Banner Corporation Reports Net Income of $48.9 Million, or $1.43 Per Diluted Share, for Second Quarter 2026; Declares Quarterly Cash Dividend of $0.52 Per Share

Banner Corporation Reports Net Income of $48.9 Million, or $1.43 Per Diluted Share, for Second Quarter 2026; Declares Quarterly Cash Dividend of $0.52 Per Share Banner Corporation (NASDAQ: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $48.9 million, or $1.43 per diluted share, for the second quarter of 2026, compared to $54.7 million, or $1.60 per diluted share, for the preceding quarter, and $45.5 million, or $1.31 per diluted share, for the second quarter of 2025. Net interest income was $153.7 million for the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million for the second quarter a year ago. The increase in net interest income compared to the prior quarter primarily reflects one additional calendar day in the current quarter, net interest margin expansion and growth in average interest-earning assets, partially offset by higher interest expense associated with increased FHLB borrowings. The increase in net interest income compared to the second quarter a year ago primarily reflects lower funding costs and an increase in the average balance of interest-earning assets. Second quarter 2026 results included a $3.8 million provision for credit losses, compared to a $796,000 recapture of provision for credit losses in the preceding quarter and a $4.8 million provision for credit losses in the second quarter of 2025. Net income was $103.6 million, or $3.03 per diluted share, for the six months ended June 30, 2026, compared to net income of $90.6 million, or $2.61 per diluted share, for the six months ended June 30, 2025. Results for the six months ended June 30, 2026 include a $3.0 million provision for credit losses, a $1.2 million net loss on the sale of securities and a $1.5 million net increase in the fair value adjustments on financial instruments carried at fair value, compared to a $7.9 million provision for credit losses, a $3,000 net loss on the sale of securities and an $403,000 net increase in the fair value adjustments on financial instruments carried at fair value during the same period in 2025. Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.52 per share payable August 14, 2026, to common shareholders of record on August 4, 2026. “Banner’s results for the second quarter reflect the continued strength of our super community bank model, which prioritizes deepening client relationships, maintaining a strong funding base, and delivering exceptional service while upholding a moderate risk profile,” said Mark Grescovich, President and CEO. “Our earnings for the second quarter of 2026 benefited from robust loan growth. This benefit was offset by increased non-interest expense, which partially reflects investments in new software that we expect will enhance efficiency and support long-term growth. Banner continues to build on a foundation of solid credit quality, backed by a well-funded credit loss reserve and a robust capital position that offers both resilience and flexibility for future growth. At the same time, the strategic investments we have made across the organization are delivering tangible results, further positioning Banner for long-term success. We also continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter-end. For more than 135 years, Banner has upheld its core values by consistently doing the right thing for our clients, communities, colleagues, company and shareholders. Our long-standing commitment has enabled us to earn trust, navigate change with confidence and continue building a strong foundation for the future.” “In addition, we recently announced our agreement to acquire Pacific Financial Corporation, the holding company for Bank of the Pacific,” Grescovich continued. “Bank of the Pacific is a highly-respected, financially strong community bank with exceptional core deposits. This transaction expands our presence and density in attractive Western Washington and Western Oregon markets while offering Bank of the Pacific customers broader product offerings and technology tools, increased commercial lending limits and an expanded branch delivery system. We look forward to welcoming their employees, clients and shareholders to Banner.” At June 30, 2026, Banner, on a consolidated basis, had $16.59 billion in assets, $11.83 billion in net loans and $13.79 billion in deposits. Banner operates 135 full-service branch offices, including branches located in eight of the top 20 largest western United States Metropolitan Statistical Areas by population. Second Quarter 2026 Highlights Net interest margin, on a tax equivalent basis, was 4.13% for the current quarter, compared to 4.11% in the preceding quarter and 3.92% in the second quarter a year ago.Revenue was $172.0 million for the second quarter of 2026, compared to $169.3 million in the preceding quarter and increased 6% from $162.2 million in the second quarter a year ago.Net interest income was $153.7 million in the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million in the second quarter a year ago.Mortgage banking operations revenue was $2.8 million for the second quarter of 2026, compared to $3.2 million in both the preceding quarter and the second quarter a year ago.Return on average assets was 1.20% for the second quarter of 2026, compared to 1.37% in the preceding quarter and 1.13% in the second quarter a year ago.Net loans receivable increased 2% to $11.83 billion at June 30, 2026, compared to $11.55 billion at March 31, 2026, and increased 3% from $11.53 billion at June 30, 2025.Loan originations were $1.26 billion for the second quarter of 2026, compared to $863.2 million in the preceding quarter and $966.6 million in the second quarter a year ago.Total deposits were $13.79 billion at June 30, 2026, compared to $13.84 billion at March 31, 2026 and $13.53 billion at June 30, 2025.Core deposits represented 89% of total deposits at June 30, 2026.Non-performing assets were $60.5 million, or 0.36% of total assets, at June 30, 2026, compared to $51.7 million, or 0.32% of total assets, at March 31, 2026, and $49.8 million, or 0.30% of total assets, at June 30, 2025.The allowance for credit losses - loans was $161.8 million, or 1.35% of total loans receivable, as of June 30, 2026, compared to $160.4 million, or 1.37% of total loans receivable, as of March 31, 2026, and $160.5 million, or 1.37% of total loans receivable, as of June 30, 2025.Dividends paid to shareholders were $0.52 per share in the quarter ended June 30, 2026.Common shareholders’ equity per share increased 1% to $58.83 at June 30, 2026, compared to $58.06 at the preceding quarter end, and increased 9% from $53.95 at June 30, 2025.Tangible common shareholders’ equity per share* increased 2% to $47.82 at June 30, 2026, compared to $47.00 at March 31, 2026, and increased 11% from $43.09 at June 30, 2025. *Non-GAAP (Generally Accepted Accounting Principles) financial measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. Significant Recent Initiatives and Events On April 30, 2026, Banner entered into a definitive merger agreement to acquire Pacific Financial Corporation (“Pacific Financial”), the holding company for Bank of the Pacific, in an all-stock transaction. Under the terms of the agreement, at the effective time of the merger, shareholders of Pacific Financial will receive 0.2633 shares of Banner common stock for each Pacific Financial common share they own. The transaction is expected to close in the third quarter of 2026 and is subject to closing conditions, including Pacific Financial shareholder and regulatory approvals. Income Statement Review Net interest income was $153.7 million in the second quarter of 2026, compared to $150.2 million in the preceding quarter and $144.4 million in the second quarter a year ago. Net interest margin, on a tax equivalent basis, increased two basis points to 4.13% for the second quarter of 2026, compared to 4.11% in the preceding quarter, and increased 21 basis points from 3.92% in the second quarter a year ago. The net interest margin for the current quarter benefited from a higher average yield on interest-earning assets and lower borrowing costs. Interest income was $202.7 million in the second quarter of 2026, compared to $197.8 million in the preceding quarter and $200.3 million in the second quarter of 2025. Average yields on interest-earning assets increased by two basis points to 5.41% for the second quarter of 2026, compared to 5.39% for the preceding quarter, primarily reflecting loan growth and a slight increase in loan yields. Compared to the second quarter a year ago, average yields on interest-earning assets increased by one basis point from 5.40%. Average loan yields increased by two basis points to 6.09% in the second quarter of 2026, compared to 6.07% in the preceding quarter, and decreased from 6.12% in the second quarter a year ago. Interest expense was $48.9 million in the second quarter of 2026, compared to $47.6 million in the preceding quarter and $55.9 million in the second quarter a year ago. Total deposit costs decreased by two basis points to 1.33% in the second quarter of 2026, compared to 1.35% in the preceding quarter, and decreased by 14 basis points compared to 1.47% in the second quarter a year ago. The decrease in deposit costs in the current quarter compared to both the prior quarter and the same quarter a year ago was primarily due to lower pricing on certificates of deposit and money market accounts as well as an increase in the average balance of non-interest-bearing deposits. The decrease in deposit costs in the current quarter compared to the same quarter a year ago also reflected a decrease in the average rate paid on interest-bearing checking accounts and savings accounts. The average rate paid on borrowings decreased two basis points to 3.88% in the second quarter of 2026 from 3.90% in the preceding quarter and decreased by 59 basis points from 4.47% in the second quarter a year ago. The year-over-year decrease was primarily due to declines in both average interest rates paid and the average balance of higher-costing FHLB advances. The total cost of funding liabilities increased one basis point to 1.39% in the second quarter of 2026, compared to 1.38% in the preceding quarter, and decreased 21 basis points from 1.60% in the second quarter a year ago, primarily reflecting lower deposit and borrowing rates paid. A $3.8 million provision for credit losses was recorded in the current quarter (comprised of a $1.6 million provision for credit losses - loans and a $2.2 million provision for credit losses - unfunded loan commitments). This compares to a $796,000 recapture of provision for credit losses in the prior quarter (comprised of a $1.3 million provision for credit losses - loans and a $2.1 million recapture of provision for credit losses - unfunded loan commitments) and a $4.8 million provision for credit losses in the second quarter a year ago (comprised of a $4.2 million provision for credit losses - loans and a $588,000 provision for credit losses - unfunded loan commitments). The provision for credit losses recorded in the second quarter of 2026 primarily reflected loan growth, partially offset by improvements in credit quality and changes in portfolio mix. Total non-interest income was $18.2 million in the second quarter of 2026, compared to $19.2 million in the preceding quarter and $17.8 million in the second quarter a year ago. The decrease from the previous quarter was driven primarily by a $1.8 million unfavorable shift in fair value adjustments on financial instruments. In addition, the current quarter included a slight gain on the sale of securities, compared to net losses of $1.2 million in the preceding quarter, partially offsetting the decrease in non-interest income. Compared to the prior year quarter, the increase in non-interest income was primarily attributable to an increase in deposit fees and other service charges, partially offset by lower mortgage banking revenue. Total non-interest income was $37.4 million for the six months ended June 30, 2026, compared to $36.9 million for the same period a year earlier. Total non-interest expense was $108.0 million in the second quarter of 2026, compared to $102.6 million in the preceding quarter and $101.3 million in the second quarter of 2025. The increase from the previous quarter reflected a $1.7 million increase in salary and employee benefits, primarily reflecting increased loan commissions and normal salary and wage increases, a $2.0 million increase in information and computer data services, primarily due to increased computer software expenses, including $924,000 of expense related to the write-off of our previous commercial loan origination software, a $1.1 million increase in professional and legal expenses, primarily reflecting increased legal fees, and a $1.3 million increase in advertising and marketing expense, primarily reflecting the timing of direct mail marketing, printed media, and radio and television expenses. In addition, the current quarter includes $238,000 of merger related expenses. These increases were partially offset by a $1.4 million increase in capitalized loan origination costs, reflecting increased loan origination activity, primarily in the construction and land and one- to four-family residential loan categories. The increase compared to the same quarter a year ago primarily reflects increases in salary and employee benefits, information and computer data services expenses, and advertising and marketing expenses, partially offset by a decrease in occupancy and equipment costs. For the six months ended June 30, 2026, total non-interest expense was $210.6 million, compared to $202.6 million for the six months ended June 30, 2025. Banner’s efficiency ratio was 62.80% for the second quarter of 2026, compared to 60.60% in the preceding quarter and 62.50% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 61.30% for the second quarter of 2026, compared to 59.45% in the preceding quarter and 60.28% in the year-ago quarter. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a discussion and reconciliation of non-GAAP financial measures. Balance Sheet Review Total assets were $16.59 billion at June 30, 2026, compared to $16.34 billion at March 31, 2026, and $16.44 billion at June 30, 2025. The increase compared to the prior quarter was primarily due to loan growth, partially offset by a reduction in securities. Securities and interest-bearing deposits held at other banks totaled $3.17 billion at June 30, 2026, compared to $3.24 billion at March 31, 2026 and $3.29 billion at June 30, 2025. The average effective duration of the securities portfolio was approximately 6.1 years and 6.6 years at June 30, 2026 and June 30, 2025, respectively. Total loans receivable increased 2% to $11.99 billion at June 30, 2026, compared to $11.71 billion at March 31, 2026, and increased 3% from $11.69 billion at June 30, 2025. Commercial real estate loans totaled $4.14 billion at June 30, 2026, an increase of 1% compared to $4.11 billion at March 31, 2026, and an increase of 4% from $3.97 billion at June 30, 2025. The increases from both periods reflected a combination of new loan production and the transfer of commercial construction loans to the commercial real estate portfolio upon completion of the construction phase. Commercial business loans totaled $2.58 billion at June 30, 2026, an increase of 6% compared to $2.43 billion at March 31, 2026, and an increase of 5% from $2.47 billion at June 30, 2025. The increases from both periods reflected new loan production. Multifamily real estate loans increased 7% to $855.9 million at June 30, 2026, compared to $798.2 million at March 31, 2026, and decreased 1% from $860.7 million at June 30, 2025. The increase from the prior quarter primarily reflected the transfer of multifamily construction loans to the multifamily real estate portfolio upon completion of the construction phase, while the decrease from the prior year reflected loan payoffs that exceeded transfers from the multifamily construction portfolio. Consumer loans increased 7% to $827.0 million at June 30, 2026, compared to $774.0 million at March 31, 2026, and increased 13% compared to $732.5 million at June 30, 2025. The increases from both periods primarily reflected new loan production and advances on home equity revolving lines of credit. Loans held for sale were $27.2 million at June 30, 2026, compared to $33.8 million at March 31, 2026, and $37.7 million at June 30, 2025. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $134.6 million, compared to $132.6 million in the preceding quarter, and $104.6 million in the second quarter a year ago. The decrease in loans held for sale at June 30, 2026, compared to both the preceding and prior year quarters, was primarily attributable to higher sales volumes of one- to four-family residential mortgage loans held for sale during the current quarter. Total deposits were $13.79 billion at June 30, 2026, compared to $13.84 billion at March 31, 2026, and $13.53 billion a year ago. Core deposits decreased to $12.32 billion at June 30, 2026, compared to $12.38 billion at March 31, 2026, and increased compared to $12.05 billion at June 30, 2025. The decrease compared to the preceding quarter primarily reflects a decrease in interest-bearing transaction and savings accounts, as well as money market accounts, due to normal seasonal activity as clients use deposit balances to pay taxes, partially offset by an increase in non-interest-bearing deposits. The increase compared to the prior year quarter reflects increases in interest-bearing transaction and savings accounts. Core deposits remained stable at 89% of total deposits at June 30, 2026, March 31, 2026 and June 30, 2025. Certificates of deposit increased 1% to $1.47 billion at June 30, 2026, compared to $1.46 billion at March 31, 2026, and were flat compared to $1.48 billion a year earlier. There were $320.0 million of outstanding FHLB advances at June 30, 2026, compared to no outstanding FHLB advances at March 31, 2026, and $565.0 million a year ago. The increase in FHLB advances during the current quarter is due to FHLB advances being temporarily used to fund the second quarter loan growth and seasonal deposit outflows. At June 30, 2026, off-balance sheet liquidity included additional borrowing capacity of $3.45 billion at the FHLB and $1.64 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million. At June 30, 2026, total common shareholders’ equity was $2.00 billion, or 12.05% of total assets, compared to $1.97 billion, or 12.03% of total assets at March 31, 2026, and $1.87 billion, or 11.35% of total assets at June 30, 2025. The increase in total common shareholders’ equity from March 31, 2026, was primarily attributable to a $31.0 million increase in retained earnings resulting from $48.9 million in net income, partially offset by the accrual of $17.9 million in cash dividends during the second quarter of 2026. At June 30, 2026, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.63 billion, or 10.02% of tangible assets, compared to $1.59 billion, or 9.97% of tangible assets, at March 31, 2026, and $1.49 billion, or 9.28% of tangible assets, a year ago. See “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At June 30, 2026, Banner’s estimated common equity Tier 1 capital ratio was 12.82%, its estimated Tier 1 leverage capital to average assets ratio was 11.79%, and its estimated total capital to risk-weighted assets ratio was 14.67%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports. Credit Quality The allowance for credit losses - loans was $161.8 million, or 1.35% of total loans receivable and 295% of non-performing loans, at June 30, 2026, compared to $160.4 million, or 1.37% of total loans receivable and 353% of non-performing loans, at March 31, 2026, and $160.5 million, or 1.37% of total loans receivable and 373% of non-performing loans, at June 30, 2025. The allowance ratio remained stable compared to both prior periods, reflecting consistent portfolio composition and credit performance. Coverage of non-performing loans remained strong at 295% at June 30, 2026, compared to 353% at March 31, 2026. The year-over-year decline from 373% at June 30, 2025 reflects a moderate increase in non-performing loans over the past year, while the allowance level has remained stable and commensurate with the portfolio’s risk profile. In addition to the allowance for credit losses - loans, the allowance for credit losses - unfunded loan commitments was $15.1 million at June 30, 2026, compared to $12.9 million at March 31, 2026, and $12.8 million at June 30, 2025. Net loan charge-offs remained minimal at $101,000 in the second quarter of 2026, compared to net loan charge-offs of $1.2 million and $1.0 million in the preceding quarter and second quarter a year ago, respectively. Non-performing loans were $54.8 million at June 30, 2026, compared to $45.4 million at March 31, 2026, and $43.0 million at June 30, 2025. Despite the increase in non-performing loans, substandard loans declined to $218.4 million at June 30, 2026, from $235.0 million at March 31, 2026. Total non-performing assets were $60.5 million, or 0.36% of total assets, at June 30, 2026, compared to $51.7 million, or 0.32% of total assets, at March 31, 2026, and $49.8 million, or 0.30% of total assets, at June 30, 2025. Conference Call Banner will host a conference call on Thursday, July 23, 2026, at 8:00 a.m. PDT, to discuss its second quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (800) 715-9871 to participate in the call. A replay of the call will be available at www.bannerbank.com. About the Company Banner Corporation is a $16.59 billion bank holding company operating a commercial bank primarily in Washington, Oregon, California and Idaho through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com. Forward-Looking Statements When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Forward-looking statements may relate to, among other things, future financial performance, strategic plans or objectives, revenues or earnings projections, and other financial or operational information. These statements are inherently subject to numerous risks and uncertainties, including ongoing market volatility and evolving global conditions, which may cause actual results to differ materially from those expressed or implied. These factors include, but are not limited to: (1) adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of labor shortages, elevated inflation, recessionary pressures, or slowing economic growth; (2) changes in interest rate levels, volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, access to capital and liquidity; (3) the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; (4) geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, South America, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors, including, but not limited to, agriculture-based lending; (5) the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; (6) the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; (7) expectations regarding key growth initiatives and strategic priorities; (8) credit risks from lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (9) results of examinations by regulatory authorities, which could result in the imposition of penalties, required changes to our business practices, or additional reserves; (10) competitive pressures among depository and non-depository institutions that adversely affect pricing, market share, deposit flows or product offerings; (11) fluctuations in real estate values; (12) the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; (13) vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; (14) market volatility or deterioration in capital markets affecting liquidity, valuations, or investor confidence; (15) the costs, effects and outcomes of litigation or other legal proceedings involving the Company; (16) legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; (17) climate-related risks and natural disasters, which may affect loan collateral, operations, or compliance obligations; (18) changes in accounting principles, policies or guidelines; (19) the impact of pending and future acquisitions or business combinations, including related goodwill impairment risks and integration challenges; (20) effects of critical accounting policies and judgments, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; (21) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (22) other risks detailed from time to time in Banner’s other reports filed with and furnished to the Securities and Exchange Commission including Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. Further, statements about the potential effects of Banner’s proposed merger with Pacific Financial on Banner’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond Banner’s control, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully or such integration may be more difficult, time-consuming or costly than expected; (2) any of the anticipated benefits of the merger may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the merger or the announcement of the merger, and the parties may be challenged in retaining key relationships both during the pendency of the merger and following the completion of the merger if that occurs; (4) the parties may not meet expectations regarding the timing of the merger; (5) required regulatory approvals or the approval of Pacific Financial shareholders may not be obtained or such approvals may be more difficult, time-consuming or costly than expected; (6) there may be challenges in satisfying the other conditions to completion of the merger or the merger may fail to close for any other reason; (7) management’s attention may be diverted from ongoing business operations and opportunities due to the merger; (8) there may be potential negative impacts caused by the dilution resulting from Banner’s issuance of shares of Banner Common Stock in connection with the merger; and (9) other factors detailed in Banner’s filings with the SEC. Additional Information About the Pacific Financial Corporation Merger and Where to Find It This press release does not constitute an offer to sell or the solicitation of an offer to buy or exchange any securities or a solicitation of any vote or approval with respect to the proposed transaction. In connection with the proposed merger, a registration statement on Form S-4 was filed with the SEC and declared effective on June 16, 2026. The proxy statement of Pacific Financial and the prospectus of Banner included therein has been mailed to shareholders of Pacific Financial in connection with their votes on the merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS (AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS) BECAUSE SUCH DOCUMENTS CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER AND RELATED MATTERS. The proxy statement/prospectus and other documents relating to the merger filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge from Banner upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the proxy statement/prospectus. Participants in the Solicitation Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed Merger under SEC rules. Information about the directors and executive officers of Banner and Pacific Financial is included in the proxy statement/prospectus for the proposed transaction filed with the SEC. These documents may be obtained free of charge in the manner described above under “Additional Information About the Pacific Financial Corporation Merger and Where to Find It.” Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by its directors or executive officers have changed since the amounts set forth in Banner’s proxy statement for its 2026 annual meeting of shareholders, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information About the Pacific Financial Corporation Merger and Where to Find It.” RESULTS OF OPERATIONS Quarters Ended Six Months Ended (in thousands except shares and per share data) Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025 INTEREST INCOME: Loans receivable $ 178,389 $ 173,703 $ 175,373 $ 352,092 $ 344,050 Mortgage-backed securities 14,053 14,316 15,416 28,369 31,160 Securities and cash equivalents 10,244 9,799 9,470 20,043 18,917 Total interest income 202,686 197,818 200,259 400,504 394,127 INTEREST EXPENSE: Deposits 45,554 45,678 49,316 91,232 98,053 Federal Home Loan Bank (FHLB) advances 1,426 40 3,370 1,466 4,230 Other borrowings 732 697 675 1,429 1,369 Subordinated debt 1,234 1,234 2,499 2,468 4,993 Total interest expense 48,946 47,649 55,860 96,595 108,645 Net interest income 153,740 150,169 144,399 303,909 285,482 PROVISION (RECAPTURE) FOR CREDIT LOSSES 3,818 (796 ) 4,795 3,022 7,934 Net interest income after provision (recapture) for credit losses 149,922 150,965 139,604 300,887 277,548 NON-INTEREST INCOME: Deposit fees and other service charges 11,728 11,391 10,835 23,119 21,604 Mortgage banking operations 2,792 3,212 3,226 6,004 6,329 Bank-owned life insurance 2,471 2,312 2,384 4,783 4,959 Miscellaneous 1,380 1,826 1,221 3,206 3,567 18,371 18,741 17,666 37,112 36,459 Net gain (loss) on sale of securities 8 (1,242 ) (3 ) (1,234 ) (3 ) Net change in valuation of financial instruments carried at fair value (157 ) 1,662 88 1,505 403 Total non-interest income 18,222 19,161 17,751 37,383 36,859 NON-INTEREST EXPENSE: Salary and employee benefits 69,388 67,732 65,486 137,120 130,343 Less capitalized loan origination costs (5,283 ) (3,886 ) (4,924 ) (9,169 ) (8,254 ) Occupancy and equipment 10,936 10,697 12,256 21,633 24,353 Information and computer data services 10,322 8,313 8,199 18,635 15,827 Payment and card processing services 6,218 6,041 5,899 12,259 11,649 Professional and legal expenses 2,719 1,613 2,271 4,332 4,701 Advertising and marketing 1,982 673 1,087 2,655 1,677 Deposit insurance 2,819 2,717 2,800 5,536 5,597 State and municipal business and use taxes 1,773 1,820 1,416 3,593 2,870 Real estate operations, net 165 109 392 274 331 Amortization of core deposit intangibles 256 256 455 512 911 Miscellaneous 6,695 6,523 6,011 13,218 12,602 Total non-interest expense 107,990 102,608 101,348 210,598 202,607 Income before provision for income taxes 60,154 67,518 56,007 127,672 111,800 PROVISION FOR INCOME TAXES 11,268 12,802 10,511 24,070 21,169 NET INCOME $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631 Earnings per common share: Basic $ 1.44 $ 1.61 $ 1.31 $ 3.04 $ 2.62 Diluted $ 1.43 $ 1.60 $ 1.31 $ 3.03 $ 2.61 Cumulative dividends declared per common share $ 0.52 $ 0.50 $ 0.48 $ 1.02 $ 0.96 Weighted average number of common shares outstanding: Basic 34,012,611 34,039,234 34,627,433 34,025,849 34,568,948 Diluted 34,129,173 34,254,587 34,738,948 34,197,096 34,761,044 FINANCIAL CONDITION Percentage Change (in thousands except shares and per share data) Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr ASSETS Cash and due from banks $ 215,508 $ 180,158 $ 182,772 $ 239,339 20 % (10 )% Interest-bearing deposits 219,944 259,081 239,868 244,009 (15 )% (10 )% Total cash and cash equivalents 435,452 439,239 422,640 483,348 (1 )% (10 )% Securities - available for sale, amortized cost $2,273,608, $2,294,225, $2,271,471 and $2,372,331, respectively 2,015,891 2,035,021 2,016,261 2,064,581 (1 )% (2 )% Securities - held to maturity, fair value $787,987, $791,763, $814,668 and $801,838, respectively 929,309 943,688 961,196 981,312 (2 )% (5 )% Total securities 2,945,200 2,978,709 2,977,457 3,045,893 (1 )% (3 )% FHLB stock 24,209 9,809 16,476 35,151 147 % (31 )% Loans held for sale 27,160 33,778 42,902 37,651 (20 )% (28 )% Loans receivable 11,994,410 11,707,626 11,721,687 11,690,373 2 % 3 % Allowance for credit losses – loans (161,849 ) (160,352 ) (160,276 ) (160,501 ) 1 % 1 % Net loans receivable 11,832,561 11,547,274 11,561,411 11,529,872 2 % 3 % Accrued interest receivable 65,016 63,736 60,525 64,729 2 % — % Property and equipment, net 108,247 108,303 111,522 117,175 — % (8 )% Goodwill 373,121 373,121 373,121 373,121 — % — % Other intangibles, net 979 1,235 1,491 2,147 (21 )% (54 )% Bank-owned life insurance 324,164 321,660 319,347 316,365 1 % 2 % Operating lease right-of-use assets 29,534 31,056 32,736 38,754 (5 )% (24 )% Other assets 427,904 436,352 434,860 392,963 (2 )% 9 % Total assets $ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169 2 % 1 % LIABILITIES Deposits: Non-interest-bearing $ 4,542,942 $ 4,532,639 $ 4,489,839 $ 4,504,491 — % 1 % Interest-bearing transaction and savings accounts 7,773,630 7,842,911 7,721,003 7,545,028 (1 )% 3 % Interest-bearing certificates 1,473,021 1,464,814 1,532,304 1,477,772 1 % — % Total deposits 13,789,593 13,840,364 13,743,146 13,527,291 — % 2 % Advances from FHLB 320,000 — 150,000 565,000 — % (43 )% Other borrowings 114,497 115,723 107,715 117,112 (1 )% (2 )% Junior subordinated debentures at fair value 79,652 79,472 79,151 73,366 — % 9 % Operating lease liabilities 32,108 33,794 35,755 41,696 (5 )% (23 )% Accrued expenses and other liabilities 210,134 261,295 245,266 200,194 (20 )% 5 % Deferred compensation 48,300 46,990 47,158 46,846 3 % 3 % Total liabilities 14,594,284 14,377,638 14,408,191 14,571,505 2 % — % SHAREHOLDERS’ EQUITY Common stock 1,268,527 1,268,298 1,282,505 1,309,004 — % (3 )% Retained earnings 940,210 909,222 871,803 801,082 3 % 17 % Accumulated other comprehensive loss (209,474 ) (210,886 ) (208,011 ) (244,422 ) (1 )% (14 )% Total shareholders’ equity 1,999,263 1,966,634 1,946,297 1,865,664 2 % 7 % Total liabilities and shareholders’ equity $ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169 2 % 1 % Common Shares Issued: Shares outstanding at end of period 33,984,909 33,875,098 34,097,856 34,583,994 Common shareholders’ equity per share (1) $ 58.83 $ 58.06 $ 57.08 $ 53.95 Common shareholders’ tangible equity per share (1) (2) $ 47.82 $ 47.00 $ 46.09 $ 43.09 Common shareholders’ equity to total assets 12.05 % 12.03 % 11.90 % 11.35 % Common shareholders’ tangible equity to tangible assets (2) 10.02 % 9.97 % 9.84 % 9.28 % Consolidated Tier 1 leverage capital ratio 11.79 % 11.68 % 11.41 % 11.29 % (1) Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding. (2) Common shareholders’ tangible equity and tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) LOANS Percentage Change Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr Commercial real estate (CRE): Owner-occupied $ 1,229,993 $ 1,176,035 $ 1,138,298 $ 1,125,249 5 % 9 % Investment properties 1,744,127 1,719,220 1,701,413 1,625,001 1 % 7 % Small balance CRE 1,166,516 1,218,388 1,212,357 1,223,477 (4 )% (5 )% Multifamily real estate 855,862 798,230 850,789 860,700 7 % (1 )% Construction, land and land development: Commercial construction 181,843 174,761 156,021 159,222 4 % 14 % Multifamily construction 503,058 502,166 514,330 568,058 — % (11 )% One- to four-family construction 631,183 617,233 607,447 551,806 2 % 14 % Land and land development 378,172 400,959 433,678 417,474 (6 )% (9 )% Commercial business: Commercial business 1,286,818 1,231,154 1,225,108 1,318,483 5 % (2 )% Small business scored 1,295,861 1,199,913 1,187,360 1,152,531 8 % 12 % Agricultural business, including secured by farmland: Agricultural business, including secured by farmland 337,487 332,440 353,152 345,742 2 % (2 )% One- to four-family residential 1,556,493 1,563,088 1,573,191 1,610,133 — % (3 )% Consumer: Consumer—home equity revolving lines of credit 744,546 682,692 679,489 639,757 9 % 16 % Consumer—other 82,451 91,347 89,054 92,740 (10 )% (11 )% Total loans receivable $ 11,994,410 $ 11,707,626 $ 11,721,687 $ 11,690,373 2 % 3 % Loans 30 - 89 days past due and on accrual $ 17,686 $ 30,177 $ 26,767 $ 10,786 Total delinquent loans (including loans on non-accrual), net $ 61,333 $ 65,632 $ 63,093 $ 47,764 Total delinquent loans / Total loans receivable 0.51 % 0.56 % 0.54 % 0.41 % LOANS BY GEOGRAPHIC LOCATION Percentage Change Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr Amount Percentage Amount Amount Amount Washington $ 5,359,130 45 % $ 5,313,022 $ 5,371,200 $ 5,438,285 1 % (1 )% California 3,275,124 27 % 3,159,842 3,105,405 3,010,678 4 % 9 % Oregon 2,210,617 18 % 2,166,750 2,159,404 2,141,185 2 % 3 % Idaho 732,830 6 % 690,608 667,343 671,217 6 % 9 % Utah 78,216 1 % 77,046 82,594 70,474 2 % 11 % Other 338,493 3 % 300,358 335,741 358,534 13 % (6 )% Total loans receivable $ 11,994,410 100 % $ 11,707,626 $ 11,721,687 $ 11,690,373 2 % 3 % ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) LOAN ORIGINATIONS Quarters Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Commercial real estate $ 163,031 $ 220,193 $ 216,189 Multifamily real estate 215 3,869 13,065 Construction and land 561,290 323,941 411,210 Commercial business 312,028 168,324 203,656 Agricultural business 9,032 22,562 14,414 One-to four-family residential 37,998 13,416 5,491 Consumer 172,152 110,913 102,600 Total loan originations (excluding loans held for sale) $ 1,255,746 $ 863,218 $ 966,625 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS Quarters Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Balance, beginning of period $ 160,352 $ 160,276 $ 157,323 Provision for credit losses – loans 1,598 1,292 4,201 Recoveries of loans previously charged off: Commercial real estate 12 11 53 Construction and land 5 4 — One- to four-family real estate 12 13 58 Commercial business 171 81 361 Agricultural business, including secured by farmland 213 4 1 Consumer 63 140 168 476 253 641 Loans charged off: Commercial business (293 ) (863 ) (892 ) Agricultural business, including secured by farmland (4 ) — (362 ) Consumer (280 ) (606 ) (410 ) (577 ) (1,469 ) (1,664 ) Net charge-offs (101 ) (1,216 ) (1,023 ) Balance, end of period $ 161,849 $ 160,352 $ 160,501 Net charge-offs / average loans receivable (0.001 )% (0.010 )% (0.009 )% ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Commercial real estate $ 42,167 $ 41,788 $ 41,599 $ 41,036 Multifamily real estate 9,859 9,201 9,805 9,918 Construction and land 32,124 34,589 35,508 34,124 One- to four-family real estate 19,478 19,640 19,552 20,917 Commercial business 41,114 39,452 37,785 38,591 Agricultural business, including secured by farmland 5,859 4,930 5,567 6,216 Consumer 11,248 10,752 10,460 9,699 Total allowance for credit losses – loans $ 161,849 $ 160,352 $ 160,276 $ 160,501 Allowance for credit losses - loans / Total loans receivable 1.35 % 1.37 % 1.37 % 1.37 % Allowance for credit losses - loans / Non-performing loans 295 % 353 % 351 % 373 % CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS Quarters Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Balance, beginning of period $ 12,903 $ 14,985 $ 12,162 Provision (recapture) for credit losses - unfunded loan commitments 2,222 (2,082 ) 588 Balance, end of period $ 15,125 $ 12,903 $ 12,750 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) NON-PERFORMING ASSETS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Loans on non-accrual status: Secured by real estate: Commercial $ 2,132 $ 2,027 $ 525 $ 10 Construction and land 12,648 4,321 5,175 4,369 One- to four-family 23,398 20,945 19,855 15,480 Commercial business 6,968 6,988 6,751 6,647 Agricultural business, including secured by farmland 2,967 5,511 4,609 8,690 Consumer 4,784 4,214 4,610 4,802 52,897 44,006 41,525 39,998 Loans more than 90 days delinquent, still on accrual: Secured by real estate: Commercial 234 — — — Construction and land — — 1,268 — One- to four-family 1,427 636 2,698 2,896 Consumer 265 795 148 80 1,926 1,431 4,114 2,976 Total non-performing loans 54,823 45,437 45,639 42,974 REO 5,720 6,248 5,578 6,801 Other repossessed assets — — 18 — Total non-performing assets $ 60,543 $ 51,685 $ 51,235 $ 49,775 Total non-performing assets to total assets 0.36 % 0.32 % 0.31 % 0.30 % LOANS BY CREDIT RISK RATING Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Pass $ 11,754,475 $ 11,416,687 $ 11,446,550 $ 11,432,456 Special Mention 21,509 55,981 82,060 68,372 Substandard 218,426 234,958 193,077 189,545 Total $ 11,994,410 $ 11,707,626 $ 11,721,687 $ 11,690,373 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) DEPOSIT COMPOSITION Percentage Change Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Prior Qtr Prior Yr Qtr Non-interest-bearing $ 4,542,942 $ 4,532,639 $ 4,489,839 $ 4,504,491 — % 1 % Interest-bearing checking 2,623,149 2,628,731 2,609,080 2,534,900 — % 3 % Regular savings accounts 3,853,612 3,859,530 3,723,922 3,538,372 — % 9 % Money market accounts 1,296,869 1,354,650 1,388,001 1,471,756 (4 )% (12 )% Total interest-bearing transaction and savings accounts 7,773,630 7,842,911 7,721,003 7,545,028 (1 )% 3 % Total core deposits 12,316,572 12,375,550 12,210,842 12,049,519 — % 2 % Interest-bearing certificates 1,473,021 1,464,814 1,532,304 1,477,772 1 % — % Total deposits $ 13,789,593 $ 13,840,364 $ 13,743,146 $ 13,527,291 — % 2 % GEOGRAPHIC CONCENTRATION OF DEPOSITS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Percentage Change Amount Percentage Amount Amount Amount Prior Qtr Prior Yr Qtr Washington $ 7,268,041 53 % $ 7,429,406 $ 7,500,215 $ 7,334,391 (2 )% (1 )% Oregon 3,142,625 23 % 3,125,040 3,035,104 3,029,712 1 % 4 % California 2,631,688 19 % 2,558,466 2,483,948 2,486,514 3 % 6 % Idaho 747,239 5 % 727,452 723,879 676,674 3 % 10 % Total deposits $ 13,789,593 100 % $ 13,840,364 $ 13,743,146 $ 13,527,291 — % 2 % INCLUDED IN TOTAL DEPOSITS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Public non-interest-bearing accounts $ 171,112 $ 146,846 $ 138,860 $ 151,484 Public interest-bearing transaction & savings accounts 242,061 237,776 234,669 250,350 Public interest-bearing certificates 34,794 36,125 34,431 21,272 Total public deposits $ 447,967 $ 420,747 $ 407,960 $ 423,106 Collateralized public deposits $ 348,318 $ 325,675 $ 312,310 $ 329,416 Total brokered deposits $ — $ — $ 50,002 $ 49,977 AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Number of deposit accounts 441,808 444,250 445,989 451,185 Average account balance per account $ 32 $ 32 $ 31 $ 30 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) ESTIMATED REGULATORY CAPITAL RATIOS AS OF JUNE 30, 2026 Actual Minimum to be categorized as "Adequately Capitalized" Minimum to be categorized as "Well Capitalized" Amount Ratio Amount Ratio Amount Ratio Banner Corporation-consolidated: Total capital to risk-weighted assets $ 2,092,299 14.67 % $ 1,140,941 8.00 % $ 1,426,177 10.00 % Tier 1 capital to risk-weighted assets 1,915,042 13.43 % 855,706 6.00 % 855,706 6.00 % Tier 1 leverage capital to average assets 1,915,042 11.79 % 649,595 4.00 % n/a n/a Common equity tier 1 capital to risk-weighted assets 1,828,542 12.82 % 641,780 4.50 % n/a n/a Banner Bank: Total capital to risk-weighted assets 1,987,693 13.94 % 1,140,409 8.00 % 1,425,511 10.00 % Tier 1 capital to risk-weighted assets 1,810,436 12.70 % 855,307 6.00 % 1,140,409 8.00 % Tier 1 leverage capital to average assets 1,810,436 11.15 % 649,364 4.00 % 811,705 5.00 % Common equity tier 1 capital to risk-weighted assets 1,810,436 12.70 % 641,480 4.50 % 926,582 6.50 % These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) (rates / ratios annualized) ANALYSIS OF NET INTEREST SPREAD Quarters Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Average Balance Interest and Dividends Yield / Cost(3) Average Balance Interest and Dividends Yield / Cost(3) Average Balance Interest and Dividends Yield / Cost(3) Interest-earning assets: Held for sale loans $ 33,242 $ 509 6.14 % $ 26,051 $ 381 5.93 % $ 29,936 $ 503 6.74 % Real estate secured loans 9,875,493 148,303 6.02 % 9,754,431 144,369 6.00 % 9,565,357 143,909 6.03 % Commercial/agricultural loans 1,881,938 29,866 6.37 % 1,853,248 29,153 6.38 % 1,924,092 31,196 6.50 % Consumer and other loans 117,727 2,015 6.87 % 116,147 2,040 7.12 % 121,142 2,087 6.91 % Total loans(1) 11,908,400 180,693 6.09 % 11,749,877 175,943 6.07 % 11,640,527 177,695 6.12 % Mortgage-backed securities 2,275,561 14,269 2.52 % 2,326,123 14,509 2.53 % 2,496,972 15,576 2.50 % Other securities 938,205 9,915 4.24 % 878,650 9,040 4.17 % 893,062 9,561 4.29 % Interest-bearing deposits with banks 139,672 1,102 3.16 % 184,204 1,518 3.34 % 75,539 577 3.06 % FHLB stock 16,342 150 3.68 % 9,912 148 6.06 % 23,077 222 3.86 % Total investment securities 3,369,780 25,436 3.03 % 3,398,889 25,215 3.01 % 3,488,650 25,936 2.98 % Total interest-earning assets 15,278,180 206,129 5.41 % 15,148,766 201,158 5.39 % 15,129,177 203,631 5.40 % Non-interest-earning assets 1,082,054 1,106,533 994,003 Total assets $ 16,360,234 $ 16,255,299 $ 16,123,180 Deposits: Interest-bearing checking accounts $ 2,606,252 9,433 1.45 % $ 2,631,917 9,273 1.43 % $ 2,465,015 9,462 1.54 % Savings accounts 3,830,346 19,009 1.99 % 3,792,427 18,388 1.97 % 3,493,965 18,837 2.16 % Money market accounts 1,314,496 5,790 1.77 % 1,387,870 6,151 1.80 % 1,492,229 7,729 2.08 % Certificates of deposit 1,465,885 11,322 3.10 % 1,481,349 11,866 3.25 % 1,489,611 13,288 3.58 % Total interest-bearing deposits 9,216,979 45,554 1.98 % 9,293,563 45,678 1.99 % 8,940,820 49,316 2.21 % Non-interest-bearing deposits 4,523,594 — — % 4,470,629 — — % 4,480,579 — — % Total deposits 13,740,573 45,554 1.33 % 13,764,192 45,678 1.35 % 13,421,399 49,316 1.47 % Other interest-bearing liabilities: FHLB advances 145,176 1,426 3.94 % 4,089 40 3.97 % 296,671 3,370 4.56 % Other borrowings 116,146 732 2.53 % 111,569 697 2.53 % 122,227 675 2.22 % Junior subordinated debentures and subordinated notes 89,178 1,234 5.55 % 89,178 1,234 5.61 % 168,793 2,499 5.94 % Total borrowings 350,500 3,392 3.88 % 204,836 1,971 3.90 % 587,691 6,544 4.47 % Total funding liabilities 14,091,073 48,946 1.39 % 13,969,028 47,649 1.38 % 14,009,090 55,860 1.60 % Other non-interest-bearing liabilities(2) 290,601 320,808 274,407 Total liabilities 14,381,674 14,289,836 14,283,497 Shareholders’ equity 1,978,560 1,965,463 1,839,683 Total liabilities and shareholders’ equity $ 16,360,234 $ 16,255,299 $ 16,123,180 Net interest income/rate spread (tax equivalent) 157,183 4.02 % 153,509 4.01 % 147,771 3.80 % Net interest margin (tax equivalent) 4.13 % 4.11 % 3.92 % Reconciliation to reported net interest income: Adjustments for taxable equivalent basis (3,443 ) (3,340 ) (3,372 ) Net interest income and margin, as reported $ 153,740 4.04 % $ 150,169 4.02 % $ 144,399 3.83 % Additional Key Financial Ratios: Return on average assets 1.20 % 1.37 % 1.13 % Adjusted return on average assets(4) 1.21 % 1.36 % 1.16 % Return on average equity 9.91 % 11.29 % 9.92 % Adjusted return on average equity(4) 9.98 % 11.23 % 10.20 % Return on average tangible common equity(4) 12.27 % 14.00 % 12.56 % Average equity/average assets 12.09 % 12.09 % 11.41 % Average interest-earning assets/average interest-bearing liabilities 159.69 % 159.49 % 158.78 % Average interest-earning assets/average funding liabilities 108.42 % 108.45 % 108.00 % Non-interest income/average assets 0.45 % 0.48 % 0.44 % Non-interest expense/average assets 2.65 % 2.56 % 2.52 % Efficiency ratio 62.80 % 60.60 % 62.50 % Adjusted efficiency ratio(4) 61.30 % 59.45 % 60.28 % (1) Average balances include loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans. (2) Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures. (3) Tax-exempt income is calculated on a tax equivalent basis, which Banner believes provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice. The tax equivalent yield adjustment to interest earned on loans was $2.3 million, $2.2 million and $2.3 million for the quarters ended June 30, 2026, March 31, 2026 and June 30, 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the quarters ended June 30, 2026, March 31, 2026, and June 30, 2025. (4) Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) (rates / ratios annualized) ANALYSIS OF NET INTEREST SPREAD Six Months Ended Jun 30, 2026 Jun 30, 2025 Average Balance Interest and Dividends Yield/Cost(3) Average Balance Interest and Dividends Yield/Cost(3) Interest-earning assets: Held for sale loans $ 29,666 $ 890 6.05 % $ 26,217 $ 860 6.61 % Real estate secured loans 9,815,296 292,672 6.01 % 9,466,335 281,633 6.00 % Commercial/agricultural loans 1,867,672 59,019 6.37 % 1,915,699 61,948 6.52 % Consumer and other loans 116,942 4,055 6.99 % 121,316 4,179 6.95 % Total loans(1) 11,829,576 356,636 6.08 % 11,529,567 348,620 6.10 % Mortgage-backed securities 2,300,703 28,778 2.52 % 2,519,851 31,471 2.52 % Other securities 908,592 18,955 4.21 % 897,870 19,248 4.32 % Interest-bearing deposits with banks 161,815 2,620 3.27 % 70,675 1,061 3.03 % FHLB stock 13,145 298 4.57 % 17,969 371 4.16 % Total investment securities 3,384,255 50,651 3.02 % 3,506,365 52,151 3.00 % Total interest-earning assets 15,213,831 407,287 5.40 % 15,035,932 400,771 5.38 % Non-interest-earning assets 1,094,225 1,000,216 Total assets $ 16,308,056 $ 16,036,148 Deposits: Interest-bearing checking accounts $ 2,619,014 18,706 1.44 % $ 2,423,292 17,999 1.50 % Savings accounts 3,811,491 37,397 1.98 % 3,472,556 36,940 2.15 % Money market accounts 1,350,980 11,941 1.78 % 1,523,571 15,589 2.06 % Certificates of deposit 1,473,574 23,188 3.17 % 1,510,404 27,525 3.67 % Total interest-bearing deposits 9,255,059 91,232 1.99 % 8,929,823 98,053 2.21 % Non-interest-bearing deposits 4,497,258 — — % 4,503,461 — — % Total deposits 13,752,317 91,232 1.34 % 13,433,284 98,053 1.47 % Other interest-bearing liabilities: FHLB advances 75,022 1,466 3.94 % 186,597 4,230 4.57 % Other borrowings 113,870 1,429 2.53 % 128,459 1,369 2.15 % Junior subordinated debentures and subordinated notes 89,178 2,468 5.58 % 169,233 4,993 5.95 % Total borrowings 278,070 5,363 3.89 % 484,289 10,592 4.41 % Total funding liabilities 14,030,387 96,595 1.39 % 13,917,573 108,645 1.57 % Other non-interest-bearing liabilities(2) 305,621 299,082 Total liabilities 14,336,008 14,216,655 Shareholders’ equity 1,972,048 1,819,493 Total liabilities and shareholders’ equity $ 16,308,056 $ 16,036,148 Net interest income/rate spread (tax equivalent) 310,692 4.01 % 292,126 3.81 % Net interest margin (tax equivalent) 4.12 % 3.92 % Reconciliation to reported net interest income: Adjustments for taxable equivalent basis (6,783 ) (6,644 ) Net interest income and margin, as reported $ 303,909 4.03 % $ 285,482 3.83 % Additional Key Financial Ratios: Return on average assets 1.28 % 1.14 % Adjusted return on average assets(4) 1.28 % 1.15 % Return on average equity 10.59 % 10.04 % Adjusted return on average equity(4) 10.60 % 10.16 % Return on average tangible common equity(4) 13.13 % 12.76 % Average equity/average assets 12.09 % 11.35 % Average interest-earning assets/average interest-bearing liabilities 159.59 % 159.72 % Average interest-earning assets/average funding liabilities 108.43 % 108.04 % Non-interest income/average assets 0.46 % 0.46 % Non-interest expense/average assets 2.60 % 2.55 % Efficiency ratio 61.71 % 62.85 % Adjusted efficiency ratio(4) 60.38 % 61.22 % (1) Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans. (2) Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures. (3) Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $4.5 million and $4.6 million for the six months ended June 30, 2026 and 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.2 million and $2.1 million for the six months ended June 30, 2026 and 2025, respectively. (4) Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) * Non-GAAP Financial Measures In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this earnings release contains certain non-GAAP financial measures. Tangible common shareholders’ equity per share, the ratio of tangible common equity to tangible assets and the return on average tangible common equity, and references to adjusted revenue, adjusted earnings, the adjusted return on average assets, the adjusted return on average equity and the adjusted efficiency ratio represent non-GAAP financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below: ADJUSTED REVENUE Quarters Ended Six Months Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025 Net interest income (GAAP) $ 153,740 $ 150,169 $ 144,399 $ 303,909 $ 285,482 Non-interest income (GAAP) 18,222 19,161 17,751 37,383 36,859 Total revenue (GAAP) 171,962 169,330 162,150 341,292 322,341 Exclude: Net (gain) loss on sale of securities (8 ) 1,242 3 1,234 3 Net change in valuation of financial instruments carried at fair value 157 (1,662 ) (88 ) (1,505 ) (403 ) Losses incurred on building and lease exits — — 919 — 919 Adjusted revenue (non-GAAP) $ 172,111 $ 168,910 $ 162,984 $ 341,021 $ 322,860 ADJUSTED EARNINGS Quarters Ended Six Months Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025 Net income (GAAP) $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631 Exclude: Net (gain) loss on sale of securities (8 ) 1,242 3 1,234 3 Net change in valuation of financial instruments carried at fair value 157 (1,662 ) (88 ) (1,505 ) (403 ) Merger and acquisition-related expenses 238 — — 238 — Building and lease exit costs 47 9 1,753 56 1,753 Related net tax (benefit) expense (104 ) 99 (401 ) (5 ) (325 ) Total adjusted earnings (non-GAAP) $ 49,216 $ 54,404 $ 46,763 $ 103,620 $ 91,659 Diluted earnings per share (GAAP) $ 1.43 $ 1.60 $ 1.31 $ 3.03 $ 2.61 Diluted adjusted earnings per share (non-GAAP) $ 1.44 $ 1.59 $ 1.35 $ 3.03 $ 2.64 Return on average assets 1.20 % 1.37 % 1.13 % 1.28 % 1.14 % Adjusted return on average assets(1) 1.21 % 1.36 % 1.16 % 1.28 % 1.15 % Return on average equity 9.91 % 11.29 % 9.92 % 10.59 % 10.04 % Adjusted return on average equity(2) 9.98 % 11.23 % 10.20 % 10.60 % 10.16 % AVERAGE TANGIBLE COMMON EQUITY Quarters Ended Six Months Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025 Net Income (GAAP) $ 48,886 $ 54,716 $ 45,496 $ 103,602 $ 90,631 Exclude: Amortization of intangibles, net of tax $ 202 $ 202 $ 360 $ 404 $ 720 Tangible net income available to common shareholders (non-GAAP) $ 49,088 $ 54,918 $ 45,856 $ 104,006 $ 91,351 Average common shareholder’s equity $ 1,978,560 $ 1,965,463 $ 1,839,683 $ 1,972,048 $ 1,819,493 Exclude: Average goodwill and other intangible assets, net 374,225 374,477 375,486 374,350 375,713 Average tangible common equity $ 1,604,335 $ 1,590,986 $ 1,464,197 $ 1,597,698 $ 1,443,780 Return on average tangible common equity(3) 12.27 % 14.00 % 12.56 % 13.13 % 12.76 % (1) Adjusted earnings (non-GAAP) divided by average assets. (2) Adjusted earnings (non-GAAP) divided by average equity. (3) Tangible net income (non-GAAP) divided by average tangible common equity (non-GAAP). ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) ADJUSTED EFFICIENCY RATIO Quarters Ended Six Months Ended Jun 30, 2026 Mar 31, 2026 Jun 30, 2025 Jun 30, 2026 Jun 30, 2025 Non-interest expense (GAAP) $ 107,990 $ 102,608 $ 101,348 $ 210,598 $ 202,607 Exclude: CDI amortization (256 ) (256 ) (455 ) (512 ) (911 ) State/municipal tax expense (1,773 ) (1,820 ) (1,416 ) (3,593 ) (2,870 ) REO operations (165 ) (109 ) (392 ) (274 ) (331 ) Merger and acquisition-related expenses (238 ) — — (238 ) — Building and lease exit costs (47 ) (9 ) (834 ) (56 ) (834 ) Adjusted non-interest expense (non-GAAP) $ 105,511 $ 100,414 $ 98,251 $ 205,925 $ 197,661 Net interest income (GAAP) $ 153,740 $ 150,169 $ 144,399 $ 303,909 $ 285,482 Non-interest income (GAAP) 18,222 19,161 17,751 37,383 36,859 Total revenue (GAAP) 171,962 169,330 162,150 341,292 322,341 Exclude: Net (gain) loss on sale of securities (8 ) 1,242 3 1,234 3 Net change in valuation of financial instruments carried at fair value 157 (1,662 ) (88 ) (1,505 ) (403 ) Losses incurred on building and lease exits — — 919 — 919 Adjusted revenue (non-GAAP) $ 172,111 $ 168,910 $ 162,984 $ 341,021 $ 322,860 Efficiency ratio (GAAP) 62.80 % 60.60 % 62.50 % 61.71 % 62.85 % Adjusted efficiency ratio (non-GAAP)(1) 61.30 % 59.45 % 60.28 % 60.38 % 61.22 % (1) Adjusted non-interest expense (non-GAAP) divided by adjusted revenue (non-GAAP). TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS Jun 30, 2026 Mar 31, 2026 Dec 31, 2025 Jun 30, 2025 Shareholders’ equity (GAAP) $ 1,999,263 $ 1,966,634 $ 1,946,297 $ 1,865,664 Exclude goodwill and other intangible assets, net 374,100 374,356 374,612 375,268 Tangible common shareholders’ equity (non-GAAP) $ 1,625,163 $ 1,592,278 $ 1,571,685 $ 1,490,396 Total assets (GAAP) $ 16,593,547 $ 16,344,272 $ 16,354,488 $ 16,437,169 Exclude goodwill and other intangible assets, net 374,100 374,356 374,612 375,268 Total tangible assets (non-GAAP) $ 16,219,447 $ 15,969,916 $ 15,979,876 $ 16,061,901 Common shareholders’ equity to total assets (GAAP) 12.05 % 12.03 % 11.90 % 11.35 % Tangible common shareholders’ equity to tangible assets (non-GAAP) 10.02 % 9.97 % 9.84 % 9.28 % TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE Shareholders’ equity (GAAP) $ 1,999,263 $ 1,966,634 $ 1,946,297 $ 1,865,664 Tangible common shareholders’ equity (non-GAAP) $ 1,625,163 $ 1,592,278 $ 1,571,685 $ 1,490,396 Common shares outstanding at end of period 33,984,909 33,875,098 34,097,856 34,583,994 Common shareholders’ equity (book value) per share (GAAP) $ 58.83 $ 58.06 $ 57.08 $ 53.95 Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) $ 47.82 $ 47.00 $ 46.09 $ 43.09 MARK J. GRESCOVICH, PRESIDENT & CEO ROBERT G. BUTTERFIELD, CFO (509) 527-3636 Source: Banner Corporation