11 unchanged sentences
Weakness in the national economy, or the economies of the markets in which we operate, could have a material adverse effect on our financial condition, results of operations and prospects.
−Removed: We provide banking and financial services primarily to businesses and individuals in the states of Washington, Oregon, California and Idaho.
−Removed: All of our branches and most of our deposit clients are also located in these four states.
−Removed: Further, as a result of a high concentration of our client base in the Puget Sound area and eastern Washington state regions, the deterioration of businesses in these areas, or one or more businesses with a large employee base in these areas, could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
−Removed: As we expand our presence in areas such as San Diego and Sacramento, and throughout California, we will be exposed to concentration risks in those areas as well.
−Removed: In addition, weakness in the global economy and prevalent global supply chain issues have adversely affected numerous businesses within our market areas, particularly those reliant on international trade.
−Removed: Changes in agreements or relationships between the United States and other countries may further impact these businesses and, by extension, our operations.
−Removed: A downturn in economic conditions, be it due to inflation, recessive trends, geopolitical conflicts, adverse weather, the impact of COVID-19 variants, or other factors, could have a material adverse effect on our business, financial condition, liquidity and results of operations, including but not limited to:
+Added: We provide banking and financial services primarily to businesses and individuals in the states of Washington, Oregon, California and Idaho, with all of our branches and most of our deposit clients located in these four states.
+Added: Our client base is highly concentrated in the Puget Sound area and eastern Washington.
+Added: A deterioration in the business environment in these regions, or one or more businesses with a large employee base in these areas, could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.
+Added: As we expand into other areas, such as San Diego, Sacramento, and throughout California, we face additional concentration risks in those markets.
+Added: Furthermore, trade wars, tariffs, or shifts in trade policies between the United States and other nations could disrupt supply chains, increase costs for businesses, and reduce export opportunities for our clients.
+Added: These developments may, in turn, negatively impact these businesses and, by extension, our operations and financial performance.
+Added: A downturn in economic conditions, be it due to inflation, recessive trends, geopolitical conflicts, adverse weather, severe fire or other natural disasters, or other factors, could have a material adverse effect on our business, financial condition, liquidity and results of operations, including but not limited to:
• Reduced demand for our products and services, potentially leading to a decline in our overall loans or assets;
4 unchanged sentences
• Reduction in our low-cost or non-interest-bearing deposits.
−Removed: A decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loans are more geographically diverse.
−Removed: Our loan portfolio is predominantly secured by real estate.
−Removed: Deterioration in the real estate markets where collateral for a loan is real property could negatively affect the borrower’s ability to repay the loan and the value of the collateral securing the loan.
−Removed: Real estate values are affected by various factors, including economic conditions, regulatory changes, and natural disasters such as earthquakes, flooding and tornadoes.
−Removed: If we are required to liquidate a significant amount of collateral during a period of reduced real estate values, our financial condition and profitability could be adversely affected.
−Removed: Adverse changes in the regional and general economy could reduce our growth rate, impair our ability to collect loans and generally have a negative effect on our financial condition and results of operations.
−Removed: External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations.
+Added: A decline in local economic conditions could disproportionately affect our earnings and capital compared to larger financial institutions with more geographically diverse real estate loan portfolios.
+Added: Because our loan portfolio is predominantly secured by real estate, deterioration in real estate markets could impair borrowers’ ability to repay loans and reduce the value of the underlying collateral.
+Added: Real estate values are influenced by a range of factors, including economic conditions, government policies, natural disasters (e.g., fires, earthquakes, flooding and tornadoes), and trade-related pressures affecting construction costs or material availability.
+Added: Liquidating significant collateral during a period of depressed real estate values could negatively impact our financial condition and profitability.
+Added: Adverse changes in regional or general economic conditions may reduce our growth rate, impair our ability to collect loans and generally have a negative effect on our financial condition and results of operations.
+Added: Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations.
Our financial condition and results of operations are affected by credit policies of monetary authorities, particularly the Federal Reserve.
Actions by monetary and fiscal authorities, including the Federal Reserve, could lead to inflation, deflation, or other economic phenomena that could adversely affect our financial performance.
−Removed: Inflation has risen sharply since the end of 2021 at levels not seen for over 40 years.
−Removed: Inflationary pressures, while easing recently, remained elevated throughout most of 2023.
−Removed: Small- to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
−Removed: Consequently, the ability of our business clients to repay their loans may deteriorate quickly, which would adversely impact our results of operations and financial condition.
+Added: tariffs on imported goods could exacerbate inflationary pressures by increasing the cost of goods and materials for businesses and consumers.
+Added: This may particularly affect small to medium-sized businesses, as they are less able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
+Added: Consequently, our business clients may experience increased financial strain, reducing their ability to repay loans and adversely impacting our results of operations and financial condition.
Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which could adversely affect our results of operations and financial condition.
−Removed: Virtually all our assets and liabilities are monetary in nature.
−Removed: As a result, interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.
−Removed: Interest rates do not necessarily move in the same direction or by the same magnitude as the prices of goods and services.
−Removed: Risks related to recent events impacting the banking industry could adversely affect our stock price, results of operations and financial condition.
−Removed: The banking industry has been negatively impacted by the failures of Silicon Valley Bank and Signature Bank in March 2023, and First Republic Bank in May 2023.
−Removed: These failures highlighted deposit-related risks to the banking industry, in particular the speed at which deposits can be moved.
−Removed: These events led to decreased investor and depositor confidence in regional banks as well as increased volatility in the stock trading prices of regional banks, to varying degrees.
−Removed: Despite differences in business models across the banking industry, further concerns related to these events could adversely impact our deposits, liquidity, results of operations and the trading price of our stock.
+Added: Virtually all of our assets and liabilities are monetary in nature, and as a result, interest rates tend to have a more significant impact on our performance than general levels of inflation or deflation.
+Added: However, interest rates do not necessarily move in the same direction or magnitude as the prices of goods and services, creating additional uncertainty in the economic environment.
+Added: T able of C onten ts
Risks Related to Credit and Lending
Our loan portfolio includes loans with a higher risk of loss.
−Removed: In addition to our first-lien one- to four-family residential real estate lending, we originate construction and land loans, commercial and multifamily mortgage loans, commercial business loans, agricultural mortgage loans and agricultural business loans, and consumer loans, primarily within our market areas, which generally involve a higher risk of loss than first-lien one- to four-family residential real estate lending.
−Removed: We had $9.29 billion outstanding in these types of higher risk loans at December 31, 2023, compared to $8.97 billion at December 31, 2022, which typically present different risks to us than our first-lien one- to four-family residential real estate for a number of reasons, including the following:
+Added: In addition to first-lien one- to four-family residential real estate lending, we originate construction and land and land development loans, commercial and multifamily real estate loans, commercial business loans, agricultural mortgage and business loans, and consumer loans, primarily within our market areas.
+Added: As of December 31, 2024, we had $9.76 billion outstanding in these non-first-lien one- to four-family residential real estate loan categories, compared to $9.29 billion as of December 31, 2023.
+Added: These loans present risks distinct from those associated with first-lien one- to four-family residential real estate lending for a number of reasons, including the following:
• Construction and Land Loans.
1 unchanged sentence
This type of lending carries inherent uncertainties in estimating a property’s future value upon project completion and the overall cost (including interest) of the project.
−Removed: These uncertainties arise from challenges in estimating construction costs, assessing the market value upon project completion and considering the impact of government regulations on real property.
−Removed: Consequently, accurately evaluating the total funds required to complete a project and determining the loan-to-value ratio for the completed project is often challenging.
−Removed: If the estimate of construction costs proves inaccurate, we may be required to advance funds beyond the amount originally committed to ensure project completion.
−Removed: If our appraisal of a completed project’s value proves to be overstated, we may have inadequate security for loan repayment upon project completion and subsequent losses.
−Removed: Challenges such as disputes between borrowers and builders and the failure of builders to pay subcontractors, and the concentration of higher loan amounts among a limited number of builders further increases risk exposure.
+Added: These challenges arise from difficulties in estimating construction costs, assessing market value upon project completion, and accounting for the impact of government regulations on real property.
+Added: Accurately evaluating the total funds required to complete a project and determining the loan-to-value ratio for the completed project is often challenging.
+Added: If construction cost estimates are inaccurate, we may be required to advance funds beyond the original loan commitment to ensure project completion.
+Added: Additionally, if the appraised value of the completed project is overstated, we may have inadequate security for loan repayment, resulting in potential losses.
+Added: Other risks include disputes between borrowers and builders, the failure of builders to pay subcontractors, and the concentration of higher loan amounts among a limited number of builders.
A downturn in housing or the real estate market could increase delinquencies, defaults and foreclosures, and significantly impair the value of our collateral and our ability to sell the collateral upon foreclosure.
−Removed: Multiple loans to a single builder amplify our risk exposure, wherein adverse developments in one loan or credit relationship pose significant loss potential.
−Removed: In addition, during the term of some of our construction loans, no payment from the borrower is required since the accumulated interest is added to the principal of the loan through an interest reserve.
−Removed: Increases in market rates of interest may have a more pronounced effect on construction loans by rapidly depleting the interest reserves prior to completion and/or increasing the end-purchaser’s borrowing costs, thereby possibly reducing the homeowner’s ability to finance the home upon completion or the overall demand for the project.
−Removed: Properties under construction are often difficult to sell and typically must be completed in order to be successfully sold, which also complicates the process of managing problem construction loans.
−Removed: This may require us to advance additional funds and/or contract with another builder to complete construction and assume the market risk of selling the project at a future market price, which may or may not enable us to fully recover unpaid loan funds and associated construction and liquidation costs.
−Removed: Loans on land under development or held for future construction also pose additional risk due to the lack of income generation from the property and potential liquidity of collateral, significantly affected by supply and demand.
−Removed: As a result, this type of lending often involves disbursing substantial funds, with repayment dependent on project success and the borrower’s ability to sell or lease the property or obtain permanent financing, rather than independent repayment capability.
−Removed: Construction loans made by us include those with a sales contract or permanent loan in place for the finished homes and those for which purchasers for the finished homes may not be identified either during or following the construction period, known as speculative construction loans.
−Removed: Speculative construction loans pose additional risks, especially regarding finding end-purchasers for finished projects.
−Removed: We attempt to mitigate this risk by actively monitoring the number of unsold homes in our construction loan portfolio and local housing markets in an attempt to maintain an appropriate balance between home sales and new loan originations.
−Removed: In addition, the maximum number of speculative construction loans (loans that are not pre-sold) approved for each builder is based on a combination of factors, including their financial capacity, market demand for the finished product and the ratio of sold to unsold inventory the builder maintains.
−Removed: We have also attempted to diversify the risk associated with speculative construction lending by doing business with a large number of small and mid-sized builders spread over a relatively large geographic region representing numerous sub-markets within our service area.
+Added: Multiple loans to a single builder amplify these risks, as adverse developments in one loan or credit relationship could result in significant losses.
At December 31, 2024, non-performing construction and land loans totaled $4.0 million, or 11% of total non-performing loans.
+Added: Some construction loans include interest reserves, where accumulated interest is added to the loan principal rather than requiring borrower payments during the loan term.
+Added: Rising market interest rates can rapidly deplete these reserves before project completion and increase borrowing costs for end-purchasers, potentially reducing their ability to finance the home or diminishing demand for the project.
+Added: Properties under construction are also challenging to sell and typically need to be completed before a sale can occur, complicating the management of problem construction loans.
+Added: This may require advancing additional funds or contracting with another builder to complete the project, exposing us to market risks and potential losses on unpaid loan funds and associated costs.
+Added: Loans on land under development or held for future construction carry additional risks due to the lack of income generation and reduced collateral liquidity, both of which are highly influenced by supply and demand dynamics.
+Added: These loans often involve substantial disbursements, with repayment dependent on the success of the project and the borrower’s ability to sell or lease the property or obtain permanent financing.
+Added: Our construction loans include both those secured by sales contracts or permanent loans for finished homes and speculative construction loans, where end-purchasers may not be identified during or after the construction period.
+Added: Speculative construction loans present additional risks related to finding buyers for completed projects.
+Added: To mitigate this risk, we actively monitor the number of unsold homes in our construction loan portfolio and local housing markets to maintain a balance between home sales and new loan originations.
+Added: We also limit the number of speculative construction loans approved for each builder based on factors such as financial capacity, market demand, and the ratio of sold to unsold inventory.
+Added: Additionally, we diversify risk by working with a large number of small- to mid-sized builders across a broad geographic region, encompassing multiple sub-markets within our service area.
• Commercial and Multifamily Real Estate Loans .
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Many of these loans involve higher principal amounts than other types of loans, and some commercial borrowers maintain multiple loans with us.
−Removed: Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan.
−Removed: Repayment of these loans typically is dependent upon income being generated from the property securing the loan in amounts sufficient to cover operating expenses and debt service, which may be adversely affected by changes in the economy or local market conditions.
−Removed: In addition, many of our commercial and multifamily real estate loans are not fully amortizing and contain large balloon payments upon maturity.
−Removed: These balloon payments may require the borrower to either sell or refinance the underlying property, potentially heightening the risk of default or non-payment.
−Removed: If we foreclose on a commercial or multifamily real estate loan, our holding period for the collateral typically longer than for one- to four-family residential loans because there are fewer potential purchasers of the collateral.
+Added: Consequently, an adverse development with respect to a single loan or credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan.
+Added: Repayment of these loans typically depends on the income generated from the property securing the loan, in amounts sufficient to cover operating expenses and debt service.
+Added: This income may be adversely affected by changes in the economy or local market conditions.
+Added: In addition, many of our commercial and multifamily real estate loans are not fully amortizing and include large balloon payments at maturity.
+Added: These balloon payments may require the borrower to either sell or refinance the underlying property, potentially increasing the risk of default or non-payment.
+Added: If we foreclose on a commercial or multifamily real estate loan, the holding period for the collateral is typically longer than for one- to four-family residential loans as a result of the smaller pool of potential buyers.
At December 31, 2024, non-performing commercial and multifamily real estate loans totaled $2.2 million, or 6% of total non-performing loans.
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At December 31, 2024, commercial business loans were $2.42 billion, or 21% of our total loan portfolio.
−Removed: Our commercial business loans are primarily made based on the cash flow of the borrower and secondarily on the underlying collateral provided by the borrower.
−Removed: A borrower’s cash flow may prove to be unpredictable, and collateral securing these loans may fluctuate in value.
+Added: These loans are primarily made based on the borrower’s cash flow and, secondarily, on the underlying collateral provided by the borrower.
+Added: A borrower’s cash flow can be unpredictable, and the value of collateral securing these loans may fluctuate.
Most often, this collateral includes accounts receivable, inventory, equipment, or real estate.
−Removed: In the case of loans secured by accounts receivable, the availability of funds for repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its clients.
−Removed: Other collateral securing commercial business loans may depreciate over time, may be difficult to appraise, may be illiquid and may fluctuate in value based on the success of the business.
+Added: For loans secured by accounts receivable, the availability of funds for repayment may depend substantially on the borrower’s ability to collect amounts due from its clients.
+Added: Other types of collateral securing commercial business loans may depreciate over time, be difficult to appraise, lack liquidity, or fluctuate in value depending on the success of the business.
At December 31, 2024, non-performing commercial business loans totaled $7.1 million, or 19% of total non-performing loans.
+Added: T able of C onten ts
• Agricultural Loans .
At December 31, 2024, agricultural loans were $340.3 million, or 3% of our total loan portfolio.
−Removed: Repayment of agricultural loans is dependent upon the successful operation of the business and is subject to many factors outside the control of either us or the borrowers.
−Removed: These factors include adverse weather conditions that prevent the planting of crops or limit crop yields (such as hail, drought and floods), loss of crops or livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, tariffs and environmental regulations).
−Removed: In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect successful operation of the farm.
+Added: Repayment of agricultural loans depends on the successful operation of the business and is subject to numerous factors beyond the control of either us or the borrowers.
+Added: These factors include adverse weather conditions that prevent crop planting or limit yields (such as hail, drought, and floods), loss of crops or livestock due to disease or other causes, declines in market prices for agricultural products (both domestically and internationally), and the impact of government regulations (including changes in price supports, subsidies, tariffs, and environmental policies).
+Added: Additionally, many farms rely on a limited number of key individuals whose injury or death could significantly affect the farm’s successful operation.
If the cash flow from a farming operation is diminished, the borrower’s ability to repay the loan may be impaired.
−Removed: Consequently, agricultural loans may involve a greater degree of risk than other types of loans, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets such as farm equipment (some of which is highly specialized with a limited or no market for resale), or assets such as livestock or crops.
−Removed: In such cases, any repossessed collateral for a defaulted agricultural operating loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation or because the assessed value of the collateral exceeds the eventual realization value.
+Added: As a result, agricultural loans may pose a greater degree of risk than other types of loans, particularly those that are unsecured or secured by rapidly depreciating assets, such as farm equipment (some of which is highly specialized and may have little or no resale market), or assets like livestock or crops.
+Added: In such cases, repossessed collateral from a defaulted agricultural loan may not provide an adequate source of repayment for the outstanding loan balance due to the greater likelihood of damage, loss, or depreciation, or because the collateral’s assessed value exceeds its eventual realization value.
At December 31, 2024, non-performing agricultural loans totaled $8.5 million, or 23% of total non-performing loans.
2 unchanged sentences
Home equity lines of credit, which represented 87% of our total consumer loan portfolio at December 31, 2024, generally entail greater risk than one- to four-family residential mortgage loans where we are in the first lien position.
−Removed: For home equity lines secured by a second mortgage, it is less likely that we will be successful in recovering all of our loan proceeds in the event of default as the value of the property must be sufficient to cover the repayment of the first mortgage loan, and the costs associated with foreclosure, before the balance on the second mortgage loan is repaid.
−Removed: In the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation.
−Removed: The remaining deficiency often does not warrant further substantial collection efforts against the borrower.
−Removed: In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.
−Removed: Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount which can be recovered on these consumer loans.
−Removed: Loans that we purchased, or indirectly originated, may also give rise to claims and defenses by a consumer loan borrower against an assignee of such loans such as us, and a borrower may be able to assert against the assignee claims and defenses that it has against the seller of the underlying collateral.
+Added: For home equity lines secured by a second mortgage, it is less likely that we will recover all our loan proceeds in the event of default as the value of the property must be sufficient to cover repayment of the first mortgage loan and foreclosure-related costs before the second mortgage loan balance is repaid.
+Added: For consumer loans that are unsecured or secured by rapidly depreciating assets, such as automobiles, any repossessed collateral from a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the higher likelihood of damage, loss, or depreciation.
+Added: The remaining deficiency often does not justify further substantial collection efforts against the borrower.
+Added: Additionally, consumer loan collections depend on the borrower’s financial stability, making them more vulnerable to adverse events such as job loss, divorce, illness, or personal bankruptcy.
+Added: Furthermore, federal and state laws, including bankruptcy and insolvency laws, may limit the amount recoverable on these loans.
+Added: Loans we purchased or indirectly originated may also expose us to claims and defenses by borrowers.
+Added: In such cases, borrowers may assert claims and defenses against us as an assignee that they could have raised against the seller of the underlying collateral.
At December 31, 2024, non-performing consumer loans totaled $4.9 million, or 13% of total non-performing loans.
8 unchanged sentences
As a result, these loans may experience higher rates of delinquencies, defaults and losses, which will in turn adversely affect our financial condition and results of operations.
+Added: At December 31, 2024, non-performing one- to four-family residential loans totaled $10.4 million, or 28% of total non-performing loans.
Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio, which would cause our results of operations, liquidity and financial condition to be adversely affected.
4 unchanged sentences
• the duration of the loan;
−Removed: • the character and creditworthiness of a particular borrower;
+Added: • the character and creditworthiness of the borrower;
• changes in economic and industry conditions.
−Removed: We maintain an allowance for credit losses— a reserve established through a provision for expected losses—we believe is appropriate to provide for lifetime expected credit losses in our loan portfolio.
+Added: T able of C onten ts
+Added: We maintain an allowance for credit losses that we believe is appropriate to provide for lifetime expected credit losses in our loan portfolio.
The appropriate level of the allowance for credit losses is determined by Management through periodic reviews and consideration of several factors, including, but not limited to:
6 unchanged sentences
If current conditions in the housing and real estate markets weaken, we expect we will experience increased delinquencies and credit losses.
+Added: The ongoing Los Angeles wildfires that began in January 2025 present heightened risks to our loan portfolio and the adequacy of our allowance for loan losses.
+Added: Borrowers impacted by the fires may face financial hardship, leading to increased loan defaults and reduced repayment capacity.
+Added: Damage to or destruction of properties securing loans may result in collateral value depreciation, further increasing potential losses.
+Added: Additionally, inadequate insurance coverage or denied claims may limit recovery efforts and contribute to greater uncertainty in estimating credit losses.
+Added: Local economic disruptions, such as business closures and job losses, may impair borrowers’ ability to meet financial obligations, requiring adjustments to our credit loss assumptions.
+Added: The concentration of our loan portfolio in fire-prone areas further increases exposure, while the growing frequency and severity of wildfires due to climate change heightens long-term risks.
+Added: These factors may necessitate increases to our allowance for loan losses to account for elevated credit risks.
+Added: While we continuously evaluate our allowance to ensure it reflects current and expected risks, there can be no assurance it will be sufficient to cover actual losses, particularly in the context of ongoing and future wildfire-related challenges.
Bank regulatory agencies also periodically review our allowance for credit losses and may require an increase in the provision for credit losses or the recognition of further loan charge-offs, based on judgments different than those of Management.
If charge-offs in future periods exceed the allowance for credit losses, we may need additional provision to increase the allowance for credit losses.
−Removed: Any increases in the allowance for credit losses will result in a decrease in net income and, most likely, capital, and may have a material negative effect on our financial condition and results of operations.
+Added: Any increases in the allowance for credit losses will reduce net income and, most likely, capital, and may have a material negative effect on our financial condition and results of operations.
+Added: T able of C onten ts
Risks Related to Merger and Acquisition Strategy
−Removed: We pursue a strategy of supplementing internal growth by acquiring other financial companies or their assets and liabilities that we believe will help us fulfill our strategic objectives and enhance our earnings.
−Removed: We may be adversely affected by risks associated with potential acquisitions.
+Added: We pursue a strategy of supplementing internal growth by acquiring other financial companies or their assets and liabilities, which we believe will help us fulfill our strategic objectives and enhance our earnings.
+Added: We may be adversely affected by risks associated with growth through acquisitions.
As part of our general growth strategy, we periodically expand our business through acquisitions.
−Removed: Although our business strategy emphasizes organic expansion, from time to time in the ordinary course of business, we engage in discussions with potential acquisition targets.
−Removed: There can be no assurance that we will successfully identify suitable acquisition candidates, complete acquisitions and successfully integrate acquired operations into our existing operations, or expand into new markets.
−Removed: The consummation of any future acquisitions may dilute shareholder value or may have an adverse effect upon our operating results while the operations of the acquired business are being integrated into our operations.
−Removed: In addition, once integrated, acquired operations may not achieve levels of profitability comparable to those achieved by Banner’s existing operations, or otherwise perform as expected.
−Removed: Further, transaction-related expenses may adversely affect our earnings.
−Removed: These adverse effects on our earnings and results of operations may have a negative impact on the value of Banner’s stock.
−Removed: Acquiring banks, bank branches or businesses involves risks commonly associated with acquisitions, including:
+Added: While our primary focus is organic growth, from time to time we engage in discussions with potential acquisition targets as part of our ordinary business activities.
+Added: There can be no assurance that we will successfully identify suitable acquisition candidates, complete acquisitions, successfully integrate acquired operations into our existing operations, or expand into new markets.
+Added: Future acquisitions may dilute shareholder value or may have an adverse effect upon our operating results during the integration process.
+Added: In addition, acquired operations may fail to achieve the profitability levels of our existing operations or meet performance expectations.
+Added: Transaction-related expenses may also adversely affect our earnings, which could, in turn, negatively impact the value of our stock.
+Added: Acquiring banks, bank branches, or businesses involves several risks, including:
• we may be exposed to potential asset quality issues or unknown or contingent liabilities of the banks, businesses, assets, and liabilities we acquire.
13 unchanged sentences
We may incur impairment to goodwill.
−Removed: In accordance with GAAP, we record assets acquired and liabilities assumed in a business combination at their fair value with the excess of the purchase consideration over the net assets acquired resulting in the recognition of goodwill.
+Added: In accordance with generally accepted accounting principles (GAAP), we record assets acquired and liabilities assumed in a business combination at their fair value with the excess of the purchase consideration over the net assets acquired resulting in the recognition of goodwill.
As a result, acquisitions typically result in recording goodwill.
6 unchanged sentences
Our results of operations, liquidity and cash flows are subject to interest rate risk.
−Removed: Our earnings and cash flows are largely dependent upon our net interest income.
−Removed: Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies, and in particular the Federal Reserve.
−Removed: Since March 2022, in response to inflation, the Federal Open Market Committee (FOMC) of the Federal Reserve has increased the target range for the federal funds rate by 525 basis points, including 225 basis points during 2023, to a range of 5.25% to 5.50% as of December 31, 2023.
−Removed: As inflation eases, the FOMC has indicated rate decreases may be expected during 2024.
−Removed: However, if the FOMC further increases the targeted federal funds rate, overall interest rates will likely continue to rise, which may negatively impact our net interest margin and loan demand by reducing refinancing activity and new home purchases.
+Added: Our earnings and cash flows are largely dependent upon our net interest income, which is significantly affected by interest rates.
+Added: Interest rates are highly sensitive to factors beyond our control, such as general economic conditions and policies set by governmental and regulatory bodies, particularly the Federal Reserve.
+Added: Increases in interest rates could reduce our net interest income, weaken the housing market by curbing refinancing activity and home purchases, and negatively affect the broader U.S.
+Added: economy, potentially leading to slower economic growth or recessionary conditions.
We principally manage interest rate risk by managing our volume and mix of our earning assets and funding liabilities.
−Removed: If we are unable to manage interest rate risk effectively, our business, financial condition and results of operations could be materially affected.
−Removed: Changes in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers to repay their current loan obligations or by reducing our margins and profitability.
−Removed: Our net interest margin is the difference between the yield we earn on our assets and the interest rate we pay for deposits and our other sources of funding.
−Removed: Changes in interest rates, up or down, could adversely affect our net interest margin and, as a result, our net interest income.
−Removed: Although the yield we earn on our assets and our funding costs tend to move in the same direction in response to changes in interest rates, one can rise or fall faster than the other, causing our net interest margin to expand or contract.
−Removed: Our liabilities tend to be shorter in duration than our assets, so they may adjust faster in response to changes in interest rates.
−Removed: As a result, when interest rates rise, our funding costs may rise faster than the yield we earn on our assets, causing our net interest margin to contract until the yields on interest-earning assets catch up.
−Removed: Changes in the slope of the “yield curve”—or the spread between short-term and long-term interest rates—could also reduce our net interest margin.
−Removed: Normally, the yield curve is upward sloping, meaning short-term rates are lower than long-term rates.
−Removed: Because our liabilities tend to be shorter in duration than our assets, when the yield curve flattens or even inverts, we could experience pressure on our net interest margin as our cost of funds increases relative to the yield we can earn on our assets.
−Removed: Also, interest rate decreases can lead to increased prepayments of loans and mortgage-backed securities as borrowers refinance their loans to reduce borrowing costs.
−Removed: Under these circumstances, we are subject to reinvestment risk as we may have to redeploy such repayment proceeds into lower yielding investments, which would likely decrease our income.
−Removed: A sustained increase in market interest rates could adversely affect our earnings.
−Removed: As is the case with many banks, we attempt to maintain or increase our proportion of non-interest-bearing deposits comprising either, which has been challenging over the last year.
+Added: If we are unable to manage this risk effectively, our business, financial condition and results of operations could be materially affected.
+Added: T able of C onten ts
+Added: Our net interest margin, the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities, can be adversely affected by interest rate changes.
+Added: While yields on assets and costs of liabilities tend to move in the same direction, they may do so at different speeds, causing the margin to expand or contract.
+Added: As our interest-bearing liabilities often have shorter durations than our interest-earning assets, a rise in interest rates may lead to funding costs increasing faster than asset yields, compressing our net interest margin.
+Added: Additionally, changes in the slope of the yield curve, such as flattening or inversion, can further pressure our margins as funding costs rise relative to asset yields.
+Added: Conversely, falling rates can initially reduce our net interest income as our floating-rate assets tend to be more immediately responsive to changes in market rates than most deposit liabilities.
+Added: In addition, a decline in market interest rates could increase loan prepayments, leading to reinvestment in lower-yielding assets, reducing income.
+Added: In a rising rate environment, retaining deposits can become costlier.
At December 31, 2024, we had $1.45 billion in certificates of deposit that mature within one year and $12.01 billion in non-interest-bearing, negotiable order of withdrawal (NOW) checking, savings and money market accounts.
−Removed: We would incur a higher cost of funds to retain these deposits in a rising interest rate environment.
−Removed: Our net interest income could be adversely affected if the rates we pay on deposits and borrowings increase more rapidly than the rates we earn on loans and other investments.
−Removed: In addition, a substantial amount of our loans have adjustable interest rates.
−Removed: As a result, these loans may experience a higher rate of default in a rising interest rate environment.
−Removed: Further, a significant portion of our adjustable-rate loans have interest rate floors below which the loan’s contractual interest rate may not adjust.
−Removed: Approximately 64% of our loan portfolio was comprised of adjustable or floating-rate loans at December 31, 2023, and approximately $4.79 billion, or 69%, of those loans contained interest rate floors, below which the loans’ contractual interest rate may not adjust.
−Removed: At December 31, 2023, the weighted average floor interest rate of these loans was 4.40%.
−Removed: At that date, approximately $1.36 billion, or 29%, of these loans were at their floor interest rate.
−Removed: The inability of our loans to adjust downward can contribute to increased income in periods of declining interest rates, although this result is subject to the risks that borrowers may refinance these loans during periods of declining interest rates.
−Removed: Also, when loans are at their floors, there is a further risk that our interest income may not increase as rapidly as our cost of funds during periods of increasing interest rates, which could have a material adverse effect on our results of operations.
−Removed: Although Management believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on our results of operations, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations.
−Removed: Also, our interest rate risk modeling techniques and assumptions may not fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results.
+Added: If deposit and borrowing rates rise faster than loan and investment yields, our net interest income and overall earnings could decline.
+Added: A substantial amount of our loans have adjustable interest rates, which may result in a higher rate of default in a rising interest rate environment.
+Added: Additionally, a significant portion of our adjustable-rate loans include interest rate floors that prevent the loan’s contractual interest rate from falling below a specified level.
+Added: At December 31, 2024, approximately 65% of our loan portfolio consisted of adjustable or floating-rate loans, and approximately $5.19 billion, or 70%, of those loans contained interest rate floors.
+Added: The weighted average floor interest rate of these loans was 4.77%, and approximately $1.34 billion, or 26%, of these loans were at their floor interest rate.
+Added: The presence of interest rate floors can increase income during periods of declining interest rates, as the rates on these loans cannot adjust downward below the floor.
+Added: However, this benefit is subject to the risk that borrowers may refinance these loans to take advantage of lower rates.
+Added: Furthermore, when loans are at their floor interest rates, our interest income may not rise as quickly as our cost of funds during periods of increasing interest rates, which could materially and adversely affect our results of operations.
+Added: While we employ asset and liability management strategies to mitigate interest rate risk, unexpected, substantial, or prolonged rate changes could materially affect our financial condition and results of operations.
+Added: Additionally, our interest rate risk models and assumptions may not fully capture the impact of actual rate changes on our balance sheet or projected operating results.
Our securities portfolio may be negatively impacted by fluctuations in market value and interest rates.
Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings.
−Removed: Fluctuations in market value may be caused by changes in market interest rates, rating agency actions in respect to the securities, defaults by the issuer or with respect to the underlying securities, lower market prices for securities and limited investor demand.
+Added: These fluctuations may result from changes in market interest rates, rating agency actions in respect to the securities, defaults by the issuer or with respect to the underlying securities, lower market prices, or limited investor demand.
Our available-for-sale debt securities in an unrealized loss position are evaluated to determine whether the decline in fair value has resulted from credit losses or other factors.
−Removed: If a credit loss exists, an allowance for credit losses is recorded for the credit loss, resulting in a charge against earnings.
−Removed: Changes in interest rates can also have an adverse effect on our financial condition, as our available-for-sale securities are reported at their estimated fair value, and therefore are impacted by fluctuations in interest rates.
−Removed: Generally, the fair value of fixed-rate securities fluctuates inversely with changes in interest rates.
−Removed: Unrealized gains and losses on securities available-for-sale are reported as a separate component of AOCI, net of tax.
+Added: If a credit loss is identified, an allowance for credit losses is recorded, resulting in a charge against earnings.
+Added: Because available-for-sale securities are reported at estimated fair value, changes in interest rates can adversely affect our financial condition.
+Added: The fair value of fixed-rate securities generally moves inversely with interest rate changes.
+Added: Unrealized gains and losses on these securities are reported as a separate component of AOCI, net of tax.
Decreases in the fair value of securities—available-for-sale resulting from increases in interest rates could have an adverse effect on shareholders’ equity.
−Removed: There can be no assurance that the declines in market value will not result in credit losses, which would lead to additional provision for credit losses that could have a material adverse effect on our net income and capital levels.
+Added: Additionally, there is no assurance that the declines in market value will not result in credit losses, which would lead to additional provisions for credit losses that could materially affect our net income and capital levels.
An increase in interest rates, change in the programs offered by secondary market purchasers or our ability to qualify for their programs may reduce our mortgage banking revenues, which would negatively impact our non-interest income.
−Removed: Our mortgage banking operations provide a significant portion of our non-interest income.
−Removed: We generate mortgage banking revenues primarily from gains on the sale of one- to four-family mortgage loans.
−Removed: The one- to four-family mortgage loans are sold pursuant to programs currently offered by Fannie Mae, Freddie Mac, Ginnie Mae and non-Government Sponsored Enterprise (GSE) investors.
−Removed: These entities account for a substantial portion of the secondary market in residential one- to four-family mortgage loans.
−Removed: Future changes in the one- to four-family programs, including our eligibility to participate in these programs, the criteria for loans to be accepted, or laws that significantly affect the activity of such entities could materially adversely affect our results of operations.
−Removed: Mortgage banking is generally considered a volatile source of income because it depends largely on the level of loan volume which, in turn, depends largely on prevailing market interest rates.
+Added: Our mortgage banking operations provide a significant portion of our non-interest income, primarily through gains on the sale of one-to-four-family residential loans.
+Added: These loans are sold pursuant to programs offered by Fannie Mae, Freddie Mac, Ginnie Mae, and non-Government Sponsored Enterprise (“GSE”) investors, which collectively account for a substantial portion of the secondary market for such loans.
+Added: Changes to these programs, our eligibility to participate, the criteria for loan acceptance, or related laws could materially and adversely affect our results of operations.
+Added: Mortgage banking is generally considered a volatile source of income because it depends largely on loan volume, which is influenced by prevailing market interest rates.
In a rising or higher interest rate environment, our originations of mortgage loans may decrease, resulting in fewer loans that are available to be sold to investors.
This would result in a decrease in mortgage banking revenues and a corresponding decrease in non-interest income.
−Removed: In addition, our results of operations are affected by the amount of non-interest expense associated with mortgage banking activities, such as salaries and employee benefits, occupancy, equipment and data processing expense and other operating costs.
−Removed: During periods of reduced loan demand, our results of operations may be adversely affected to the extent that we are unable to reduce expenses commensurate with the decline in loan originations.
−Removed: In addition, although we sell loans into the secondary market without recourse, we are required to give customary representations and warranties about the loans to the buyers.
−Removed: If we breach those representations and warranties, the buyers may require us to repurchase the loans and we may incur a loss on the repurchase.
+Added: Our results of operations are also affected by the amount of non-interest expense associated with mortgage banking activities, including salaries and employee benefits, occupancy, equipment, data processing, and other operating costs.
+Added: During periods of reduced loan demand, we may face challenges in reducing these expenses proportionately, which could adversely impact our results of operations.
+Added: Although we sell loans into the secondary market without recourse, we provide customary representations and warranties to buyers.
+Added: If these representations and warranties are breached, we may be required to repurchase the loans, potentially incurring a loss.
+Added: T able of C onten ts
Certain hedging strategies that we use to manage investment in mortgage loans held for sale and interest rate lock commitments may be ineffective to offset any adverse changes in the fair value of these assets due to changes in interest rates and market liquidity.
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Risks Related to Regulatory, Legal and Compliance
−Removed: Proposed FDIC guidelines on corporate governance and risk management standards may affect our profitability, capital adequacy, and reputation.
−Removed: In October 2023, considering recent and historical bank failures, the FDIC proposed guidelines aimed at establishing corporate governance and risk management expectations for all insured state-chartered banks, excluding those who are member of the Federal Reserve, with total assets exceeding $10 billion.
−Removed: This initiative, conducted through rulemaking under Section 39 of the Federal Deposit Insurance Act, empowers the FDIC to set forth enforceable standards that banks must comply with.
−Removed: The guidelines focus on defining obligations of the board of directors, specifying board composition and committee structures, and outlining expectations for an independent risk management function.
−Removed: The impetus behind these guidelines stems from the FDIC’s observation that financial institutions with deficient corporate governance and risk management practices face a higher risk of failure.
−Removed: The FDIC aims to enhance a bank’s safety and soundness, minimizing the likelihood of failure and mitigating potential losses.
−Removed: The introduction of multiple safeguards within a bank’s risk management function seeks to avoid a “single point of failure.” As currently proposed, the guidelines could have various effects on us, and other banks subject to the guidelines, including:
−Removed: • elevating compliance costs and operational complexity for the Bank, potentially diminishing net income and return on equity;
−Removed: • mandating the Bank to maintain increased capital or liquidity to meet the proposed risk management standards, which may limit our ability to leverage assets and generate higher returns;
−Removed: • subjecting the Bank to heightened regulatory scrutiny and enforcement actions, posing risks to our reputation and the Company’s market value;
−Removed: • creating competitive disparities for covered institutions, such as the Bank, compared to other financial entities not subject to similar standards;
−Removed: • making attracting and maintaining qualified directors willing to serve on the Bank’s board more difficult.
−Removed: The precise impact of the proposed guidelines on the Company’s profitability, capital adequacy, and reputation remains uncertain at this time.
+Added: New or proposed FDIC guidelines on corporate governance and risk management standards may affect our profitability, capital adequacy, and reputation.
+Added: In October 2023, the FDIC proposed guidelines to establish corporate governance and risk management standards for insured state nonmember banks with total consolidated assets of $10 billion or more.
+Added: These guidelines focus on defining the responsibilities of the board of directors, specifying board composition and committee structures, establishing expectations for an independent risk management function, and introducing safeguards to prevent a "single point of failure" in risk management processes.
+Added: If implemented, these guidelines could materially affect us and other banks subject to their requirements in the following ways:
+Added: • Compliance with the guidelines may elevate operational complexity and costs, potentially diminishing our net income and return on equity.
+Added: • The guidelines could mandate maintaining increased levels of capital or liquidity, which may restrict our ability to leverage assets and generate higher returns.
+Added: • The guidelines may subject us to heightened regulatory oversight and enforcement actions, which could adversely affect our reputation and market valuation.
+Added: • Banks subject to these guidelines, including us, may face competitive disadvantages compared to financial institutions not subject to similar standards.
+Added: • The guidelines’ emphasis on board responsibilities and independence may make it more challenging to attract and retain qualified directors willing to serve on our board.
+Added: The full implications of the proposed guidelines on our profitability, capital adequacy, and reputation remain uncertain at this time.
+Added: However, the potential for increased operational burdens, reduced financial flexibility, and elevated regulatory risks underscores the importance of monitoring developments closely and adapting our governance and risk management practices to meet evolving regulatory expectations.
+Added: Failure to effectively manage these challenges could have a material adverse effect on our business, financial condition, and results of operations.
New or changing tax, accounting, and regulatory rules and interpretations could significantly impact strategic initiatives, results of operations, cash flows, and financial condition.
11 unchanged sentences
We cannot predict what restrictions may be imposed upon us with future legislation.
+Added: T able of C onten ts
Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations.
−Removed: The effects of climate change continue to create concern for the state of the environment.
−Removed: As a result, the global business community has increased its political and social awareness surrounding the issue, and the United States has entered into international agreements in an attempt to reduce global temperatures.
−Removed: Further, the U.S.
−Removed: Congress, state legislatures and federal and state regulatory agencies continue to propose initiatives to supplement the global effort to combat climate change.
−Removed: Similar and even more expansive initiatives are expected under the current administration, including potentially increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate change in stress testing scenarios and systemic risk assessments, revising expectations for credit portfolio concentrations based on climate-related factors and encouraging investment by banks in climate-related initiatives and lending to communities disproportionately impacted by the effects of climate change.
−Removed: The lack of empirical data surrounding the credit and other financial risks posed by climate change render it difficult, or even impossible, to specifically predict how climate change may impact our financial condition and results of operations;
−Removed: however, the physical effects of climate change may also directly impact us.
−Removed: Unpredictable and more frequent weather disasters may adversely impact the real property, and/or the value of the real property, securing the loans in our portfolios.
−Removed: Additionally, if insurance obtained by our borrowers is insufficient to cover losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, natural disasters and related events, which could impact our financial condition and results of operations.
−Removed: Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and the communities in which we operate.
−Removed: Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
+Added: The effects of climate change continue to raise significant concerns about the state of the environment.
+Added: However, under a new administration, federal policy may shift to reduce the emphasis on climate change initiatives and environmental regulations.
+Added: This could include scaling back federal participation in international agreements, such as is occurring with the Paris Agreement, and reducing regulatory pressures on businesses, including banks, to address climate-related risks.
+Added: Legislative and regulatory proposals aimed at combating climate change may face greater scrutiny or diminished priority.
+Added: The lack of empirical data regarding the financial and credit risks posed by climate change still makes it difficult to predict its specific impact on our financial condition and results of operations.
+Added: However, the physical effects of climate change, such as more frequent and severe weather disasters, could directly affect us.
+Added: For instance, such events may damage real property securing loans in our portfolios or reduce the value of that collateral.
+Added: If our borrowers’ insurance is insufficient to cover these losses or if insurance becomes unavailable, the value of the collateral securing our loans could be negatively affected, potentially impacting our financial condition and results of operations.
+Added: Moreover, climate change may adversely affect regional and local economic activity, harming our clients and the communities in which we operate.
+Added: Regardless of changes in federal policy, the effects of climate change and their unknown long-term impacts could still have a material adverse effect on our financial condition and results of operations.
Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to obtain regulatory approval of acquisitions.
5 unchanged sentences
While we have developed policies and procedures designed to assist in compliance with these laws and regulations, no assurance can be given that these policies and procedures will be effective in preventing violations of these laws and regulations.
−Removed: Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us.
−Removed: Any of these results could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
+Added: Additionally, any perceived or actual failure to prevent money laundering or terrorist financing activities could significantly damage our reputation.
+Added: These outcomes could have a material adverse effect on our business, financial condition, results of operations, and growth prospects.
If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected.
Our enterprise risk management framework seeks to achieve an appropriate balance between risk and return, which is critical to optimizing shareholder value.
−Removed: We have established processes and procedures intended to identify, measure, monitor, report, analyze and control the types of risk to which we are subject.
−Removed: These risks include liquidity risk, credit risk, market risk, interest rate risk, operational risk, legal and compliance risk, and reputational risk, among others.
−Removed: We also maintain a compliance program designed to identify, measure, assess, and report on our adherence to applicable laws, regulations, policies and procedures.
−Removed: While we assess and improve these programs on an ongoing basis, there can be no assurance that our risk management or compliance programs, along with other related controls, will effectively mitigate all risk and limit losses in our business.
+Added: We have established processes and procedures intended to identify, measure, monitor, report, analyze and control the types of risks we face.
+Added: These risks include liquidity, credit, market, interest rate, operational, legal and compliance, and reputational risks, among others.
+Added: We also maintain a compliance program designed to identify, measure and report on our adherence to applicable laws, regulations, policies and procedures.
+Added: Although we continuously assess and improve these programs, there can be no assurance that our risk management or compliance programs, along with other related controls, will effectively mitigate all risk and limit losses in our business.
However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified.
1 unchanged sentence
Our business and financial results could be impacted materially by adverse results in legal proceedings.
−Removed: Legal proceedings could result in judgments, significant time and attention from our management, or other adverse effects on our business and financial results.
+Added: Legal proceedings could result in judgments, significant management time and attention, or other adverse effects on our business and financial results.
We establish estimated liabilities for legal claims when payments associated with claims become probable and the amount of loss can be reasonably estimated.
−Removed: We may still incur losses for a matter even if we have not established an estimated liability.
+Added: We may incur losses for a matter even if we have not established an estimated liability.
In addition, the actual cost of resolving a legal claim may be substantially higher than any amounts accrued for that matter.
−Removed: The ultimate resolution of any legal proceeding, depending on the remedy sought and granted, could materially adversely affect our results of operations and financial condition.
+Added: The ultimate resolution of any legal proceeding, depending on the remedy granted, could materially adversely affect our results of operations and financial condition.
+Added: T able of C onten ts
Risks Related to Cybersecurity, Data and Fraud
We are subject to certain risks in connection with our use of technology.
−Removed: Our security measures may not be sufficient to mitigate the risk of a cyberattack.
−Removed: Communications and information systems are essential to the conduct of our business, as we use such systems to manage our client relationships, our general ledger and virtually all other aspects of our business.
−Removed: Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks.
−Removed: Although we take protective measures and endeavor to modify them as circumstances warrant, the security of our computer systems, software and networks may be vulnerable to breaches, fraudulent or unauthorized access, denial or degradation of service attacks, misuse, computer viruses, malware or other malicious code and cyberattacks that could have a meaningful security impact.
−Removed: If one or more of these events occur, this could jeopardize our or our clients’ confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause significant interruptions or malfunctions in our operations or the operations of our clients or counterparties.
−Removed: We may be required to expend substantial additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us.
−Removed: We could also suffer significant reputational damage and loss of business.
−Removed: Security breaches in our internet banking activities could further expose us to possible liability and damage our reputation .
−Removed: Increases in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third-party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our clients and underlying transactions.
−Removed: Any compromise of our security could deter clients from using our internet banking services that involve the transmission of confidential information.
−Removed: Although we have developed and continue to invest in systems and processes that are designed to detect and prevent security breaches and cyberattacks and periodically test our security, these precautions may not protect our systems from compromises or breaches of our security measures, and any failure of these precautions could result in losses to us or our clients, our loss of business and/or clients, damage to our reputation, the incurrence of additional expenses, disruption to our business, our inability to grow our online services or other businesses, additional regulatory scrutiny or penalties, or our exposure to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Our security measures may not protect us from system failures or interruptions.
−Removed: While we have established policies and procedures to prevent or limit the impact of systems failures and interruptions, there can be no assurance that such events will not occur or that they will be adequately addressed if they do.
−Removed: In addition, we outsource certain aspects of our data processing and other operational functions to certain third-party providers.
−Removed: While we select third-party vendors carefully, we do not control their actions.
−Removed: If our third-party providers encounter difficulties including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher transaction volumes, cyberattacks and security breaches or if we otherwise have difficulty in communicating with them, our ability to adequately process and account for transactions could be affected, and our ability to deliver products and services to our clients and otherwise conduct business operations could be adversely impacted.
−Removed: Replacing these third-party vendors could also entail significant delay and expense.
−Removed: Threats to information security also exist in the processing of client information through various other vendors and their personnel.
−Removed: We cannot provide assurance that such breaches, failures or interruptions will not occur or, if they do occur, that they will be adequately addressed by us or the third parties on which we rely.
−Removed: We may not be insured against all types of losses, including losses resulting from third party failures, and insurance coverage may be inadequate to cover all losses resulting from breaches, system failures or other disruptions.
−Removed: If any of our third-party service providers experience financial, operational or technological difficulties, or if there is any other disruption in our relationships with them, we may be required to identify alternative sources of such services, and we cannot provide assurance that we could negotiate terms that are as favorable to us, or could obtain services with similar functionality as found in our existing systems without the need to expend substantial resources, if at all.
−Removed: Further, the occurrence of any systems failure or interruption could damage our reputation and result in a loss of clients and business, could subject us to additional regulatory scrutiny, or could expose us to legal liability.
−Removed: Any of these occurrences could have a material adverse effect on our financial condition and results of operations.
+Added: Our security measures may not be sufficient to mitigate the risk of a cyber-attack.
+Added: Communications and information systems are essential to our business operations, as we rely on these systems to manage our client relationships, maintain our general ledger, and support virtually all other aspects of our operations.
+Added: Our business depends on the secure processing, storage, and transmission of confidential and other information through our computer systems and networks.
+Added: Although we take protective measures and adapt them as circumstances evolve, our systems, software, and networks may remain vulnerable to breaches, fraudulent or unauthorized access, denial or degradation of service attacks, misuse, computer viruses, malware, or other cyber threats.
+Added: If any of these events occur, they could compromise our or our clients’ confidential information, disrupt operations, or harm our clients or counterparties.
+Added: We may incur significant expenses to investigate and remediate security vulnerabilities, enhance protective measures, or address the impact of a cyber-attack.
+Added: Such incidents could expose us to litigation, regulatory scrutiny, and financial losses not fully covered by insurance.
+Added: They could also cause significant reputational damage, which may deter clients from using our services.
+Added: Cybersecurity risks are particularly acute in internet banking.
+Added: Increases in criminal sophistication, advances in technology, or vulnerabilities in third-party systems (such as browsers and operating systems) could lead to breaches that compromise the security of data and transactions.
+Added: A breach could discourage clients from using our online services, negatively impacting our business.
+Added: While we have developed and continue to invest in systems and processes to detect and prevent security breaches, no system is foolproof.
+Added: Breaches could result in financial losses to us or our clients, reputational harm, additional compliance costs, business disruption, regulatory penalties, and potential legal liabilities.
+Added: These outcomes could materially adversely affect our financial condition, results of operations, and ability to grow our online services.
+Added: In addition, our security measures may not protect us from system failures or interruptions.
+Added: Although we have policies and procedures to mitigate such risks, we cannot guarantee their effectiveness.
+Added: We also rely on third-party providers for data processing and operational support.
+Added: While we carefully select these providers, we do not control their actions.
+Added: If a third-party vendor experiences disruptions, cyber-attacks, or fails to meet our service standards, it could impair our ability to process transactions, deliver products and services, or conduct business.
+Added: Transitioning to alternative vendors could involve significant delays and costs.
+Added: Further, information security risks may arise from the processing of client data by third-party vendors and their personnel.
+Added: We cannot assure you that breaches, system failures, or interruptions will not occur or that they will be adequately addressed by us or our vendors.
+Added: Additionally, our insurance coverage may not fully protect against all losses from such events.
+Added: If any of our third-party providers experience financial, operational, or technological difficulties, or if disruptions occur in our relationships with them, we may be required to find alternative service providers.
+Added: This could involve negotiating less favorable terms or incurring substantial costs to implement new systems.
+Added: Any of these occurrences, whether system failures, security breaches, or vendor disruptions, could damage our reputation, result in client and business losses, expose us to regulatory scrutiny and legal liabilities, and have a material adverse effect on our financial condition and results of operations.
+Added: Our current and future uses of Artificial Intelligence (AI) and other emerging technologies may create additional risks.
+Added: The increasing adoption of AI in financial services presents significant opportunities but also introduces a range of risks that could impact our operations, regulatory compliance, and client trust.
+Added: AI introduces model risk, where flawed algorithms or biased data could result in inaccurate credit decisions, compliance violations, or discriminatory outcomes in lending or client service.
+Added: Cybersecurity threats, such as data breaches, adversarial attacks, and data poisoning, pose significant challenges, particularly as these systems handle large volumes of sensitive client information.
+Added: Additionally, the opaque nature of some AI models, often referred to as "black-box" systems, raises regulatory compliance concerns, as regulators increasingly require transparency and explainability in AI-driven decision-making.
+Added: Operational risks also arise from potential system failures, over-reliance on AI, and integration challenges with existing infrastructure.
+Added: Disruptions in AI systems could impact critical functions such as fraud detection, transaction monitoring, and client support.
+Added: Ethical and reputational risks, including unintended consequences or perceived unfairness in AI-driven decisions, may erode client trust and expose us to regulatory scrutiny.
+Added: Mitigating these risks requires a robust governance framework, regularly testing and auditing of AI models, and strong human oversight.
+Added: Investments in cybersecurity, data privacy protections, and employee training are critical to managing these risks.
We are subject to certain risks in connection with our data management or aggregation.
3 unchanged sentences
Failure to manage data effectively and to aggregate data in an accurate and timely manner may limit our ability to manage current and emerging risks, and to manage changing business needs.
+Added: T able of C onten ts
Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.
7 unchanged sentences
Effective liquidity management is essential to our business.
−Removed: We require sufficient liquidity to meet client loan requests, client deposit maturities and withdrawals, payments on our debt obligations as they come due and other cash commitments under both normal operating conditions and other unpredictable circumstances, including events causing industry or general financial market stress.
−Removed: An inability to raise funds through deposits, borrowings, the sale of loans or investment securities and other sources could have a substantial negative effect on our liquidity.
−Removed: We rely on client deposits and at times, borrowings from the FHLB of Des Moines and certain other wholesale funding sources to fund our operations.
−Removed: Deposit flows and the prepayment of loans and mortgage-related securities are strongly influenced by such external factors as the direction of interest rates, whether actual or perceived, and the competition for deposits and loans in the markets we serve.
−Removed: Further, changes to the FHLB of Des Moines’s underwriting guidelines for wholesale borrowings or lending policies may limit or restrict our ability to borrow, and could therefore have a significant adverse impact on our liquidity.
−Removed: Historically, we have been able to replace maturing deposits and borrowings if desired;
−Removed: however, we may not be able to replace such funds in the future if, among other things, our financial condition, the financial condition of the FHLB of Des Moines, or market conditions change.
−Removed: Our access to funding sources in amounts adequate to finance our activities or on terms which are acceptable could be impaired by factors that affect us specifically or the financial services industry or economy in general, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry or deterioration in credit markets.
−Removed: Additional factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our deposits and loans are concentrated, negative operating results, or adverse regulatory action against us.
−Removed: Any decline in available funding in amounts adequate to finance our activities or on terms which are acceptable could adversely impact our ability to originate loans, invest in securities, meet our expenses, or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could, in turn, have a material adverse effect on our business, financial condition and results of operations.
−Removed: Additionally, collateralized public funds are bank deposits of state and local municipalities.
−Removed: These deposits are required to be secured by certain investment grade securities to ensure repayment, which on the one hand tends to reduce our contingent liquidity risk by making these funds somewhat less credit sensitive, but on the other hand reduces standby liquidity by restricting the potential liquidity of the pledged collateral.
−Removed: Although these deposits historically have been a relatively stable source of funds for us, availability depends on the individual municipality’s fiscal policies and cash flow needs.
+Added: We require sufficient liquidity to meet client loan requests, deposit maturities and withdrawals, payments on debt obligations, and other cash commitments under both normal operating conditions and unpredictable circumstances, including events causing industry or financial market stress.
+Added: An inability to raise funds through deposits, borrowings, loan and investment security sales, or other sources could severely impact our liquidity.
+Added: We rely on client deposits and, at times, borrowings from the FHLB of Des Moines and other wholesale funding sources to fund operations.
+Added: Deposit flows and loan and mortgage-related security prepayments are strongly influenced by external factors, such as interest rate trends (both actual and perceived) and market competition.
+Added: Changes to the FHLB of Des Moines’s lending policies or underwriting guidelines may limit our ability to borrow and adversely affect our liquidity.
+Added: Although we have historically been able to replace maturing deposits and borrowings, future replacements may be challenging due to changes in our financial condition, the FHLB of Des Moines’s condition, or broader market disruptions.
+Added: Our access to adequate funding could also be impaired by factors affecting us specifically or the financial industry generally, such as financial market disruptions, negative perceptions of the financial services sector, or deteriorating credit markets.
+Added: Additional challenges to liquidity could arise from reduced business activity in our core markets, adverse regulatory actions, or negative operating results.
+Added: Any significant decline in funding availability could impede our ability to originate loans, invest in securities, meet expenses, or fulfill obligations such as repaying borrowings and meeting deposit withdrawal demands, potentially resulting in a material adverse impact on our business, financial condition, and results of operations.
+Added: Additionally, collateralized public funds (state and local municipal deposits secured by investment-grade securities) help reduce contingent liquidity risk by being less credit-sensitive, however, the pledging of collateral to secure these funds limits their availability as a reserve source of liquidity.
+Added: While these deposits have historically provided stable funding, their availability depends on the fiscal policies and cash flow needs of individual municipalities.
Benefits of strategic initiatives may not be realized.
−Removed: Banner’s ability to compete depends on a number of factors, including, among others, its ability to develop and successfully execute strategic plans and initiatives.
−Removed: We may not be successful in achieving some or all of our strategic initiatives.
−Removed: The expected cost savings and revenue growth from our strategic initiatives may not be realized.
−Removed: The costs to implement our strategic initiatives may be greater than anticipated.
−Removed: Changes in economic conditions beyond our control, including changes in interest rates, may affect our ability to achieve our objectives.
−Removed: Our inability to execute on or achieve the anticipated outcomes of our strategic initiatives may affect how the market perceives us and could impede our growth and profitability.
+Added: Our ability to compete depends on various factors, including our ability to develop and successfully execute strategic plans and initiatives.
+Added: However, we may not achieve some or all of our strategic objectives.
+Added: Expected cost savings and revenue growth from these initiatives may not materialize, and the costs of implementation may be greater than anticipated.
+Added: Additionally, changes in economic conditions beyond our control, such as fluctuations in interest rates, may affect our ability to achieve our objectives.
+Added: Failure to execute or achieve the anticipated outcomes of our strategic initiatives could negatively impact market perceptions of our company and impede our growth and profitability.
Development of new products and services may impose additional costs on us and may expose us to increased operational risk.
−Removed: Our financial performance depends, in part, on our ability to develop and market new and innovative services and to adopt or develop new technologies that differentiate our products or provide cost efficiencies, while avoiding increased related expenses.
−Removed: This dependency is exacerbated in the current “FinTech” environment, where financial institutions are significantly investing in evaluating new technologies, such as blockchain, and developing potentially industry-changing new products, services and industry standards.
−Removed: The introduction of new products and services can entail significant time and resources, including regulatory approvals.
−Removed: Substantial risks and uncertainties are associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid technological change in the industry, our ability to access technical and other information from our clients, the significant and ongoing investments required to bring new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately describe the product or service and its underlying risks.
−Removed: Our failure to manage these risks and uncertainties also exposes us to enhanced risk of operational lapses which may result in the recognition of financial statement liabilities.
−Removed: Regulatory and internal control requirements, capital requirements, competitive alternatives, vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to our clients.
−Removed: Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on our business and reputation, as well as on our consolidated results of operations and financial condition.
+Added: Our financial performance depends, in part, on our ability to develop and market innovative services and adopt new technologies that differentiate our products or create cost efficiencies while controlling related expenses.
+Added: This reliance is heightened in the current “FinTech” environment, where financial institutions are heavily investing in emerging technologies, such as blockchain, and developing potentially industry-changing products, services, and standards.
+Added: The introduction of new products and services requires significant time and resources, including obtaining regulatory approvals.
+Added: It also entails substantial risks and uncertainties, such as meeting technical and control requirements, keeping pace with rapid technological advancements, accessing client information, and making significant ongoing investments to ensure timely market entry at competitive prices.
+Added: Additionally, preparing marketing, sales, and other materials that accurately describe the products, services, and their risks is critical.
+Added: Failure to manage these challenges increases the risk of operational lapses, which could result in financial liabilities.
+Added: Factors such as regulatory and internal control requirements, capital demands, competitive alternatives, vendor relationships, and shifting market preferences also influence whether new initiatives can be successfully launched in a timely and appealing manner.
+Added: If we fail to effectively address these risks in the development and implementation of new products or services, our business and reputation could suffer, potentially leading to a material adverse impact on our consolidated results of operations and financial condition.
+Added: T able of C onten ts
We are dependent on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects.
−Removed: Competition for qualified employees and personnel in the banking industry is intense and there are a limited number of qualified persons with knowledge of, and experience in, the community banking industry where the Bank conducts its business.
−Removed: The process of recruiting personnel with the combination of skills and attributes required to carry out our strategies is often lengthy.
−Removed: Our success depends to a significant degree on our ability to attract and retain qualified management, loan origination, finance, administrative, marketing and technical personnel and upon the continued contributions of our management and personnel.
−Removed: In particular, our success has been, and continues to be, highly dependent upon the abilities of key executives, including our president, and certain other employees.
−Removed: We could undergo a difficult transition period if we were to lose the services of any of these individuals.
−Removed: Our success also depends on the experience of our banking facilities’ managers and bankers and on their relationships with the clients and communities they serve.
−Removed: In addition, our success has been and continues to be highly dependent upon the services of our directors, some of whom are at or nearing retirement age, and we may not be able to identify and attract suitable candidates to replace such directors.
−Removed: The loss of these key persons could negatively impact the affected banking operations.
+Added: Competition for qualified employees in the banking industry is intense, with a limited pool of candidates experienced in community banking.
+Added: Our success relies on attracting and retaining skilled management, loan origination, finance, administrative, marketing, and technical personnel, as well as on the continued contributions of key executives, including our president, and other critical employees.
+Added: Losing any of these individuals could result in a challenging transition period and negatively impact our operations.
+Added: Additionally, the experience and client relationships of our banking facility managers are vital to maintaining strong connections with the communities we serve.
+Added: The loss of these key personnel or directors nearing retirement without suitable replacements could adversely affect our business.
We rely on other companies to provide key components of our business infrastructure.
−Removed: We rely on numerous external vendors to provide us with products and services necessary to maintain our day-to-day operations.
−Removed: Accordingly, our operations are exposed to risk that these vendors will not perform in accordance with the contracted arrangements under service level agreements.
−Removed: The failure of an external vendor to perform in accordance with the contracted arrangements under service level agreements because of changes in the vendor’s organizational structure, financial condition, support for existing products and services or strategic focus or for any other reason, could be disruptive to our operations, which in turn could have a material negative impact on our financial condition and results of operations.
−Removed: We also could be adversely affected to the extent such an agreement is not renewed by the third-party vendor or is renewed on terms less favorable to us.
−Removed: Additionally, the bank regulatory agencies expect financial institutions to be responsible for all aspects of our vendors’ performance, including aspects which they delegate to third parties.
−Removed: Disruptions or failures in the physical infrastructure or operating systems that support our business and clients, or cyberattacks or security breaches of the network system or devices that our clients use to access our products and services could result in client attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition.
+Added: We rely on numerous external vendors to provide products and services necessary for our day-to-day operations.
+Added: Accordingly, our operations are exposed to risks associated with vendor performance under service level agreements.
+Added: If a vendor fails to meet its contractual obligations due to changes in its organizational structure, financial condition, support for existing products and services, strategic focus, or any other reason, our operations could be disrupted, potentially causing a material adverse impact on our financial condition and results of operations.
+Added: Furthermore, we could be adversely affected if a vendor agreement is not renewed or is renewed on terms less favorable to us.
+Added: Regulatory agencies also require financial institutions to remain accountable for all aspects of vendor performance, including activities delegated to third parties.
+Added: Additionally, disruptions or failures in the physical infrastructure or operating systems supporting our business and clients, or cyber-attacks or security breaches involving networks, systems, or devices used by our clients to access our services, could lead to client attrition, regulatory fines or penalties, reputational damage, reimbursement or compensation costs, and increased compliance expenses.
+Added: Any of these outcomes could materially and adversely affect our financial condition and results of operations.
Any inaccurate assumptions in our analytical and forecasting models could cause us to miscalculate our projected revenue or losses, which could adversely affect us.
−Removed: We use analytical and forecasting models to estimate the effects of economic conditions on our financial assets and liabilities as well as our mortgage servicing rights.
+Added: We use analytical and forecasting models to estimate the effects of economic conditions on our financial assets and liabilities including our mortgage servicing rights.
Those models include assumptions about interest rates and consumer behavior that may be incorrect.
If our model assumptions are incorrect, improperly applied or inadequate, we may record higher than expected losses or lower than expected revenues which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Managing reputational risk is important to attracting and maintaining clients, investors and employees.
−Removed: Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, unethical practices, employee misconduct, failure to deliver minimum standards of service or quality or operational failures due to integration or conversion challenges as a result of acquisitions we undertake, compliance deficiencies, and questionable or fraudulent activities of our clients.
−Removed: We have policies and procedures in place to protect our reputation and promote ethical conduct, but these policies and procedures may not be fully effective.
−Removed: Negative publicity regarding our business, employees, or clients, with or without merit, may result in the loss of clients, investors and employees, costly litigation, a decline in revenues and increased governmental regulation.
−Removed: Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.
−Removed: Companies are facing increasing scrutiny from clients, regulators, investors, and other stakeholders related to their environmental, social and governance (ESG) practices and disclosure.
−Removed: Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions, human rights, and corporate governance.
−Removed: Increased ESG-related compliance costs could result in increases to our overall operational costs.
−Removed: Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and our stock price.
−Removed: New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure.
+Added: Regulatory changes to Diversity, Equity and Inclusion (“DEI”) and Environmental, Social and Governance (“ESG”) practices may adversely impact our reputation, compliance costs, and business operations.
+Added: In light of the recent executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” which revokes previous mandates promoting DEI and directs federal agencies to combat “illegal DEI” practices in the private sector, we must reassess our ESG strategies to ensure compliance with the evolving regulatory environment.
+Added: The order signals a shift in federal oversight and enforcement priorities, potentially affecting internal policies, hiring practices, supplier diversity programs, and corporate governance frameworks.
+Added: The executive order rescinds prior directives, such as Executive Order 11246, which required affirmative action and non-discriminatory practices by federal contractors.
+Added: As a result, federal agencies may reevaluate existing contracts, scrutinize hiring and promotion policies, and take enforcement actions against companies perceived to be engaging in practices that do not align with the revised federal standards.
+Added: Additionally, new guidance or rulemaking stemming from the executive order could impose restrictions on voluntary DEI initiatives, training programs, or supplier diversity efforts.
+Added: These developments may necessitate changes to our internal policies, reporting obligations, and public disclosures, creating operational and compliance challenges.
+Added: Failure to align our DEI and ESG efforts with the current legal framework could result in reputational damage, legal challenges, and adverse impacts on our operations.
+Added: Government investigations, enforcement actions, or private litigation challenging our DEI- and ESG-related policies could lead to financial penalties, increased legal costs, and potential restrictions on our ability to engage in government contracting.
+Added: Moreover, various private third-party organizations continue to evaluate companies based on ESG and DEI practices.
+Added: Unfavorable ratings from these entities could influence investor decisions, limit access to capital, and generate negative sentiment among stakeholders.
+Added: While the executive order aims to eliminate specific DEI programs, investors, customers, and other stakeholders may still expect transparency and commitment to broader ESG goals, including workforce diversity, community engagement, and responsible corporate governance.
+Added: Companies that scale back DEI initiatives to comply with federal mandates may face backlash from institutional investors, advocacy groups, and employees who view such actions as a retreat from social responsibility commitments.
+Added: Additionally, inconsistencies between federal and state-level DEI policies may create further complexities, as certain states continue to mandate affirmative action or corporate diversity disclosures.
+Added: Moreover, the rapid pace of change in legal frameworks, regulatory guidance and enforcement priorities resulting from the recent Presidential transition yields considerably increased uncertainty and compounds the difficulty of establishing and maintaining compliance.
+Added: T able of C onten ts
+Added: Adapting to the recent regulatory changes is crucial to maintaining our reputation, ensuring operational continuity, and meeting stakeholder expectations in the evolving ESG landscape.
+Added: Noncompliance or perceived noncompliance with the executive order and related regulatory guidance could expose us to increased regulatory scrutiny, litigation risks, and limitations on business opportunities.
+Added: At the same time, misalignment with investor and stakeholder expectations regarding ESG and DEI commitments could impair our brand value, reduce employee engagement and retention, and negatively impact our stock performance.
+Added: Given these factors, we must carefully assess and adjust our policies, disclosures, and risk mitigation strategies to navigate the shifting legal and business environment effectively.
Risks Related to Holding Our Common Stock
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