Form 8-K
8-K — BANNER CORP
Accession: 0000946673-26-000163
Filed: 2026-07-22
Period: 2026-07-22
CIK: 0000946673
SIC: 6022 (STATE COMMERCIAL BANKS)
Item: Results of Operations and Financial Condition
Item: Regulation FD Disclosure
Item: Other Events
Item: Financial Statements and Exhibits
Documents
8-K — banr-20260722.htm (Primary)
EX-99.1 (banr-06302026xex991earning.htm)
EX-99.2 (a2026-q2presentation.htm)
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8-K
8-K (Primary)
Filename: banr-20260722.htm · Sequence: 1
banr-20260722
0000946673false00009466732026-07-222026-07-22
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 22, 2026
Banner Corporation
(Exact name of registrant as specified in its charter)
Washington
000-26584
91-1691604
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
10 S. First Avenue, Walla Walla, Washington 99362
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (including area code) (509) 527-3636
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $.01 per share BANR The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.*
On July 22, 2026, Banner Corporation issued its earnings release for the quarter ended June 30, 2026. A copy of the earnings release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.*
Banner Corporation intends to review the investor presentation attached as Exhibit 99.2 to this Current Report on Form 8-K in conjunction with its earnings release conference call on July 23, 2026, and from time to time in presentations to investors and other stakeholders.
Item 8.01 Other Events.
On July 22, 2026, Banner Corporation announced its Board of Directors declared a regular quarterly cash dividend on Banner Corporation common stock of $0.52 per share, payable on August 14, 2026 to stockholders of record as of the close of business on August 4, 2026.
Item 9.01 Financial Statements and Exhibits.*
(d) Exhibits
99.1 Press Release of Banner Corporation dated July 22, 2026.
99.2 Banner Corporation Investor Materials
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* The information furnished under Item 2.02, Item 7.01 and Item 9.01 of this Current Report on Form 8-K, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of Banner Corporation under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BANNER CORPORATION
Date: July 22, 2026
By: /s/ Robert G Butterfield
Robert G Butterfield
Executive Vice President, Treasurer and
Chief Financial Officer
EX-99.1
EX-99.1
Filename: banr-06302026xex991earning.htm · Sequence: 2
Document
Exhibit 99.1
CONTACT: MARK J. GRESCOVICH,
PRESIDENT & CEO
ROBERT G. BUTTERFIELD, CFO
(509) 527-3636
NEWS RELEASE
Banner Corporation Reports Net Income of $48.9 Million, or $1.43 Per Diluted Share, for Second Quarter 2026;
Declares Quarterly Cash Dividend of $0.52 Per Share
Walla Walla, WA - July 22, 2026 - Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $48.9 million, or $1.43 per diluted share, for the second quarter of 2026, compared to $54.7 million, or $1.60 per diluted share, for the preceding quarter, and $45.5 million, or $1.31 per diluted share, for the second quarter of 2025. Net interest income was $153.7 million for the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million for the second quarter a year ago. The increase in net interest income compared to the prior quarter primarily reflects one additional calendar day in the current quarter, net interest margin expansion and growth in average interest-earning assets, partially offset by higher interest expense associated with increased FHLB borrowings. The increase in net interest income compared to the second quarter a year ago primarily reflects lower funding costs and an increase in the average balance of interest-earning assets. Second quarter 2026 results included a $3.8 million provision for credit losses, compared to a $796,000 recapture of provision for credit losses in the preceding quarter and a $4.8 million provision for credit losses in the second quarter of 2025.
Net income was $103.6 million, or $3.03 per diluted share, for the six months ended June 30, 2026, compared to net income of $90.6 million, or $2.61 per diluted share, for the six months ended June 30, 2025. Results for the six months ended June 30, 2026 include a $3.0 million provision for credit losses, a $1.2 million net loss on the sale of securities and a $1.5 million net increase in the fair value adjustments on financial instruments carried at fair value, compared to a $7.9 million provision for credit losses, a $3,000 net loss on the sale of securities and an $403,000 net increase in the fair value adjustments on financial instruments carried at fair value during the same period in 2025.
Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.52 per share payable August 14, 2026, to common shareholders of record on August 4, 2026.
“Banner’s results for the second quarter reflect the continued strength of our super community bank model, which prioritizes deepening client relationships, maintaining a strong funding base, and delivering exceptional service while upholding a moderate risk profile,” said Mark Grescovich, President and CEO. “Our earnings for the second quarter of 2026 benefited from robust loan growth. This benefit was offset by increased non-interest expense, which partially reflects investments in new software that we expect will enhance efficiency and support long-term growth. Banner continues to build on a foundation of solid credit quality, backed by a well-funded credit loss reserve and a robust capital position that offers both resilience and flexibility for future growth. At the same time, the strategic investments we have made across the organization are delivering tangible results, further positioning Banner for long-term success. We also continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter-end. For more than 135 years, Banner has upheld its core values by consistently doing the right thing for our clients, communities, colleagues, company and shareholders. Our long-standing commitment has enabled us to earn trust, navigate change with confidence and continue building a strong foundation for the future.”
“In addition, we recently announced our agreement to acquire Pacific Financial Corporation, the holding company for Bank of the Pacific,” Grescovich continued. “Bank of the Pacific is a highly-respected, financially strong community bank with exceptional core deposits. This transaction expands our presence and density in attractive Western Washington and Western Oregon markets while offering Bank of the Pacific customers broader product offerings and technology tools, increased commercial lending limits and an expanded branch delivery system. We look forward to welcoming their employees, clients and shareholders to Banner.”
At June 30, 2026, Banner, on a consolidated basis, had $16.59 billion in assets, $11.83 billion in net loans and $13.79 billion in deposits. Banner operates 135 full-service branch offices, including branches located in eight of the top 20 largest western United States Metropolitan Statistical Areas by population.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 2
Second Quarter 2026 Highlights
•Net interest margin, on a tax equivalent basis, was 4.13% for the current quarter, compared to 4.11% in the preceding quarter and 3.92% in the second quarter a year ago.
•Revenue was $172.0 million for the second quarter of 2026, compared to $169.3 million in the preceding quarter and increased 6% from $162.2 million in the second quarter a year ago.
•Net interest income was $153.7 million in the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million in the second quarter a year ago.
•Mortgage banking operations revenue was $2.8 million for the second quarter of 2026, compared to $3.2 million in both the preceding quarter and the second quarter a year ago.
•Return on average assets was 1.20% for the second quarter of 2026, compared to 1.37% in the preceding quarter and 1.13% in the second quarter a year ago.
•Net loans receivable increased 2% to $11.83 billion at June 30, 2026, compared to $11.55 billion at March 31, 2026, and increased 3% from $11.53 billion at June 30, 2025.
•Loan originations were $1.26 billion for the second quarter of 2026, compared to $863.2 million in the preceding quarter and $966.6 million in the second quarter a year ago.
•Total deposits were $13.79 billion at June 30, 2026, compared to $13.84 billion at March 31, 2026 and $13.53 billion at June 30, 2025.
•Core deposits represented 89% of total deposits at June 30, 2026.
•Non-performing assets were $60.5 million, or 0.36% of total assets, at June 30, 2026, compared to $51.7 million, or 0.32% of total assets, at March 31, 2026, and $49.8 million, or 0.30% of total assets, at June 30, 2025.
•The allowance for credit losses - loans was $161.8 million, or 1.35% of total loans receivable, as of June 30, 2026, compared to $160.4 million, or 1.37% of total loans receivable, as of March 31, 2026, and $160.5 million, or 1.37% of total loans receivable, as of June 30, 2025.
•Dividends paid to shareholders were $0.52 per share in the quarter ended June 30, 2026.
•Common shareholders’ equity per share increased 1% to $58.83 at June 30, 2026, compared to $58.06 at the preceding quarter end, and increased 9% from $53.95 at June 30, 2025.
•Tangible common shareholders’ equity per share* increased 2% to $47.82 at June 30, 2026, compared to $47.00 at March 31, 2026, and increased 11% from $43.09 at June 30, 2025.
*Non-GAAP (Generally Accepted Accounting Principles) financial measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.
Significant Recent Initiatives and Events
On April 30, 2026, Banner entered into a definitive merger agreement to acquire Pacific Financial Corporation (“Pacific Financial”), the holding company for Bank of the Pacific, in an all-stock transaction. Under the terms of the agreement, at the effective time of the merger, shareholders of Pacific Financial will receive 0.2633 shares of Banner common stock for each Pacific Financial common share they own. The transaction is expected to close in the third quarter of 2026 and is subject to closing conditions, including Pacific Financial shareholder and regulatory approvals.
Income Statement Review
Net interest income was $153.7 million in the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million in the second quarter a year ago. Net interest margin, on a tax equivalent basis, increased two basis points to 4.13% for the second quarter of 2026, compared to 4.11% in the preceding quarter, and increased 21 basis points from 3.92% in the second quarter a year ago. The net interest margin for the current quarter benefited from a higher average yield on interest-earning assets and lower borrowing costs.
Interest income was $202.7 million in the second quarter of 2026, compared to $197.8 million in the preceding quarter and $200.3 million in the second quarter of 2025. Average yields on interest-earning assets increased by two basis points to 5.41% for the second quarter of 2026, compared to 5.39% for the preceding quarter, primarily reflecting loan growth and a slight increase in loan yields. Compared to the second quarter a year ago, average yields on interest-earning assets increased by one basis point from 5.40%. Average loan yields increased by two basis points to 6.09% in the second quarter of 2026, compared to 6.07% in the preceding quarter, and decreased from 6.12% in the second quarter a year ago.
Interest expense was $48.9 million in the second quarter of 2026, compared to $47.6 million in the preceding quarter and $55.9 million in the second quarter a year ago. Total deposit costs decreased by two basis points to 1.33% in the second quarter of 2026, compared to 1.35% in the preceding quarter, and decreased by 14 basis points compared to 1.47% in the second quarter a year ago. The decrease in deposit costs in the current quarter compared to both the prior quarter and the same quarter a year ago was primarily due to lower pricing on certificates of deposit and money market accounts as well as an increase in the average balance of non-interest-bearing deposits. The decrease in deposit costs in the current quarter compared to the same quarter a year ago also reflected a decrease in the average rate paid on interest-bearing checking accounts and savings accounts. The average rate paid on borrowings decreased two basis points to 3.88% in the second quarter of 2026 from 3.90% in the preceding quarter and decreased by 59 basis points from 4.47% in the second quarter a year ago. The year-over-year decrease was primarily due to declines in both average interest rates paid and the average balance of higher-costing FHLB advances. The total cost of funding liabilities increased one basis point to 1.39% in the second quarter of 2026, compared to 1.38% in the preceding quarter, and decreased 21 basis points from 1.60% in the second quarter a year ago, primarily reflecting lower deposit and borrowing rates paid.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 3
A $3.8 million provision for credit losses was recorded in the current quarter (comprised of a $1.6 million provision for credit losses - loans and a $2.2 million provision for credit losses - unfunded loan commitments). This compares to a $796,000 recapture of provision for credit losses in the prior quarter (comprised of a $1.3 million provision for credit losses - loans and a $2.1 million recapture of provision for credit losses - unfunded loan commitments) and a $4.8 million provision for credit losses in the second quarter a year ago (comprised of a $4.2 million provision for credit losses - loans and a $588,000 provision for credit losses - unfunded loan commitments). The provision for credit losses recorded in the second quarter of 2026 primarily reflected loan growth, partially offset by improvements in credit quality and changes in portfolio mix.
Total non-interest income was $18.2 million in the second quarter of 2026, compared to $19.2 million in the preceding quarter and $17.8 million in the second quarter a year ago. The decrease from the previous quarter was driven primarily by a $1.8 million unfavorable shift in fair value adjustments on financial instruments. In addition, the current quarter included a slight gain on the sale of securities, compared to net losses of $1.2 million in the preceding quarter, partially offsetting the decrease in non-interest income. Compared to the prior year quarter, the increase in non-interest income was primarily attributable to an increase in deposit fees and other service charges, partially offset by lower mortgage banking revenue. Total non-interest income was $37.4 million for the six months ended June 30, 2026, compared to $36.9 million for the same period a year earlier.
Total non-interest expense was $108.0 million in the second quarter of 2026, compared to $102.6 million in the preceding quarter and $101.3 million in the second quarter of 2025. The increase from the previous quarter reflected a $1.7 million increase in salary and employee benefits, primarily reflecting increased loan commissions and normal salary and wage increases, a $2.0 million increase in information and computer data services, primarily due to increased computer software expenses, including $924,000 of expense related to the write-off of our previous commercial loan origination software, a $1.1 million increase in professional and legal expenses, primarily reflecting increased legal fees, and a $1.3 million increase in advertising and marketing expense, primarily reflecting the timing of direct mail marketing, printed media, and radio and television expenses. In addition, the current quarter includes $238,000 of merger related expenses. These increases were partially offset by a $1.4 million increase in capitalized loan origination costs, reflecting increased loan origination activity, primarily in the construction and land and one- to four-family residential loan categories. The increase compared to the same quarter a year ago primarily reflects increases in salary and employee benefits, information and computer data services expenses, and advertising and marketing expenses, partially offset by a decrease in occupancy and equipment costs. For the six months ended June 30, 2026, total non-interest expense was $210.6 million, compared to $202.6 million for the six months ended June 30, 2025.
Banner’s efficiency ratio was 62.80% for the second quarter of 2026, compared to 60.60% in the preceding quarter and 62.50% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 61.30% for the second quarter of 2026, compared to 59.45% in the preceding quarter and 60.28% in the year-ago quarter. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a discussion and reconciliation of non-GAAP financial measures.
Balance Sheet Review
Total assets were $16.59 billion at June 30, 2026, compared to $16.34 billion at March 31, 2026, and $16.44 billion at June 30, 2025. The increase compared to the prior quarter was primarily due to loan growth, partially offset by a reduction in securities. Securities and interest-bearing deposits held at other banks totaled $3.17 billion at June 30, 2026, compared to $3.24 billion at March 31, 2026 and $3.29 billion at June 30, 2025. The average effective duration of the securities portfolio was approximately 6.1 years and 6.6 years at June 30, 2026 and June 30, 2025, respectively.
Total loans receivable increased 2% to $11.99 billion at June 30, 2026, compared to $11.71 billion at March 31, 2026, and increased 3% from $11.69 billion at June 30, 2025. Commercial real estate loans totaled $4.14 billion at June 30, 2026, an increase of 1% compared to $4.11 billion at March 31, 2026, and an increase of 4% from $3.97 billion at June 30, 2025. The increases from both periods reflected a combination of new loan production and the transfer of commercial construction loans to the commercial real estate portfolio upon completion of the construction phase. Commercial business loans totaled $2.58 billion at June 30, 2026, an increase of 6% compared to $2.43 billion at March 31, 2026, and an increase of 5% from $2.47 billion at June 30, 2025. The increases from both periods reflected new loan production. Multifamily real estate loans increased 7% to $855.9 million at June 30, 2026, compared to $798.2 million at March 31, 2026, and decreased 1% from $860.7 million at June 30, 2025. The increase from the prior quarter primarily reflected the transfer of multifamily construction loans to the multifamily real estate portfolio upon completion of the construction phase, while the decrease from the prior year reflected loan payoffs that exceeded transfers from the multifamily construction portfolio. Consumer loans increased 7% to $827.0 million at June 30, 2026, compared to $774.0 million at March 31, 2026, and increased 13% compared to $732.5 million at June 30, 2025. The increases from both periods primarily reflected new loan production and advances on home equity revolving lines of credit.
Loans held for sale were $27.2 million at June 30, 2026, compared to $33.8 million at March 31, 2026, and $37.7 million at June 30, 2025. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $134.6 million, compared to $132.6 million in the preceding quarter, and $104.6 million in the second quarter a year ago. The decrease in loans held for sale at June 30, 2026, compared to both the preceding and prior year quarters, was primarily attributable to higher sales volumes of one- to four-family residential mortgage loans held for sale during the current quarter.
Total deposits were $13.79 billion at June 30, 2026, compared to $13.84 billion at March 31, 2026, and $13.53 billion a year ago. Core deposits decreased to $12.32 billion at June 30, 2026, compared to $12.38 billion at March 31, 2026, and increased compared to $12.05 billion at June 30, 2025. The decrease compared to the preceding quarter primarily reflects a decrease in interest-bearing transaction and savings accounts, as well as money market accounts, due to normal seasonal activity as clients use deposit balances to pay taxes, partially offset by an increase in non-interest-bearing deposits. The increase compared to the prior year quarter reflects increases in interest-bearing transaction and savings accounts. Core deposits remained stable at 89% of total deposits at June 30, 2026, March 31, 2026 and June 30, 2025. Certificates of deposit increased 1% to $1.47 billion at June 30, 2026, compared to $1.46 billion at March 31, 2026, and were flat compared to $1.48 billion a year earlier.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 4
There were $320.0 million of outstanding FHLB advances at June 30, 2026, compared to no outstanding FHLB advances at March 31, 2026, and $565.0 million a year ago. The increase in FHLB advances during the current quarter is due to FHLB advances being temporarily used to fund the second quarter loan growth and seasonal deposit outflows. At June 30, 2026, off-balance sheet liquidity included additional borrowing capacity of $3.45 billion at the FHLB and $1.64 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.
At June 30, 2026, total common shareholders’ equity was $2.00 billion, or 12.05% of total assets, compared to $1.97 billion, or 12.03% of total assets at March 31, 2026, and $1.87 billion, or 11.35% of total assets at June 30, 2025. The increase in total common shareholders’ equity from March 31, 2026, was primarily attributable to a $31.0 million increase in retained earnings resulting from $48.9 million in net income, partially offset by the accrual of $17.9 million in cash dividends during the second quarter of 2026. At June 30, 2026, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.63 billion, or 10.02% of tangible assets, compared to $1.59 billion, or 9.97% of tangible assets, at March 31, 2026, and $1.49 billion, or 9.28% of tangible assets, a year ago. See “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.
Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At June 30, 2026, Banner’s estimated common equity Tier 1 capital ratio was 12.82%, its estimated Tier 1 leverage capital to average assets ratio was 11.79%, and its estimated total capital to risk-weighted assets ratio was 14.67%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.
Credit Quality
The allowance for credit losses - loans was $161.8 million, or 1.35% of total loans receivable and 295% of non-performing loans, at June 30, 2026, compared to $160.4 million, or 1.37% of total loans receivable and 353% of non-performing loans, at March 31, 2026, and $160.5 million, or 1.37% of total loans receivable and 373% of non-performing loans, at June 30, 2025. The allowance ratio remained stable compared to both prior periods, reflecting consistent portfolio composition and credit performance. Coverage of non-performing loans remained strong at 295% at June 30, 2026, compared to 353% at March 31, 2026. The year-over-year decline from 373% at June 30, 2025 reflects a moderate increase in non-performing loans over the past year, while the allowance level has remained stable and commensurate with the portfolio’s risk profile. In addition to the allowance for credit losses - loans, the allowance for credit losses - unfunded loan commitments was $15.1 million at June 30, 2026, compared to $12.9 million at March 31, 2026, and $12.8 million at June 30, 2025. Net loan charge-offs remained minimal at $101,000 in the second quarter of 2026, compared to net loan charge-offs of $1.2 million and $1.0 million in the preceding quarter and second quarter a year ago, respectively. Non-performing loans were $54.8 million at June 30, 2026, compared to $45.4 million at March 31, 2026, and $43.0 million at June 30, 2025. Despite the increase in non-performing loans, substandard loans declined to $218.4 million at June 30, 2026, from $235.0 million at March 31, 2026. Total non-performing assets were $60.5 million, or 0.36% of total assets, at June 30, 2026, compared to $51.7 million, or 0.32% of total assets, at March 31, 2026, and $49.8 million, or 0.30% of total assets, at June 30, 2025.
Conference Call
Banner will host a conference call on Thursday, July 23, 2026, at 8:00 a.m. PDT, to discuss its second quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (800) 715-9871 to participate in the call. A replay of the call will be available at www.bannerbank.com.
About the Company
Banner Corporation is a $16.59 billion bank holding company operating a commercial bank primarily in Washington, Oregon, California and Idaho through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 5
Forward-Looking Statements
When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Forward-looking statements may relate to, among other things, future financial performance, strategic plans or objectives, revenues or earnings projections, and other financial or operational information. These statements are inherently subject to numerous risks and uncertainties, including ongoing market volatility and evolving global conditions, which may cause actual results to differ materially from those expressed or implied. These factors include, but are not limited to: (1) adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of labor shortages, elevated inflation, recessionary pressures, or slowing economic growth; (2) changes in interest rate levels, volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, access to capital and liquidity; (3) the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; (4) geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, South America, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors, including, but not limited to, agriculture-based lending; (5) the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; (6) the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; (7) expectations regarding key growth initiatives and strategic priorities; (8) credit risks from lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (9) results of examinations by regulatory authorities, which could result in the imposition of penalties, required changes to our business practices, or additional reserves; (10) competitive pressures among depository and non-depository institutions that adversely affect pricing, market share, deposit flows or product offerings; (11) fluctuations in real estate values; (12) the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; (13) vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; (14) market volatility or deterioration in capital markets affecting liquidity, valuations, or investor confidence; (15) the costs, effects and outcomes of litigation or other legal proceedings involving the Company; (16) legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; (17) climate-related risks and natural disasters, which may affect loan collateral, operations, or compliance obligations; (18) changes in accounting principles, policies or guidelines; (19) the impact of pending and future acquisitions or business combinations, including related goodwill impairment risks and integration challenges; (20) effects of critical accounting policies and judgments, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; (21) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (22) other risks detailed from time to time in Banner’s other reports filed with and furnished to the Securities and Exchange Commission including Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.
Further, statements about the potential effects of Banner’s proposed merger with Pacific Financial on Banner’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond Banner’s control, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully or such integration may be more difficult, time-consuming or costly than expected; (2) any of the anticipated benefits of the merger may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the merger or the announcement of the merger, and the parties may be challenged in retaining key relationships both during the pendency of the merger and following the completion of the merger if that occurs; (4) the parties may not meet expectations regarding the timing of the merger; (5) required regulatory approvals or the approval of Pacific Financial shareholders may not be obtained or such approvals may be more difficult, time-consuming or costly than expected; (6) there may be challenges in satisfying the other conditions to completion of the merger or the merger may fail to close for any other reason; (7) management’s attention may be diverted from ongoing business operations and opportunities due to the merger; (8) there may be potential negative impacts caused by the dilution resulting from Banner’s issuance of shares of Banner Common Stock in connection with the merger; and (9) other factors detailed in Banner’s filings with the SEC.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 6
Additional Information About the Pacific Financial Corporation Merger and Where to Find It
This press release does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval with respect to the proposed transaction.
In connection with the proposed merger, a registration statement on Form S-4 was filed with the SEC and declared effective on June 16, 2026. The proxy statement of Pacific Financial and the prospectus of Banner included therein has been mailed to shareholders of Pacific Financial in connection with their votes on the merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER AND RELATED MATTERS.
The proxy statement/prospectus and other documents relating to the merger filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge from Banner upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the proxy statement/prospectus.
Participants in the Solicitation
Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed Merger under SEC rules. Information about the directors and executive officers of Banner and Pacific Financial is included in the proxy statement/prospectus for the proposed transaction filed with the SEC. These documents may be obtained free of charge in the manner described above under “Additional Information About the Pacific Financial Corporation Merger and Where to Find It.”
Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by its directors or executive officers have changed since the amounts set forth in Banner’s proxy statement for its 2026 annual meeting of shareholders, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information About the Pacific Financial Corporation Merger and Where to Find It.”
BANR - Second Quarter 2026 Results
July 22, 2026
Page 7
RESULTS OF OPERATIONS Quarters Ended Six Months Ended
(in thousands except shares and per share data) Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
INTEREST INCOME:
Loans receivable $ 178,389 $ 173,703 $ 175,373 $ 352,092 $ 344,050
Mortgage-backed securities 14,053 14,316 15,416 28,369 31,160
Securities and cash equivalents 10,244 9,799 9,470 20,043 18,917
Total interest income 202,686 197,818 200,259 400,504 394,127
INTEREST EXPENSE:
Deposits 45,554 45,678 49,316 91,232 98,053
Federal Home Loan Bank (FHLB) advances 1,426 40 3,370 1,466 4,230
Other borrowings 732 697 675 1,429 1,369
Subordinated debt
1,234 1,234 2,499 2,468 4,993
Total interest expense 48,946 47,649 55,860 96,595 108,645
Net interest income 153,740 150,169 144,399 303,909 285,482
PROVISION (RECAPTURE) FOR CREDIT LOSSES 3,818 (796) 4,795 3,022 7,934
Net interest income after provision (recapture) for credit losses 149,922 150,965 139,604 300,887 277,548
NON-INTEREST INCOME:
Deposit fees and other service charges 11,728 11,391 10,835 23,119 21,604
Mortgage banking operations 2,792 3,212 3,226 6,004 6,329
Bank-owned life insurance 2,471 2,312 2,384 4,783 4,959
Miscellaneous 1,380 1,826 1,221 3,206 3,567
18,371 18,741 17,666 37,112 36,459
Net gain (loss) on sale of securities 8 (1,242) (3) (1,234) (3)
Net change in valuation of financial instruments carried at fair value (157) 1,662 88 1,505 403
Total non-interest income 18,222 19,161 17,751 37,383 36,859
NON-INTEREST EXPENSE:
Salary and employee benefits 69,388 67,732 65,486 137,120 130,343
Less capitalized loan origination costs (5,283) (3,886) (4,924) (9,169) (8,254)
Occupancy and equipment 10,936 10,697 12,256 21,633 24,353
Information and computer data services 10,322 8,313 8,199 18,635 15,827
Payment and card processing services 6,218 6,041 5,899 12,259 11,649
Professional and legal expenses 2,719 1,613 2,271 4,332 4,701
Advertising and marketing 1,982 673 1,087 2,655 1,677
Deposit insurance 2,819 2,717 2,800 5,536 5,597
State and municipal business and use taxes 1,773 1,820 1,416 3,593 2,870
Real estate operations, net 165 109 392 274 331
Amortization of core deposit intangibles 256 256 455 512 911
Miscellaneous 6,695 6,523 6,011 13,218 12,602
Total non-interest expense 107,990 102,608 101,348 210,598 202,607
Income before provision for income taxes 60,154 67,518 56,007 127,672 111,800
PROVISION FOR INCOME TAXES 11,268 12,802 10,511 24,070 21,169
NET INCOME $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631
Earnings per common share:
Basic $ 1.44 $ 1.61 $ 1.31 $ 3.04 $ 2.62
Diluted $ 1.43 $ 1.60 $ 1.31 $ 3.03 $ 2.61
Cumulative dividends declared per common share $ 0.52 $ 0.50 $ 0.48 $ 1.02 $ 0.96
Weighted average number of common shares outstanding:
Basic 34,012,611 34,039,234 34,627,433 34,025,849 34,568,948
Diluted 34,129,173 34,254,587 34,738,948 34,197,096 34,761,044
BANR - Second Quarter 2026 Results
July 22, 2026
Page 8
FINANCIAL CONDITION Percentage Change
(in thousands except shares and per share data) Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr
ASSETS
Cash and due from banks $ 215,508 $ 180,158 $ 182,772 $ 239,339 20 % (10) %
Interest-bearing deposits 219,944 259,081 239,868 244,009 (15) % (10) %
Total cash and cash equivalents
435,452 439,239 422,640 483,348 (1) % (10) %
Securities - available for sale, amortized cost $2,273,608, $2,294,225, $2,271,471 and $2,372,331, respectively
2,015,891 2,035,021 2,016,261 2,064,581 (1) % (2) %
Securities - held to maturity, fair value $787,987, $791,763, $814,668 and $801,838, respectively
929,309 943,688 961,196 981,312 (2) % (5) %
Total securities
2,945,200 2,978,709 2,977,457 3,045,893 (1) % (3) %
FHLB stock 24,209 9,809 16,476 35,151 147 % (31) %
Loans held for sale 27,160 33,778 42,902 37,651 (20) % (28) %
Loans receivable 11,994,410 11,707,626 11,721,687 11,690,373 2 % 3 %
Allowance for credit losses – loans (161,849) (160,352) (160,276) (160,501) 1 % 1 %
Net loans receivable
11,832,561 11,547,274 11,561,411 11,529,872 2 % 3 %
Accrued interest receivable 65,016 63,736 60,525 64,729 2 % — %
Property and equipment, net 108,247 108,303 111,522 117,175 — % (8) %
Goodwill 373,121 373,121 373,121 373,121 — % — %
Other intangibles, net 979 1,235 1,491 2,147 (21) % (54) %
Bank-owned life insurance 324,164 321,660 319,347 316,365 1 % 2 %
Operating lease right-of-use assets 29,534 31,056 32,736 38,754 (5) % (24) %
Other assets 427,904 436,352 434,860 392,963 (2) % 9 %
Total assets
$ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169 2 % 1 %
LIABILITIES
Deposits:
Non-interest-bearing $ 4,542,942 $ 4,532,639 $ 4,489,839 $ 4,504,491 — % 1 %
Interest-bearing transaction and savings accounts 7,773,630 7,842,911 7,721,003 7,545,028 (1) % 3 %
Interest-bearing certificates 1,473,021 1,464,814 1,532,304 1,477,772 1 % — %
Total deposits 13,789,593 13,840,364 13,743,146 13,527,291 — % 2 %
Advances from FHLB 320,000 — 150,000 565,000 — % (43) %
Other borrowings 114,497 115,723 107,715 117,112 (1) % (2) %
Junior subordinated debentures at fair value 79,652 79,472 79,151 73,366 — % 9 %
Operating lease liabilities 32,108 33,794 35,755 41,696 (5) % (23) %
Accrued expenses and other liabilities 210,134 261,295 245,266 200,194 (20) % 5 %
Deferred compensation 48,300 46,990 47,158 46,846 3 % 3 %
Total liabilities 14,594,284 14,377,638 14,408,191 14,571,505 2 % — %
SHAREHOLDERS’ EQUITY
Common stock 1,268,527 1,268,298 1,282,505 1,309,004 — % (3) %
Retained earnings 940,210 909,222 871,803 801,082 3 % 17 %
Accumulated other comprehensive loss (209,474) (210,886) (208,011) (244,422) (1) % (14) %
Total shareholders’ equity 1,999,263 1,966,634 1,946,297 1,865,664 2 % 7 %
Total liabilities and shareholders’ equity $ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169 2 % 1 %
Common Shares Issued:
Shares outstanding at end of period 33,984,909 33,875,098 34,097,856 34,583,994
Common shareholders’ equity per share (1)
$ 58.83 $ 58.06 $ 57.08 $ 53.95
Common shareholders’ tangible equity per share (1) (2)
$ 47.82 $ 47.00 $ 46.09 $ 43.09
Common shareholders’ equity to total assets 12.05 % 12.03 % 11.90 % 11.35 %
Common shareholders’ tangible equity to tangible assets (2)
10.02 % 9.97 % 9.84 % 9.28 %
Consolidated Tier 1 leverage capital ratio 11.79 % 11.68 % 11.41 % 11.29 %
(1) Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
(2) Common shareholders’ tangible equity and tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 9
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
LOANS Percentage Change
Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr
Commercial real estate (CRE):
Owner-occupied $ 1,229,993 $ 1,176,035 $ 1,138,298 $ 1,125,249 5 % 9 %
Investment properties 1,744,127 1,719,220 1,701,413 1,625,001 1 % 7 %
Small balance CRE 1,166,516 1,218,388 1,212,357 1,223,477 (4) % (5) %
Multifamily real estate 855,862 798,230 850,789 860,700 7 % (1) %
Construction, land and land development:
Commercial construction 181,843 174,761 156,021 159,222 4 % 14 %
Multifamily construction 503,058 502,166 514,330 568,058 — % (11) %
One- to four-family construction 631,183 617,233 607,447 551,806 2 % 14 %
Land and land development 378,172 400,959 433,678 417,474 (6) % (9) %
Commercial business:
Commercial business 1,286,818 1,231,154 1,225,108 1,318,483 5 % (2) %
Small business scored 1,295,861 1,199,913 1,187,360 1,152,531 8 % 12 %
Agricultural business, including secured by farmland:
Agricultural business, including secured by farmland 337,487 332,440 353,152 345,742 2 % (2) %
One- to four-family residential 1,556,493 1,563,088 1,573,191 1,610,133 — % (3) %
Consumer:
Consumer—home equity revolving lines of credit 744,546 682,692 679,489 639,757 9 % 16 %
Consumer—other 82,451 91,347 89,054 92,740 (10) % (11) %
Total loans receivable $ 11,994,410 $ 11,707,626 $ 11,721,687 $ 11,690,373 2 % 3 %
Loans 30 - 89 days past due and on accrual $ 17,686 $ 30,177 $ 26,767 $ 10,786
Total delinquent loans (including loans on non-accrual), net $ 61,333 $ 65,632 $ 63,093 $ 47,764
Total delinquent loans / Total loans receivable 0.51 % 0.56 % 0.54 % 0.41 %
LOANS BY GEOGRAPHIC LOCATION Percentage Change
Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr
Amount Percentage Amount Amount Amount
Washington $ 5,359,130 45 % $ 5,313,022 $ 5,371,200 $ 5,438,285 1 % (1) %
California 3,275,124 27 % 3,159,842 3,105,405 3,010,678 4 % 9 %
Oregon 2,210,617 18 % 2,166,750 2,159,404 2,141,185 2 % 3 %
Idaho 732,830 6 % 690,608 667,343 671,217 6 % 9 %
Utah 78,216 1 % 77,046 82,594 70,474 2 % 11 %
Other 338,493 3 % 300,358 335,741 358,534 13 % (6) %
Total loans receivable $ 11,994,410 100 % $ 11,707,626 $ 11,721,687 $ 11,690,373 2 % 3 %
BANR - Second Quarter 2026 Results
July 22, 2026
Page 10
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
LOAN ORIGINATIONS Quarters Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025
Commercial real estate $ 163,031 $ 220,193 $ 216,189
Multifamily real estate 215 3,869 13,065
Construction and land 561,290 323,941 411,210
Commercial business 312,028 168,324 203,656
Agricultural business 9,032 22,562 14,414
One-to four-family residential 37,998 13,416 5,491
Consumer 172,152 110,913 102,600
Total loan originations (excluding loans held for sale) $ 1,255,746 $ 863,218 $ 966,625
BANR - Second Quarter 2026 Results
July 22, 2026
Page 11
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS
Quarters Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025
Balance, beginning of period $ 160,352 $ 160,276 $ 157,323
Provision for credit losses – loans 1,598 1,292 4,201
Recoveries of loans previously charged off:
Commercial real estate 12 11 53
Construction and land 5 4 —
One- to four-family real estate 12 13 58
Commercial business 171 81 361
Agricultural business, including secured by farmland 213 4 1
Consumer 63 140 168
476 253 641
Loans charged off:
Commercial business (293) (863) (892)
Agricultural business, including secured by farmland (4) — (362)
Consumer (280) (606) (410)
(577) (1,469) (1,664)
Net charge-offs (101) (1,216) (1,023)
Balance, end of period $ 161,849 $ 160,352 $ 160,501
Net charge-offs / average loans receivable (0.001) % (0.010) % (0.009) %
ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Commercial real estate $ 42,167 $ 41,788 $ 41,599 $ 41,036
Multifamily real estate 9,859 9,201 9,805 9,918
Construction and land 32,124 34,589 35,508 34,124
One- to four-family real estate 19,478 19,640 19,552 20,917
Commercial business 41,114 39,452 37,785 38,591
Agricultural business, including secured by farmland 5,859 4,930 5,567 6,216
Consumer 11,248 10,752 10,460 9,699
Total allowance for credit losses – loans $ 161,849 $ 160,352 $ 160,276 $ 160,501
Allowance for credit losses - loans / Total loans receivable 1.35 % 1.37 % 1.37 % 1.37 %
Allowance for credit losses - loans / Non-performing loans 295 % 353 % 351 % 373 %
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
Quarters Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025
Balance, beginning of period $ 12,903 $ 14,985 $ 12,162
Provision (recapture) for credit losses - unfunded loan commitments 2,222 (2,082) 588
Balance, end of period $ 15,125 $ 12,903 $ 12,750
BANR - Second Quarter 2026 Results
July 22, 2026
Page 12
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
NON-PERFORMING ASSETS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Loans on non-accrual status:
Secured by real estate:
Commercial $ 2,132 $ 2,027 $ 525 $ 10
Construction and land 12,648 4,321 5,175 4,369
One- to four-family 23,398 20,945 19,855 15,480
Commercial business 6,968 6,988 6,751 6,647
Agricultural business, including secured by farmland 2,967 5,511 4,609 8,690
Consumer 4,784 4,214 4,610 4,802
52,897 44,006 41,525 39,998
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:
Commercial 234 — — —
Construction and land — — 1,268 —
One- to four-family 1,427 636 2,698 2,896
Consumer 265 795 148 80
1,926 1,431 4,114 2,976
Total non-performing loans 54,823 45,437 45,639 42,974
REO 5,720 6,248 5,578 6,801
Other repossessed assets — — 18 —
Total non-performing assets $ 60,543 $ 51,685 $ 51,235 $ 49,775
Total non-performing assets to total assets 0.36 % 0.32 % 0.31 % 0.30 %
LOANS BY CREDIT RISK RATING Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Pass $ 11,754,475 $ 11,416,687 $ 11,446,550 $ 11,432,456
Special Mention 21,509 55,981 82,060 68,372
Substandard 218,426 234,958 193,077 189,545
Total $ 11,994,410 $ 11,707,626 $ 11,721,687 $ 11,690,373
BANR - Second Quarter 2026 Results
July 22, 2026
Page 13
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
DEPOSIT COMPOSITION Percentage Change
Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr
Non-interest-bearing $ 4,542,942 $ 4,532,639 $ 4,489,839 $ 4,504,491 — % 1 %
Interest-bearing checking 2,623,149 2,628,731 2,609,080 2,534,900 — % 3 %
Regular savings accounts 3,853,612 3,859,530 3,723,922 3,538,372 — % 9 %
Money market accounts 1,296,869 1,354,650 1,388,001 1,471,756 (4) % (12) %
Total interest-bearing transaction and savings accounts 7,773,630 7,842,911 7,721,003 7,545,028 (1) % 3 %
Total core deposits 12,316,572 12,375,550 12,210,842 12,049,519 — % 2 %
Interest-bearing certificates 1,473,021 1,464,814 1,532,304 1,477,772 1 % — %
Total deposits $ 13,789,593 $ 13,840,364 $ 13,743,146 $ 13,527,291 — % 2 %
GEOGRAPHIC CONCENTRATION OF DEPOSITS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Percentage Change
Amount Percentage Amount Amount Amount Prior Qtr Prior Yr Qtr
Washington $ 7,268,041 53 % $ 7,429,406 $ 7,500,215 $ 7,334,391 (2) % (1) %
Oregon 3,142,625 23 % 3,125,040 3,035,104 3,029,712 1 % 4 %
California 2,631,688 19 % 2,558,466 2,483,948 2,486,514 3 % 6 %
Idaho 747,239 5 % 727,452 723,879 676,674 3 % 10 %
Total deposits $ 13,789,593 100 % $ 13,840,364 $ 13,743,146 $ 13,527,291 — % 2 %
INCLUDED IN TOTAL DEPOSITS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Public non-interest-bearing accounts $ 171,112 $ 146,846 $ 138,860 $ 151,484
Public interest-bearing transaction & savings accounts 242,061 237,776 234,669 250,350
Public interest-bearing certificates 34,794 36,125 34,431 21,272
Total public deposits $ 447,967 $ 420,747 $ 407,960 $ 423,106
Collateralized public deposits $ 348,318 $ 325,675 $ 312,310 $ 329,416
Total brokered deposits $ — $ — $ 50,002 $ 49,977
AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Number of deposit accounts 441,808 444,250 445,989 451,185
Average account balance per account $ 32 $ 32 $ 31 $ 30
BANR - Second Quarter 2026 Results
July 22, 2026
Page 14
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ESTIMATED REGULATORY CAPITAL RATIOS AS OF JUNE 30, 2026 Actual Minimum to be categorized as "Adequately Capitalized" Minimum to be
categorized as
"Well Capitalized"
Amount Ratio Amount Ratio Amount Ratio
Banner Corporation-consolidated:
Total capital to risk-weighted assets $ 2,092,299 14.67 % $ 1,140,941 8.00 % $ 1,426,177 10.00 %
Tier 1 capital to risk-weighted assets 1,915,042 13.43 % 855,706 6.00 % 855,706 6.00 %
Tier 1 leverage capital to average assets 1,915,042 11.79 % 649,595 4.00 % n/a n/a
Common equity tier 1 capital to risk-weighted assets 1,828,542 12.82 % 641,780 4.50 % n/a n/a
Banner Bank:
Total capital to risk-weighted assets 1,987,693 13.94 % 1,140,409 8.00 % 1,425,511 10.00 %
Tier 1 capital to risk-weighted assets 1,810,436 12.70 % 855,307 6.00 % 1,140,409 8.00 %
Tier 1 leverage capital to average assets 1,810,436 11.15 % 649,364 4.00 % 811,705 5.00 %
Common equity tier 1 capital to risk-weighted assets 1,810,436 12.70 % 641,480 4.50 % 926,582 6.50 %
These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 15
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD Quarters Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025
Average Balance Interest and Dividends
Yield / Cost (3)
Average Balance Interest and Dividends
Yield / Cost (3)
Average Balance Interest and Dividends
Yield / Cost (3)
Interest-earning assets:
Held for sale loans
$ 33,242 $ 509 6.14 % $ 26,051 $ 381 5.93 % $ 29,936 $ 503 6.74 %
Real estate secured loans 9,875,493 148,303 6.02 % 9,754,431 144,369 6.00 % 9,565,357 143,909 6.03 %
Commercial/agricultural loans
1,881,938 29,866 6.37 % 1,853,248 29,153 6.38 % 1,924,092 31,196 6.50 %
Consumer and other loans
117,727 2,015 6.87 % 116,147 2,040 7.12 % 121,142 2,087 6.91 %
Total loans (1)
11,908,400 180,693 6.09 % 11,749,877 175,943 6.07 % 11,640,527 177,695 6.12 %
Mortgage-backed securities
2,275,561 14,269 2.52 % 2,326,123 14,509 2.53 % 2,496,972 15,576 2.50 %
Other securities
938,205 9,915 4.24 % 878,650 9,040 4.17 % 893,062 9,561 4.29 %
Interest-bearing deposits with banks
139,672 1,102 3.16 % 184,204 1,518 3.34 % 75,539 577 3.06 %
FHLB stock
16,342 150 3.68 % 9,912 148 6.06 % 23,077 222 3.86 %
Total investment securities 3,369,780 25,436 3.03 % 3,398,889 25,215 3.01 % 3,488,650 25,936 2.98 %
Total interest-earning assets
15,278,180 206,129 5.41 % 15,148,766 201,158 5.39 % 15,129,177 203,631 5.40 %
Non-interest-earning assets 1,082,054 1,106,533 994,003
Total assets
$ 16,360,234 $ 16,255,299 $ 16,123,180
Deposits:
Interest-bearing checking accounts
$ 2,606,252 9,433 1.45 % $ 2,631,917 9,273 1.43 % $ 2,465,015 9,462 1.54 %
Savings accounts
3,830,346 19,009 1.99 % 3,792,427 18,388 1.97 % 3,493,965 18,837 2.16 %
Money market accounts
1,314,496 5,790 1.77 % 1,387,870 6,151 1.80 % 1,492,229 7,729 2.08 %
Certificates of deposit
1,465,885 11,322 3.10 % 1,481,349 11,866 3.25 % 1,489,611 13,288 3.58 %
Total interest-bearing deposits
9,216,979 45,554 1.98 % 9,293,563 45,678 1.99 % 8,940,820 49,316 2.21 %
Non-interest-bearing deposits
4,523,594 — — % 4,470,629 — — % 4,480,579 — — %
Total deposits
13,740,573 45,554 1.33 % 13,764,192 45,678 1.35 % 13,421,399 49,316 1.47 %
Other interest-bearing liabilities:
FHLB advances
145,176 1,426 3.94 % 4,089 40 3.97 % 296,671 3,370 4.56 %
Other borrowings
116,146 732 2.53 % 111,569 697 2.53 % 122,227 675 2.22 %
Junior subordinated debentures and subordinated notes
89,178 1,234 5.55 % 89,178 1,234 5.61 % 168,793 2,499 5.94 %
Total borrowings
350,500 3,392 3.88 % 204,836 1,971 3.90 % 587,691 6,544 4.47 %
Total funding liabilities
14,091,073 48,946 1.39 % 13,969,028 47,649 1.38 % 14,009,090 55,860 1.60 %
Other non-interest-bearing liabilities (2)
290,601 320,808 274,407
Total liabilities
14,381,674 14,289,836 14,283,497
Shareholders’ equity 1,978,560 1,965,463 1,839,683
Total liabilities and shareholders’ equity $ 16,360,234 $ 16,255,299 $ 16,123,180
Net interest income/rate spread (tax equivalent) 157,183 4.02 % 153,509 4.01 % 147,771 3.80 %
Net interest margin (tax equivalent) 4.13 % 4.11 % 3.92 %
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis (3,443) (3,340) (3,372)
Net interest income and margin, as reported $ 153,740 4.04 % $ 150,169 4.02 % $ 144,399 3.83 %
Additional Key Financial Ratios:
Return on average assets 1.20 % 1.37 % 1.13 %
Adjusted return on average assets (4)
1.21 % 1.36 % 1.16 %
Return on average equity 9.91 % 11.29 % 9.92 %
Adjusted return on average equity (4)
9.98 % 11.23 % 10.20 %
Return on average tangible common equity (4)
12.27 % 14.00 % 12.56 %
Average equity/average assets 12.09 % 12.09 % 11.41 %
Average interest-earning assets/average interest-bearing liabilities 159.69 % 159.49 % 158.78 %
Average interest-earning assets/average funding liabilities 108.42 % 108.45 % 108.00 %
Non-interest income/average assets 0.45 % 0.48 % 0.44 %
Non-interest expense/average assets 2.65 % 2.56 % 2.52 %
Efficiency ratio 62.80 % 60.60 % 62.50 %
Adjusted efficiency ratio (4)
61.30 % 59.45 % 60.28 %
(1)Average balances include loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
(2)Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
(3)Tax-exempt income is calculated on a tax equivalent basis, which Banner believes provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice. The tax equivalent yield adjustment to interest earned on loans was $2.3 million, $2.2 million and $2.3 million for the quarters ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the quarters ended June 30, 2026, March 31, 2026, and June 30, 2025.
(4)Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 16
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD Six Months Ended
Jun 30, 2026 Jun 30, 2025
Average Balance Interest and Dividends
Yield/Cost (3)
Average Balance Interest and Dividends
Yield/Cost (3)
Interest-earning assets:
Held for sale loans
$ 29,666 $ 890 6.05 % $ 26,217 $ 860 6.61 %
Real estate secured loans 9,815,296 292,672 6.01 % 9,466,335 281,633 6.00 %
Commercial/agricultural loans
1,867,672 59,019 6.37 % 1,915,699 61,948 6.52 %
Consumer and other loans
116,942 4,055 6.99 % 121,316 4,179 6.95 %
Total loans (1)
11,829,576 356,636 6.08 % 11,529,567 348,620 6.10 %
Mortgage-backed securities
2,300,703 28,778 2.52 % 2,519,851 31,471 2.52 %
Other securities
908,592 18,955 4.21 % 897,870 19,248 4.32 %
Interest-bearing deposits with banks
161,815 2,620 3.27 % 70,675 1,061 3.03 %
FHLB stock
13,145 298 4.57 % 17,969 371 4.16 %
Total investment securities 3,384,255 50,651 3.02 % 3,506,365 52,151 3.00 %
Total interest-earning assets
15,213,831 407,287 5.40 % 15,035,932 400,771 5.38 %
Non-interest-earning assets 1,094,225 1,000,216
Total assets
$ 16,308,056 $ 16,036,148
Deposits:
Interest-bearing checking accounts
$ 2,619,014 18,706 1.44 % $ 2,423,292 17,999 1.50 %
Savings accounts
3,811,491 37,397 1.98 % 3,472,556 36,940 2.15 %
Money market accounts
1,350,980 11,941 1.78 % 1,523,571 15,589 2.06 %
Certificates of deposit
1,473,574 23,188 3.17 % 1,510,404 27,525 3.67 %
Total interest-bearing deposits
9,255,059 91,232 1.99 % 8,929,823 98,053 2.21 %
Non-interest-bearing deposits
4,497,258 — — % 4,503,461 — — %
Total deposits
13,752,317 91,232 1.34 % 13,433,284 98,053 1.47 %
Other interest-bearing liabilities:
FHLB advances
75,022 1,466 3.94 % 186,597 4,230 4.57 %
Other borrowings
113,870 1,429 2.53 % 128,459 1,369 2.15 %
Junior subordinated debentures and subordinated notes
89,178 2,468 5.58 % 169,233 4,993 5.95 %
Total borrowings
278,070 5,363 3.89 % 484,289 10,592 4.41 %
Total funding liabilities
14,030,387 96,595 1.39 % 13,917,573 108,645 1.57 %
Other non-interest-bearing liabilities (2)
305,621 299,082
Total liabilities
14,336,008 14,216,655
Shareholders’ equity 1,972,048 1,819,493
Total liabilities and shareholders’ equity $ 16,308,056 $ 16,036,148
Net interest income/rate spread (tax equivalent) 310,692 4.01 % 292,126 3.81 %
Net interest margin (tax equivalent) 4.12 % 3.92 %
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis (6,783) (6,644)
Net interest income and margin, as reported $ 303,909 4.03 % $ 285,482 3.83 %
Additional Key Financial Ratios:
Return on average assets 1.28 % 1.14 %
Adjusted return on average assets (4)
1.28 % 1.15 %
Return on average equity 10.59 % 10.04 %
Adjusted return on average equity (4)
10.60 % 10.16 %
Return on average tangible common equity (4)
13.13 % 12.76 %
Average equity/average assets 12.09 % 11.35 %
Average interest-earning assets/average interest-bearing liabilities 159.59 % 159.72 %
Average interest-earning assets/average funding liabilities 108.43 % 108.04 %
Non-interest income/average assets 0.46 % 0.46 %
Non-interest expense/average assets 2.60 % 2.55 %
Efficiency ratio 61.71 % 62.85 %
Adjusted efficiency ratio (4)
60.38 % 61.22 %
(1)Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
(2)Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
(3)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $4.5 million and $4.6 million for the six months ended June 30, 2026 and 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.2 million and $2.1 million for the six months ended June 30, 2026 and 2025, respectively.
(4)Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.
BANR - Second Quarter 2026 Results
July 22, 2026
Page 17
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
* Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this earnings release contains certain non-GAAP financial measures. Tangible common shareholders’ equity per share, the ratio of tangible common equity to tangible assets and the return on average tangible common equity, and references to adjusted revenue, adjusted earnings, the adjusted return on average assets, the adjusted return on average equity and the adjusted efficiency ratio represent non-GAAP financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:
ADJUSTED REVENUE Quarters Ended Six Months Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net interest income (GAAP) $ 153,740 $ 150,169 $ 144,399 $ 303,909 $ 285,482
Non-interest income (GAAP) 18,222 19,161 17,751 37,383 36,859
Total revenue (GAAP) 171,962 169,330 162,150 341,292 322,341
Exclude: Net (gain) loss on sale of securities (8) 1,242 3 1,234 3
Net change in valuation of financial instruments carried at fair value 157 (1,662) (88) (1,505) (403)
Losses incurred on building and lease exits — — 919 — 919
Adjusted revenue (non-GAAP) $ 172,111 $ 168,910 $ 162,984 $ 341,021 $ 322,860
ADJUSTED EARNINGS Quarters Ended Six Months Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net income (GAAP) $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631
Exclude: Net (gain) loss on sale of securities (8) 1,242 3 1,234 3
Net change in valuation of financial instruments carried at fair value 157 (1,662) (88) (1,505) (403)
Merger and acquisition-related expenses 238 — — 238 —
Building and lease exit costs 47 9 1,753 56 1,753
Related net tax (benefit) expense (104) 99 (401) (5) (325)
Total adjusted earnings (non-GAAP) $ 49,216 $ 54,404 $ 46,763 $ 103,620 $ 91,659
Diluted earnings per share (GAAP) $ 1.43 $ 1.60 $ 1.31 $ 3.03 $ 2.61
Diluted adjusted earnings per share (non-GAAP) $ 1.44 $ 1.59 $ 1.35 $ 3.03 $ 2.64
Return on average assets 1.20 % 1.37 % 1.13 % 1.28 % 1.14 %
Adjusted return on average assets (1)
1.21 % 1.36 % 1.16 % 1.28 % 1.15 %
Return on average equity 9.91 % 11.29 % 9.92 % 10.59 % 10.04 %
Adjusted return on average equity (2)
9.98 % 11.23 % 10.20 % 10.60 % 10.16 %
AVERAGE TANGIBLE COMMON EQUITY Quarters Ended Six Months Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Net Income (GAAP) $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631
Exclude: Amortization of intangibles, net of tax $ 202 $ 202 $ 360 $ 404 $ 720
Tangible net income available to common shareholders (non-GAAP) $ 49,088 $ 54,918 $ 45,856 $ 104,006 $ 91,351
Average common shareholder’s equity $ 1,978,560 $ 1,965,463 $ 1,839,683 $ 1,972,048 $ 1,819,493
Exclude: Average goodwill and other intangible assets, net 374,225 374,477 375,486 374,350 375,713
Average tangible common equity $ 1,604,335 $ 1,590,986 $ 1,464,197 $ 1,597,698 $ 1,443,780
Return on average tangible common equity (3)
12.27 % 14.00 % 12.56 % 13.13 % 12.76 %
(1)Adjusted earnings (non-GAAP) divided by average assets.
(2)Adjusted earnings (non-GAAP) divided by average equity.
(3)Tangible net income (non-GAAP) divided by average tangible common equity (non-GAAP).
BANR - Second Quarter 2026 Results
July 22, 2026
Page 18
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ADJUSTED EFFICIENCY RATIO Quarters Ended Six Months Ended
Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025
Non-interest expense (GAAP) $ 107,990 $ 102,608 $ 101,348 $ 210,598 $ 202,607
Exclude: CDI amortization (256) (256) (455) (512) (911)
State/municipal tax expense (1,773) (1,820) (1,416) (3,593) (2,870)
REO operations (165) (109) (392) (274) (331)
Merger and acquisition-related expenses (238) — — (238) —
Building and lease exit costs (47) (9) (834) (56) (834)
Adjusted non-interest expense (non-GAAP) $ 105,511 $ 100,414 $ 98,251 $ 205,925 $ 197,661
Net interest income (GAAP) $ 153,740 $ 150,169 $ 144,399 $ 303,909 $ 285,482
Non-interest income (GAAP) 18,222 19,161 17,751 37,383 36,859
Total revenue (GAAP) 171,962 169,330 162,150 341,292 322,341
Exclude: Net (gain) loss on sale of securities (8) 1,242 3 1,234 3
Net change in valuation of financial instruments carried at fair value 157 (1,662) (88) (1,505) (403)
Losses incurred on building and lease exits — — 919 — 919
Adjusted revenue (non-GAAP) $ 172,111 $ 168,910 $ 162,984 $ 341,021 $ 322,860
Efficiency ratio (GAAP) 62.80 % 60.60 % 62.50 % 61.71 % 62.85 %
Adjusted efficiency ratio (non-GAAP) (1)
61.30 % 59.45 % 60.28 % 60.38 % 61.22 %
(1)Adjusted non-interest expense (non-GAAP) divided by adjusted revenue (non-GAAP).
TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025
Shareholders’ equity (GAAP) $ 1,999,263 $ 1,966,634 $ 1,946,297 $ 1,865,664
Exclude goodwill and other intangible assets, net 374,100 374,356 374,612 375,268
Tangible common shareholders’ equity (non-GAAP) $ 1,625,163 $ 1,592,278 $ 1,571,685 $ 1,490,396
Total assets (GAAP) $ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169
Exclude goodwill and other intangible assets, net 374,100 374,356 374,612 375,268
Total tangible assets (non-GAAP) $ 16,219,447 $ 15,969,916 $ 15,979,876 $ 16,061,901
Common shareholders’ equity to total assets (GAAP) 12.05 % 12.03 % 11.90 % 11.35 %
Tangible common shareholders’ equity to tangible assets (non-GAAP) 10.02 % 9.97 % 9.84 % 9.28 %
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
Shareholders’ equity (GAAP) $ 1,999,263 $ 1,966,634 $ 1,946,297 $ 1,865,664
Tangible common shareholders’ equity (non-GAAP) $ 1,625,163 $ 1,592,278 $ 1,571,685 $ 1,490,396
Common shares outstanding at end of period 33,984,909 33,875,098 34,097,856 34,583,994
Common shareholders’ equity (book value) per share (GAAP) $ 58.83 $ 58.06 $ 57.08 $ 53.95
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) $ 47.82 $ 47.00 $ 46.09 $ 43.09
EX-99.2
EX-99.2
Filename: a2026-q2presentation.htm · Sequence: 3
a2026-q2presentation
S e c o n d Q u a r t e r 2 0 2 6 Since 1890
Disclosure Statement 1 This presentation includes forward-looking statements. These statements include descriptions of management’s plans, objectives or goals for future operations, products or services, forecast of financial or other performance measures and statements about Banner’s general outlook for economic and other conditions. Additional forward-looking statements may be made in the question-and-answer period following the presentation. These forward-looking statements are subject to several risks and uncertainties and actual results may differ materially from those discussed today. Information on the risk factors that could cause actual results to differ are available from the earnings press release that was released July 22, 2026 as well as the Form 10-K for the year ended December 31, 2025 and Forms 10-Q filed quarterly thereafter. Forward-looking statements are effective only as of the date they are made, and Banner assumes no obligation to update information concerning its expectations.
Second quarter 2026 highlights 2 • Net income of $48.9 million, compared to $54.7 million for the prior quarter • HFI Loan growth of $286 million quarter-over-quarter (10% annualized) • Total loan originations (excluding HFS) were $1.26 billion • Core deposits declined by $59 million quarter-over-quarter (2% annualized) and grew $267 million year-over-year (2%) • Net interest margin (tax equivalent) increased by 2 basis points to 4.13% • Efficiency ratio (GAAP) was 62.80%, compared to 60.60% in the prior quarter; adjusted, non- GAAP efficiency ratio was 61.30% compared to 59.45% in the prior quarter • Return on average assets of 1.20%, and return on average tangible common equity of 12.27%, compared to 1.37% and 14.00%, respectively, for the prior quarter • $1.6 million provision for credit losses - loans and $2.2 million provision for credit losses - unfunded commitments; Allowance for credit losses – loans was 1.35% of total loans • Non-performing assets remained low at 0.36% of total assets, up 4 basis points from last quarter • Kroll Bond Rating Agency, LLC affirmed the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Banner Corporation, and affirmed the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for Banner Bank • Announced cash dividend to $0.52 per share to be paid in August 2026
Building value at Banner Building value for stakeholders … by focusing on core banking competency … that is sustainable through change events … and scalable with acquisition growth Banner Corporation Assets $16.6B Deposits $13.8B Loans $12.0B Offices 135 Employees 1,888 3 Acquisition History 2019 Q4 2018 Q4 2015 Q4 2015 Q1 2014 Q2 AltaPacific Bank Skagit Bank AmericanWest Bank Siuslaw Bank SW Oregon Branches Assets $0.4B $0.9B $4.5B $0.4B $0.2B Deposits $0.3B $0.8B $3.6B $0.3B $0.2B Loans $0.3B $0.6B $3.0B $0.2B $0.1B Offices 6 11 98 10 6
Building value at Banner Growing with … Scale in attractive markets Low-cost deposit franchise Commercially focused loan portfolio Conservative balance sheet Financially appealing opportunity Pacific Financial Corp Assets $ 1.3B Deposits $ 1.1B Loans $ 0.8B Offices 21 4 Expected close: Third Quarter 2026
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Growing revenue Take advantage of ideal geography Offer super community bank value proposition Guard and improve reputation Grow market share 5
Growing revenue … in a good place since 1890 6 Source: U.S. Census Bureau Moody’s Analytics Forecasted (October 2025) Population Estimate (millions) 2020 2030 Growth Washington 7.7 8.2 7%* Oregon 4.2 4.4 3% Idaho 1.8 2.2 19%* California 39.5 39.4 0% Region 53.3 54.2 2% United States 331.6 347.0 5% * Among the fastest growing in the country
Growing revenue … in an ideal geography Powerful and diverse economic drivers From Banner’s Pacific Northwest base to … Technology Manufacturing Consumer Logistics Natural Resources Agriculture Traditional, specialty crops, orchards, wineries, … California From Apple to from Silicon Valley to the Central Valley … the world’s 5th largest economy* 7 * Source: International Monetary Fund and U.S. Bureau of Economic Analysis, October 2025
Growing revenue Our super community bank value proposition Broad product offerings serving middle market, small business and consumer client base Decision-making as close to client as possible Delivery channels aligned to maximize tactical execution of strategic plan Community investment 8
Growing revenue Guard and protect our reputation America’s Best Regional Banks Newsweek 2024, 2025 and 2026 Most Trustworthy Companies in America Newsweek 2023 - 2026 5-Star rating™ (highest category) BauerFinancial; 13+ years Outstanding CRA Rating FDIC 2021 and 2025 (two consecutive examination cycles) 100 Best Banks in America Forbes, 9 consecutive years (2017-2026) Top 50 U.S. Public Banks (assets of $10B+) S&P Global Market Intelligence 2021-2025 Great Place to Work certification May 2025 & 2026 9
$ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0 5 10 15 20 25 30 0% 4% 8% 12% 16% 20% 24% 28% $ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0 25 50 75 100 125 150 175 200 Growing revenue Deposit Fees as % of Core Revenue 1 Other Fees Mortgage Banking Deposit Fees 10 1. Excludes net gain/loss on sale of securities, change in valuation of financial instruments carried at fair value and gains/losses incurred on building and leases exits. Core revenue 1 Quarter Ending Quarter Last 12 Months Amount Amount 06/30/26 $172M $680M 12/31/09 $45M $177M Non-interest income 1 Quarter Ending Quarter Last 12 Months Amount Amount 06/30/26 $18.4M $73.3M 12/31/09 $6.6M $31.1M Other Income Net Interest Income
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Protecting net interest margin Improve earning asset mix Improve funding mix Reduce deposit costs Maintain loan-to-deposit ratio 11
Protecting net interest margin $ Millions Avg Bal Cost (in bps) Non-interest 4,524 0 Interest Bearing 7,751 177 CDs 1,466 310 Subtotal Deposits 13,741 133 FHLB & Other 350 388 Total 14,091 139 12 32% 55% 10% 3% 78% 22% 33% 30% 37% Non-interest Bearing Certificates of Deposit Interest Bearing and Savings Securities & Int-bearing Deposits Loans Fixed: 4.94% Yield Floating: 6.86% Yield Low-Cost Funding Mix 6/30/2026 Adjustable: 5.63% Yield Earning Asset Mix 6/30/2026 Loan Repricing Structure 6/30/2026 $ Millions Avg Bal Yield (in bps) Loans 11,908 609 Securities & Int- bearing Deposits 3,370 303 Total 15,278 541 67% of the loan portfolio is floating/adjustable 74% of the floating/adjustable loans have floors 22% of the loans that have floors are at the floor 37% of the loans that have floors are within 100 basis points of the floor (excludes loans at the floor) FHLB & Other
20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 —% 1% 2% 3% 4% 5% 6% 7% $ B ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0 2 4 6 8 10 12 14 16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Protecting net interest margin Non-core Deposits Core Deposits Manage deposit costs Quarter Ending Quarter Last 12 Months Amount Rate Amount Rate 06/30/26 $45.6M 1.33% $194.0M 1.40% 12/31/09 $17.7M 1.83% $83.2M 2.21% 13 Focus on core deposits Quarter Ending Balance % of Total Deposits 06/30/26 $12,317M 89% 12/31/09 $1,924M 50% Loan Yield Deposit Cost Core Deposits % Loan–Deposit Spread
20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 -20% -10% 0% 10% 20% 30% 40% 50% Protecting net interest margin Peer Median Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation Net Non-core Funding Dependence Peer Top Quartile 14 $ B illio n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 —% 20% 40% 60% 80% 100% 0 2 4 6 8 10 12 14 Banner Loan-to-Deposit Ratio Deposits Loans
20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0% 1% 2% 3% 4% 5% 6% 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Protecting net interest margin Maintain top quartile net interest margin Quarter Ending Quarter Last 12 Months Amount Rate 1 Amount Rate 1 06/30/26 $154M 4.13% $606M 4.06% 12/31/09 $39M 3.53% $146M 3.36% Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation 15 Peer Top Quartile Peer Median Net Interest Margin 1 Banner Net Interest Margin 1 Earning Asset Yield Funding Cost 1. On a tax equivalent basis
Conservative investment portfolio 16 Assumes flat forward balance sheet, parallel and sustained shift in market rates ratably over a 12-month period (ramp) or immediate (shock); Base as of 6/30/26 CMO, $948, 32.2% MBS, $748, 25.4% CMBS, $429, 14.6% Municipal, $477, 16.2% ABS, $201, 6.8% Corp, $131, 4.5% Agency, $9, 0.3% Other, $2, 0.1% Y e ar s 1.88 1.36 2.43 2.14 6.46 6.23 6.06 6.03 Total Portfolio Effective Duration Duration on New Purchases Q3 2025 Q4 2025 Q1 2026 Q2 2026 0.00 2.00 4.00 6.00 8.00 6.79% 5.44% 4.62% 5.29% 2.93% 2.94% 2.94% 2.99% New Purchases Tax Effective Yield Total Portfolio Tax Effective Yield Q3 2025 Q4 2025 Q1 2026 Q2 2026 0% 2% 4% 6% 8% 12 Month Net Interest Income Sensitivity ($MM), % Change Quarterly New Purchases: Average Duration Investment Portfolio Composition ($2.95 billion) 74% of investments are Agency MBS/CMO or AAA rated 2.6% non-rated investments, principally CRA investments Portfolio is a diversified mix of asset types and blend of fixed and floating rate instruments. It remains moderately asset sensitive. Quarterly New Purchases: Average Yield $ MillionsRamp $MM Ramp % Change Shock $MM Shock % Change Up 200 645,985 1.0% 653,349 2.1% Up 100 644,867 0.8% 652,163 1.9% Base 639,777 0.0% 639,777 0.0% Down 100 633,772 (0.9)% 625,307 (2.3)% Down 200 628,916 (1.7)% 614,129 (4.0)%
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Spending carefully Benefit from scale Control core operating expense 17
$ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0 20 40 60 80 100 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 50% 60% 70% 80% 90% 100% Spending carefully Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation 18 Control core operating expense Quarter Ending Quarter Last 12 Months Amount Amount 06/30/26 $106M $406M 12/31/09 $31M $132M Peer Top Quartile Peer Median Banner Efficiency Ratio Occupancy Compensation Information Services Other Efficiency Ratio
Maintaining a moderate risk profile Embrace effective enterprise risk management Minimize non-performing assets Maintain appropriate loan loss reserve Maintain appropriate risk capital Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely 19
Commercial RE 34% Multifamily 7% Construction 14% Commercial 22% Agricultural 3% 1-4 Family 13% Consumer 7% Diversified loan portfolio 20 Loan Composition 6/30/2026 CRE Breakout $MM % Owner Ooccuped CRE 1,230 10 % Investment Properties 1,744 14 % Small Balance CRE 1,167 10 % Total Comm CRE 4,141 34 % Construction Breakout $MM % Commercial 182 2 % Multifamily 503 4 % 1-4 Family 631 5 % Land 378 3 % Total Construction 1,694 14 % Loan Originations (commitments, $MM) A ve rag e Y ie ld 8.47% 8.23% 7.56% 8.01% 7.27% 7.35% 6.88%6.69% 6.53% Commercial RE Multifamily Construction Commercial Agricultural 1-4 Fam Consumer Avg Yield on New Loan Originations Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 Q4' 25 Q1 '26 Q2 '26 0 200 400 600 800 1,000 1,200 1,400 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
21 Characteristics of highlighted loan segments Office 1 Balances ($MM) $637.2 Percent of Total Loans 5.3% Total Investor Office $345.2 Total Owner Occupied $292.0 Average Loan Size $0.8 Largest Loan Size $18.1 30 + days Past Due $0.5 Adversely Classified $0.9 Retail 2 Balances ($MM) $1,550.7 Percent of Total Loans 13.0% Balance of Retail Loans Secured by CRE * $1,436.1 Average Loan Size $0.7 Average CRE Secured Loan Size $0.9 Largest Loan Size $47.4 30 + days Past Due $5.6 Adversely Classified $20.5 * No mall exposure Healthcare 3 Balances ($MM) $470.8 Percent of Total Loans 3.9% Balance Secured by Medical Office * $190.3 Medical Office as a % of Total Loans 1.6% Average Loan Size $0.6 Average Medical Office Size $0.9 Largest Loan Size $18.5 30 + days Past Due $0.8 Adversely Classified $13.5 * No hospital exposure 1 By collateral code 2 Retail business loans, both commercial and commercial real estate secured loans 3 All healthcare and social services, including both commercial and commercial real estate secured loans Multifamily Balances ($MM) $855.9 Percent of Total Loans 7.2% Total Affordable Housing $483.5 Total Market Rent/ Middle Income $372.3 Average Loan Size $1.7 Largest Loan Size $20.1 30 + days Past Due $0.2 Adversely Classified $2.0 CA 39% ID 6% OR 15% Other 2% WA 38% CA 31% ID 7% OR 17% Other 5% WA 40% CA 24% ID 4% OR 14% Other 4% WA 54% CA 35% ID 1% OR 22% Other 3% WA 39% As of 6/30/26
22 As of 6/30/26 Origination Year Portfolio Segment Balance % Owner Occupied 2026 2025 2024 2023 and earlier Office $637.2 46% $54.9 $70.7 $19.1 $492.5 Retail (CRE Secured) $1,436.1 56% $170.1 $183.1 $210.6 $872.2 Medical Office $190.3 45% $30.4 $26.3 $12.7 $121.0 Multifamily $855.9 0% $4.9 $18.9 $30.0 $802.2 As of 6/30/26 Scheduled Maturity or Next Reprice Date (excludes variable rate loans) Portfolio Segment Balance < 12 months 1 - 2 years 2 - 3 years 3 - 5 years > 5 years Office $637.2 $110.5 $62.8 $68.8 $205.4 $92.4 Retail (CRE Secured) $1,436.1 $167.7 $111.1 $197.5 $556.9 $149.2 Medical Office $190.3 $20.6 $11.4 $20.2 $84.2 $24.8 Multifamily $855.9 $149.2 $30.8 $40.5 $88.7 $454.1 Characteristics of highlighted loan segments $ in Millions
Allowance for credit losses 23 $ M ill io n s ACL Provision 2.4 1.7 3.0 3.1 4.8 2.7 2.4 3.8 -0.8 20 24 -Q 2 20 24 -Q 3 20 24 -Q 4 20 25 -Q 1 20 25 -Q 2 20 25 -Q 3 20 25 -Q 4 20 26 -Q 1 20 26 -Q 2 $ M ill io n s $108.4 $167.3 $132.1 $141.5$149.6$155.5$160.3$160.4$161.8 1.16% 1.90% 1.48% 1.39% 1.38% 1.37% 1.37% 1.37% 1.35% ACL - Loans ACL - Loans as % of Loans, excluding PPP C EC L D ay 1 12 /3 1/ 20 20 12 /3 1/ 20 21 12 /3 1/ 20 22 12 /3 1/ 20 23 12 /3 1/ 20 24 12 /3 1/ 20 25 20 26 -Q 1 20 26 -Q 2 Allocation of Allowance for Credit Losses-Loans as of 6/30/26 Allowance ($000) % Coverage Non-performing ($000) % Coverage NPLs Commercial RE 42,167 1.02% 2,366 NM* Multifamily 9,859 1.15% 0 0% Construction 32,124 1.90% 12,648 254% 1-4 Family 19,478 1.25% 24,825 78% Commercial 41,114 1.59% 6,968 590% Agricultural 5,859 1.74% 2,967 197% Consumer 11,248 1.36% 5,049 223% Total 161,849 1.35% 54,823 295% *not meaningful
20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $ M ill io n s 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 20 24 -Q 4 20 25 -Q 4 0 50 100 150 200 250 300 350Minimize non-performing assets Quarter Ending NPAs REO Amount % of TA Amount % of TA 06/30/26 $61M 0.36% $6M 0.03% 12/31/09 $292M 6.11% $78M 2.01% Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation Maintaining a moderate risk profile ACLL Real Estate Owned Non-performing Loans Peer Top Quartile Peer Median Banner ACLL to Total Loans 24
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Employing capital wisely Maintain premium to tangible book value Pay appropriate dividends Prepare for future opportunities 25
Reconciliation of non-GAAP measures 26 $ Thousands Quarters Ended PRE-TAX PRE-PROVISION EARNINGS Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Income before provision for income taxes (GAAP) $ 60,154 $ 67,518 $ 56,007 Provision for credit losses 3,818 (796) 4,795 Pre-tax pre-provision earnings (non-GAAP) 63,972 66,722 60,802 Exclude net (gain)/loss on sale of securities (8) 1,242 3 Exclude net change in valuation of financial instruments carried at fair value 157 (1,662) (88) Exclude merger and acquisition-related expenses 238 — — Exclude net building and lease exit costs 47 9 1,753 Adjusted pre-tax pre-provision earnings (non-GAAP) $ 64,406 $ 66,311 $ 62,470
Building value at Banner Building value for … Shareholders by delivering top quartile financial performance Clients by delivering super community bank service and products Employees by offering opportunity and reward Communities by providing capital and staying involved 27
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Cover
Jul. 22, 2026
Document Information [Line Items]
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Document Period End Date
Jul. 22, 2026
Entity Registrant Name
Banner Corporation
Entity Incorporation, State or Country Code
WA
Entity File Number
000-26584
Entity Tax Identification Number
91-1691604
Entity Address, Address Line One
10 S. First Avenue,
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Walla Walla
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WA
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99362
City Area Code
509
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+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
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- Definition
Name of the Exchange on which a security is registered.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
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- Definition
Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
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- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
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