▸ Accounting standards require that we account for acquisitions using a method that could result in goodwill. If the purchase price of the acquired company exceeds the fair value of the acquired net assets, the excess will be included in the· · · · ● 1 ▸ Integrating Luther Burbank with the Company may prove more difficult, costly or time consuming than expected, and the anticipated benefits and cost savings of the Merger may not be realized.· · · · ● 1 ▸ The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact our business.· · · · ● 1 ▸ We are subject to complex state and federal laws, rules, regulations and standards regarding data privacy and cybersecurity, which impact how we conduct our business.· · · · ● 1 ▸ Impairment of goodwill may adversely impact future results of operations.· · · ● ● 2 ▸ Our entry into California may present increased risk that may adversely impact our business, prospects and financial condition.· · · ● ● 2 rw ▸ Recent negative developments affecting the banking industry, and resulting media coverage, have eroded customer confidence in the banking system.· · · ● ● 2 ▸ Changes to monetary policy by the Federal Reserve could adversely impact our results of operations.· · ● ● ● 3 ▸ Climate change could adversely affect our business, affect client activity levels and damage our reputation.· · ● ● ● 3 ▸ Fluctuating interest rates could adversely affect our business.· · ● ● ● 3 ▸ If we are not able to retain or attract key employees, or if we were to suffer the loss of a significant number of employees, we could experience a disruption in our business.· · ● ● ● 3 ▸ Inflationary pressures and rising prices may affect our results of operations and financial condition.· · ● ● ● 3 ▸ Our real estate lending also exposes us to the risk of environmental liabilities.· · ● ● ● 3 ▸ Our risk management framework may not be effective in mitigating risks and losses to us.· · ● ● ● 3 ▸ The Company’s business or the value of its common shares could be negatively affected as a result of actions by activist shareholders.· · ● ● ● 3 ▸ Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations.· · ● ● ● 3 ▸ We may not be able to continue to grow organically or through acquisitions.· · ● ● ● 3 ▸ A pandemic or similar health crisis, may adversely affect our business and our customers, counterparties, employees, and third-party service providers in the future.· ● ● ● ● 4 rw ▸ Changes in retail distribution strategies and consumer behavior may adversely impact our business, financial condition and results of operations.· ● ● ● ● 4 ▸ We are exposed to risks related to fraud and cyber-attacks.· ● ● ● ● 4 ▸ We are exposed to risks related to our operational, technological, and third-party provided technology infrastructure.· ● ● ● ● 4 ▸ If the merger with Luther Burbank is approved, the Company’s shareholders will have less influence as a shareholder of the combined company than as a shareholder of Company.· · · ● · 1 ▸ Reflecting concerns about liquidity and the uncertain economic environment, many lenders have reduced funding to borrowers.This tightening of credit has also contributed to a lack of consumer confidence and increased market volatility.· · · ● · 1 ▸ The Company’s pending merger with Luther Burbank Corporation may expose the Company to certain risks.· · · ● · 1 ▸ General market conditions and unpredictable factors could adversely affect market prices for the depositary shares.· ● · · · 1 ▸ The Company has recently changed our consumer online and mobile banking platforms to provide more flexibility and customizable feature sets to improve customer experience. This change provides the Company more opportunity to differentiate· ● · · · 1 ▸ Our business is subject to interest rate risk, and changes in market interest rates may negatively affect our business, financial condition and results of operations.● ● ● · · 3 ▸ Our systems, technology and digital capabilities may not provide the desired results, which may expose us to significant risks.● · · · · 1 ▸ The COVID-19 pandemic is adversely affecting us and our customers, counterparties, employees, and third-party service providers, and the adverse impacts on our business, financial position, results of operations, and prospects could be significant.● · · · · 1 ▸ The ongoing COVID-19 pandemic is increasing cyber-security risks.● ● · · · 2 ▸ The replacement of the LIBOR benchmark interest rate may have an impact on our business, financial condition or results of operations.● ● ● · · 3 rw ▸ The spread of COVID-19 has created a global public-health crisis that has impacted household, business, economic, and market conditions, including in the western United States where we conduct nearly all of our business.● ● · · · 2 ▸ We have a risk of systems failures and cyber-security risk, including "hacking" and "identity theft."● · · · · 1 ▸ We have adopted new accounting guidance, specifically CECL, to account for our credit losses that may be more volatile and may adversely impact our financial statements when forecasted market conditions change.● · · · · 1 ▸ A downturn in the real estate market would hurt our business.● ● ● ● ● 5 ▸ A person holding our Common Stock could have the voting power of their shares of Common Stock on all matters significantly reduced under Washington's anti-takeover statutes, if the person acquires 10% or more of the voting stock of the Company.● ● ● ● ● 5 ▸ Current uncertain economic conditions pose challenges, and could adversely affect our business, financial condition and results of operations.● ● ● ● ● 5 ▸ Deposit insurance premiums could increase further in the future.● ● ● ● ● 5 ▸ Failure to comply with the 2020 and 2013 Consent Orders from the Consumer Financial Protection Bureau regarding our Home Mortgage Disclosure Act submissions could result in additional regulatory enforcement action.● ● ● ● ● 5 ▸ If these conditions or similar ones continue to exist or worsen, we could experience continuing or increased adverse effects on our financial condition.● ● ● ● ● 5 ▸ group Market and Industry Risks● ● ● ● ● 5 ▸ Our ability to pay dividends is subject to limitations that may affect our ability to continue to pay dividends to shareholders.● ● ● ● ● 5 ▸ Our allowance for credit losses ("ACL") may not be adequate to cover future loan losses, which could adversely affect our financial condition and results of operations.● ● ● ● ● 5 ▸ Our liquidity may be adversely impacted by issues arising from certain industry deficiencies in foreclosure practices, including delays and challenges in the foreclosure process.● ● ● ● ● 5 ▸ Our operations are focused in the western United States, subjecting us to the risks of general economic conditions in these market areas.● ● ● ● ● 5 ▸ Recent national and state legislation and regulatory initiatives to support the financial services industry have been coupled with numerous restrictions and requirements that could detrimentally affect our business.● ● ● ● ● 5 ▸ group Regulatory and Litigation Risks● ● ● ● ● 5 ▸ The Bank faces strong competition from other financial institutions and new market participants, offering services similar to those offered by the Bank.● ● ● ● ● 5 ▸ The market price for our Common Stock may be volatile.● ● ● ● ● 5 ▸ There may be future sales or other dilution of the Company's equity, which may adversely affect the market price of our Common Stock or depositary shares.● ● ● ● ● 5 rw ▸ We are subject to various claims and litigation, which could result in significant expenses, losses and damage to our reputation.● ● ● ● ● 5 ▸ We may suffer losses in our loan portfolio due to inadequate or faulty underwriting and loan collection practices.● ● ● ● ● 5 ▸ We operate in a highly regulated industry, which limits the manner and scope of our business activities.● ● ● ● ● 5 ▸ We rely, in part, on external financing to fund our operations and the unavailability of such funding in the future could adversely impact our growth and prospects.● ● ● ● ● 5 
