BANR 8-K
Banner Corp (BANR)
8-K
2025-10-15
For: 2025-10-15
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April 10, 2026
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): October 15, 2025
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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:
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[
[
[
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 October 15, 2025, Banner Corporation issued its earnings release for the quarter ended September 30, 2025. 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 October 16, 2025, and from time to time in presentations to investors and other stakeholders.
Item 8.01 Other Events.
On October 15, 2025, Banner Corporation announced its Board of Directors declared a regular quarterly cash dividend on Banner Corporation common stock of $0.50 per share, payable on November 14, 2025 to stockholders of record as of the close of business on November 4, 2025.
Item 9.01 Financial Statements and Exhibits.*
(d) Exhibits
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: October 15, 2025 | By: /s/ Robert G Butterfield | ||||
| Robert G Butterfield | |||||
| Executive Vice President, Treasurer and Chief Financial Officer | |||||
Exhibit 99.1
 |  | CONTACT: | MARK J. GRESCOVICH, | ||||||||
| PRESIDENT & CEO | |||||||||||
| ROBERT G. BUTTERFIELD, CFO | |||||||||||
| (509) 527-3636 | |||||||||||
| NEWS RELEASE | |||||||||||
Banner Corporation Reports Net Income of $53.5 Million, or $1.54 Per Diluted Share, for Third Quarter 2025;
Increases Quarterly Cash Dividend Declared by 4% to $0.50 Per Share
Walla Walla, WA - October 15, 2025 - Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $53.5 million, or $1.54 per diluted share, for the third quarter of 2025, compared to $45.5 million, or $1.31 per diluted share, for the preceding quarter and $45.2 million, or $1.30 per diluted share, for the third quarter of 2024. Net interest income was $150.0 million for the third quarter of 2025, compared to $144.4 million in the preceding quarter and $135.7 million for the third quarter a year ago. The increase in net interest income compared to the preceding quarter and the prior year quarter reflects an increase in both the yield and average balance of interest-earning assets. The increase in net interest income compared to the prior year quarter also reflects a decrease in overall funding costs. Third quarter 2025 results included a $2.7 million provision for credit losses, compared to $4.8 million in the preceding quarter and $1.7 million in the third quarter of 2024. Net income was $144.1 million, or $4.15 per diluted share, for the nine months ended September 30, 2025, compared to net income of $122.5 million, or $3.54 per diluted share, for the nine months ended September 30, 2024. Banner’s results for the nine months ended September 30, 2025 include a $10.6 million provision for credit losses, a $374,000 net gain on the sale of securities and a $626,000 net increase in the fair value adjustments on financial instruments carried at fair value, compared to a $4.6 million provision for credit losses, a $5.5 million net loss on the sale of securities and a $1.1 million net decrease in the fair value adjustments on financial instruments carried at fair value during the same period in 2024.
Banner announced that its Board of Directors increased its regular quarterly cash dividend by 4% to $0.50 per share payable November 14, 2025, to common shareholders of record on November 4, 2025.
“Banner’s third quarter performance reflects the continued strength of our super community bank strategy, which focuses on building client relationships, preserving a strong funding base, and delivering exceptional service while sustaining a moderate risk profile,” said Mark Grescovich, President and CEO. “Our earnings for the third quarter of 2025 benefited from solid year over year loan growth as well as higher yields on interest-earning assets. The strategic investments we have made across the organization are generating meaningful returns and are further strengthening Banner for long-term success. Additionally, Banner continues to demonstrate strong credit quality, supported by stable credit metrics, a well-funded reserve for loan losses, and a robust capital position that provides resilience and flexibility for future growth. We also continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter-end. For 135 years, Banner has stayed true to 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 navigate change with confidence and continue building a strong foundation for the future.”
At September 30, 2025, Banner, on a consolidated basis, had $16.56 billion in assets, $11.54 billion in net loans and $14.02 billion in deposits. Banner operates 135 full-service branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 2
Third Quarter 2025 Highlights
•Net interest margin, on a tax equivalent basis, was 3.98% for the current quarter, compared to 3.92% in the preceding quarter and 3.72% in the third quarter a year ago.
•Revenue increased 5% to $170.7 million for the third quarter of 2025, compared to $162.2 million in the preceding quarter and increased 11% from $153.7 million in the third quarter a year ago.
•Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities, the net change in valuation of financial instruments, and gains or losses incurred on building and lease exits) was $168.7 million in the third quarter of 2025, compared to $163.0 million in the preceding quarter and $153.7 million in the third quarter a year ago.
•Net interest income was $150.0 million in the third quarter of 2025, compared to $144.4 million in the preceding quarter and increased 11% from $135.7 million in the third quarter a year ago.
•Mortgage banking operations revenue was $3.3 million for the third quarter of 2025, compared to $3.2 million in both the preceding quarter and the third quarter a year ago.
•Return on average assets was 1.30% for the third quarter of 2025, compared to 1.13% in both the preceding quarter and third quarter a year ago.
•Net loans receivable were $11.54 billion at September 30, 2025, compared to $11.53 billion at June 30, 2025, and increased 4% compared to $11.07 billion at September 30, 2024.
•Total deposits increased 4% to $14.02 billion at September 30, 2025, compared to $13.53 billion at June 30, 2025 and $13.54 billion at September 30, 2024.
•Core deposits represented 89% of total deposits at September 30, 2025.
•Non-performing assets were $45.3 million, or 0.27% of total assets, at September 30, 2025, compared to $49.8 million, or 0.30% of total assets, at June 30, 2025 and $45.2 million, or 0.28% of total assets, at September 30, 2024.
•The allowance for credit losses - loans was $159.7 million, or 1.36% of total loans receivable, as of September 30, 2025, compared to $160.5 million, or 1.37% of total loans receivable, as of June 30, 2025 and $154.6 million, or 1.38% of total loans receivable, as of September 30, 2024.
•Dividends paid to shareholders were $0.48 per share in the quarter ended September 30, 2025.
•Common shareholders’ equity per share increased 3% to $55.71 at September 30, 2025, compared to $53.95 at the preceding quarter end, and increased 7% from $52.06 at September 30, 2024.
•Tangible common shareholders’ equity per share* increased 4% to $44.79 at September 30, 2025, compared to $43.09 at June 30, 2025, and increased 9% from $41.12 at September 30, 2024.
•Repurchased 250,000 shares of Banner common stock during the third quarter of 2025 at an average price of $63.11 per share.
*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.
Income Statement Review
Net interest income was $150.0 million in the third quarter of 2025, compared to $144.4 million in the preceding quarter and $135.7 million in the third quarter a year ago. Net interest margin, on a tax equivalent basis, increased six basis points to 3.98% for the third quarter of 2025, compared to 3.92% for the preceding quarter, and increased 26 basis points compared to 3.72% in the third quarter a year ago. The net interest margin for the current quarter benefited from higher yields on interest-earning assets and lower funding costs.
Interest income was $205.8 million in the third quarter of 2025, compared to $200.3 million in the preceding quarter and $195.8 million in the third quarter a year ago. Average yields on interest-earning assets increased three basis points to 5.43% for the third quarter of 2025, compared to 5.40% for the preceding quarter, and increased 10 basis points compared to 5.33% in the third quarter a year ago, primarily due to increases in average loan yields. Average loan yields increased five basis points to 6.17%, compared to 6.12% in the preceding quarter, and increased 13 basis points compared to 6.04% in the third quarter a year ago. The increase in average loan yields during the current quarter primarily reflects new loans being originated at higher interest rates and adjustable-rate loans repricing higher.
Interest expense was $55.9 million in both the third quarter of 2025 and the preceding quarter, compared to $60.2 million in the third quarter a year ago. Total deposit costs increased three basis points to 1.50% in the third quarter of 2025, compared to 1.47% the preceding quarter and decreased 11 basis points compared to 1.61% in the third quarter a year ago. The decrease in deposit costs in the current quarter compared to the same quarter a year ago was primarily due to interest rate declines in the second half of 2024. The average rate paid on borrowings decreased 29 basis points to 4.18% in the third quarter of 2025, compared to 4.47% in the preceding quarter, and decreased compared to 5.08% in the third quarter a year ago, primarily due to declines in both market interest rates and the average balance of borrowings. The total cost of funding liabilities decreased three basis points to 1.57% in the third quarter of 2025, compared to 1.60% in the preceding quarter, primarily due to a decrease in the average balance of FHLB advances, as the increase in deposits was used to pay down borrowings. The total cost of funding liabilities also decreased 16 basis points from 1.73% in the third quarter a year ago, primarily due to deposit interest rate declines and decreases in both the average balance and cost of borrowings, partially offset by an increase in the average balance of interest-bearing deposits.
A $2.7 million provision for credit losses was recorded in the current quarter (comprised of a $1.4 million provision for credit losses - loans and a $1.3 million provision for credit losses - unfunded loan commitments). This compares to a $4.8 million provision for credit losses in the prior quarter (comprised of a $4.2 million provision for credit losses - loans and a $588,000 provision for credit losses - unfunded loan commitments) and a $1.7 million provision for credit losses in the third quarter a year ago (comprised of a $2.0 million provision for credit losses - loans and a $262,000 recapture of provision for credit losses - unfunded loan commitments). The provision for credit losses in the quarter was driven by changes in both portfolio mix and individually evaluated loans.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 3
Total non-interest income was $20.7 million in the third quarter of 2025, compared to $17.8 million in the preceding quarter and $18.1 million in the third quarter a year ago. The increase from the preceding quarter was primarily due to a $2.0 million increase in miscellaneous income, which reflected gains recognized on the sale of assets during the current quarter, compared to losses incurred on building and lease exits during the prior quarter associated with Banner’s reduction of excess office space. The increase compared to the prior year quarter was also primarily due to the increase in miscellaneous income resulting from the disposition of assets. Total non-interest income was $57.6 million for the nine months ended September 30, 2025, compared to $46.9 million for the same period a year earlier.
Mortgage banking operations revenue was $3.3 million in the third quarter of 2025, compared to $3.2 million in both the preceding quarter and the third quarter a year ago. The volume of one- to four-family loans sold during the current quarter increased compared to both the preceding quarter and the prior year quarter. Home purchase activity accounted for 88% of one- to four-family mortgage loan originations in the third quarter of 2025, compared to 85% in the preceding quarter and 88% in the third quarter of 2024.
Total non-interest expense was $102.0 million in the third quarter of 2025, compared to $101.3 million in the preceding quarter and $96.3 million in the third quarter of 2024. The increase from the previous quarter reflected a $450,000 increase in miscellaneous expense due to an increase in talent acquisition and other employee related expenses and a $308,000 increase in advertising and marketing expenses due to increases in direct mail marketing and community development expenses, partially offset by a $551,000 decrease in salary and employee benefits resulting from decreased medical premiums expense and payroll taxes. In addition, the current quarter included losses of $1.0 million in building and lease exit costs, compared to $834,000 of such costs in the previous quarter. The increase compared to the same quarter a year ago primarily reflects increases in salary and employee benefits, information and computer data services and professional and legal expenses. For the nine months ended September 30, 2025, total non-interest expense was $304.6 million, compared to $292.1 million for the nine months ended September 30, 2024.
Banner’s efficiency ratio was 59.76% for the third quarter of 2025, compared to 62.50% in the preceding quarter and 62.63% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 58.54% for the third quarter of 2025, compared to 60.28% in the preceding quarter and 61.27% in the year-ago quarter. The improvement in Banner’s efficiency ratio compared to both the preceding and prior year quarters primarily reflected stronger net interest margins, combined with controlled growth in operating expenses. 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 $16.56 billion at September 30, 2025, up from $16.44 billion at June 30, 2025 and $16.19 billion at September 30, 2024. The increase compared to the prior quarter was primarily due to an increase in interest-bearing deposits held at other banks, partially offset by decreases in securities. Securities and interest-bearing deposits held at other banks totaled $3.47 billion at September 30, 2025, compared to $3.29 billion at June 30, 2025 and $3.50 billion at September 30, 2024. The average effective duration of the securities portfolio was approximately 6.4 years at September 30, 2025, compared to 6.3 years at September 30, 2024.
Total loans receivable were $11.70 billion at September 30, 2025, up from $11.69 billion at June 30, 2025 and up 4% compared to $11.22 billion at September 30, 2024. Commercial real estate loans increased to $4.00 billion at September 30, 2025, compared to $3.97 billion at June 30, 2025, and increased 5% compared to $3.79 billion at September 30, 2024. The increase in commercial real estate loans from both June 30, 2025 and September 30, 2024 was a combination of both new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase. Construction, land and land development loans increased 2% to $1.74 billion at September 30, 2025, compared to $1.70 billion at June 30, 2025, and increased 14% compared to $1.53 billion at September 30, 2024. The increase from both June 30, 2025 and September 30, 2024 was primarily due to new production and advances, partially offset by payoffs and transfers to the portfolio upon the completion of the construction phase. Commercial business loans decreased 2% to $2.43 billion at September 30, 2025, compared to $2.47 billion at June 30, 2025, primarily due to payoffs and paydowns outpacing new loan production, and increased 3% compared to $2.37 billion at September 30, 2024, primarily as a result of new loan production.
Loans held for sale were $20.3 million at September 30, 2025, compared to $37.7 million at June 30, 2025 and $78.8 million at September 30, 2024. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $136.9 million, compared to $104.6 million in the preceding quarter and $95.0 million in the third quarter a year ago. The decrease in loans held for sale compared to the preceding and prior year quarters was primarily the result of increased sales of one- to four- family residential mortgage loans held for sale, with loan sales outpacing originations during the quarter.
Total deposits were $14.02 billion at September 30, 2025, compared to $13.53 billion at June 30, 2025 and $13.54 billion a year ago. Core deposits increased 4% to $12.48 billion at September 30, 2025, compared to $12.05 billion at June 30, 2025, and increased 4% compared to $12.02 billion at September 30, 2024. The increase compared to the preceding and prior year quarters primarily reflects increases in interest-bearing transaction and savings accounts. Core deposits remain stable at 89% of total deposits at September 30, 2025, June 30, 2025 and September 30, 2024. Certificates of deposit increased 4% to $1.54 billion at September 30, 2025, compared to $1.48 billion at June 30, 2025, and increased from $1.52 billion a year earlier.
FHLB advances decreased 82% to $100.0 million at September 30, 2025, compared to $565.0 million at June 30, 2025 and decreased 57% compared to $230.0 million a year ago as deposits were used as the primary source of funds during the current quarter. At September 30, 2025, off-balance sheet liquidity included additional borrowing capacity of $3.25 billion at the FHLB and $1.63 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 4
At September 30, 2025, total common shareholders’ equity was $1.91 billion or 11.55% of total assets, compared to $1.87 billion or 11.35% of total assets at June 30, 2025, and $1.79 billion or 11.08% of total assets at September 30, 2024. The increase at September 30, 2025 compared to June 30, 2025 was due to a $36.7 million increase in retained earnings resulting from $53.5 million in net income, partially offset by the accrual of $16.8 million of cash dividends during the third quarter of 2025. In addition, Banner repurchased 250,000 shares of its common stock in the third quarter of 2025 at an average price of $63.11 per share. At September 30, 2025, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.54 billion, or 9.50% of tangible assets, compared to $1.49 billion, or 9.28% of tangible assets, at June 30, 2025, and $1.42 billion, or 8.96% 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 September 30, 2025, Banner’s estimated common equity Tier 1 capital ratio was 12.78%, its estimated Tier 1 leverage capital to average assets ratio was 11.33%, and its estimated total capital to risk-weighted assets ratio was 14.66%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.
Credit Quality
The allowance for credit losses - loans was $159.7 million, or 1.36% of total loans receivable and 399% of non-performing loans, at September 30, 2025, compared to $160.5 million, or 1.37% of total loans receivable and 373% of non-performing loans, at June 30, 2025, and $154.6 million, or 1.38% of total loans receivable and 359% of non-performing loans, at September 30, 2024. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $14.0 million at September 30, 2025, compared to $12.8 million at June 30, 2025, and $13.8 million at September 30, 2024. Net loan charge-offs totaled $2.2 million in the third quarter of 2025, compared to net loan charge-offs of $1.0 million and $230,000 in the preceding quarter and third quarter a year ago, respectively. Non-performing loans were $40.0 million at September 30, 2025, compared to $43.0 million at June 30, 2025, and $43.0 million a year ago. Substandard loans were $174.0 million as of September 30, 2025, compared to $189.5 million as of June 30, 2025 and $150.1 million a year ago. Total non-performing assets were $45.3 million, or 0.27% of total assets, at September 30, 2025, compared to $49.8 million, or 0.30% of total assets, at June 30, 2025, and $45.2 million, or 0.28% of total assets, a year ago.
Conference Call
Banner will host a conference call on Thursday, October 16, 2025, at 8:00 a.m. PDT, to discuss its third quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (833) 470-1428 using access code 613608 to participate in the call. A replay of the call will be available at www.bannerbank.com.
About the Company
Banner Corporation is a $16.56 billion bank holding company operating a commercial bank in four Western states 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 - Third Quarter 2025 Results
October 15, 2025
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 and the duration 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, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors, including, but not limited to, agriculture-based lending; (5) the effects of federal government shutdowns, debt ceiling standoff, or other fiscal policy uncertainty; (6) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (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 affecting pricing, market share 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, 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 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.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 6
| RESULTS OF OPERATIONS | Quarters Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
| (in thousands except shares and per share data) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | |||||||||||||||||||||||||||
| INTEREST INCOME: | ||||||||||||||||||||||||||||||||
| Loans receivable | $ | 179,065 | $ | 175,373 | $ | 168,338 | $ | 523,115 | $ | 486,004 | ||||||||||||||||||||||
| Mortgage-backed securities | 15,090 | 15,416 | 16,357 | 46,250 | 49,999 | |||||||||||||||||||||||||||
| Securities and cash equivalents | 11,693 | 9,470 | 11,146 | 30,610 | 33,664 | |||||||||||||||||||||||||||
| Total interest income | 205,848 | 200,259 | 195,841 | 599,975 | 569,667 | |||||||||||||||||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||||||||||||||||
| Deposits | 52,251 | 49,316 | 53,785 | 150,304 | 147,248 | |||||||||||||||||||||||||||
| Federal Home Loan Bank (FHLB) advances | 1,527 | 3,370 | 2,263 | 5,757 | 8,856 | |||||||||||||||||||||||||||
| Other borrowings | 694 | 675 | 1,147 | 2,063 | 3,482 | |||||||||||||||||||||||||||
Subordinated debt | 1,387 | 2,499 | 2,971 | 6,380 | 8,901 | |||||||||||||||||||||||||||
| Total interest expense | 55,859 | 55,860 | 60,166 | 164,504 | 168,487 | |||||||||||||||||||||||||||
| Net interest income | 149,989 | 144,399 | 135,675 | 435,471 | 401,180 | |||||||||||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | 2,670 | 4,795 | 1,692 | 10,604 | 4,581 | |||||||||||||||||||||||||||
| Net interest income after provision for credit losses | 147,319 | 139,604 | 133,983 | 424,867 | 396,599 | |||||||||||||||||||||||||||
| NON-INTEREST INCOME: | ||||||||||||||||||||||||||||||||
| Deposit fees and other service charges | 10,955 | 10,835 | 10,741 | 32,559 | 32,353 | |||||||||||||||||||||||||||
| Mortgage banking operations | 3,298 | 3,226 | 3,180 | 9,627 | 8,521 | |||||||||||||||||||||||||||
| Bank-owned life insurance | 2,702 | 2,384 | 2,445 | 7,661 | 7,049 | |||||||||||||||||||||||||||
| Miscellaneous | 3,175 | 1,221 | 1,658 | 6,742 | 5,538 | |||||||||||||||||||||||||||
| 20,130 | 17,666 | 18,024 | 56,589 | 53,461 | ||||||||||||||||||||||||||||
| Net gain (loss) on sale of securities | 377 | (3) | — | 374 | (5,465) | |||||||||||||||||||||||||||
| Net change in valuation of financial instruments carried at fair value | 223 | 88 | 39 | 626 | (1,143) | |||||||||||||||||||||||||||
| Total non-interest income | 20,730 | 17,751 | 18,063 | 57,589 | 46,853 | |||||||||||||||||||||||||||
| NON-INTEREST EXPENSE: | ||||||||||||||||||||||||||||||||
| Salary and employee benefits | 64,935 | 65,486 | 61,832 | 195,278 | 188,032 | |||||||||||||||||||||||||||
| Less capitalized loan origination costs | (4,802) | (4,924) | (4,354) | (13,056) | (12,669) | |||||||||||||||||||||||||||
| Occupancy and equipment | 12,518 | 12,256 | 12,040 | 36,871 | 36,630 | |||||||||||||||||||||||||||
| Information and computer data services | 8,199 | 8,199 | 7,134 | 24,026 | 21,694 | |||||||||||||||||||||||||||
| Payment and card processing services | 6,060 | 5,899 | 5,346 | 17,709 | 16,747 | |||||||||||||||||||||||||||
| Professional and legal expenses | 2,190 | 2,271 | 2,102 | 6,891 | 4,833 | |||||||||||||||||||||||||||
| Advertising and marketing | 1,395 | 1,087 | 1,161 | 3,072 | 3,438 | |||||||||||||||||||||||||||
| Deposit insurance | 2,867 | 2,800 | 2,874 | 8,464 | 8,541 | |||||||||||||||||||||||||||
| State and municipal business and use taxes | 1,655 | 1,416 | 1,432 | 4,525 | 4,130 | |||||||||||||||||||||||||||
| Real estate operations, net | 203 | 392 | 103 | 534 | 180 | |||||||||||||||||||||||||||
| Amortization of core deposit intangibles | 341 | 455 | 590 | 1,252 | 2,037 | |||||||||||||||||||||||||||
| Miscellaneous | 6,461 | 6,011 | 6,031 | 19,063 | 18,467 | |||||||||||||||||||||||||||
| Total non-interest expense | 102,022 | 101,348 | 96,291 | 304,629 | 292,060 | |||||||||||||||||||||||||||
| Income before provision for income taxes | 66,027 | 56,007 | 55,755 | 177,827 | 151,392 | |||||||||||||||||||||||||||
| PROVISION FOR INCOME TAXES | 12,525 | 10,511 | 10,602 | 33,694 | 28,885 | |||||||||||||||||||||||||||
| NET INCOME | $ | 53,502 | $ | 45,496 | $ | 45,153 | $ | 144,133 | $ | 122,507 | ||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||||||||
| Basic | $ | 1.55 | $ | 1.31 | $ | 1.31 | $ | 4.17 | $ | 3.56 | ||||||||||||||||||||||
| Diluted | $ | 1.54 | $ | 1.31 | $ | 1.30 | $ | 4.15 | $ | 3.54 | ||||||||||||||||||||||
| Cumulative dividends declared per common share | $ | 0.48 | $ | 0.48 | $ | 0.48 | $ | 1.44 | $ | 1.44 | ||||||||||||||||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||||||||||||||||
| Basic | 34,494,824 | 34,627,433 | 34,498,830 | 34,543,969 | 34,459,662 | |||||||||||||||||||||||||||
| Diluted | 34,659,346 | 34,738,948 | 34,650,322 | 34,730,103 | 34,575,498 | |||||||||||||||||||||||||||
| (Decrease) increase in common shares outstanding | (248,697) | 94,022 | 936 | (124,535) | 108,319 | |||||||||||||||||||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 7
| FINANCIAL CONDITION | Percentage Change | |||||||||||||||||||||||||||||||||||||
| (in thousands except shares and per share data) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | Prior Qtr | Prior Yr Qtr | ||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 193,453 | $ | 239,339 | $ | 203,402 | $ | 226,568 | (19) | % | (15) | % | ||||||||||||||||||||||||||
| Interest-bearing deposits | 479,410 | 244,009 | 298,456 | 252,227 | 96 | % | 90 | % | ||||||||||||||||||||||||||||||
Total cash and cash equivalents | 672,863 | 483,348 | 501,858 | 478,795 | 39 | % | 41 | % | ||||||||||||||||||||||||||||||
Securities - available for sale, amortized cost $2,292,835, $2,372,331, $2,460,262 and $2,523,968, respectively | 2,018,525 | 2,064,581 | 2,104,511 | 2,237,939 | (2) | % | (10) | % | ||||||||||||||||||||||||||||||
Securities - held to maturity, fair value $815,434, $801,838, $825,528 and $879,278, respectively | 971,603 | 981,312 | 1,001,564 | 1,013,903 | (1) | % | (4) | % | ||||||||||||||||||||||||||||||
Total securities | 2,990,128 | 3,045,893 | 3,106,075 | 3,251,842 | (2) | % | (8) | % | ||||||||||||||||||||||||||||||
| FHLB stock | 14,226 | 35,151 | 22,451 | 19,751 | (60) | % | (28) | % | ||||||||||||||||||||||||||||||
| Loans held for sale | 20,334 | 37,651 | 32,021 | 78,841 | (46) | % | (74) | % | ||||||||||||||||||||||||||||||
| Loans receivable | 11,702,538 | 11,690,373 | 11,354,656 | 11,224,606 | — | % | 4 | % | ||||||||||||||||||||||||||||||
| Allowance for credit losses – loans | (159,707) | (160,501) | (155,521) | (154,585) | — | % | 3 | % | ||||||||||||||||||||||||||||||
Net loans receivable | 11,542,831 | 11,529,872 | 11,199,135 | 11,070,021 | — | % | 4 | % | ||||||||||||||||||||||||||||||
| Accrued interest receivable | 64,914 | 64,729 | 60,885 | 66,981 | — | % | (3) | % | ||||||||||||||||||||||||||||||
| Property and equipment, net | 113,848 | 117,175 | 124,589 | 125,256 | (3) | % | (9) | % | ||||||||||||||||||||||||||||||
| Goodwill | 373,121 | 373,121 | 373,121 | 373,121 | — | % | — | % | ||||||||||||||||||||||||||||||
| Other intangibles, net | 1,806 | 2,147 | 3,058 | 3,647 | (16) | % | (50) | % | ||||||||||||||||||||||||||||||
| Bank-owned life insurance | 317,469 | 316,365 | 312,549 | 310,400 | — | % | 2 | % | ||||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 35,494 | 38,754 | 39,998 | 38,192 | (8) | % | (7) | % | ||||||||||||||||||||||||||||||
| Other assets | 416,047 | 392,963 | 424,297 | 371,829 | 6 | % | 12 | % | ||||||||||||||||||||||||||||||
Total assets | $ | 16,563,081 | $ | 16,437,169 | $ | 16,200,037 | $ | 16,188,676 | 1 | % | 2 | % | ||||||||||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||||||||||||||||
| Non-interest-bearing | $ | 4,572,338 | $ | 4,504,491 | $ | 4,591,543 | $ | 4,688,244 | 2 | % | (2) | % | ||||||||||||||||||||||||||
| Interest-bearing transaction and savings accounts | 7,903,215 | 7,545,028 | 7,423,183 | 7,328,051 | 5 | % | 8 | % | ||||||||||||||||||||||||||||||
| Interest-bearing certificates | 1,540,382 | 1,477,772 | 1,499,672 | 1,521,853 | 4 | % | 1 | % | ||||||||||||||||||||||||||||||
| Total deposits | 14,015,935 | 13,527,291 | 13,514,398 | 13,538,148 | 4 | % | 4 | % | ||||||||||||||||||||||||||||||
| Advances from FHLB | 100,000 | 565,000 | 290,000 | 230,000 | (82) | % | (57) | % | ||||||||||||||||||||||||||||||
| Other borrowings | 120,536 | 117,112 | 125,257 | 154,533 | 3 | % | (22) | % | ||||||||||||||||||||||||||||||
| Subordinated notes, net | — | — | 80,278 | 80,170 | — | % | (100) | % | ||||||||||||||||||||||||||||||
| Junior subordinated debentures at fair value | 76,251 | 73,366 | 67,477 | 66,257 | 4 | % | 15 | % | ||||||||||||||||||||||||||||||
| Operating lease liabilities | 38,826 | 41,696 | 43,472 | 42,318 | (7) | % | (8) | % | ||||||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 251,464 | 200,194 | 258,070 | 237,128 | 26 | % | 6 | % | ||||||||||||||||||||||||||||||
| Deferred compensation | 47,177 | 46,846 | 46,759 | 46,401 | 1 | % | 2 | % | ||||||||||||||||||||||||||||||
| Total liabilities | 14,650,189 | 14,571,505 | 14,425,711 | 14,394,955 | 1 | % | 2 | % | ||||||||||||||||||||||||||||||
| SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||||||||||||||||||
| Common stock | 1,295,821 | 1,309,004 | 1,307,509 | 1,304,792 | (1) | % | (1) | % | ||||||||||||||||||||||||||||||
| Retained earnings | 837,826 | 801,082 | 744,091 | 714,472 | 5 | % | 17 | % | ||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (220,755) | (244,422) | (277,274) | (225,543) | (10) | % | (2) | % | ||||||||||||||||||||||||||||||
| Total shareholders’ equity | 1,912,892 | 1,865,664 | 1,774,326 | 1,793,721 | 3 | % | 7 | % | ||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,563,081 | $ | 16,437,169 | $ | 16,200,037 | $ | 16,188,676 | 1 | % | 2 | % | ||||||||||||||||||||||||||
| Common Shares Issued: | ||||||||||||||||||||||||||||||||||||||
| Shares outstanding at end of period | 34,335,297 | 34,583,994 | 34,459,832 | 34,456,688 | ||||||||||||||||||||||||||||||||||
Common shareholders’ equity per share (1) | $ | 55.71 | $ | 53.95 | $ | 51.49 | $ | 52.06 | ||||||||||||||||||||||||||||||
Common shareholders’ tangible equity per share (1) (2) | $ | 44.79 | $ | 43.09 | $ | 40.57 | $ | 41.12 | ||||||||||||||||||||||||||||||
| Common shareholders’ equity to total assets | 11.55 | % | 11.35 | % | 10.95 | % | 11.08 | % | ||||||||||||||||||||||||||||||
Common shareholders’ tangible equity to tangible assets (2) | 9.50 | % | 9.28 | % | 8.84 | % | 8.96 | % | ||||||||||||||||||||||||||||||
| Consolidated Tier 1 leverage capital ratio | 11.33 | % | 11.29 | % | 11.05 | % | 10.91 | % | ||||||||||||||||||||||||||||||
| (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 - Third Quarter 2025 Results
October 15, 2025
Page 8
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| LOANS | Percentage Change | |||||||||||||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | Prior Qtr | Prior Yr Qtr | |||||||||||||||||||||||||||||||||
| Commercial real estate (CRE): | ||||||||||||||||||||||||||||||||||||||
| Owner-occupied | $ | 1,134,559 | $ | 1,125,249 | $ | 1,027,426 | $ | 990,516 | 1 | % | 15 | % | ||||||||||||||||||||||||||
| Investment properties | 1,652,141 | 1,625,001 | 1,623,672 | 1,583,863 | 2 | % | 4 | % | ||||||||||||||||||||||||||||||
| Small balance CRE | 1,210,357 | 1,223,477 | 1,213,792 | 1,218,822 | (1) | % | (1) | % | ||||||||||||||||||||||||||||||
| Multifamily real estate | 860,650 | 860,700 | 894,425 | 889,866 | — | % | (3) | % | ||||||||||||||||||||||||||||||
| Construction, land and land development: | ||||||||||||||||||||||||||||||||||||||
| Commercial construction | 144,125 | 159,222 | 122,362 | 124,051 | (9) | % | 16 | % | ||||||||||||||||||||||||||||||
| Multifamily construction | 586,104 | 568,058 | 513,706 | 524,108 | 3 | % | 12 | % | ||||||||||||||||||||||||||||||
| One- to four-family construction | 578,128 | 551,806 | 514,220 | 507,350 | 5 | % | 14 | % | ||||||||||||||||||||||||||||||
| Land and land development | 427,348 | 417,474 | 369,663 | 370,690 | 2 | % | 15 | % | ||||||||||||||||||||||||||||||
| Commercial business: | ||||||||||||||||||||||||||||||||||||||
| Commercial business | 1,254,460 | 1,318,483 | 1,318,333 | 1,281,615 | (5) | % | (2) | % | ||||||||||||||||||||||||||||||
| Small business scored | 1,176,889 | 1,152,531 | 1,104,117 | 1,087,714 | 2 | % | 8 | % | ||||||||||||||||||||||||||||||
| Agricultural business, including secured by farmland: | ||||||||||||||||||||||||||||||||||||||
| Agricultural business, including secured by farmland | 354,884 | 345,742 | 340,280 | 346,686 | 3 | % | 2 | % | ||||||||||||||||||||||||||||||
| One- to four-family residential | 1,582,605 | 1,610,133 | 1,591,260 | 1,575,164 | (2) | % | — | % | ||||||||||||||||||||||||||||||
| Consumer: | ||||||||||||||||||||||||||||||||||||||
| Consumer—home equity revolving lines of credit | 649,188 | 639,757 | 625,680 | 622,615 | 1 | % | 4 | % | ||||||||||||||||||||||||||||||
| Consumer—other | 91,100 | 92,740 | 95,720 | 101,546 | (2) | % | (10) | % | ||||||||||||||||||||||||||||||
| Total loans receivable | $ | 11,702,538 | $ | 11,690,373 | $ | 11,354,656 | $ | 11,224,606 | — | % | 4 | % | ||||||||||||||||||||||||||
| Loans 30 - 89 days past due and on accrual | $ | 14,674 | $ | 10,786 | $ | 26,824 | $ | 13,030 | ||||||||||||||||||||||||||||||
| Total delinquent loans (including loans on non-accrual), net | $ | 45,529 | $ | 47,764 | $ | 55,432 | $ | 44,656 | ||||||||||||||||||||||||||||||
| Total delinquent loans / Total loans receivable | 0.39 | % | 0.41 | % | 0.49 | % | 0.40 | % | ||||||||||||||||||||||||||||||
| LOANS BY GEOGRAPHIC LOCATION | Percentage Change | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | Prior Qtr | Prior Yr Qtr | |||||||||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||
| Washington | $ | 5,407,327 | 46 | % | $ | 5,438,285 | $ | 5,245,886 | $ | 5,203,637 | (1) | % | 4 | % | ||||||||||||||||||||||||||||||
| California | 3,064,993 | 26 | % | 3,010,678 | 2,861,435 | 2,796,965 | 2 | % | 10 | % | ||||||||||||||||||||||||||||||||||
| Oregon | 2,137,422 | 18 | % | 2,141,185 | 2,113,229 | 2,108,229 | — | % | 1 | % | ||||||||||||||||||||||||||||||||||
| Idaho | 668,949 | 6 | % | 671,217 | 665,158 | 652,148 | — | % | 3 | % | ||||||||||||||||||||||||||||||||||
| Utah | 79,697 | 1 | % | 70,474 | 82,459 | 85,316 | 13 | % | (7) | % | ||||||||||||||||||||||||||||||||||
| Other | 344,150 | 3 | % | 358,534 | 386,489 | 378,311 | (4) | % | (9) | % | ||||||||||||||||||||||||||||||||||
| Total loans receivable | $ | 11,702,538 | 100 | % | $ | 11,690,373 | $ | 11,354,656 | $ | 11,224,606 | — | % | 4 | % | ||||||||||||||||||||||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 9
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
| LOAN ORIGINATIONS | Quarters Ended | ||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | |||||||||||||||
| Commercial real estate | $ | 118,354 | $ | 216,189 | $ | 114,372 | |||||||||||
| Multifamily real estate | 2,500 | 13,065 | 314 | ||||||||||||||
| Construction and land | 369,363 | 411,210 | 472,506 | ||||||||||||||
| Commercial business | 167,627 | 203,656 | 179,871 | ||||||||||||||
| Agricultural business | 7,681 | 14,414 | 5,877 | ||||||||||||||
| One-to four-family residential | 6,817 | 5,491 | 24,488 | ||||||||||||||
| Consumer | 122,193 | 102,600 | 96,137 | ||||||||||||||
| Total loan originations (excluding loans held for sale) | $ | 794,535 | $ | 966,625 | $ | 893,565 | |||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 10
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS | Quarters Ended | |||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | ||||||||||||||||||
| Balance, beginning of period | $ | 160,501 | $ | 157,323 | $ | 152,848 | ||||||||||||||
| Provision for credit losses – loans | 1,384 | 4,201 | 1,967 | |||||||||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||
| Commercial real estate | 36 | 53 | 65 | |||||||||||||||||
| Construction and land | 725 | — | — | |||||||||||||||||
| One- to four-family real estate | 13 | 58 | 14 | |||||||||||||||||
| Commercial business | 99 | 361 | 613 | |||||||||||||||||
| Agricultural business, including secured by farmland | 99 | 1 | 1 | |||||||||||||||||
| Consumer | 78 | 168 | 41 | |||||||||||||||||
| 1,050 | 641 | 734 | ||||||||||||||||||
| Loans charged off: | ||||||||||||||||||||
| Construction and land | (218) | — | (145) | |||||||||||||||||
| Commercial business | (518) | (892) | (414) | |||||||||||||||||
| Agricultural business, including secured by farmland | (2,054) | (362) | — | |||||||||||||||||
| Consumer | (438) | (410) | (405) | |||||||||||||||||
| (3,228) | (1,664) | (964) | ||||||||||||||||||
| Net charge-offs | (2,178) | (1,023) | (230) | |||||||||||||||||
| Balance, end of period | $ | 159,707 | $ | 160,501 | $ | 154,585 | ||||||||||||||
| Net charge-offs / average loans receivable | (0.019) | % | (0.009) | % | (0.002) | % | ||||||||||||||
| ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | ||||||||||||||||||||||
| Commercial real estate | $ | 41,191 | $ | 41,036 | $ | 40,830 | $ | 40,040 | ||||||||||||||||||
| Multifamily real estate | 9,901 | 9,918 | 10,308 | 10,233 | ||||||||||||||||||||||
| Construction and land | 35,144 | 34,124 | 29,038 | 28,322 | ||||||||||||||||||||||
| One- to four-family real estate | 20,485 | 20,917 | 20,807 | 20,463 | ||||||||||||||||||||||
| Commercial business | 37,646 | 38,591 | 38,611 | 39,779 | ||||||||||||||||||||||
| Agricultural business, including secured by farmland | 5,268 | 6,216 | 5,727 | 5,340 | ||||||||||||||||||||||
| Consumer | 10,072 | 9,699 | 10,200 | 10,408 | ||||||||||||||||||||||
| Total allowance for credit losses – loans | $ | 159,707 | $ | 160,501 | $ | 155,521 | $ | 154,585 | ||||||||||||||||||
| Allowance for credit losses - loans / Total loans receivable | 1.36 | % | 1.37 | % | 1.37 | % | 1.38 | % | ||||||||||||||||||
| Allowance for credit losses - loans / Non-performing loans | 399 | % | 373 | % | 421 | % | 359 | % | ||||||||||||||||||
| CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS | Quarters Ended | |||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | ||||||||||||||||||
| Balance, beginning of period | $ | 12,750 | $ | 12,162 | $ | 14,027 | ||||||||||||||
| Provision (recapture) for credit losses - unfunded loan commitments | 1,290 | 588 | (262) | |||||||||||||||||
| Balance, end of period | $ | 14,040 | $ | 12,750 | $ | 13,765 | ||||||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 11
| ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| NON-PERFORMING ASSETS | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | |||||||||||||||||||
| Loans on non-accrual status: | |||||||||||||||||||||||
| Secured by real estate: | |||||||||||||||||||||||
| Commercial | $ | 460 | $ | 10 | $ | 2,186 | $ | 2,127 | |||||||||||||||
| Construction and land | 4,240 | 4,369 | 3,963 | 4,286 | |||||||||||||||||||
| One- to four-family | 16,576 | 15,480 | 10,016 | 9,592 | |||||||||||||||||||
| Commercial business | 6,824 | 6,647 | 7,067 | 10,705 | |||||||||||||||||||
| Agricultural business, including secured by farmland | 5,765 | 8,690 | 8,485 | 7,703 | |||||||||||||||||||
| Consumer | 4,877 | 4,802 | 4,835 | 4,636 | |||||||||||||||||||
| 38,742 | 39,998 | 36,552 | 39,049 | ||||||||||||||||||||
| Loans more than 90 days delinquent, still on accrual: | |||||||||||||||||||||||
| Secured by real estate: | |||||||||||||||||||||||
| Commercial | 274 | — | — | 2,258 | |||||||||||||||||||
| Construction and land | — | — | — | 380 | |||||||||||||||||||
| One- to four-family | 834 | 2,896 | 369 | 961 | |||||||||||||||||||
| Commercial business | 166 | — | — | — | |||||||||||||||||||
| Consumer | — | 80 | 35 | 359 | |||||||||||||||||||
| 1,274 | 2,976 | 404 | 3,958 | ||||||||||||||||||||
| Total non-performing loans | 40,016 | 42,974 | 36,956 | 43,007 | |||||||||||||||||||
| REO | 5,272 | 6,801 | 2,367 | 2,221 | |||||||||||||||||||
| Other repossessed assets | — | — | 300 | — | |||||||||||||||||||
| Total non-performing assets | $ | 45,288 | $ | 49,775 | $ | 39,623 | $ | 45,228 | |||||||||||||||
| Total non-performing assets to total assets | 0.27 | % | 0.30 | % | 0.24 | % | 0.28 | % | |||||||||||||||
| LOANS BY CREDIT RISK RATING | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | |||||||||||||||||||
| Pass | $ | 11,491,485 | $ | 11,432,456 | $ | 11,118,744 | $ | 11,022,014 | |||||||||||||||
| Special Mention | 37,013 | 68,372 | 43,451 | 52,497 | |||||||||||||||||||
| Substandard | 174,040 | 189,545 | 192,461 | 150,095 | |||||||||||||||||||
| Total | $ | 11,702,538 | $ | 11,690,373 | $ | 11,354,656 | $ | 11,224,606 | |||||||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 12
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| DEPOSIT COMPOSITION | Percentage Change | |||||||||||||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | Prior Qtr | Prior Yr Qtr | |||||||||||||||||||||||||||||||||
| Non-interest-bearing | $ | 4,572,338 | $ | 4,504,491 | $ | 4,591,543 | $ | 4,688,244 | 2 | % | (2) | % | ||||||||||||||||||||||||||
| Interest-bearing checking | 2,734,822 | 2,534,900 | 2,393,864 | 2,344,561 | 8 | % | 17 | % | ||||||||||||||||||||||||||||||
| Regular savings accounts | 3,705,823 | 3,538,372 | 3,478,423 | 3,339,859 | 5 | % | 11 | % | ||||||||||||||||||||||||||||||
| Money market accounts | 1,462,570 | 1,471,756 | 1,550,896 | 1,643,631 | (1) | % | (11) | % | ||||||||||||||||||||||||||||||
| Total interest-bearing transaction and savings accounts | 7,903,215 | 7,545,028 | 7,423,183 | 7,328,051 | 5 | % | 8 | % | ||||||||||||||||||||||||||||||
| Total core deposits | 12,475,553 | 12,049,519 | 12,014,726 | 12,016,295 | 4 | % | 4 | % | ||||||||||||||||||||||||||||||
| Interest-bearing certificates | 1,540,382 | 1,477,772 | 1,499,672 | 1,521,853 | 4 | % | 1 | % | ||||||||||||||||||||||||||||||
| Total deposits | $ | 14,015,935 | $ | 13,527,291 | $ | 13,514,398 | $ | 13,538,148 | 4 | % | 4 | % | ||||||||||||||||||||||||||
| GEOGRAPHIC CONCENTRATION OF DEPOSITS | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | Percentage Change | |||||||||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Amount | Amount | Prior Qtr | Prior Yr Qtr | ||||||||||||||||||||||||||||||||||||||
| Washington | $ | 7,648,527 | 55 | % | $ | 7,334,391 | $ | 7,441,413 | $ | 7,413,414 | 4 | % | 3 | % | ||||||||||||||||||||||||||||||
| Oregon | 3,081,329 | 22 | % | 3,029,712 | 2,981,327 | 2,997,843 | 2 | % | 3 | % | ||||||||||||||||||||||||||||||||||
| California | 2,542,903 | 18 | % | 2,486,514 | 2,392,573 | 2,423,295 | 2 | % | 5 | % | ||||||||||||||||||||||||||||||||||
| Idaho | 743,176 | 5 | % | 676,674 | 699,085 | 703,596 | 10 | % | 6 | % | ||||||||||||||||||||||||||||||||||
| Total deposits | $ | 14,015,935 | 100 | % | $ | 13,527,291 | $ | 13,514,398 | $ | 13,538,148 | 4 | % | 4 | % | ||||||||||||||||||||||||||||||
| INCLUDED IN TOTAL DEPOSITS | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | ||||||||||||||||||||||
| Public non-interest-bearing accounts | $ | 139,999 | $ | 151,484 | $ | 165,667 | $ | 141,541 | ||||||||||||||||||
| Public interest-bearing transaction & savings accounts | 230,192 | 250,350 | 248,746 | 246,332 | ||||||||||||||||||||||
| Public interest-bearing certificates | 35,660 | 21,272 | 25,423 | 28,144 | ||||||||||||||||||||||
| Total public deposits | $ | 405,851 | $ | 423,106 | $ | 439,836 | $ | 416,017 | ||||||||||||||||||
| Collateralized public deposits | $ | 312,142 | $ | 329,416 | $ | 336,376 | $ | 317,960 | ||||||||||||||||||
| Total brokered deposits | $ | 49,989 | $ | 49,977 | $ | 50,346 | $ | 50,333 | ||||||||||||||||||
| AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | ||||||||||||||||||||||
| Number of deposit accounts | 449,087 | 451,185 | 460,004 | 459,127 | ||||||||||||||||||||||
| Average account balance per account | $ | 31 | $ | 30 | $ | 30 | $ | 30 | ||||||||||||||||||
BANR - Third Quarter 2025 Results
October 15, 2025
Page 13
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| ESTIMATED REGULATORY CAPITAL RATIOS AS OF SEPTEMBER 30, 2025 | 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 | $ | 2,009,954 | 14.66 | % | $ | 1,096,832 | 8.00 | % | $ | 1,371,040 | 10.00 | % | ||||||||||||||||||||||||||
| Tier 1 capital to risk-weighted assets | 1,838,541 | 13.41 | % | 822,624 | 6.00 | % | 822,624 | 6.00 | % | |||||||||||||||||||||||||||||
| Tier 1 leverage capital to average assets | 1,838,541 | 11.33 | % | 649,161 | 4.00 | % | n/a | n/a | ||||||||||||||||||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 1,752,041 | 12.78 | % | 616,968 | 4.50 | % | n/a | n/a | ||||||||||||||||||||||||||||||
| Banner Bank: | ||||||||||||||||||||||||||||||||||||||
| Total capital to risk-weighted assets | 1,941,114 | 14.16 | % | 1,096,375 | 8.00 | % | 1,370,469 | 10.00 | % | |||||||||||||||||||||||||||||
| Tier 1 capital to risk-weighted assets | 1,769,772 | 12.91 | % | 822,281 | 6.00 | % | 1,096,375 | 8.00 | % | |||||||||||||||||||||||||||||
| Tier 1 leverage capital to average assets | 1,769,772 | 10.91 | % | 648,959 | 4.00 | % | 811,198 | 5.00 | % | |||||||||||||||||||||||||||||
| Common equity tier 1 capital to risk-weighted assets | 1,769,772 | 12.91 | % | 616,711 | 4.50 | % | 890,805 | 6.50 | % | |||||||||||||||||||||||||||||
These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 14
| ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| (rates / ratios annualized) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| ANALYSIS OF NET INTEREST SPREAD | Quarters Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 32,109 | $ | 531 | 6.56 | % | $ | 29,936 | $ | 503 | 6.74 | % | $ | 26,954 | $ | 453 | 6.69 | % | |||||||||||||||||||||||||||||||||||
Mortgage loans | 9,651,895 | 147,682 | 6.07 | % | 9,565,357 | 143,909 | 6.03 | % | 9,207,468 | 135,497 | 5.85 | % | |||||||||||||||||||||||||||||||||||||||||
Commercial/agricultural loans | 1,869,782 | 31,124 | 6.60 | % | 1,924,092 | 31,196 | 6.50 | % | 1,879,215 | 32,547 | 6.89 | % | |||||||||||||||||||||||||||||||||||||||||
Consumer and other loans | 119,593 | 2,114 | 7.01 | % | 121,142 | 2,087 | 6.91 | % | 128,548 | 2,154 | 6.67 | % | |||||||||||||||||||||||||||||||||||||||||
Total loans (1) | 11,673,379 | 181,451 | 6.17 | % | 11,640,527 | 177,695 | 6.12 | % | 11,242,185 | 170,651 | 6.04 | % | |||||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | 2,445,497 | 15,269 | 2.48 | % | 2,496,972 | 15,576 | 2.50 | % | 2,623,399 | 16,498 | 2.50 | % | |||||||||||||||||||||||||||||||||||||||||
Other securities | 854,725 | 9,065 | 4.21 | % | 893,062 | 9,561 | 4.29 | % | 943,310 | 11,120 | 4.69 | % | |||||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits with banks | 291,147 | 3,053 | 4.16 | % | 75,539 | 577 | 3.06 | % | 51,604 | 493 | 3.80 | % | |||||||||||||||||||||||||||||||||||||||||
FHLB stock | 15,729 | 463 | 11.68 | % | 23,077 | 222 | 3.86 | % | 16,664 | 412 | 9.84 | % | |||||||||||||||||||||||||||||||||||||||||
| Total investment securities | 3,607,098 | 27,850 | 3.06 | % | 3,488,650 | 25,936 | 2.98 | % | 3,634,977 | 28,523 | 3.12 | % | |||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 15,280,477 | 209,301 | 5.43 | % | 15,129,177 | 203,631 | 5.40 | % | 14,877,162 | 199,174 | 5.33 | % | |||||||||||||||||||||||||||||||||||||||||
| Non-interest-earning assets | 1,022,905 | 994,003 | 981,290 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 16,303,382 | $ | 16,123,180 | $ | 15,858,452 | |||||||||||||||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing checking accounts | $ | 2,618,924 | 10,834 | 1.64 | % | $ | 2,465,015 | 9,462 | 1.54 | % | $ | 2,295,723 | 9,497 | 1.65 | % | ||||||||||||||||||||||||||||||||||||||
Savings accounts | 3,616,728 | 20,170 | 2.21 | % | 3,493,965 | 18,837 | 2.16 | % | 3,268,647 | 19,299 | 2.35 | % | |||||||||||||||||||||||||||||||||||||||||
Money market accounts | 1,471,938 | 7,799 | 2.10 | % | 1,492,229 | 7,729 | 2.08 | % | 1,611,543 | 9,184 | 2.27 | % | |||||||||||||||||||||||||||||||||||||||||
Certificates of deposit | 1,510,966 | 13,448 | 3.53 | % | 1,489,611 | 13,288 | 3.58 | % | 1,540,637 | 15,805 | 4.08 | % | |||||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 9,218,556 | 52,251 | 2.25 | % | 8,940,820 | 49,316 | 2.21 | % | 8,716,550 | 53,785 | 2.45 | % | |||||||||||||||||||||||||||||||||||||||||
Non-interest-bearing deposits | 4,573,009 | — | — | % | 4,480,579 | — | — | % | 4,601,755 | — | — | % | |||||||||||||||||||||||||||||||||||||||||
Total deposits | 13,791,565 | 52,251 | 1.50 | % | 13,421,399 | 49,316 | 1.47 | % | 13,318,305 | 53,785 | 1.61 | % | |||||||||||||||||||||||||||||||||||||||||
| Other interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
FHLB advances | 133,380 | 1,527 | 4.54 | % | 296,671 | 3,370 | 4.56 | % | 161,413 | 2,263 | 5.58 | % | |||||||||||||||||||||||||||||||||||||||||
Other borrowings | 119,727 | 694 | 2.30 | % | 122,227 | 675 | 2.22 | % | 159,439 | 1,147 | 2.86 | % | |||||||||||||||||||||||||||||||||||||||||
Junior subordinated debentures and subordinated notes | 89,178 | 1,387 | 6.17 | % | 168,793 | 2,499 | 5.94 | % | 179,075 | 2,971 | 6.60 | % | |||||||||||||||||||||||||||||||||||||||||
Total borrowings | 342,285 | 3,608 | 4.18 | % | 587,691 | 6,544 | 4.47 | % | 499,927 | 6,381 | 5.08 | % | |||||||||||||||||||||||||||||||||||||||||
Total funding liabilities | 14,133,850 | 55,859 | 1.57 | % | 14,009,090 | 55,860 | 1.60 | % | 13,818,232 | 60,166 | 1.73 | % | |||||||||||||||||||||||||||||||||||||||||
Other non-interest-bearing liabilities (2) | 296,036 | 274,407 | 311,803 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 14,429,886 | 14,283,497 | 14,130,035 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,873,496 | 1,839,683 | 1,728,417 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,303,382 | $ | 16,123,180 | $ | 15,858,452 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/rate spread (tax equivalent) | 153,442 | 3.86 | % | 147,771 | 3.80 | % | 139,008 | 3.60 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin (tax equivalent) | 3.98 | % | 3.92 | % | 3.72 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments for taxable equivalent basis | (3,453) | (3,372) | (3,333) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income and margin, as reported | $ | 149,989 | 3.89 | % | $ | 144,399 | 3.83 | % | $ | 135,675 | 3.63 | % | |||||||||||||||||||||||||||||||||||||||||
| Additional Key Financial Ratios: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Return on average assets | 1.30 | % | 1.13 | % | 1.13 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted return on average assets (4) | 1.28 | % | 1.16 | % | 1.13 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Return on average equity | 11.33 | % | 9.92 | % | 10.39 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted return on average equity (4) | 11.18 | % | 10.20 | % | 10.39 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Average equity/average assets | 11.49 | % | 11.41 | % | 10.90 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Average interest-earning assets/average interest-bearing liabilities | 159.82 | % | 158.78 | % | 161.42 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Average interest-earning assets/average funding liabilities | 108.11 | % | 108.00 | % | 107.66 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest income/average assets | 0.50 | % | 0.44 | % | 0.45 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest expense/average assets | 2.48 | % | 2.52 | % | 2.42 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | 59.76 | % | 62.50 | % | 62.63 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Adjusted efficiency ratio (4) | 58.54 | % | 60.28 | % | 61.27 | % | |||||||||||||||||||||||||||||||||||||||||||||||
(1)Average balances include loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans.
(2)Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.
(3)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.4 million for the quarter ended September 30, 2025 and $2.3 million for both the quarters ended June 30, 2025 and September 30, 2024. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for both the quarters ended September 30, 2025 and June 30, 2025 and $1.0 million for the quarter ended September 30, 2024.
(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 - Third Quarter 2025 Results
October 15, 2025
Page 15
| ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| (rates / ratios annualized) | |||||||||||||||||||||||||||||||||||
| ANALYSIS OF NET INTEREST SPREAD | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| Sep 30, 2025 | Sep 30, 2024 | ||||||||||||||||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/Cost (3) | Average Balance | Interest and Dividends | Yield/Cost (3) | ||||||||||||||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||||||||||||||
Held for sale loans | $ | 28,203 | $ | 1,391 | 6.59 | % | $ | 16,225 | $ | 826 | 6.80 | % | |||||||||||||||||||||||
Mortgage loans | 9,528,868 | 429,315 | 6.02 | % | 9,036,256 | 390,011 | 5.77 | % | |||||||||||||||||||||||||||
Commercial/agricultural loans | 1,900,225 | 93,072 | 6.55 | % | 1,861,182 | 95,155 | 6.83 | % | |||||||||||||||||||||||||||
Consumer and other loans | 120,735 | 6,293 | 6.97 | % | 131,676 | 6,506 | 6.60 | % | |||||||||||||||||||||||||||
Total loans (1) | 11,578,031 | 530,071 | 6.12 | % | 11,045,339 | 492,498 | 5.96 | % | |||||||||||||||||||||||||||
Mortgage-backed securities | 2,494,794 | 46,740 | 2.50 | % | 2,674,555 | 50,424 | 2.52 | % | |||||||||||||||||||||||||||
Other securities | 883,330 | 28,313 | 4.29 | % | 962,183 | 33,802 | 4.69 | % | |||||||||||||||||||||||||||
Interest-bearing deposits with banks | 144,974 | 4,114 | 3.79 | % | 51,630 | 1,530 | 3.96 | % | |||||||||||||||||||||||||||
FHLB stock | 17,214 | 834 | 6.48 | % | 18,931 | 986 | 6.96 | % | |||||||||||||||||||||||||||
| Total investment securities | 3,540,312 | 80,001 | 3.02 | % | 3,707,299 | 86,742 | 3.13 | % | |||||||||||||||||||||||||||
Total interest-earning assets | 15,118,343 | 610,072 | 5.40 | % | 14,752,638 | 579,240 | 5.24 | % | |||||||||||||||||||||||||||
| Non-interest-earning assets | 1,007,862 | 950,588 | |||||||||||||||||||||||||||||||||
Total assets | $ | 16,126,205 | $ | 15,703,226 | |||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
Interest-bearing checking accounts | $ | 2,489,219 | 28,833 | 1.55 | % | $ | 2,185,796 | 23,834 | 1.46 | % | |||||||||||||||||||||||||
Savings accounts | 3,521,141 | 57,110 | 2.17 | % | 3,161,266 | 51,778 | 2.19 | % | |||||||||||||||||||||||||||
Money market accounts | 1,506,171 | 23,388 | 2.08 | % | 1,648,208 | 26,696 | 2.16 | % | |||||||||||||||||||||||||||
Certificates of deposit | 1,510,594 | 40,973 | 3.63 | % | 1,514,982 | 44,940 | 3.96 | % | |||||||||||||||||||||||||||
Total interest-bearing deposits | 9,027,125 | 150,304 | 2.23 | % | 8,510,252 | 147,248 | 2.31 | % | |||||||||||||||||||||||||||
Non-interest-bearing deposits | 4,526,898 | — | — | % | 4,649,297 | — | — | % | |||||||||||||||||||||||||||
Total deposits | 13,554,023 | 150,304 | 1.48 | % | 13,159,549 | 147,248 | 1.49 | % | |||||||||||||||||||||||||||
| Other interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
FHLB advances | 168,663 | 5,757 | 4.56 | % | 211,135 | 8,856 | 5.60 | % | |||||||||||||||||||||||||||
Other borrowings | 125,517 | 2,063 | 2.20 | % | 171,838 | 3,482 | 2.71 | % | |||||||||||||||||||||||||||
Junior subordinated debentures and subordinated notes | 142,255 | 6,380 | 6.00 | % | 179,941 | 8,901 | 6.61 | % | |||||||||||||||||||||||||||
Total borrowings | 436,435 | 14,200 | 4.35 | % | 562,914 | 21,239 | 5.04 | % | |||||||||||||||||||||||||||
Total funding liabilities | 13,990,458 | 164,504 | 1.57 | % | 13,722,463 | 168,487 | 1.64 | % | |||||||||||||||||||||||||||
Other non-interest-bearing liabilities (2) | 298,056 | 303,367 | |||||||||||||||||||||||||||||||||
Total liabilities | 14,288,514 | 14,025,830 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,837,691 | 1,677,396 | |||||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 16,126,205 | $ | 15,703,226 | |||||||||||||||||||||||||||||||
| Net interest income/rate spread (tax equivalent) | 445,568 | 3.83 | % | 410,753 | 3.60 | % | |||||||||||||||||||||||||||||
| Net interest margin (tax equivalent) | 3.94 | % | 3.72 | % | |||||||||||||||||||||||||||||||
| Reconciliation to reported net interest income: | |||||||||||||||||||||||||||||||||||
| Adjustments for taxable equivalent basis | (10,097) | (9,573) | |||||||||||||||||||||||||||||||||
| Net interest income and margin, as reported | $ | 435,471 | 3.85 | % | $ | 401,180 | 3.63 | % | |||||||||||||||||||||||||||
| Additional Key Financial Ratios: | |||||||||||||||||||||||||||||||||||
| Return on average assets | 1.19 | % | 1.04 | % | |||||||||||||||||||||||||||||||
Adjusted return on average assets (4) | 1.20 | % | 1.08 | % | |||||||||||||||||||||||||||||||
| Return on average equity | 10.49 | % | 9.76 | % | |||||||||||||||||||||||||||||||
Adjusted return on average equity (4) | 10.51 | % | 10.16 | % | |||||||||||||||||||||||||||||||
| Average equity/average assets | 11.40 | % | 10.68 | % | |||||||||||||||||||||||||||||||
| Average interest-earning assets/average interest-bearing liabilities | 159.75 | % | 162.60 | % | |||||||||||||||||||||||||||||||
| Average interest-earning assets/average funding liabilities | 108.06 | % | 107.51 | % | |||||||||||||||||||||||||||||||
| Non-interest income/average assets | 0.48 | % | 0.40 | % | |||||||||||||||||||||||||||||||
| Non-interest expense/average assets | 2.53 | % | 2.48 | % | |||||||||||||||||||||||||||||||
| Efficiency ratio | 61.78 | % | 65.19 | % | |||||||||||||||||||||||||||||||
Adjusted efficiency ratio (4) | 60.30 | % | 62.84 | % | |||||||||||||||||||||||||||||||
(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 $7.0 million and $6.5 million for the nine months ended September 30, 2025 and 2024, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $3.1 million for both the nine months ended September 30, 2025 and 2024.
(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 - Third Quarter 2025 Results
October 15, 2025
Page 16
| 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 and the ratio of tangible common equity to tangible assets, 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 | Nine Months Ended | |||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | |||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 149,989 | $ | 144,399 | $ | 135,675 | $ | 435,471 | $ | 401,180 | |||||||||||||||||||
| Non-interest income (GAAP) | 20,730 | 17,751 | 18,063 | 57,589 | 46,853 | ||||||||||||||||||||||||
| Total revenue (GAAP) | 170,719 | 162,150 | 153,738 | 493,060 | 448,033 | ||||||||||||||||||||||||
| Exclude: Net (gain) loss on sale of securities | (377) | 3 | — | (374) | 5,465 | ||||||||||||||||||||||||
| Net change in valuation of financial instruments carried at fair value | (223) | (88) | (39) | (626) | 1,143 | ||||||||||||||||||||||||
| (Gains) losses incurred on building and lease exits | (1,373) | 919 | — | (454) | — | ||||||||||||||||||||||||
| Adjusted revenue (non-GAAP) | $ | 168,746 | $ | 162,984 | $ | 153,699 | $ | 491,606 | $ | 454,641 | |||||||||||||||||||
| ADJUSTED EARNINGS | Quarters Ended | Nine Months Ended | |||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | |||||||||||||||||||||||||
| Net income (GAAP) | $ | 53,502 | $ | 45,496 | $ | 45,153 | $ | 144,133 | $ | 122,507 | |||||||||||||||||||
| Exclude: Net (gain) loss on sale of securities | (377) | 3 | — | (374) | 5,465 | ||||||||||||||||||||||||
| Net change in valuation of financial instruments carried at fair value | (223) | (88) | (39) | (626) | 1,143 | ||||||||||||||||||||||||
| Building and lease exit costs | (331) | 1,753 | — | 1,422 | — | ||||||||||||||||||||||||
| Related net tax expense (benefit) | 224 | (401) | 9 | (101) | (1,586) | ||||||||||||||||||||||||
| Total adjusted earnings (non-GAAP) | $ | 52,795 | $ | 46,763 | $ | 45,123 | $ | 144,454 | $ | 127,529 | |||||||||||||||||||
| Diluted earnings per share (GAAP) | $ | 1.54 | $ | 1.31 | $ | 1.30 | $ | 4.15 | $ | 3.54 | |||||||||||||||||||
| Diluted adjusted earnings per share (non-GAAP) | $ | 1.52 | $ | 1.35 | $ | 1.30 | $ | 4.16 | $ | 3.69 | |||||||||||||||||||
| Return on average assets | 1.30 | % | 1.13 | % | 1.13 | % | 1.19 | % | 1.04 | % | |||||||||||||||||||
Adjusted return on average assets (1) | 1.28 | % | 1.16 | % | 1.13 | % | 1.20 | % | 1.08 | % | |||||||||||||||||||
| Return on average equity | 11.33 | % | 9.92 | % | 10.39 | % | 10.49 | % | 9.76 | % | |||||||||||||||||||
Adjusted return on average equity (2) | 11.18 | % | 10.20 | % | 10.39 | % | 10.51 | % | 10.16 | % | |||||||||||||||||||
(1)Adjusted earnings (non-GAAP) divided by average assets.
(2)Adjusted earnings (non-GAAP) divided by average equity.
BANR - Third Quarter 2025 Results
October 15, 2025
Page 17
| ADDITIONAL FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| ADJUSTED EFFICIENCY RATIO | Quarters Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | Sep 30, 2025 | Sep 30, 2024 | ||||||||||||||||||||||||||||
| Non-interest expense (GAAP) | $ | 102,022 | $ | 101,348 | $ | 96,291 | $ | 304,629 | $ | 292,060 | ||||||||||||||||||||||
| Exclude: CDI amortization | (341) | (455) | (590) | (1,252) | (2,037) | |||||||||||||||||||||||||||
| State/municipal tax expense | (1,655) | (1,416) | (1,432) | (4,525) | (4,130) | |||||||||||||||||||||||||||
| REO operations | (203) | (392) | (103) | (534) | (180) | |||||||||||||||||||||||||||
| Building and lease exit costs | (1,042) | (834) | — | (1,876) | — | |||||||||||||||||||||||||||
| Adjusted non-interest expense (non-GAAP) | $ | 98,781 | $ | 98,251 | $ | 94,166 | $ | 296,442 | $ | 285,713 | ||||||||||||||||||||||
| Net interest income (GAAP) | $ | 149,989 | $ | 144,399 | $ | 135,675 | $ | 435,471 | $ | 401,180 | ||||||||||||||||||||||
| Non-interest income (GAAP) | 20,730 | 17,751 | 18,063 | 57,589 | 46,853 | |||||||||||||||||||||||||||
| Total revenue (GAAP) | 170,719 | 162,150 | 153,738 | 493,060 | 448,033 | |||||||||||||||||||||||||||
| Exclude: Net (gain) loss on sale of securities | (377) | 3 | — | (374) | 5,465 | |||||||||||||||||||||||||||
| Net change in valuation of financial instruments carried at fair value | (223) | (88) | (39) | (626) | 1,143 | |||||||||||||||||||||||||||
| (Gains) losses incurred on building and lease exits | (1,373) | 919 | — | (454) | — | |||||||||||||||||||||||||||
| Adjusted revenue (non-GAAP) | $ | 168,746 | $ | 162,984 | $ | 153,699 | $ | 491,606 | $ | 454,641 | ||||||||||||||||||||||
| Efficiency ratio (GAAP) | 59.76 | % | 62.50 | % | 62.63 | % | 61.78 | % | 65.19 | % | ||||||||||||||||||||||
Adjusted efficiency ratio (non-GAAP) (1) | 58.54 | % | 60.28 | % | 61.27 | % | 60.30 | % | 62.84 | % | ||||||||||||||||||||||
(1)Adjusted non-interest expense (non-GAAP) divided by adjusted revenue.
| TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS | ||||||||||||||||||||||||||
| Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | Sep 30, 2024 | |||||||||||||||||||||||
| Shareholders’ equity (GAAP) | $ | 1,912,892 | $ | 1,865,664 | $ | 1,774,326 | $ | 1,793,721 | ||||||||||||||||||
| Exclude goodwill and other intangible assets, net | 374,927 | 375,268 | 376,179 | 376,768 | ||||||||||||||||||||||
| Tangible common shareholders’ equity (non-GAAP) | $ | 1,537,965 | $ | 1,490,396 | $ | 1,398,147 | $ | 1,416,953 | ||||||||||||||||||
| Total assets (GAAP) | $ | 16,563,081 | $ | 16,437,169 | $ | 16,200,037 | $ | 16,188,676 | ||||||||||||||||||
| Exclude goodwill and other intangible assets, net | 374,927 | 375,268 | 376,179 | 376,768 | ||||||||||||||||||||||
| Total tangible assets (non-GAAP) | $ | 16,188,154 | $ | 16,061,901 | $ | 15,823,858 | $ | 15,811,908 | ||||||||||||||||||
| Common shareholders’ equity to total assets (GAAP) | 11.55 | % | 11.35 | % | 10.95 | % | 11.08 | % | ||||||||||||||||||
| Tangible common shareholders’ equity to tangible assets (non-GAAP) | 9.50 | % | 9.28 | % | 8.84 | % | 8.96 | % | ||||||||||||||||||
| TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE | ||||||||||||||||||||||||||
| Shareholders’ equity (GAAP) | $ | 1,912,892 | $ | 1,865,664 | $ | 1,774,326 | $ | 1,793,721 | ||||||||||||||||||
| Tangible common shareholders’ equity (non-GAAP) | $ | 1,537,965 | $ | 1,490,396 | $ | 1,398,147 | $ | 1,416,953 | ||||||||||||||||||
| Common shares outstanding at end of period | 34,335,297 | 34,583,994 | 34,459,832 | 34,456,688 | ||||||||||||||||||||||
| Common shareholders’ equity (book value) per share (GAAP) | $ | 55.71 | $ | 53.95 | $ | 51.49 | $ | 52.06 | ||||||||||||||||||
| Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) | $ | 44.79 | $ | 43.09 | $ | 40.57 | $ | 41.12 | ||||||||||||||||||
T h i r d Q u a r t e r 2 0 2 5 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 October 15, 2025 as well as the Form 10-K for the year ended December 31, 2024 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.
Third quarter 2025 highlights 2 • Net income of $53.5 million, compared to $45.5 million for the prior quarter • HFI Loan growth of $478 million year-over-year (4%) • Total loan originations (excluding HFS) were $795 million • Core deposit growth of $426 million quarter-over-quarter (14% annualized) • Net interest margin (tax equivalent) increased 6 basis points to 3.98% • Efficiency ratio (GAAP) improved 274 basis points quarter-over-quarter to 59.76%; adjusted, non-GAAP efficiency ratio improved 174 basis points to 58.54% • Return on average assets of 1.30%, and return on average equity of 11.33%, compared to 1.13% and 9.92%, respectively, for the prior quarter • $1.4 million provision for credit losses - loans driven by changes in portfolio mix and individually evaluated loans; $1.3 million provision for credit losses - unfunded commitments; Allowance for credit losses – loans was 1.36% of total loans • Non-performing assets remained low at 0.27% of total assets, down 3 basis points from last quarter • Repurchased 250,000 shares of Banner common stock at an average price of $63.11 per share • Announced 4% increase in dividend to $0.50 per share to be paid in November 2025
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 $14.0B Loans $11.7B Offices 135 Employees 1,889 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 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 4
Growing revenue … in a good place since 1890 5 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* 6 * 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 7
Growing revenue Guard and protect our reputation Best in Customer Satisfaction for Retail Banking in the Northwest J.D. Power *for J.D. Power 2025 Award Information, visit jdpower.com/awards Most Trustworthy Companies in America Newsweek 2023, 2024 and 2025 World’s Most Trustworthy Companies Newsweek 2023, 2024 and 2025 America’s Best Regional Banks Newsweek 2024 & 2025 Outstanding CRA Rating FDIC 2025 and 2021 (two consecutive examination cycles) 5-Star rating™ (highest category) BauerFinancial; 12+ years 100 Best Banks in America Forbes, 9 consecutive years (2017-2025) Top 50 U.S. Public Banks (assets of $10B+) S&P Global Market Intelligence 2021-2024 Great Place to Work certification (May 2025-2026) 8
$ 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 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 0 25 50 75 100 125 150 175 200 Growing revenue Deposit Fees as % of Core Revenue 1 Other Fees Mortgage Banking Deposit Fees 9 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 revenue1 Quarter Ending Quarter Last 12 Months Amount Amount 09/30/25 $169M $652M 12/31/09 $45M $177M Non-interest income1 Quarter Ending Quarter Last 12 Months Amount Amount 09/30/25 $18.8M $75.7M 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 10
Protecting net interest margin $ Millions Avg Bal Cost (in bps) Non-interest 4,573 0 Interest Bearing 7,708 200 CDs 1,511 353 Subtotal Deposits 13,792 150 FHLB & Other 342 418 Total 14,134 157 11 32% 55% 11% 2% 76% 24% 34% 30% 36% Non-interest Bearing Certificates of Deposit Interest Bearing and Savings Securities & Int-bearing Deposits Loans Fixed: 4.89% Yield Floating: 7.47% Yield Low Cost Funding Mix 9/30/2025 Adjustable: 5.42% Yield Earning Asset Mix 9/30/2025 Loan Repricing Structure 9/30/2025 $ Millions Avg Bal Yield (in bps) Loans 11,673 617 Securities & Int- bearing Deposits 3,607 306 Total 15,280 543 66% of the loan portfolio is floating/adjustable 71% of the floating/adjustable loans have floors 22% of the loans that have floors are at the floor 29% 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 —% 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 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 09/30/25 $52.3M 1.50% $202.5M 1.50% 12/31/09 $17.7M 1.83% $83.2M 2.21% 12 Focus on core deposits Quarter Ending Balance % of Total Deposits 09/30/25 $12,476M 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% -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 13 $ 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% 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 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 Amount Rate 09/30/25 $150M 3.89% $576M 3.82% 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 14 Peer Top Quartile Peer Median Net Interest Margin Banner Net Interest Margin Earning Asset Yield Funding Cost
Conservative investment portfolio 15 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 9/30/25 CMO, $1,017, 34.0% MBS, $787, 26.3% CMBS, $456, 15.2% Municipal, $463, 15.5% ABS, $135, 4.5% Corp, $124, 4.1% Agency, $7, 0.2% Other, $3, 0.1% Y e ar s -0.42 9.01 6.10 1.88 6.56 6.50 6.47 6.46 Total Portfolio Effective Duration Duration on New Purchases Q4 2024 Q1 2025 Q2 2025 Q3 2025 -2.00 0.00 2.00 4.00 6.00 8.00 10.00 6.46% 4.85% 5.73% 6.79% 2.99% 2.97% 2.96% 2.93% New Purchases Tax Effective Yield Total Portfolio Tax Effective Yield Q4 2024 Q1 2025 Q2 2025 Q3 2025 0% 2% 4% 6% 8% 12 Month Net Interest Income Sensitivity ($MM), % Change Quarterly New Purchases: Average Duration Investment Portfolio Composition ($2.99 billion) 76% of investments are Agency MBS/CMO or AAA rated 8.6% 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 200 635,138 1.4% 644,959 3.0% Up 100 632,843 1.0% 641,365 2.4% Base 626,379 0.0% 626,379 0.0% Down 100 618,107 (1.3)% 607,681 (3.0)% Down 200 611,711 (2.3)% 593,364 (5.3)%
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 16
$ 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 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 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 17 Control core operating expense Quarter Ending Quarter Last 12 Months Amount Amount 09/30/25 $99M $394M 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 18
Commercial RE 34% Multifamily 7% Construction 15% Commercial 21% Agricultural 3% 1-4 Family 14% Consumer 6% Diversified loan portfolio 19 Loan Composition 9/30/2025 CRE Breakout $MM % Owner Ooccuped CRE 1,135 10 % Investment Properties 1,652 14 % Small Balance CRE 1,210 10 % Total Comm CRE 3,997 34 % Construction Breakout $MM % Commercial 144 1 % Multifamily 586 5 % 1-4 Family 578 5 % Land 427 4 % Total Construction 1,736 15 % Loan Originations (commitments, $MM) A ve rag e Y ie ld 8.27% 8.59%8.47%8.47% 8.23% 7.56% 8.01% 7.27% 7.35% Commercial RE Multifamily Construction Commercial Agricultural 1-4 Fam Consumer Avg Yield on New Loan Originations Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 Q1 '25 Q2 '25 Q3 '25 0 200 400 600 800 1,000 1,200 1,400 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
20 Characteristics of highlighted loan segments Office 1 Balances ($MM) $632.0 Percent of Total Loans 5.4% Total Investor Office $356.2 Total Owner Occupied $275.8 Average Loan Size $0.8 Largest Loan Size $18.4 30 + days Past Due $0.0 Adversely Classified $0.7 Retail 2 Balances ($MM) $1,457.0 Percent of Total Loans 12.5% Balance of Retail Loans Secured by CRE * $1,351.7 Average Loan Size $0.7 Average CRE Secured Loan Size $0.8 Largest Loan Size $24.1 30 + days Past Due $1.8 Adversely Classified $24.2 * No mall exposure Healthcare 3 Balances ($MM) $414.9 Percent of Total Loans 3.6% Balance Secured by Medical Office * $165.5 Medical Office as a % of Total Loans 1.4% Average Loan Size $0.5 Average Medical Office Size $0.7 Largest Loan Size $15.8 30 + days Past Due $0.6 Adversely Classified $18.6 * No hospital exposure 1 By collateral code 2 Retail business loans, both commercial and commercial real estate secured loans 3 All healthcare and social services, including both commercial and commercial real estate secured loans Multifamily Balances ($MM) $860.7 Percent of Total Loans 7.4% Total Affordable Housing $408.4 Total Market Rent/ Middle Income $452.2 Average Loan Size $1.7 Largest Loan Size $30.0 30 + days Past Due $0.0 Adversely Classified $2.1 CA 37% ID 6% OR 15% Other 3% WA 39% CA 29% ID 6% OR 16% Other 6% WA 43% CA 19% ID 4% OR 18% Other 3% WA 56% CA 31% ID 1%OR 21% Other 7% WA 40%
21 Origination Year Portfolio Segment Balance % Owner Occupied 2025 2024 2023 2022 and earlier Office $632.0 44% $63.4 $22.2 $38.0 $508.5 Retail (CRE Secured) $1,351.7 54% $129.3 $228.0 $138.3 $856.1 Medical Office $165.5 53% $14.5 $18.0 $7.8 $125.1 Multifamily $860.7 0% $23.8 $36.0 $66.5 $734.4 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 $632.0 $101.2 $84.5 $78.2 $183.6 $106.3 Retail (CRE Secured) $1,351.7 $156.6 $155.5 $159.7 $455.6 $167.2 Medical Office $165.5 $24.7 $19.3 $11.7 $52.2 $27.4 Multifamily $860.7 $147.4 $124.4 $32.1 $80.3 $397.8 Characteristics of highlighted loan segments
Allowance for credit losses 22 $ M ill io n s ACL Provision/ 2.0 2.5 0.5 2.4 1.7 3.0 3.1 4.8 2.7 20 23 -Q 3 20 23 -Q 4 20 24 -Q 1 20 24 -Q 2 20 24 -Q 3 20 24 -Q 4 20 25 -Q 1 20 25 -Q 2 20 25 -Q 3 $ M ill io n s $108.4 $167.3 $132.1 $141.5$149.6$155.5$157.3$160.5$159.7 1.16% 1.90% 1.48% 1.39% 1.38% 1.37% 1.38% 1.37% 1.36% 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 20 25 -Q 1 20 25 -Q 2 20 25 -Q 3 Allocation of Allowance for Credit Losses-Loans Allowance ($000) % Coverage Non-performing ($000) % Coverage NPLs Commercial RE 41,191 1.03% 734 NM* Multifamily 9,901 1.15% 0 0% Construction 35,144 2.02% 4,240 829% 1-4 Family 20,485 1.29% 17,410 118% Commercial 37,646 1.55% 6,990 539% Agricultural 5,268 1.48% 5,765 91% Consumer 10,072 1.36% 4,877 207% Total 159,707 1.36% 40,016 399% *not meaningful
$ 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 0 50 100 150 200 250 300 350Minimize non-performing assets Quarter Ending NPAs REO Amount % of TA Amount % of TA 09/30/25 $45M 0.27% $5M 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 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 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Peer Top Quartile Peer Median Banner ACLL to Total Loans 23
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 24
Reconciliation of non-GAAP measures 25 $ Thousands Quarters Ended PRE-TAX PRE-PROVISION EARNINGS Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 Income before provision for income taxes (GAAP) $ 66,027 $ 56,007 $ 55,755 Provision for credit losses 2,670 4,795 1,692 Pre-tax pre-provision earnings (non-GAAP) 68,697 60,802 57,447 Exclude net (gain)/loss on sale of securities (377) 3 — Exclude net change in valuation of financial instruments carried at fair value (223) (88) (39) Exclude net building and lease exit costs (331) 1,753 — Adjusted pre-tax pre-provision earnings (non-GAAP) $ 67,766 $ 62,470 $ 57,408
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 26