasury-yields-mixed-ahead-of-fed-move/ Tue, 03 May 2022 20:50:21 +0000 https://thewindow.net/us-stocks-rise-treasury-yields-mixed-ahead-of-fed-move/

US stocks ended higher on Tuesday after a choppy trading session and Treasury bond yields were mixed ahead of the Federal Reserve’s latest monetary policy decision.

The US central bank is expected to announce it will raise interest rates by half a percentage point – the first increase of this size since 2000 – in an effort to fight inflation. Consumer prices in the United States rose 8.5% in March, the fastest pace since 1981.

Futures markets are pricing in half-point hikes at the next three policy meetings in June, July and September, with the Fed’s key interest rate expected to end the year around 2.9%, down from 0, 25 to 0.5% today.

The yield on the two-year Treasury bill, which moves with interest rate expectations, rose 0.04 percentage points to 2.77%.

While short-term yields were higher, longer-term ones fell, flattening the yield curve. The yield on the 10-year note, a benchmark for asset pricing and lending rates around the world, fell to 2.98% – it hit 3% on Monday for the first time since 2018.

On Wall Street, the blue-chip S&P 500 index ended the day up 0.5% and the Nasdaq Composite rose 0.2%. Trading volumes on the Nasdaq were 10.4% below the 100-day average and 1.7% below the 100-day average of the S&P 500.

Lou Brien, market strategist at DRW Trading, said: “It’s been really quiet today with people doing last minute accounting before the Fed, adjusting positions before what they do and say tomorrow. . Expectations of a 50 basis point hike have been priced in pretty well at this point.

The dollar index, which measures the US currency against six others and hit a 20-year high last week, fell 0.3%.

Treasury yields have been on the move for weeks ahead of the Fed’s decision. The two-year yield in April hit its highest level since 2018. The 10-year yield’s rise of 2-3% was the fastest of its kind since late 2010.

Sovereign debt yields also climbed in Europe. The yield on the German 10-year Bund, which started the year below zero, rose above 1% for the first time in seven years in European morning trade before stabilizing at 0.96%. The UK equivalent briefly crossed 2% before paring some of its gains to trade at 1.96%.

The upheaval in bond markets came after the Reserve Bank of Australia on Tuesday raised interest rates for the first time in more than a decade, raising borrowing costs 0.25 percentage points higher than expected. and citing inflation which had “rebounded faster”. , and at a higher level than expected”.

Australia’s 10-year bond yield hit 3.4%, a level not seen since 2014, while its more policy-sensitive two-year yield rose 0.2 percentage points to 2.73. %.

The Bank of England is also expected to raise UK interest rates on Thursday to their highest level since 2009. BoE Governor Andrew Bailey said last month that the institution was walking a “very, very fine line between fighting consumer price increases and preventing recession risks by raising borrowing costs too much.

]]>
“Advisors need to accept that crypto is here to stay” https://thewindow.net/advisors-need-to-accept-that-crypto-is-here-to-stay/ Tue, 03 May 2022 07:22:31 +0000 https://thewindow.net/advisors-need-to-accept-that-crypto-is-here-to-stay/

Crypto is an established asset class and will enter the mainstream, according to Jason Guthrie, head of digital assets at Wisdom Tree.

In the latest edition of FTAdviser’s Fireside Chat In Focus, in partnership with Wisdom Tree, Guthrie said: “We are past the point where there is speculation as to whether this is or not a trend that is here to stay.

“Cryptocurrencies have firmly established themselves as a new asset class and it’s really something people can’t ignore.”

He said investors will increasingly choose service providers based on their ability to access the digital asset market.

The digital assets encompass over 5,000 coins, non-fungible tokens, and topics such as the metaverse, as well as the technologies that power these protocols.

It’s those platforms that are moving heavily right now, Guthrie said, moving the technology away from a “winner takes all” investment space, which some investors might think they can’t participate in, toward a ” Multi-Channel Future” emphasizing interoperability.

It has “broadened the investment universe for a lot of people because it … means you have the ability to grow capital against a variety of protocols,” Guthrie said.

Yet, there remains a level of uncertainty about how the space will evolve over the next decade, leading to high volatility.

Guthrie said: “People need to treat this investment as such. I don’t think anyone is advocating that 50% of someone’s portfolio be in cryptocurrency. That’s how you account for risk, making allocations assessed on the basis of risk.

“We see people making 1, 2, 3, 5% of a portfolio [as part of a] risk-adjusted approach to adding it. And that’s what you see with other asset classes as well. »

So, could crypto become mainstream? “Absolutely,” Guthrie said. “We’re already on track to do that; around 2% of the world’s population is involved in crypto right now, that’s only going to grow.”

To learn more about ethical dilemmas in crypto and how crypto can help diversify a portfolio, watch the video above.

carmen.reichman@ft.com

]]>
MORGAN STANLEY FWP Form Submitted by: MORGAN STANLEY https://thewindow.net/morgan-stanley-fwp-form-submitted-by-morgan-stanley/ Mon, 02 May 2022 19:31:00 +0000 https://thewindow.net/morgan-stanley-fwp-form-submitted-by-morgan-stanley/

Investing in the buffered securities is not equivalent to investing in the underlying index. Investing in the Buffered Securities is not equivalent to investing in the Underlying Index or its constituent stocks. As an investor in the Buffered Securities, you will not have any voting rights or any right to receive any dividends or other distributions or any other rights with respect to the stocks which constitute the underlying index.

The rate we are willing to pay for securities of this type, maturity and issue size is likely to be lower than the rate implied by our secondary market credit spreads and beneficial to us. The lower rate and the inclusion of the costs associated with the issuance, sale, structuring and hedging of the buffered securities in the initial issue price reduce the economic terms of the buffered securities, ensure that the value estimated buffered securities will be lower than the initial issue price and will adversely affect secondary market prices. Assuming market conditions or other relevant factors do not change, the prices, if any, at which brokers, including MS & Co., might be willing to purchase the buffered securities in market transactions secondary will likely be significantly lower than the original issue price. , because secondary market prices will exclude issue, selling, structuring and hedging costs which are included in the initial issue price and which you bear and because secondary market prices will reflect our credit spreads in the secondary market and the bid-ask spread which any broker would charge for such a transaction in the secondary market as well as other factors.

The inclusion of the costs of issuing, selling, structuring and hedging the buffered securities in the initial issue price and the lower rate we are willing to pay as the issuer makes the economics of the buffered securities less favorable to you than they otherwise would be.

However, since the costs associated with the issue, sale, structuring and hedging of the Buffer Notes are not fully deducted upon issue, for a period of up to 6 months from the date of issue, to the extent that MS & Co. may buy or sell the Buffered Securities in the secondary market, absent changes in market conditions, including those relating to the underlying index, and to our credit spreads in the secondary market, it would do so on the basis of values ​​higher than the estimated value, and we expect that these higher values ​​also appear on your brokerage account statements.

The estimated value of buffered securities is determined by reference to our pricing and valuation models, which may differ from those of other brokers and do not constitute a maximum or minimum secondary market price. These pricing and valuation models are proprietary and based in part on subjective opinions of certain market data and certain assumptions regarding future events, which may prove to be incorrect. Therefore, since there is no market-standard way to value these types of securities, our models may yield a higher estimated value of buffered securities than that generated by others, including other brokers. in the market, if they attempt to value the Buffered Securities. Further, the estimated value on the date of pricing does not represent a minimum or maximum price at which brokers, including MS & Co., would be willing to purchase your buffered securities in the secondary market (if any) at any time. The value of your buffered securities at any time after the date of this document will vary based on many factors which cannot be precisely predicted, including our creditworthiness and changes in market conditions. See also “The Market Price of Buffered Securities Will Be Affected by Many Unpredictable Factors” above.

The buffered securities will not be listed on any stock exchange and secondary trading may be limited. The stamped securities will not be listed on any stock exchange. Therefore, there may be little or no secondary market for buffered securities. MS & Co. may, but is not obligated to, make a market for Buffered Securities and, if it once elects to make a market, may cease doing so at any time. When it creates a market, it generally does so for trades of common size in the secondary market at prices based on its estimate of the current value of the buffered securities, taking into account its bid/ask spread, our spreads credit, market volatility, the notional size of the proposed sale, the cost of unwinding any related hedging position, the time remaining to expiration and the likelihood that it will be able to resell the buffered securities . Even if there is a secondary market, it may not provide enough liquidity for you to easily trade or sell the buffered securities. Since other brokers may not participate significantly in the secondary market for buffered securities, the price at which you will be able to trade your buffered securities will likely depend on the price, if any, at which MS & Co. is willing to trade . If at any time MS & Co. were to cease making a market for the buffered securities, it is likely that there would be no secondary market for the buffered securities. Therefore, you should be prepared to hold your buffered securities until they mature.

The Calculation Agent, which is a subsidiary of Morgan Stanley and an affiliate of MSFL, will make determinations regarding buffered securities. As Calculation Agent, MS & Co. will determine the Initial Index Value and the Final Index Value, and calculate the amount of cash you will receive at maturity. In addition, certain decisions made by MS & Co., in its capacity as Calculation Agent, may require it to exercise its discretion and make subjective judgments, for example with respect to the occurrence or non-occurrence of market disruption events and the selection of a successor to the index or the calculation of the final value of the index in the event of market disruption or discontinuation of the underlying index. These potentially subjective determinations may adversely affect the payment made to you at maturity. For further information regarding these types of determinations, see “Description of the Securities – Postponement of Valuation Date(s)” and “– Calculation Agent and Calculations”.

]]>