Banner Corporation Reports Net Income of $45.5 Million, or $1.31 Per Diluted Share, for Second Quarter 2025; Declares Quarterly Cash Dividend of $0.48 Per Share

WALLA WALLA, Wash.--(BUSINESS WIRE)-- Banner Corporation (NASDAQ: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $45.5 million, or $1.31 per diluted share, for the second quarter of 2025, compared to $45.1 million, or $1.30 per diluted share, for the preceding quarter and $39.8 million, or $1.15 per diluted share, for the second quarter of 2024. Net interest income was $144.4 million for the second quarter of 2025, compared to $141.1 million in the preceding quarter and $132.5 million for the second quarter a year ago. The increase in net interest income compared to the preceding quarter reflects an increase in both the yield and average balance of interest-earning assets, partially offset by an increase in funding costs. The increase in net interest income compared to the prior year quarter also reflects an increase in both the yield and average balance of interest-earning assets as well as a decrease in overall funding costs. Second quarter 2025 results included a $4.8 million provision for credit losses, compared to $3.1 million in the preceding quarter and $2.4 million in the second quarter of 2024. Net income was $90.6 million, or $2.61 per diluted share, for the six months ended June 30, 2025, compared to net income of $77.4 million, or $2.24 per diluted share, for the six months ended June 30, 2024. Banner’s results for the six months ended June 30, 2025 include a $7.9 million provision for credit losses, a $3,000 net loss on the sale of securities and a $403,000 net increase in the fair value adjustments on financial instruments carried at fair value, compared to a $2.9 million provision for credit losses, a $5.5 million net loss on the sale of securities and a $1.2 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 declared a regular quarterly cash dividend of $0.48 per share payable August 15, 2025, to common shareholders of record on August 5, 2025.

“Banner’s second quarter performance highlights the 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 second quarter of 2025 benefited from solid year over year loan growth as well as higher yields on interest-earning assets. This benefit was partially offset by higher funding costs. The strategic investments we have made continue to enhance our operation and position Banner well for long-term success. Banner’s credit metrics continue to be strong, our reserve for loan losses remains solid, and our capital base continues to be robust. We also continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter-end. For 134 years, Banner has upheld its core values and remained committed to doing the right thing for our clients, communities, colleagues, company and shareholders, while delivering strength and consistency through all economic cycles and change events.”

At June 30, 2025, Banner, on a consolidated basis, had $16.44 billion in assets, $11.53 billion in net loans and $13.53 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.

Second Quarter 2025 Highlights

• Net interest margin, on a tax equivalent basis, was 3.92% for both the current and preceding quarters, compared to 3.70% in the second quarter a year ago.
• Revenue was $162.2 million for the second quarter of 2025, compared to $160.2 million in the preceding quarter and increased 8% from $149.7 million in the second 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 losses incurred on building and lease exits) was $163.0 million in the second quarter of 2025, compared to $159.9 million in the preceding quarter and increased 8% from $150.5 million in the second quarter a year ago.
• Net interest income was $144.4 million in the second quarter of 2025, compared to $141.1 million in the preceding quarter and increased 9% from $132.5 million in the second quarter a year ago.
• Mortgage banking operations revenue was $3.2 million for the second quarter of 2025, compared to $3.1 million in the preceding quarter and $3.0 million in the second quarter a year ago.
• Return on average assets was 1.13%, compared to 1.15% in the preceding quarter and 1.02% in the second quarter a year ago.
• Net loans receivable increased 2% to $11.53 billion at June 30, 2025, compared to $11.28 billion at March 31, 2025, and increased 5% compared to $10.99 billion at June 30, 2024.
• Non-performing assets were $49.8 million, or 0.30% of total assets, at June 30, 2025, compared to $42.7 million, or 0.26% of total assets, at March 31, 2025 and $33.3 million, or 0.21% of total assets, at June 30, 2024.
• The allowance for credit losses - loans was $160.5 million, or 1.37% of total loans receivable, as of June 30, 2025, compared to $157.3 million, or 1.38% of total loans receivable, as of March 31, 2025 and $152.8 million, or 1.37% of total loans receivable, as of June 30, 2024.
• Total deposits decreased to $13.53 billion at June 30, 2025, compared to $13.59 billion at March 31, 2025, and increased 3% compared to $13.08 billion at June 30, 2024.
• Core deposits represented 89% of total deposits at June 30, 2025.
• Dividends paid to shareholders were $0.48 per share in the quarter ended June 30, 2025.
• Common shareholders’ equity per share increased 1% to $53.95 at June 30, 2025, compared to $53.16 at the preceding quarter end, and increased 10% from $49.07 at June 30, 2024.
• Tangible common shareholders’ equity per share* increased 2% to $43.09 at June 30, 2025, compared to $42.27 at the preceding quarter end, and increased 13% from $38.12 at June 30, 2024.

*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 $144.4 million in the second quarter of 2025, compared to $141.1 million in the preceding quarter and $132.5 million in the second quarter a year ago. Net interest margin, on a tax equivalent basis, was 3.92% for both the second quarter of 2025 and the preceding quarter, and increased 22 basis points compared to 3.70% in the second quarter a year ago. Net interest margin for the current quarter benefited from higher yields on interest earning assets.

Interest income was $200.3 million in the second quarter of 2025, compared to $193.9 million in the preceding quarter and $189.1 million in the second quarter a year ago. Average yields on interest-earning assets increased five basis points to 5.40% for the second quarter of 2025, compared to 5.35% for the preceding quarter, and increased 15 basis points compared to 5.25% in the second quarter a year ago, primarily due to increases in average loan yields. Average loan yields increased five basis points to 6.12%, compared to 6.07% in the preceding quarter, and increased 16 basis points compared to 5.96% in the second 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 the second quarter of 2025, compared to $52.8 million in the preceding quarter and $56.6 million in the second quarter a year ago. Total deposit costs were 1.47% in both the second quarter of 2025 and the preceding quarter and decreased three basis points compared to 1.50% in the second 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 the interest rate declines in the second half of 2024. The average rate paid on borrowings increased 15 basis points to 4.47% in the second quarter of 2025, compared to 4.32% in the preceding quarter, and decreased compared to 5.07% in the second quarter a year ago, primarily due to the decreases in market interest rates. The total cost of funding liabilities increased five basis points to 1.60% in the second quarter of 2025, compared to 1.55% in the preceding quarter, primarily due to an increase in the average balance of FHLB advances to temporarily fund loan growth, and decreased compared to 1.66% in the second quarter a year ago, primarily due to deposit interest rate declines.

A $4.8 million provision for credit losses was recorded in the current quarter (comprised of a $4.2 million provision for credit losses - loans, a $588,000 provision for credit losses - unfunded loan commitments and a $6,000 provision for credit losses - held-to-maturity debt securities). This compares to a $3.1 million provision for credit losses in the prior quarter (comprised of a $4.5 million provision for credit losses - loans, a $1.4 million recapture of provision for credit losses - unfunded loan commitments and a $10,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $2.4 million provision for credit losses in the second quarter a year ago (comprised of a $2.0 million provision for credit losses - loans, a $430,000 provision for credit losses - unfunded loan commitments and a $14,000 recapture of provision for credit losses - held-to-maturity debt securities). The provision for credit losses recorded in the current quarter primarily reflected loan growth, as well as risk rating migration which impacted the overall estimated reserve requirements.

Total non-interest income was $17.8 million in the second quarter of 2025, compared to $19.1 million in the preceding quarter and $17.2 million in the second quarter a year ago. The decrease in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $1.1 million decrease in miscellaneous income, primarily due to losses incurred on building and lease exits during the current quarter. The increase in non-interest income during the current quarter compared to the prior year quarter was primarily due to a $559,000 decrease in the net loss recognized on the sale of securities and a $278,000 increase in the fair value adjustments on financial instruments carried at fair value during the current quarter, partially offset by the decrease in miscellaneous income. Total non-interest income was $36.9 million for the six months ended June 30, 2025, compared to $28.8 million for the same period a year earlier.

Mortgage banking operations revenue was $3.2 million in the second quarter of 2025, compared to $3.1 million in the preceding quarter and $3.0 million in the second quarter a year ago. The volume of one- to four-family loans sold during the current quarter decreased compared to the preceding quarter and increased compared to the prior year quarter. Home purchase activity accounted for 85% of one- to four-family mortgage loan originations in the second quarter of 2025, 84% in the preceding quarter and 89% in the second quarter of 2024.

Total non-interest expense was $101.3 million in both the second quarter of 2025 and the preceding quarter and was $98.1 million in the second quarter of 2024. Non-interest expense for the current quarter compared to the previous quarter reflects a $629,000 increase in salary and employee benefits, primarily resulting from increased loan commissions and normal salary and wage increases, a $571,000 increase in information and computer data services, primarily due to increases in computer software expenses, and a $497,000 increase in advertising and marketing expenses, primarily due to increases in printed media marketing and community development expenses, offset by a $1.6 million increase in capitalized loan origination costs. In addition, the current quarter included $834,000 of building and lease exit costs. The increase in non-interest expense for the current quarter 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 six months ended June 30, 2025, total non-interest expense was $202.6 million, compared to $195.8 million for the six months ended June 30, 2024. Banner’s efficiency ratio was 62.50% for the second quarter of 2025, compared to 63.21% in the preceding quarter and 65.53% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 60.28% for the second quarter of 2025, compared to 62.18% in the preceding quarter and 63.60% 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 $16.44 billion at June 30, 2025, up from $16.17 billion at March 31, 2025 and $15.82 billion at June 30, 2024. The increase compared to the prior quarter was primarily due to increases in total loans receivable, partially offset by decreases in securities. Securities and interest-bearing deposits held at other banks totaled $3.29 billion at June 30, 2025, compared to $3.33 billion at March 31, 2025 and $3.27 billion at June 30, 2024. The average effective duration of the securities portfolio was approximately 6.6 years at June 30, 2025, compared to 6.5 years at June 30, 2024.

Total loans receivable were $11.69 billion at June 30, 2025, up from $11.44 billion at March 31, 2025 and $11.14 billion at June 30, 2024. Commercial real estate loans increased 4% to $3.97 billion at June 30, 2025, compared to $3.84 billion at March 31, 2025, and increased 7% compared to $3.72 billion at June 30, 2024. The increase in commercial real estate loans from March 31, 2025 was primarily the result of new loan production and the year over year increase 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. Multifamily real estate loans decreased 2% to $860.7 million at June 30, 2025, compared to $877.7 million at March 31, 2025, and increased 20% compared to $717.1 million at June 30, 2024. The increase from June 30, 2024 was primarily the result of the conversion of multifamily construction loans to the multifamily portfolio upon the completion of the construction phase. Commercial business loans increased 3% to $2.47 billion at June 30, 2025, compared to $2.41 billion at March 31, 2025 and increased 4% compared to $2.37 billion at June 30, 2024, primarily due to new loan production.

Loans held for sale were $37.7 million at June 30, 2025, compared to $24.5 million at March 31, 2025 and $13.4 million at June 30, 2024. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $104.6 million, compared to $108.1 million in the preceding quarter and $94.9 million in the second quarter a year ago. The increase in loans held for sale compared to the preceding and prior year quarters was primarily the result of increased originations of one- to four- family residential mortgage loans held for sale, with originations outpacing loan sales during the quarter.

Total deposits were $13.53 billion at June 30, 2025, compared to $13.59 billion at March 31, 2025 and $13.08 billion a year ago. Core deposits decreased to $12.05 billion at June 30, 2025, compared to $12.09 billion at March 31, 2025, and increased 4% compared to $11.55 billion at June 30, 2024. The increase compared to the prior year quarter primarily reflects increases in interest-bearing transaction and savings accounts. Core deposits were 89% of total deposits at both June 30, 2025 and March 31, 2025, compared to 88% at June 30, 2024. Certificates of deposit decreased to $1.48 billion at June 30, 2025, compared to $1.50 billion at March 31, 2025, and decreased 3% from $1.53 billion a year earlier. The decreases were principally due to decreases in brokered deposits.

FHLB advances were $565.0 million at June 30, 2025, compared to $168.0 million at March 31, 2025 and $398.0 million a year ago. The increase in FHLB advances were primarily used to fund loan growth. At June 30, 2025, off-balance sheet liquidity included additional borrowing capacity of $2.74 billion at the FHLB and $1.62 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

The balance of our outstanding subordinated debt was paid off during the second quarter of 2025. Subordinated notes, net of issuance costs, were $80.4 million at March 31, 2025, and $89.6 million at June 30, 2024.

At June 30, 2025, total common shareholders’ equity was $1.87 billion or 11.35% of total assets, compared to $1.83 billion or 11.34% of total assets at March 31, 2025, and $1.69 billion or 10.69% of total assets at June 30, 2024. The increase at June 30, 2025 compared to March 31, 2025 was due to a $28.7 million increase in retained earnings resulting from $45.5 million in net income, partially offset by the accrual of $16.8 million of cash dividends during the second quarter of 2025. At June 30, 2025, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.49 billion, or 9.28% of tangible assets, compared to $1.46 billion, or 9.23% of tangible assets, at March 31, 2025, and $1.31 billion, or 8.51% 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, 2025, Banner’s estimated common equity Tier 1 capital ratio was 12.63%, its estimated Tier 1 leverage capital to average assets ratio was 11.29%, and its estimated total capital to risk-weighted assets ratio was 14.51%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.

Credit Quality

The allowance for credit losses - loans was $160.5 million, or 1.37% of total loans receivable and 373% of non-performing loans, at June 30, 2025, compared to $157.3 million, or 1.38% of total loans receivable and 404% of non-performing loans, at March 31, 2025, and $152.8 million, or 1.37% of total loans receivable and 498% of non-performing loans, at June 30, 2024. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $12.8 million at June 30, 2025, compared to $12.2 million at March 31, 2025, and $14.0 million at June 30, 2024. Net loan charge-offs totaled $1.0 million in the second quarter of 2025, compared to net loan charge-offs of $2.7 million and $245,000 in the in the preceding quarter and second quarter a year ago, respectively. Non-performing loans were $43.0 million at June 30, 2025, compared to $39.0 million at March 31, 2025, and $30.7 million a year ago. Substandard loans were $189.5 million as of June 30, 2025, compared to $197.8 million as of March 31, 2025 and $122.0 million a year ago. Total non-performing assets were $49.8 million, or 0.30% of total assets, at June 30, 2025, compared to $42.7 million, or 0.26% of total assets, at March 31, 2025, and $33.3 million, or 0.21% of total assets, a year ago.

Conference Call

Banner will host a conference call on Thursday, July 17, 2025, 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 (833) 470-1428 using access code 859937 to participate in the call. A replay of the call will be available at www.bannerbank.com.

About the Company

Banner Corporation is a $16.44 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.

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 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 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.

RESULTS OF OPERATIONS		Quarters Ended												Six Months Ended
(in thousands except shares and per share data)		Jun 30, 2025				Mar 31, 2025				Jun 30, 2024				Jun 30, 2025				Jun 30, 2024
INTEREST INCOME:
Loans receivable		$	175,373			$	168,677			$	161,191			$	344,050			$	317,666
Mortgage-backed securities			15,416				15,744				16,708				31,160				33,642
Securities and cash equivalents			9,470				9,447				11,239				18,917				22,518
Total interest income			200,259				193,868				189,138				394,127				373,826
INTEREST EXPENSE:
Deposits			49,316				48,737				48,850				98,053				93,463
Federal Home Loan Bank (FHLB) advances			3,370				860				3,621				4,230				6,593
Other borrowings			675				694				1,160				1,369				2,335
Subordinated debt			2,499				2,494				2,961				4,993				5,930
Total interest expense			55,860				52,785				56,592				108,645				108,321
Net interest income			144,399				141,083				132,546				285,482				265,505
PROVISION FOR CREDIT LOSSES			4,795				3,139				2,369				7,934				2,889
Net interest income after provision for credit losses			139,604				137,944				130,177				277,548				262,616
NON-INTEREST INCOME:
Deposit fees and other service charges			10,835				10,769				10,590				21,604				21,612
Mortgage banking operations			3,226				3,103				3,006				6,329				5,341
Bank-owned life insurance			2,384				2,575				2,367				4,959				4,604
Miscellaneous			1,221				2,346				1,988				3,567				3,880
			17,666				18,793				17,951				36,459				35,437
Net loss on sale of securities			(3	)			—				(562	)			(3	)			(5,465	)
Net change in valuation of financial instruments carried at fair value			88				315				(190	)			403				(1,182	)
Total non-interest income			17,751				19,108				17,199				36,859				28,790
NON-INTEREST EXPENSE:
Salary and employee benefits			65,486				64,857				63,831				130,343				126,200
Less capitalized loan origination costs			(4,924	)			(3,330	)			(4,639	)			(8,254	)			(8,315	)
Occupancy and equipment			12,256				12,097				12,128				24,353				24,590
Information and computer data services			8,199				7,628				7,240				15,827				14,560
Payment and card processing services			5,899				5,750				5,691				11,649				11,401
Professional and legal expenses			2,271				2,430				1,201				4,701				2,731
Advertising and marketing			1,087				590				1,198				1,677				2,277
Deposit insurance			2,800				2,797				2,858				5,597				5,667
State and municipal business and use taxes			1,416				1,454				1,394				2,870				2,698
Real estate operations, net			392				(61	)			297				331				77
Amortization of core deposit intangibles			455				456				724				911				1,447
Miscellaneous			6,011				6,591				6,205				12,602				12,436
Total non-interest expense			101,348				101,259				98,128				202,607				195,769
Income before provision for income taxes			56,007				55,793				49,248				111,800				95,637
PROVISION FOR INCOME TAXES			10,511				10,658				9,453				21,169				18,283
NET INCOME		$	45,496			$	45,135			$	39,795			$	90,631			$	77,354
Earnings per common share:
Basic		$	1.31			$	1.31			$	1.15			$	2.62			$	2.25
Diluted		$	1.31			$	1.30			$	1.15			$	2.61			$	2.24
Cumulative dividends declared per common share		$	0.48			$	0.48			$	0.48			$	0.96			$	0.96
Weighted average number of common shares outstanding:
Basic			34,627,433				34,509,815				34,488,163				34,568,948				34,439,863
Diluted			34,738,948				34,778,687				34,537,012				34,761,044				34,539,620
Increase in common shares outstanding			94,022				30,140				60,531				124,162				107,383

FINANCIAL CONDITION																		Percentage Change
(in thousands except shares and per share data)		Jun 30, 2025				Mar 31, 2025				Dec 31, 2024				Jun 30, 2024				Prior Qtr			Prior Yr Qtr
ASSETS
Cash and due from banks		$	239,339			$	213,574			$	203,402			$	195,163			12	%		23	%
Interest-bearing deposits			244,009				228,371				298,456				52,295			7	%		367	%
Total cash and cash equivalents			483,348				441,945				501,858				247,458			9	%		95	%
Securities - available for sale, amortized cost $2,372,331, $2,426,395, $2,460,262 and $2,572,544, respectively			2,064,581				2,108,945				2,104,511				2,197,693			(2	)%		(6	)%
Securities - held to maturity, fair value $801,838, $819,261, $825,528 and $852,709, respectively			981,312				991,796				1,001,564				1,023,028			(1	)%		(4	)%
Total securities			3,045,893				3,100,741				3,106,075				3,220,721			(2	)%		(5	)%
FHLB stock			35,151				17,286				22,451				27,311			103	%		29	%
Loans held for sale			37,651				24,536				32,021				13,421			53	%		181	%
Loans receivable			11,690,373				11,438,796				11,354,656				11,143,848			2	%		5	%
Allowance for credit losses – loans			(160,501	)			(157,323	)			(155,521	)			(152,848	)		2	%		5	%
Net loans receivable			11,529,872				11,281,473				11,199,135				10,991,000			2	%		5	%
Accrued interest receivable			64,729				63,987				60,885				67,520			1	%		(4	)%
Property and equipment, net			117,175				119,649				124,589				126,465			(2	)%		(7	)%
Goodwill			373,121				373,121				373,121				373,121			—	%		—	%
Other intangibles, net			2,147				2,602				3,058				4,237			(17	)%		(49	)%
Bank-owned life insurance			316,365				313,942				312,549				307,948			1	%		3	%
Operating lease right-of-use assets			38,754				37,134				39,998				39,628			4	%		(2	)%
Other assets			392,963				394,396				424,297				397,364			—	%		(1	)%
Total assets		$	16,437,169			$	16,170,812			$	16,200,037			$	15,816,194			2	%		4	%
LIABILITIES
Deposits:
Non-interest-bearing		$	4,504,491			$	4,571,598			$	4,591,543			$	4,537,803			(1	)%		(1	)%
Interest-bearing transaction and savings accounts			7,545,028				7,517,617				7,423,183				7,016,327			—	%		8	%
Interest-bearing certificates			1,477,772				1,504,050				1,499,672				1,525,133			(2	)%		(3	)%
Total deposits			13,527,291				13,593,265				13,514,398				13,079,263			—	%		3	%
Advances from FHLB			565,000				168,000				290,000				398,000			236	%		42	%
Other borrowings			117,112				130,588				125,257				165,956			(10	)%		(29	)%
Subordinated notes, net			—				80,389				80,278				89,561			(100	)%		(100	)%
Junior subordinated debentures at fair value			73,366				67,711				67,477				66,831			8	%		10	%
Operating lease liabilities			41,696				40,466				43,472				44,056			3	%		(5	)%
Accrued expenses and other liabilities			200,194				210,771				258,070				235,515			(5	)%		(15	)%
Deferred compensation			46,846				46,169				46,759				46,246			1	%		1	%
Total liabilities			14,571,505				14,337,359				14,425,711				14,125,428			2	%		3	%
SHAREHOLDERS’ EQUITY
Common stock			1,309,004				1,308,967				1,307,509				1,302,236			—	%		1	%
Retained earnings			801,082				772,412				744,091				686,079			4	%		17	%
Accumulated other comprehensive loss			(244,422	)			(247,926	)			(277,274	)			(297,549	)		(1	)%		(18	)%
Total shareholders’ equity			1,865,664				1,833,453				1,774,326				1,690,766			2	%		10	%
Total liabilities and shareholders’ equity		$	16,437,169			$	16,170,812			$	16,200,037			$	15,816,194			2	%		4	%
Common Shares Issued:
Shares outstanding at end of period			34,583,994				34,489,972				34,459,832				34,455,752
Common shareholders’ equity per share (1)		$	53.95			$	53.16			$	51.49			$	49.07
Common shareholders’ tangible equity per share (1) (2)		$	43.09			$	42.27			$	40.57			$	38.12
Common shareholders’ equity to total assets			11.35	%			11.34	%			10.95	%			10.69	%
Common shareholders’ tangible equity to tangible assets (2)			9.28	%			9.23	%			8.84	%			8.51	%
Consolidated Tier 1 leverage capital ratio			11.29	%			11.22	%			11.05	%			10.80	%

(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, 2025				Mar 31, 2025				Dec 31, 2024				Jun 30, 2024				Prior Qtr			Prior Yr Qtr
Commercial real estate (CRE):
Owner-occupied		$	1,125,249			$	1,020,829			$	1,027,426			$	950,922			10	%		18	%
Investment properties			1,625,001				1,598,387				1,623,672				1,536,142			2	%		6	%
Small balance CRE			1,223,477				1,217,458				1,213,792				1,234,302			—	%		(1	)%
Multifamily real estate			860,700				877,716				894,425				717,089			(2	)%		20	%
Construction, land and land development:
Commercial construction			159,222				146,467				122,362				173,296			9	%		(8	)%
Multifamily construction			568,058				618,942				513,706				663,989			(8	)%		(14	)%
One- to four-family construction			551,806				504,265				514,220				490,237			9	%		13	%
Land and land development			417,474				396,009				369,663				352,184			5	%		19	%
Commercial business:
Commercial business			1,318,483				1,283,754				1,318,333				1,298,134			3	%		2	%
Small business scored			1,152,531				1,122,550				1,104,117				1,074,465			3	%		7	%
Agricultural business, including secured by farmland:
Agricultural business, including secured by farmland			345,742				334,899				340,280				334,583			3	%		3	%
One- to four-family residential			1,610,133				1,600,283				1,591,260				1,603,266			1	%		—	%
Consumer:
Consumer—home equity revolving lines of credit			639,757				620,483				625,680				611,739			3	%		5	%
Consumer—other			92,740				96,754				95,720				103,500			(4	)%		(10	)%
Total loans receivable		$	11,690,373			$	11,438,796			$	11,354,656			$	11,143,848			2	%		5	%
Loans 30 - 89 days past due and on accrual		$	10,786			$	37,339			$	26,824			$	11,850
Total delinquent loans (including loans on non-accrual), net		$	47,764			$	71,927			$	55,432			$	32,081
Total delinquent loans / Total loans receivable			0.41	%			0.63	%			0.49	%			0.29	%

LOANS BY GEOGRAPHIC LOCATION																	Percentage Change
		Jun 30, 2025						Mar 31, 2025			Dec 31, 2024			Jun 30, 2024			Prior Qtr			Prior Yr Qtr
		Amount			Percentage			Amount			Amount			Amount
Washington		$	5,438,285		47	%		$	5,260,906		$	5,245,886		$	5,182,378		3	%		5	%
California			3,010,678		26	%			2,927,835			2,861,435			2,787,190		3	%		8	%
Oregon			2,141,185		17	%			2,122,953			2,113,229			2,072,153		1	%		3	%
Idaho			671,217		6	%			665,625			665,158			641,209		1	%		5	%
Utah			70,474		1	%			88,858			82,459			80,295		(21	)%		(12	)%
Other			358,534		3	%			372,619			386,489			380,623		(4	)%		(6	)%
Total loans receivable		$	11,690,373		100	%		$	11,438,796		$	11,354,656		$	11,143,848		2	%		5	%

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
LOAN ORIGINATIONS	Quarters Ended
	Jun 30, 2025			Mar 31, 2025			Jun 30, 2024
Commercial real estate	$	216,189		$	37,041		$	102,258
Multifamily real estate		13,065			9,555			2,774
Construction and land		411,210			287,565			546,675
Commercial business		203,656			103,739			167,168
Agricultural business		14,414			12,765			22,255
One-to four-family residential		5,491			5,139			34,498
Consumer		102,600			80,030			120,470
Total loan originations (excluding loans held for sale)	$	966,625		$	535,834		$	996,098

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS		Quarters Ended
		Jun 30, 2025				Mar 31, 2025				Jun 30, 2024
Balance, beginning of period		$	157,323			$	155,521			$	151,140
Provision for credit losses – loans			4,201				4,549				1,953
Recoveries of loans previously charged off:
Commercial real estate			53				57				98
One- to four-family real estate			58				188				17
Commercial business			361				557				324
Agricultural business, including secured by farmland			1				10				195
Consumer			168				119				112
			641				931				746
Loans charged off:
Commercial real estate			—				—				(347	)
Construction and land			—				—				—
One- to four-family real estate			—				(13	)			—
Commercial business			(892	)			(3,301	)			(137	)
Agricultural business, including secured by farmland			(362	)			—				—
Consumer			(410	)			(364	)			(507	)
			(1,664	)			(3,678	)			(991	)
Net charge-offs			(1,023	)			(2,747	)			(245	)
Balance, end of period		$	160,501			$	157,323			$	152,848
Net (charge-offs) recoveries / Average loans receivable			(0.009	)%			(0.024	)%			(0.002	)%

ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS		Jun 30, 2025				Mar 31, 2025				Dec 31, 2024				Jun 30, 2024
Commercial real estate		$	41,036			$	40,076			$	40,830			$	39,064
Multifamily real estate			9,918				10,109				10,308				8,253
Construction and land			34,124				32,042				29,038				31,597
One- to four-family real estate			20,917				20,752				20,807				20,906
Commercial business			38,591				38,665				38,611				38,835
Agricultural business, including secured by farmland			6,216				5,641				5,727				4,045
Consumer			9,699				10,038				10,200				10,148
Total allowance for credit losses – loans		$	160,501			$	157,323			$	155,521			$	152,848
Allowance for credit losses - loans / Total loans receivable			1.37	%			1.38	%			1.37	%			1.37	%
Allowance for credit losses - loans / Non-performing loans			373	%			404	%			421	%			498	%

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS		Quarters Ended
		Jun 30, 2025			Mar 31, 2025				Jun 30, 2024
Balance, beginning of period		$	12,162		$	13,562			$	13,597
Provision (recapture) for credit losses - unfunded loan commitments			588			(1,400	)			430
Balance, end of period		$	12,750		$	12,162			$	14,027

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
NON-PERFORMING ASSETS	Jun 30, 2025				Mar 31, 2025				Dec 31, 2024				Jun 30, 2024
Loans on non-accrual status:
Secured by real estate:
Commercial	$	10			$	2,182			$	2,186			$	2,326
Construction and land		4,369				4,359				3,963				3,999
One- to four-family		15,480				10,448				10,016				8,184
Commercial business		6,647				6,425				7,067				8,694
Agricultural business, including secured by farmland		8,690				10,301				8,485				1,586
Consumer		4,802				4,874				4,835				3,380
		39,998				38,589				36,552				28,169
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:
One- to four-family		2,896				9				369				1,861
Commercial business		—				206				—				—
Consumer		80				155				35				692
		2,976				370				404				2,553
Total non-performing loans		42,974				38,959				36,956				30,722
REO		6,801				3,468				2,367				2,564
Other repossessed assets		—				300				300				—
Total non-performing assets	$	49,775			$	42,727			$	39,623			$	33,286
Total non-performing assets to total assets		0.30	%			0.26	%			0.24	%			0.21	%

LOANS BY CREDIT RISK RATING	Jun 30, 2025			Mar 31, 2025			Dec 31, 2024			Jun 30, 2024
Pass	$	11,432,456		$	11,207,852		$	11,118,744		$	10,971,850
Special Mention		68,372			33,133			43,451			50,027
Substandard		189,545			197,811			192,461			121,971
Total	$	11,690,373		$	11,438,796		$	11,354,656		$	11,143,848

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
DEPOSIT COMPOSITION														Percentage Change
		Jun 30, 2025			Mar 31, 2025			Dec 31, 2024			Jun 30, 2024			Prior Qtr			Prior Yr Qtr
Non-interest-bearing		$	4,504,491		$	4,571,598		$	4,591,543		$	4,537,803		(1	)%		(1	)%
Interest-bearing checking			2,534,900			2,431,279			2,393,864			2,208,742		4	%		15	%
Regular savings accounts			3,538,372			3,542,005			3,478,423			3,192,036		—	%		11	%
Money market accounts			1,471,756			1,544,333			1,550,896			1,615,549		(5	)%		(9	)%
Total interest-bearing transaction and savings accounts			7,545,028			7,517,617			7,423,183			7,016,327		—	%		8	%
Total core deposits			12,049,519			12,089,215			12,014,726			11,554,130		—	%		4	%
Interest-bearing certificates			1,477,772			1,504,050			1,499,672			1,525,133		(2	)%		(3	)%
Total deposits		$	13,527,291		$	13,593,265		$	13,514,398		$	13,079,263		—	%		3	%

GEOGRAPHIC CONCENTRATION OF DEPOSITS		Jun 30, 2025						Mar 31, 2025			Dec 31, 2024			Jun 30, 2024			Percentage Change
		Amount			Percentage			Amount			Amount			Amount			Prior Qtr			Prior Yr Qtr
Washington		$	7,334,391		55	%		$	7,394,201		$	7,441,413		$	7,171,699		(1	)%		2	%
Oregon			3,029,712		22	%			3,045,078			2,981,327			2,909,838		(1	)%		4	%
California			2,486,514		18	%			2,463,012			2,392,573			2,331,793		1	%		7	%
Idaho			676,674		5	%			690,974			699,085			665,933		(2	)%		2	%
Total deposits		$	13,527,291		100	%		$	13,593,265		$	13,514,398		$	13,079,263		—	%		3	%

INCLUDED IN TOTAL DEPOSITS		Jun 30, 2025			Mar 31, 2025			Dec 31, 2024			Jun 30, 2024
Public non-interest-bearing accounts		$	151,484		$	146,390		$	165,667		$	149,012
Public interest-bearing transaction & savings accounts			250,350			239,707			248,746			250,136
Public interest-bearing certificates			21,272			24,226			25,423			29,101
Total public deposits		$	423,106		$	410,323		$	439,836		$	428,249
Collateralized public deposits		$	329,416		$	313,445		$	336,376		$	326,524
Total brokered deposits		$	49,977		$	75,321		$	50,346		$	105,309
AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT		Jun 30, 2025			Mar 31, 2025			Dec 31, 2024			Jun 30, 2024
Number of deposit accounts			451,185			453,808			460,004			460,107
Average account balance per account		$	30		$	30		$	30		$	29

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ESTIMATED REGULATORY CAPITAL RATIOS AS OF JUNE 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		$	1,984,862		14.51	%		$	1,094,505		8.00	%		$	1,368,131		10.00	%
Tier 1 capital to risk-weighted assets			1,813,814		13.26	%			820,879		6.00	%			820,879		6.00	%
Tier 1 leverage capital to average assets			1,813,814		11.29	%			642,519		4.00	%			n/a		n/a
Common equity tier 1 capital to risk-weighted assets			1,727,314		12.63	%			615,659		4.50	%			n/a		n/a
Banner Bank:
Total capital to risk-weighted assets			1,909,529		13.96	%			1,094,267		8.00	%			1,367,834		10.00	%
Tier 1 capital to risk-weighted assets			1,738,518		12.71	%			820,700		6.00	%			1,094,267		8.00	%
Tier 1 leverage capital to average assets			1,738,518		10.81	%			643,174		4.00	%			803,968		5.00	%
Common equity tier 1 capital to risk-weighted assets			1,738,518		12.71	%			615,525		4.50	%			889,092		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, 2025										Mar 31, 2025										Jun 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	$	29,936		$	503			6.74	%		$	22,457		$	357			6.45	%		$	11,665		$	206			7.10	%
Mortgage loans		9,565,357			143,909			6.03	%			9,366,213			137,724			5.96	%			9,006,857			129,230			5.77	%
Commercial/agricultural loans		1,924,092			31,196			6.50	%			1,907,212			30,752			6.54	%			1,874,039			31,761			6.82	%
Consumer and other loans		121,142			2,087			6.91	%			121,492			2,092			6.98	%			132,661			2,156			6.54	%
Total loans (1)		11,640,527			177,695			6.12	%			11,417,374			170,925			6.07	%			11,025,222			163,353			5.96	%
Mortgage-backed securities		2,496,972			15,576			2.50	%			2,542,983			15,895			2.53	%			2,672,187			16,850			2.54	%
Other securities		893,062			9,561			4.29	%			902,732			9,687			4.35	%			958,809			11,181			4.69	%
Interest-bearing deposits with banks		75,539			577			3.06	%			65,758			484			2.99	%			58,022			578			4.01	%
FHLB stock		23,077			222			3.86	%			12,804			149			4.72	%			21,080			365			6.96	%
Total investment securities		3,488,650			25,936			2.98	%			3,524,277			26,215			3.02	%			3,710,098			28,974			3.14	%
Total interest-earning assets		15,129,177			203,631			5.40	%			14,941,651			197,140			5.35	%			14,735,320			192,327			5.25	%
Non-interest-earning assets		994,003										1,006,497										926,411
Total assets	$	16,123,180									$	15,948,148									$	15,661,731
Deposits:
Interest-bearing checking accounts	$	2,465,015			9,462			1.54	%		$	2,381,106			8,537			1.45	%		$	2,156,214			7,621			1.42	%
Savings accounts		3,493,965			18,837			2.16	%			3,450,908			18,103			2.13	%			3,147,522			17,200			2.20	%
Money market accounts		1,492,229			7,729			2.08	%			1,555,262			7,860			2.05	%			1,659,327			9,124			2.21	%
Certificates of deposit		1,489,611			13,288			3.58	%			1,531,428			14,237			3.77	%			1,503,597			14,905			3.99	%
Total interest-bearing deposits		8,940,820			49,316			2.21	%			8,918,704			48,737			2.22	%			8,466,660			48,850			2.32	%
Non-interest-bearing deposits		4,480,579			—			—	%			4,526,596			—			—	%			4,634,738			—			—	%
Total deposits		13,421,399			49,316			1.47	%			13,445,300			48,737			1.47	%			13,101,398			48,850			1.50	%
Other interest-bearing liabilities:
FHLB advances		296,671			3,370			4.56	%			75,300			860			4.63	%			259,549			3,621			5.61	%
Other borrowings		122,227			675			2.22	%			134,761			694			2.09	%			175,518			1,160			2.66	%
Junior subordinated debentures and subordinated notes		168,793			2,499			5.94	%			169,678			2,494			5.96	%			179,178			2,961			6.65	%
Total borrowings		587,691			6,544			4.47	%			379,739			4,048			4.32	%			614,245			7,742			5.07	%
Total funding liabilities		14,009,090			55,860			1.60	%			13,825,039			52,785			1.55	%			13,715,643			56,592			1.66	%
Other non-interest-bearing liabilities (2)		274,407										324,031										294,794
Total liabilities		14,283,497										14,149,070										14,010,437
Shareholders’ equity		1,839,683										1,799,078										1,651,294
Total liabilities and shareholders’ equity	$	16,123,180									$	15,948,148									$	15,661,731
Net interest income/rate spread (tax equivalent)				$	147,771			3.80	%					$	144,355			3.80	%					$	135,735			3.59	%
Net interest margin (tax equivalent)								3.92	%									3.92	%									3.70	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis					(3,372	)									(3,272	)									(3,189	)
Net interest income and margin, as reported				$	144,399			3.83	%					$	141,083			3.83	%					$	132,546			3.62	%
Additional Key Financial Ratios:
Return on average assets								1.13	%									1.15	%									1.02	%
Adjusted return on average assets (4)								1.16	%									1.14	%									1.04	%
Return on average equity								9.92	%									10.17	%									9.69	%
Adjusted return on average equity (4)								10.20	%									10.12	%									9.83	%
Average equity/average assets								11.41	%									11.28	%									10.54	%
Average interest-earning assets/average interest-bearing liabilities								158.78	%									160.69	%									162.27	%
Average interest-earning assets/average funding liabilities								108.00	%									108.08	%									107.43	%
Non-interest income/average assets								0.44	%									0.49	%									0.44	%
Non-interest expense/average assets								2.52	%									2.57	%									2.52	%
Efficiency ratio								62.50	%									63.21	%									65.53	%
Adjusted efficiency ratio (4)								60.28	%									62.18	%									63.60	%

(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 $2.3 million for the quarter ended June 30, 2025 and $2.2 million for both the quarters ended March 31, 2025 and June 30, 2024. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the quarter ended June 30, 2025 and $1.0 million for both the quarters ended March 31, 2025 and June 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.

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD	Six Months Ended
	Jun 30, 2025										Jun 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	$	26,217		$	860			6.61	%		$	10,802		$	373			6.94	%
Mortgage loans		9,466,335			281,633			6.00	%			8,949,709			254,514			5.72	%
Commercial/agricultural loans		1,915,699			61,948			6.52	%			1,852,067			62,608			6.80	%
Consumer and other loans		121,316			4,179			6.95	%			133,258			4,352			6.57	%
Total loans (1)		11,529,567			348,620			6.10	%			10,945,836			321,847			5.91	%
Mortgage-backed securities		2,519,851			31,471			2.52	%			2,700,413			33,926			2.53	%
Other securities		897,870			19,248			4.32	%			971,724			22,682			4.69	%
Interest-bearing deposits with banks		70,675			1,061			3.03	%			51,643			1,037			4.04	%
FHLB stock		17,969			371			4.16	%			20,077			574			5.75	%
Total investment securities		3,506,365			52,151			3.00	%			3,743,857			58,219			3.13	%
Total interest-earning assets		15,035,932			400,771			5.38	%			14,689,693			380,066			5.20	%
Non-interest-earning assets		1,000,216										935,068
Total assets	$	16,036,148									$	15,624,761
Deposits:
Interest-bearing checking accounts	$	2,423,292			17,999			1.50	%		$	2,130,228			14,337			1.35	%
Savings accounts		3,472,556			36,940			2.15	%			3,106,985			32,479			2.10	%
Money market accounts		1,523,571			15,589			2.06	%			1,666,743			17,512			2.11	%
Certificates of deposit		1,510,404			27,525			3.67	%			1,502,013			29,135			3.90	%
Total interest-bearing deposits		8,929,823			98,053			2.21	%			8,405,969			93,463			2.24	%
Non-interest-bearing deposits		4,503,461			—			—	%			4,673,330			—			—	%
Total deposits		13,433,284			98,053			1.47	%			13,079,299			93,463			1.44	%
Other interest-bearing liabilities:
FHLB advances		186,597			4,230			4.57	%			236,269			6,593			5.61	%
Other borrowings		128,459			1,369			2.15	%			178,105			2,335			2.64	%
Junior subordinated debentures and subordinated notes		169,233			4,993			5.95	%			180,379			5,930			6.61	%
Total borrowings		484,289			10,592			4.41	%			594,753			14,858			5.02	%
Total funding liabilities		13,917,573			108,645			1.57	%			13,674,052			108,321			1.59	%
Other non-interest-bearing liabilities (2)		299,082										299,103
Total liabilities		14,216,655										13,973,155
Shareholders’ equity		1,819,493										1,651,606
Total liabilities and shareholders’ equity	$	16,036,148									$	15,624,761
Net interest income/rate spread (tax equivalent)				$	292,126			3.81	%					$	271,745			3.61	%
Net interest margin (tax equivalent)								3.92	%									3.72	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis					(6,644	)									(6,240	)
Net interest income and margin, as reported				$	285,482			3.83	%					$	265,505			3.63	%
Additional Key Financial Ratios:
Return on average assets								1.14	%									1.00	%
Adjusted return on average assets (4)								1.15	%									1.06	%
Return on average equity								10.04	%									9.42	%
Adjusted return on average equity (4)								10.16	%									10.03	%
Average equity/average assets								11.35	%									10.57	%
Average interest-earning assets/average interest-bearing liabilities								159.72	%									163.21	%
Average interest-earning assets/average funding liabilities								108.04	%									107.43	%
Non-interest income/average assets								0.46	%									0.37	%
Non-interest expense/average assets								2.55	%									2.52	%
Efficiency ratio								62.85	%									66.52	%
Adjusted efficiency ratio (4)								61.22	%									63.65	%

(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 $4.6 million and $4.2 million for the six months ended June 30, 2025 and 2024, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.1 million for both the six months ended June 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.

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											Six Months Ended
	Jun 30, 2025				Mar 31, 2025				Jun 30, 2024			Jun 30, 2025				Jun 30, 2024
Net interest income (GAAP)	$	144,399			$	141,083			$	132,546		$	285,482			$	265,505
Non-interest income (GAAP)		17,751				19,108				17,199			36,859				28,790
Total revenue (GAAP)		162,150				160,191				149,745			322,341				294,295
Exclude: Net loss on sale of securities		3				—				562			3				5,465
Net change in valuation of financial instruments carried at fair value		(88	)			(315	)			190			(403	)			1,182
Losses incurred on building and lease exits		919				—				—			919				—
Adjusted revenue (non-GAAP)	$	162,984			$	159,876			$	150,497		$	322,860			$	300,942

ADJUSTED EARNINGS	Quarters Ended												Six Months Ended
	Jun 30, 2025				Mar 31, 2025				Jun 30, 2024				Jun 30, 2025				Jun 30, 2024
Net income (GAAP)	$	45,496			$	45,135			$	39,795			$	90,631			$	77,354
Exclude: Net loss on sale of securities		3				—				562				3				5,465
Net change in valuation of financial instruments carried at fair value		(88	)			(315	)			190				(403	)			1,182
Building and lease exit costs		1,753				—				—				1,753				—
Related net tax (benefit) expense		(401	)			76				(180	)			(325	)			(1,595	)
Total adjusted earnings (non-GAAP)	$	46,763			$	44,896			$	40,367			$	91,659			$	82,406
Diluted earnings per share (GAAP)	$	1.31			$	1.30			$	1.15			$	2.61			$	2.24
Diluted adjusted earnings per share (non-GAAP)	$	1.35			$	1.29			$	1.17			$	2.64			$	2.39
Return on average assets		1.13	%			1.15	%			1.02	%			1.14	%			1.00	%
Adjusted return on average assets (1)		1.16	%			1.14	%			1.04	%			1.15	%			1.06	%
Return on average equity		9.92	%			10.17	%			9.69	%			10.04	%			9.42	%
Adjusted return on average equity (2)		10.20	%			10.12	%			9.83	%			10.16	%			10.03	%

(1)		Adjusted earnings (non-GAAP) divided by average assets.
(2)		Adjusted earnings (non-GAAP) divided by average equity.

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ADJUSTED EFFICIENCY RATIO		Quarters Ended												Six Months Ended
		Jun 30, 2025				Mar 31, 2025				Jun 30, 2024				Jun 30, 2025				Jun 30, 2024
Non-interest expense (GAAP)		$	101,348			$	101,259			$	98,128			$	202,607			$	195,769
Exclude: CDI amortization			(455	)			(456	)			(724	)			(911	)			(1,447	)
State/municipal tax expense			(1,416	)			(1,454	)			(1,394	)			(2,870	)			(2,698	)
REO operations			(392	)			61				(297	)			(331	)			(77	)
Building and lease exit costs			(834	)			—				—				(834	)			—
Adjusted non-interest expense (non-GAAP)		$	98,251			$	99,410			$	95,713			$	197,661			$	191,547
Net interest income (GAAP)		$	144,399			$	141,083			$	132,546			$	285,482			$	265,505
Non-interest income (GAAP)			17,751				19,108				17,199				36,859				28,790
Total revenue (GAAP)			162,150				160,191				149,745				322,341				294,295
Exclude: Net loss on sale of securities			3				—				562				3				5,465
Net change in valuation of financial instruments carried at fair value			(88	)			(315	)			190				(403	)			1,182
Losses incurred on building and lease exits			919				—				—				919				—
Adjusted revenue (non-GAAP)		$	162,984			$	159,876			$	150,497			$	322,860			$	300,942
Efficiency ratio (GAAP)			62.50	%			63.21	%			65.53	%			62.85	%			66.52	%
Adjusted efficiency ratio (non-GAAP) (1)			60.28	%			62.18	%			63.60	%			61.22	%			63.65	%

(1)

Adjusted non-interest expense (non-GAAP) divided by adjusted revenue.

TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
		Jun 30, 2025				Mar 31, 2025				Dec 31, 2024				Jun 30, 2024
Shareholders’ equity (GAAP)		$	1,865,664			$	1,833,453			$	1,774,326			$	1,690,766
Exclude goodwill and other intangible assets, net			375,268				375,723				376,179				377,358
Tangible common shareholders’ equity (non-GAAP)		$	1,490,396			$	1,457,730			$	1,398,147			$	1,313,408
Total assets (GAAP)		$	16,437,169			$	16,170,812			$	16,200,037			$	15,816,194
Exclude goodwill and other intangible assets, net			375,268				375,723				376,179				377,358
Total tangible assets (non-GAAP)		$	16,061,901			$	15,795,089			$	15,823,858			$	15,438,836
Common shareholders’ equity to total assets (GAAP)			11.35	%			11.34	%			10.95	%			10.69	%
Tangible common shareholders’ equity to tangible assets (non-GAAP)			9.28	%			9.23	%			8.84	%			8.51	%
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
Shareholders’ equity (GAAP)		$	1,865,664			$	1,833,453			$	1,774,326			$	1,690,766
Tangible common shareholders’ equity (non-GAAP)		$	1,490,396			$	1,457,730			$	1,398,147			$	1,313,408
Common shares outstanding at end of period			34,583,994				34,489,972				34,459,832				34,455,752
Common shareholders’ equity (book value) per share (GAAP)		$	53.95			$	53.16			$	51.49			$	49.07
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP)		$	43.09			$	42.27			$	40.57			$	38.12

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250716029865/en/

MARK J. GRESCOVICH,

PRESIDENT & CEO

ROBERT G. BUTTERFIELD, CFO

(509) 527-3636

Source: Banner Corporation