Banner Corporation Reports Net Income of $47.7 Million, or $1.36 Per Diluted Share, for Third Quarter 2026; Declares Quarterly Cash Dividend of $0.52 Per Share; Results Strengthened by Completion of Pacific Financial Corporation Acquisition

Nine-month net income increased to $151.3 million despite lower third-quarter earnings versus both comparison periods.

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WALLA WALLA, Wash.--(BUSINESS WIRE)-- Banner Corporation (NASDAQ:BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $47.7 million, or $1.36 per diluted share, for the third quarter of 2026, compared to $48.9 million, or $1.43 per diluted share, for the preceding quarter, and $53.5 million, or $1.54 per diluted share, for the third quarter of 2025. Net interest income was $161.9 million for the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million for the third quarter a year ago. The increase in net interest income compared to both the prior quarter and the third quarter a year ago was primarily driven by an increase in average interest-earning assets resulting from the acquisition of Pacific Financial Corporation (“Pacific Financial”) on September 1, 2026 and organic loan growth, as well as expansion in Banner’s net interest margin reflecting higher yields on interest-earning assets. Funding costs increased compared to the prior quarter, partially offsetting the increase in interest income, but decreased compared to the third quarter a year ago. Third quarter 2026 results included $5.2 million of merger-and acquisition-related costs, compared to $238,000 in the preceding quarter and none in the third quarter of 2025. Third quarter 2026 results also included a $2.8 million provision for credit losses, compared to $3.8 million in the preceding quarter and $2.7 million in the third quarter of 2025.

Net income was $151.3 million, or $4.39 per diluted share, for the nine months ended September 30, 2026, compared to net income of $144.1 million, or $4.15 per diluted share, for the nine months ended September 30, 2025. Results for the nine months ended September 30, 2026 included a $5.8 million provision for credit losses, a $3.3 million net loss on the sale of securities and a $1.8 million net increase in fair value adjustments on financial instruments carried at fair value, compared to a $10.6 million provision for credit losses, a $374,000 net gain on the sale of securities and a $626,000 net increase in the fair value adjustments on financial instruments carried at fair value during the same period in 2025. The nine months ended September 30, 2026 results included $5.4 million of merger and acquisition related costs, compared to none for the nine months ended September 30, 2025.

Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.52 per share payable November 13, 2026, to common shareholders of record on November 5, 2026.

“During the third quarter, we completed the merger with Pacific Financial Corporation, the holding company of Bank of the Pacific,” said Mark Grescovich, President and CEO. “Bank of the Pacific was 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.”

“Banner’s results for the third 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,” Grescovich continued. “Our earnings for the third quarter of 2026 benefited from loan growth and the completion of the merger with Pacific Financial. These benefits were partially offset by higher non-interest expense, which primarily reflects merger related expenses. 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 capitalize on a strong core deposit base, with core deposits representing 90% of total deposits at quarter-end. For more than 136 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.”

At September 30, 2026, Banner, on a consolidated basis, had $18.08 billion in assets, $12.82 billion in net loans and $15.39 billion in deposits. Banner operates 153 full-service branch offices, including branches located in eight of the top 20 largest western United States Metropolitan Statistical Areas by population.

Third Quarter 2026 Highlights

• Net interest margin, on a tax equivalent basis, was 4.14% for the current quarter, compared to 4.13% in the preceding quarter and 3.98% in the third quarter a year ago.
• Revenue was $177.3 million for the third quarter of 2026, compared to $172.0 million in the preceding quarter and increased 4% from $170.7 million in the third quarter a year ago.
• Net interest income was $161.9 million in the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million in the third quarter a year ago.
• Return on average assets was 1.11% for the third quarter of 2026, compared to 1.20% in the preceding quarter and 1.30% in the third quarter a year ago.
• Net loans receivable increased 8% to $12.82 billion at September 30, 2026, compared to $11.83 billion at June 30, 2026, and increased 11% from $11.54 billion at September 30, 2025.
• Loan originations increased to $1.28 billion for the third quarter of 2026, compared to $1.26 billion in the preceding quarter and increased 61% from $794.5 million in the third quarter a year ago.
• Total deposits were $15.39 billion at September 30, 2026, compared to $13.79 billion at June 30, 2026, and $14.02 billion at September 30, 2025.
• Core deposits represented 90% of total deposits at September 30, 2026.
• Non-performing assets were $63.0 million, or 0.35% of total assets, at September 30, 2026, compared to $60.5 million, or 0.36% of total assets, at June 30, 2026, and $45.3 million, or 0.27% of total assets, at September 30, 2025.
• The allowance for credit losses - loans was $171.6 million, or 1.32% of total loans receivable, as of September 30, 2026, compared to $161.8 million, or 1.35% of total loans receivable, as of June 30, 2026, and $159.7 million, or 1.36% of total loans receivable, as of September 30, 2025.
• Dividends paid to shareholders were $0.52 per share in the quarter ended September 30, 2026.
• Common shareholders’ equity per share was $58.56 at September 30, 2026, compared to $58.83 at June 30, 2026, and increased 5% from $55.71 at September 30, 2025.
• Tangible common shareholders’ equity per share* decreased 4% to $45.84 at September 30, 2026, compared to $47.82 at June 30, 2026, and increased 2% from $44.79 at September 30, 2025.
• Repurchased 200,000 shares of Banner common stock during the third quarter of 2026 at an average price of $71.03 per share

*Non-GAAP (Generally Accepted Accounting Principles) financial measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

Significant Recent Events

On September 1, 2026, Banner completed the acquisition of Pacific Financial Corporation the holding company for Bank of the Pacific, in an all-stock transaction. At closing, Bank of the Pacific had 18 branch locations, including 15 in Washington and three in Oregon. Shareholders of Pacific Financial received 0.2633 shares of Banner common stock for each share of Pacific Financial common stock they owned, plus cash in lieu of any fractional shares, for total consideration paid of $186.8 million.

The Pacific Financial transaction was accounted for using the acquisition method of accounting. Accordingly, the assets (including identifiable intangible assets) and the liabilities of Pacific Financial were measured at their respective estimated fair values as of the merger date. The excess of the purchase price over the fair value of the net assets acquired was attributed to goodwill. The fair value on the merger date represents management's best estimates based on available information and facts and circumstances in existence on the merger date. The acquisition method of accounting is subject to adjustment within a measurement period of one year from the acquisition date. The acquisition brought $1.29 billion of assets, including $756.9 million of net loans receivable, and $1.14 billion of deposits to Banner.

Income Statement Review

Net interest income was $161.9 million in the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million in the third quarter a year ago. Net interest margin, on a tax equivalent basis, increased one basis point to 4.14% for the third quarter of 2026, compared to 4.13% in the preceding quarter, and increased 16 basis points from 3.98% in the third quarter a year ago. The net interest margin for the current quarter benefited from a higher average yield on interest-earning assets compared to the preceding quarter, partially offset by higher funding costs. Compared to the third quarter a year ago, the increase in the net interest margin primarily reflected lower funding costs and a higher average yield on interest-earning assets.

Interest income was $214.6 million in the third quarter of 2026, compared to $202.7 million in the preceding quarter and $205.8 million in the third quarter of 2025. Average yields on interest-earning assets increased five basis points to 5.46% for the third quarter of 2026, compared to 5.41% for the preceding quarter, primarily reflecting a higher proportion of loans within the interest-earning asset mix and an increase in loan yields. Compared to the third quarter a year ago, average yields on interest-earning assets increased by three basis points from 5.43%. Average loan yields increased by three basis points to 6.12% in the third quarter of 2026, compared to 6.09% in the preceding quarter, and decreased from 6.17% in the third quarter a year ago.

Interest expense was $52.7 million in the third quarter of 2026, compared to $48.9 million in the preceding quarter and $55.9 million in the third quarter a year ago. Total deposit costs increased by five basis points to 1.38% in the third quarter of 2026, compared to 1.33% in the preceding quarter, and decreased by 12 basis points compared to 1.50% in the third quarter a year ago. The increase in deposit costs compared to the preceding quarter was primarily due to higher average rates paid across all deposit categories and a shift in deposit mix toward interest-bearing deposits, partially offset by growth in non-interest-bearing deposits. The decrease in deposit costs in the current quarter compared to the same quarter a year ago primarily reflected lower average rates paid across all deposit categories.

The average rate paid on borrowings increased 11 basis points to 3.99% in the third quarter of 2026 from 3.88% in the preceding quarter, primarily reflecting higher average rates paid on borrowings and lower FHLB advances in the current quarter. The average rate paid on borrowings decreased by 19 basis points from 4.18% in the third quarter a year ago, primarily due to lower average rates paid on FHLB advances and junior subordinated debentures and subordinated notes, partially offset by a higher average rate paid on other borrowings. The total cost of funding liabilities increased four basis points to 1.43% in the third quarter of 2026, compared to 1.39% in the preceding quarter, and decreased 14 basis points from 1.57% in the third quarter a year ago.

A $2.8 million provision for credit losses was recorded in the current quarter (comprised of a $1.8 million provision for credit losses - loans and a $1.0 million provision for credit losses - unfunded loan commitments). This compares to a $3.8 million provision for credit losses in the prior quarter (comprised of a $1.6 million provision for credit losses - loans and a $2.2 million provision for credit losses - unfunded loan commitments) and a $2.7 million provision for credit losses in the third quarter a year ago (comprised of a $1.4 million provision for credit losses - loans and a $1.3 million provision for credit losses - unfunded loan commitments). The provision for credit losses recorded in the third quarter of 2026 primarily reflected loan growth, partially offset by improvements in credit quality.

Total non-interest income was $15.4 million in the third quarter of 2026, compared to $18.2 million in the preceding quarter and $20.7 million in the third quarter of 2025. The decrease from the preceding quarter was driven primarily by a net loss on the sale of securities of $2.1 million, resulting from the sale of the investment portfolio acquired from Pacific Financial, as well as a $630,000 decrease in miscellaneous income, reflecting lower gains on SBA loan sales and fluctuations in other miscellaneous income items. These decreases were partially offset by a $470,000 favorable change in fair value adjustments on financial instruments. Compared to the prior year quarter, non-interest income decreased primarily due to lower miscellaneous income, as well as lower mortgage banking revenue. These declines were partially offset by higher deposit fees and other service charges. Total non-interest income was $52.8 million for the nine months ended September 30, 2026, compared to $57.6 million for the same period in 2025.

Total non-interest expense was $115.7 million in the third quarter of 2026, compared to $108.0 million in the preceding quarter and $102.0 million in the third quarter of 2025. Merger-related expenses were $5.2 million in the third quarter of 2026, compared to $238,000 in the preceding quarter and none in the third quarter of 2025. Excluding merger-related expenses, the increase from the preceding quarter reflected increases in expenses in several categories related to the acquired Pacific Financial operations, including an increase in salary and employee benefits. In addition, real estate operations expense increased by $1.1 million, reflecting write-downs of foreclosed real estate. The increase compared to the same quarter a year ago primarily reflects increases in salary and employee benefits, information and computer data services expenses, professional and legal expenses, and real estate operations expenses, partially offset by a decrease in occupancy and equipment expense. For the nine months ended September 30, 2026, total non-interest expense was $326.3 million, compared to $304.6 million for the nine months ended September 30, 2025.

Banner’s efficiency ratio was 65.25% for the third quarter of 2026, compared to 62.80% in the preceding quarter and 59.76% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 59.53% for the third quarter of 2026, compared to 61.30% in the preceding quarter and 58.54% 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 increased 9% to $18.08 billion at September 30, 2026, compared to $16.59 billion at June 30, 2026, and increased 9% compared to $16.56 billion at September 30, 2025. The increase for both periods was primarily due to the $1.29 billion of assets acquired in the Pacific Financial acquisition. In addition, both periods benefited from organic loan growth. Securities and interest-bearing deposits held at other banks totaled $3.43 billion at September 30, 2026, compared to $3.17 billion at June 30, 2026 and $3.47 billion at September 30, 2025. The average effective duration of the securities portfolio was approximately 6.0 years and 6.4 years at September 30, 2026 and September 30, 2025, respectively.

Total loans receivable increased 8% to $13.00 billion at September 30, 2026, compared to $11.99 billion at June 30, 2026, and increased 11% from $11.70 billion at September 30, 2025. The increase in total loans compared to both periods included $765.5 million of portfolio loans acquired from Pacific Financial.

Commercial real estate loans totaled $4.61 billion at September 30, 2026, an increase of 11% from $4.14 billion at June 30, 2026, and 15% from $4.00 billion at September 30, 2025. Commercial business loans totaled $2.73 billion at September 30, 2026, an increase of 6% compared to $2.58 billion at June 30, 2026, and an increase of 12% from $2.43 billion at September 30, 2025. Growth in both categories reflected the Pacific Financial acquisition and new loan production, partially offset by payoffs and paydowns.

Multifamily real estate loans totaled $913.3 million at September 30, 2026, an increase of 7% from $855.9 million at June 30, 2026, and 6% from $860.7 million at September 30, 2025. Construction, land and land development loans totaled $1.80 billion at September 30, 2026, an increase of 6% from $1.69 billion at June 30, 2026, and 4% from $1.74 billion at September 30, 2025. Growth in these categories reflected the acquisition of Pacific Financial, as well as new loan production and advances, partially offset by transfers to the permanent loan portfolios upon completion of the construction phase.

Agricultural business loans totaled $389.2 million at September 30, 2026, an increase of 15% from $337.5 million at June 30, 2026, and 10% from $354.9 million at September 30, 2025, primarily reflecting the acquisition, partially offset by payoffs and paydowns. Consumer loans totaled $929.8 million at September 30, 2026, an increase of 12% from $827.0 million at June 30, 2026, and 26% from $740.3 million at September 30, 2025. The growth primarily reflected the acquisition of Pacific Financial, as well as new loan production and advances, particularly on home equity revolving lines of credit.

Loans held for sale were $32.7 million at September 30, 2026, compared to $27.2 million at June 30, 2026, and $20.3 million at September 30, 2025. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $103.3 million, compared to $134.6 million in the preceding quarter, and $136.9 million in the third quarter a year ago. The increase in loans held for sale at September 30, 2026, compared to both the preceding quarter and the prior year quarter, was attributable to one- to four-family residential mortgage held for sale loan originations outpacing loan sales during the current quarter.

Total deposits were $15.39 billion at September 30, 2026, compared to $13.79 billion at June 30, 2026, and $14.02 billion at September 30, 2025. Core deposits increased to $13.78 billion at September 30, 2026, compared to $12.32 billion at June 30, 2026, and $12.48 billion at September 30, 2025. The increase in deposits reflected $1.14 billion in deposits from Pacific Financial during the third quarter of 2026. Excluding acquired deposits, the increase from both the prior quarter and prior year quarter reflected increases in both noninterest-bearing and interest-bearing transaction and savings accounts. Core deposits remained stable at 90% of total deposits at September 30, 2026, and at 89% at both June 30, 2026 and September 30, 2025. Certificates of deposit increased 10% to $1.62 billion at September 30, 2026, compared to $1.47 billion at June 30, 2026, and increased 5%, compared to $1.54 billion at September 30, 2025, due to the Pacific Financial acquisition.

There were no outstanding FHLB advances at September 30, 2026, compared to $320.0 million outstanding FHLB advances at June 30, 2026, and $100.0 million at September 30, 2025. The decrease in FHLB advances during the quarter reflected repayment of all outstanding advances, as deposits served as the primary source of funding. At September 30, 2026, off-balance sheet liquidity included additional borrowing capacity of $3.82 billion at the FHLB and $1.56 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

At September 30, 2026, total common shareholders’ equity was $2.13 billion, or 11.80% of total assets, compared to $2.00 billion, or 12.05% of total assets at June 30, 2026, and $1.91 billion, or 11.55% of total assets, at September 30, 2025. The increase in total common shareholders’ equity from June 30, 2026, was primarily due to a $174.6 million increase in common stock, primarily attributable to the acquisition of Pacific Financial during the third quarter. In addition, retained earnings increased by $29.8 million, resulting from $47.7 million in net income, partially offset by the accrual of $17.9 million in cash dividends and a $69.7 million increase in accumulated other comprehensive loss. The Company repurchased 200,000 shares of its common stock in the third quarter of 2026 at an average price of $71.03 per share. At September 30, 2026, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.67 billion, or 9.48% of tangible assets, compared to $1.63 billion, or 10.02% of tangible assets, at June 30, 2026, and $1.54 billion, or 9.50% of tangible assets, at September 30, 2025. See “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At September 30, 2026, Banner’s estimated common equity Tier 1 capital ratio was 12.57%, its estimated Tier 1 leverage capital to average assets ratio was 11.59%, and its estimated total capital to risk-weighted assets ratio was 14.42%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.

Credit Quality

The allowance for credit losses - loans was $171.6 million, or 1.32% of total loans receivable and 290% of non-performing loans, at September 30, 2026, compared to $161.8 million, or 1.35% of total loans receivable and 295% of non-performing loans, at June 30, 2026, and $159.7 million, or 1.36% of total loans receivable and 399% of non-performing loans, at September 30, 2025. The allowance ratio decreased compared to both prior periods, primarily reflecting the acquisition of Pacific Financial, which had favorable credit quality and a moderately lower risk profile. Coverage of non-performing loans remained strong at 290% at September 30, 2026, compared to 295% at June 30, 2026. The year-over-year decline from 399% at September 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 $16.2 million at September 30, 2026, compared to $15.1 million at June 30, 2026, and $14.0 million at September 30, 2025. Net loan charge-offs were $704,000 in the third quarter of 2026, compared to net loan charge-offs of $101,000 and $2.2 million in the preceding quarter and third quarter of 2025, respectively. Non-performing loans were $59.1 million at September 30, 2026, compared to $54.8 million at June 30, 2026, and $40.0 million at September 30, 2025. Despite the increase in non-performing loans, substandard loans declined to $209.7 million at September 30, 2026, from $218.4 million at June 30, 2026. Total non-performing assets were $63.0 million, or 0.35% of total assets, at September 30, 2026, compared to $60.5 million, or 0.36% of total assets, at June 30, 2026, and $45.3 million, or 0.27% of total assets, at September 30, 2025.

Conference Call

Banner will host a conference call on Thursday, October 22, 2026, at 8:00 a.m. PDT, to discuss its third quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (833) 461-5787 using access code 349483357 to participate in the call. A replay of the call will be available at www.bannerbank.com.

About the Company

Banner Corporation is an $18.08 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 completed 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 Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q.

Further, statements about the effects of Banner’s acquisition of Pacific Financial, completed on September 1, 2026, 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, including the planned systems conversions, or such integration may be more difficult, time-consuming or costly than expected; (2) the anticipated benefits of the merger, including anticipated cost savings and earnings accretion, 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, and Banner may be challenged in retaining key customers and employees following its completion; (4) merger-related and integration expenses may be greater than expected; (5) preliminary estimates of the fair value of acquired assets and assumed liabilities may change during the measurement period, and acquired loans may experience higher credit losses than anticipated; (6) management’s attention may be diverted from ongoing business operations and opportunities due to integration activities; and (7) other factors detailed in Banner’s filings with the SEC.

RESULTS OF OPERATIONS		Quarters Ended												Nine Months Ended
(in thousands except shares and per share data)		Sep 30, 2026				Jun 30, 2026				Sep 30, 2025				Sep 30, 2026				Sep 30, 2025
INTEREST INCOME:
Loans receivable		$	188,586			$	178,389			$	179,065			$	540,678			$	523,115
Mortgage-backed securities			14,996				14,053				15,090				43,365				46,250
Securities and cash equivalents			10,998				10,244				11,693				31,041				30,610
Total interest income			214,580				202,686				205,848				615,084				599,975
INTEREST EXPENSE:
Deposits			50,022				45,554				52,251				141,254				150,304
Federal Home Loan Bank (FHLB) advances			653				1,426				1,527				2,119				5,757
Other borrowings			695				732				694				2,124				2,063
Subordinated debt			1,317				1,234				1,387				3,785				6,380
Total interest expense			52,687				48,946				55,859				149,282				164,504
Net interest income			161,893				153,740				149,989				465,802				435,471
PROVISION FOR CREDIT LOSSES			2,824				3,818				2,670				5,846				10,604
Net interest income after provision for credit losses			159,069				149,922				147,319				459,956				424,867
NON-INTEREST INCOME:
Deposit fees and other service charges			11,496				11,728				10,955				34,615				32,559
Mortgage banking operations			2,575				2,792				3,298				8,579				9,627
Bank-owned life insurance			2,354				2,471				2,702				7,137				7,661
Miscellaneous			750				1,380				3,175				3,956				6,742
			17,175				18,371				20,130				54,287				56,589
Net (loss) gain on sale of securities			(2,102	)			8				377				(3,336	)			374
Net change in valuation of financial instruments carried at fair value			313				(157	)			223				1,818				626
Total non-interest income			15,386				18,222				20,730				52,769				57,589
NON-INTEREST EXPENSE:
Salary and employee benefits			71,410				69,388				64,935				208,530				195,278
Less capitalized loan origination costs			(4,917	)			(5,283	)			(4,802	)			(14,086	)			(13,056	)
Occupancy and equipment			10,965				10,936				12,518				32,598				36,871
Information and computer data services			8,882				10,321				8,199				27,516				24,026
Payment and card processing services			6,821				6,218				6,060				19,080				17,709
Professional and legal expenses			2,225				2,519				2,190				6,357				6,891
Advertising and marketing			1,766				1,980				1,395				4,419				3,072
Deposit insurance			2,615				2,819				2,867				8,151				8,464
State and municipal business and use taxes			1,919				1,773				1,655				5,512				4,525
Real estate operations, net			1,261				165				203				1,535				534
Amortization of core deposit intangibles			663				256				341				1,175				1,252
Miscellaneous			6,889				6,660				6,461				20,072				19,063
			110,499				107,752				102,022				320,859				304,629
Merger and acquisition-related expenses			5,177				238				—				5,415				—
Total non-interest expense			115,676				107,990				102,022				326,274				304,629
Income before provision for income taxes			58,779				60,154				66,027				186,451				177,827
PROVISION FOR INCOME TAXES			11,070				11,268				12,525				35,140				33,694
NET INCOME		$	47,709			$	48,886			$	53,502			$	151,311			$	144,133
Earnings per common share:
Basic		$	1.37			$	1.44			$	1.55			$	4.41			$	4.17
Diluted		$	1.36			$	1.43			$	1.54			$	4.39			$	4.15
Cumulative dividends declared per common share		$	0.52			$	0.52			$	0.48			$	1.54			$	1.44
Weighted average number of common shares outstanding:
Basic			34,856,074				34,012,611				34,494,824				34,305,632				34,543,969
Diluted			35,026,771				34,129,173				34,659,346				34,479,283				34,730,103

FINANCIAL CONDITION																		Percentage Change
(in thousands except shares and per share data)		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025				Prior Qtr			Prior Yr Qtr
ASSETS
Cash and due from banks		$	234,056			$	215,508			$	182,772			$	193,453			9	%		21	%
Interest-bearing deposits			324,049				219,944				239,868				479,410			47	%		(32	)%
Total cash and cash equivalents			558,105				435,452				422,640				672,863			28	%		(17	)%
Securities - available for sale, amortized cost $2,538,271, $2,273,608, $2,271,471 and $2,292,835, respectively			2,184,309				2,015,891				2,016,261				2,018,525			8	%		8	%
Securities - held to maturity, fair value $709,449, $787,987, $814,668 and $815,434, respectively			918,914				929,309				961,196				971,603			(1	)%		(5	)%
Total securities			3,103,223				2,945,200				2,977,457				2,990,128			5	%		4	%
FHLB stock			10,000				24,209				16,476				14,226			(59	)%		(30	)%
Loans held for sale			32,698				27,160				42,902				20,334			20	%		61	%
Loans receivable			12,995,341				11,994,410				11,721,687				11,702,538			8	%		11	%
Allowance for credit losses – loans			(171,563	)			(161,849	)			(160,276	)			(159,707	)		6	%		7	%
Net loans receivable			12,823,778				11,832,561				11,561,411				11,542,831			8	%		11	%
Accrued interest receivable			72,660				65,016				60,525				64,914			12	%		12	%
Property and equipment, net			129,175				108,247				111,522				113,848			19	%		13	%
Goodwill			434,283				373,121				373,121				373,121			16	%		16	%
Other intangibles, net			28,948				979				1,491				1,806			2,857	%		1,503	%
Bank-owned life insurance			355,332				324,164				319,347				317,469			10	%		12	%
Operating lease right-of-use assets			31,454				29,534				32,736				35,494			7	%		(11	)%
Other assets			503,781				427,904				434,860				416,047			18	%		21	%
Total assets		$	18,083,437			$	16,593,547			$	16,354,488			$	16,563,081			9	%		9	%
LIABILITIES
Deposits:
Non-interest-bearing		$	4,970,392			$	4,542,942			$	4,489,839			$	4,572,338			9	%		9	%
Interest-bearing transaction and savings accounts			8,807,919				7,773,630				7,721,003				7,903,215			13	%		11	%
Interest-bearing certificates			1,615,158				1,473,021				1,532,304				1,540,382			10	%		5	%
Total deposits			15,393,469				13,789,593				13,743,146				14,015,935			12	%		10	%
Advances from FHLB			—				320,000				150,000				100,000			(100	)%		(100	)%
Other borrowings			105,248				114,497				107,715				120,536			(8	)%		(13	)%
Junior subordinated debentures at fair value			87,122				79,652				79,151				76,251			9	%		14	%
Operating lease liabilities			34,022				32,108				35,755				38,826			6	%		(12	)%
Accrued expenses and other liabilities			279,603				210,134				245,266				251,464			33	%		11	%
Deferred compensation			50,070				48,300				47,158				47,177			4	%		6	%
Total liabilities			15,949,534				14,594,284				14,408,191				14,650,189			9	%		9	%
SHAREHOLDERS’ EQUITY
Common stock			1,443,098				1,268,527				1,282,505				1,295,821			14	%		11	%
Retained earnings			970,008				940,210				871,803				837,826			3	%		16	%
Accumulated other comprehensive loss			(279,203	)			(209,474	)			(208,011	)			(220,755	)		33	%		26	%
Total shareholders’ equity			2,133,903				1,999,263				1,946,297				1,912,892			7	%		12	%
Total liabilities and shareholders’ equity		$	18,083,437			$	16,593,547			$	16,354,488			$	16,563,081			9	%		9	%
Common Shares Issued:
Shares outstanding at end of period			36,442,062				33,984,909				34,097,856				34,335,297
Common shareholders’ equity per share (1)		$	58.56			$	58.83			$	57.08			$	55.71
Common shareholders’ tangible equity per share (1) (2)		$	45.84			$	47.82			$	46.09			$	44.79
Common shareholders’ equity to total assets			11.80	%			12.05	%			11.90	%			11.55	%
Common shareholders’ tangible equity to tangible assets (2)			9.48	%			10.02	%			9.84	%			9.50	%
Consolidated Tier 1 leverage capital ratio			11.59	%			11.79	%			11.41	%			11.33	%

(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
		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025				Prior Qtr			Prior Yr Qtr
Commercial real estate (CRE):
Owner-occupied		$	1,330,460			$	1,229,993			$	1,138,298			$	1,134,559			8	%		17	%
Investment properties			1,804,740				1,744,127				1,701,413				1,652,141			3	%		9	%
Small balance CRE			1,471,499				1,166,516				1,212,357				1,210,357			26	%		22	%
Multifamily real estate			913,324				855,862				850,789				860,650			7	%		6	%
Construction, land and land development:
Commercial construction			220,048				181,843				156,021				144,125			21	%		53	%
Multifamily construction			520,521				503,058				514,330				586,104			3	%		(11	)%
One- to four-family construction			645,694				631,183				607,447				578,128			2	%		12	%
Land and land development			416,397				378,172				433,678				427,348			10	%		(3	)%
Commercial business:
Commercial business			1,358,990				1,286,818				1,225,108				1,254,460			6	%		8	%
Small business scored			1,374,527				1,295,861				1,187,360				1,176,889			6	%		17	%
Agricultural business, including secured by farmland:
Agricultural business, including secured by farmland			389,220				337,487				353,152				354,884			15	%		10	%
One- to four-family residential			1,620,111				1,556,493				1,573,191				1,582,605			4	%		2	%
Consumer:
Consumer—home equity revolving lines of credit			802,440				744,546				679,489				649,188			8	%		24	%
Consumer—other			127,370				82,451				89,054				91,100			54	%		40	%
Total loans receivable		$	12,995,341			$	11,994,410			$	11,721,687			$	11,702,538			8	%		11	%
Loans 30 - 89 days past due and on accrual		$	24,287			$	17,686			$	26,767			$	14,674
Total delinquent loans (including loans on non-accrual), net		$	73,285			$	61,333			$	63,093			$	45,529
Total delinquent loans / Total loans receivable			0.56	%			0.51	%			0.54	%			0.39	%

LOANS BY GEOGRAPHIC LOCATION																	Percentage Change
		Sep 30, 2026						Jun 30, 2026			Dec 31, 2025			Sep 30, 2025			Prior Qtr			Prior Yr Qtr
		Amount			Percentage			Amount			Amount			Amount
Washington		$	5,947,312		46	%		$	5,359,130		$	5,371,200		$	5,407,327		11	%		10	%
California			3,422,524		26	%			3,275,124			3,105,405			3,064,993		5	%		12	%
Oregon			2,495,998		19	%			2,210,617			2,159,404			2,137,422		13	%		17	%
Idaho			736,557		6	%			732,830			667,343			668,949		1	%		10	%
Utah			88,784		1	%			78,216			82,594			79,697		14	%		11	%
Other			304,166		2	%			338,493			335,741			344,150		(10	)%		(12	)%
Total loans receivable		$	12,995,341		100	%		$	11,994,410		$	11,721,687		$	11,702,538		8	%		11	%

ADDITIONAL FINANCIAL INFORMATION (dollars in thousands)
LOAN ORIGINATIONS	Quarters Ended
	Sep 30, 2026				Jun 30, 2026				Sep 30, 2025
Commercial real estate	$	203,374			$	163,031			$	118,354
Multifamily real estate		28,351				215				2,500
Construction and land		594,168				561,290				369,363
Commercial business		251,592				312,028				167,627
Agricultural business		4,890				9,032				7,681
One-to four-family residential		35,337				37,998				6,817
Consumer		165,021				172,152				122,193
Total loan originations (excluding loans held for sale)	$	1,282,733			$	1,255,746			$	794,535

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS		Quarters Ended
		Sep 30, 2026				Jun 30, 2026				Sep 30, 2025
Balance, beginning of period		$	161,849			$	160,352			$	160,501
Initial allowance for credit loss at acquisition			8,624				—				—
Provision for credit losses – loans			1,794				1,598				1,384
Recoveries of loans previously charged off:
Commercial real estate			10				12				36
Construction and land			—				5				725
One- to four-family real estate			12				12				13
Commercial business			433				171				99
Agricultural business, including secured by farmland			5				213				99
Consumer			68				63				78
			528				476				1,050
Loans charged off:
Construction and land			—				—				(218	)
One- to four-family real estate			(207	)			—				—
Commercial business			(500	)			(293	)			(518	)
Agricultural business, including secured by farmland			—				(4	)			(2,054	)
Consumer			(525	)			(280	)			(438	)
			(1,232	)			(577	)			(3,228	)
Net charge-offs			(704	)			(101	)			(2,178	)
Balance, end of period		$	171,563			$	161,849			$	159,707
Net charge-offs / average loans receivable			(0.006	)%			(0.001	)%			(0.019	)%

ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Commercial real estate		$	46,114			$	42,167			$	41,599			$	41,191
Multifamily real estate			10,543				9,859				9,805				9,901
Construction and land			33,231				32,124				35,508				35,144
One- to four-family real estate			19,361				19,478				19,552				20,485
Commercial business			42,702				41,114				37,785				37,646
Agricultural business, including secured by farmland			6,523				5,859				5,567				5,268
Consumer			13,089				11,248				10,460				10,072
Total allowance for credit losses – loans		$	171,563			$	161,849			$	160,276			$	159,707
Allowance for credit losses - loans / Total loans receivable			1.32	%			1.35	%			1.37	%			1.36	%
Allowance for credit losses - loans / Non-performing loans			290	%			295	%			351	%			399	%

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS	Quarters Ended
	Sep 30, 2026				Jun 30, 2026				Sep 30, 2025
Balance, beginning of period	$	15,125			$	12,903			$	12,750
Provision for credit losses - unfunded loan commitments		1,029				2,222				1,290
Balance, end of period	$	16,154			$	15,125			$	14,040

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
NON-PERFORMING ASSETS	Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Loans on non-accrual status:
Secured by real estate:
Commercial	$	5,376			$	2,132			$	525			$	460
Multifamily		167				—				—				—
Construction and land		12,200				12,648				5,175				4,240
One- to four-family		25,624				23,398				19,855				16,576
Commercial business		5,229				6,968				6,751				6,824
Agricultural business, including secured by farmland		3,021				2,967				4,609				5,765
Consumer		4,790				4,784				4,610				4,877
		56,407				52,897				41,525				38,742
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:
Commercial		—				234				—				274
Construction and land		—				—				1,268				—
One- to four-family		2,491				1,427				2,698				834
Commercial business		—				—				—				166
Consumer		199				265				148				—
		2,690				1,926				4,114				1,274
Total non-performing loans		59,097				54,823				45,639				40,016
REO		3,860				5,720				5,578				5,272
Other repossessed assets		—				—				18				—
Total non-performing assets	$	62,957			$	60,543			$	51,235			$	45,288
Total non-performing assets to total assets		0.35	%			0.36	%			0.31	%			0.27	%

LOANS BY CREDIT RISK RATING	Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Pass	$	12,751,020			$	11,754,475			$	11,446,550			$	11,491,485
Special Mention		34,665				21,509				82,060				37,013
Substandard		209,656				218,426				193,077				174,040
Total	$	12,995,341			$	11,994,410			$	11,721,687			$	11,702,538

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
DEPOSIT COMPOSITION														Percentage Change
		Sep 30, 2026			Jun 30, 2026			Dec 31, 2025			Sep 30, 2025			Prior Qtr			Prior Yr Qtr
Non-interest-bearing		$	4,970,392		$	4,542,942		$	4,489,839		$	4,572,338		9	%		9	%
Interest-bearing checking			3,088,085			2,623,149			2,609,080			2,734,822		18	%		13	%
Regular savings accounts			4,099,252			3,853,612			3,723,922			3,705,823		6	%		11	%
Money market accounts			1,620,582			1,296,869			1,388,001			1,462,570		25	%		11	%
Total interest-bearing transaction and savings accounts			8,807,919			7,773,630			7,721,003			7,903,215		13	%		11	%
Total core deposits			13,778,311			12,316,572			12,210,842			12,475,553		12	%		10	%
Interest-bearing certificates			1,615,158			1,473,021			1,532,304			1,540,382		10	%		5	%
Total deposits		$	15,393,469		$	13,789,593		$	13,743,146		$	14,015,935		12	%		10	%

GEOGRAPHIC CONCENTRATION OF DEPOSITS		Sep 30, 2026						Jun 30, 2026			Dec 31, 2025			Sep 30, 2025			Percentage Change
		Amount			Percentage			Amount			Amount			Amount			Prior Qtr			Prior Yr Qtr
Washington		$	8,562,173		56	%		$	7,268,041		$	7,500,215		$	7,648,527		18	%		12	%
Oregon			3,275,006		21	%			3,142,625			3,035,104			3,081,329		4	%		6	%
California			2,783,673		18	%			2,631,688			2,483,948			2,542,903		6	%		9	%
Idaho			772,617		5	%			747,239			723,879			743,176		3	%		4	%
Total deposits		$	15,393,469		100	%		$	13,789,593		$	13,743,146		$	14,015,935		12	%		10	%

INCLUDED IN TOTAL DEPOSITS		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Public non-interest-bearing accounts		$	164,992			$	171,112			$	138,860			$	139,999
Public interest-bearing transaction & savings accounts			378,147				242,061				234,669				230,192
Public interest-bearing certificates			48,995				34,794				34,431				35,660
Total public deposits		$	592,134			$	447,967			$	407,960			$	405,851
Collateralized public deposits		$	488,656			$	348,318			$	312,310			$	312,142
Total brokered deposits		$	—			$	—			$	50,002			$	49,989
AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Number of deposit accounts			474,642				441,808				445,989				449,087
Average account balance per account		$	33			$	32			$	31			$	31

ADDITIONAL FINANCIAL INFORMATION
(in thousands)
ACQUISITION OF PACIFIC FINANCIAL CORPORATION
The following table* provides the estimated fair value of the assets acquired and liabilities assumed in the Pacific Financial Corporation acquisition at September 1, 2026 (in thousands):
	Pacific Financial Corporation
	September 1, 2026
Cash paid			$	982
Fair value of common shares issued				185,864
Total consideration				186,846
Fair value of assets acquired:
Cash and cash equivalents	120,605
Securities	322,928
Federal Home Loan Bank stock	768
Net loans receivable	756,921
Property and equipment	20,306
Core deposit intangible	28,632
Bank-owned life insurance	28,795
Deferred tax asset	534
Operating lease right-of-use assets	3,126
Other assets	9,537
Total assets acquired	1,292,152
Fair value of liabilities assumed:
Deposits	1,140,283
Junior subordinated debentures	11,400
Deferred compensation	2,547
Operating lease liabilities	3,206
Other liabilities	9,032
Total liabilities assumed	1,166,468
Net assets acquired				125,684
Goodwill			$	61,162
* Amounts recorded in this table are preliminary estimates of fair value. Additional adjustments to the acquisition accounting may be required with a measurement period of one year from the acquisition date.

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
KEY FINANCIAL RATIOS	Quarters Ended									Nine Months Ended
	Sep 30, 2026			Jun 30, 2026			Sep 30, 2025			Sep 30, 2026			Sep 30, 2025
Return on average assets	1.11	%		1.20	%		1.30	%		1.22	%		1.19	%
Adjusted return on average assets (1)	1.24	%		1.21	%		1.28	%		1.27	%		1.20	%
Return on average equity	9.19	%		9.91	%		11.33	%		10.11	%		10.49	%
Adjusted return on average equity (1)	10.22	%		9.98	%		11.18	%		10.47	%		10.51	%
Return on average tangible common equity (1)	11.58	%		12.27	%		14.24	%		12.59	%		13.27	%
Average equity/average assets	12.10	%		12.09	%		11.49	%		12.10	%		11.40	%
Average interest-earning assets/average interest-bearing liabilities	158.87	%		159.69	%		159.82	%		159.34	%		159.75	%
Average interest-earning assets/average funding liabilities	108.34	%		108.42	%		108.11	%		108.40	%		108.06	%
Non-interest income/average assets	0.36	%		0.45	%		0.50	%		0.43	%		0.48	%
Non-interest expense/average assets	2.70	%		2.65	%		2.48	%		2.64	%		2.53	%
Efficiency ratio	65.25	%		62.80	%		59.76	%		62.92	%		61.78	%
Adjusted efficiency ratio (1)	59.53	%		61.30	%		58.54	%		60.09	%		60.30	%

(1)	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.

ESTIMATED REGULATORY CAPITAL RATIOS AS OF SEPTEMBER 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		$	2,238,012		14.42	%		$	1,241,499		8.00	%		$	1,551,873		10.00	%
Tier 1 capital to risk-weighted assets			1,950,818		12.57	%			931,124		6.00	%			931,124		6.00	%
Tier 1 leverage capital to average assets			1,950,818		11.59	%			673,198		4.00	%			n/a		n/a
Common equity tier 1 capital to risk-weighted assets			1,950,818		12.57	%			698,343		4.50	%			n/a		n/a
Banner Bank:
Total capital to risk-weighted assets			2,139,006		13.79	%			1,241,112		8.00	%			1,551,390		10.00	%
Tier 1 capital to risk-weighted assets			1,951,312		12.58	%			930,834		6.00	%			1,241,112		8.00	%
Tier 1 leverage capital to average assets			1,951,312		11.60	%			672,922		4.00	%			841,153		5.00	%
Common equity tier 1 capital to risk-weighted assets			1,951,312		12.58	%			698,126		4.50	%			1,008,404		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
	Sep 30, 2026										Jun 30, 2026										Sep 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	$	28,484		$	435			6.06	%		$	33,242		$	509			6.14	%		$	32,109		$	531			6.56	%
Real estate secured loans		10,336,321			157,949			6.06	%			9,875,493			148,303			6.02	%			9,651,895			147,682			6.07	%
Commercial/agricultural loans		1,892,754			30,243			6.34	%			1,881,938			29,866			6.37	%			1,869,782			31,124			6.60	%
Consumer and other loans		128,400			2,332			7.21	%			117,727			2,015			6.87	%			119,593			2,114			7.01	%
Total loans (1)		12,385,959			190,959			6.12	%			11,908,400			180,693			6.09	%			11,673,379			181,451			6.17	%
Mortgage-backed securities		2,358,520			15,220			2.56	%			2,275,561			14,269			2.52	%			2,445,497			15,269			2.48	%
Other securities		964,707			10,346			4.25	%			938,205			9,915			4.24	%			854,725			9,065			4.21	%
Interest-bearing deposits with banks		135,744			1,256			3.67	%			139,672			1,102			3.16	%			291,147			3,053			4.16	%
FHLB stock		12,815			329			10.19	%			16,342			150			3.68	%			15,729			463			11.68	%
Total investment securities		3,471,786			27,151			3.10	%			3,369,780			25,436			3.03	%			3,607,098			27,850			3.06	%
Total interest-earning assets		15,857,745			218,110			5.46	%			15,278,180			206,129			5.41	%			15,280,477			209,301			5.43	%
Non-interest-earning assets		1,155,000										1,082,054										1,022,905
Total assets	$	17,012,745									$	16,360,234									$	16,303,382
Deposits:
Interest-bearing checking accounts	$	2,819,736			11,215			1.58	%		$	2,606,252			9,433			1.45	%		$	2,618,924			10,834			1.64	%
Savings accounts		3,963,030			20,276			2.03	%			3,830,346			19,009			1.99	%			3,616,728			20,170			2.21	%
Money market accounts		1,414,605			6,485			1.82	%			1,314,496			5,790			1.77	%			1,471,938			7,799			2.10	%
Certificates of deposit		1,519,253			12,046			3.15	%			1,465,885			11,322			3.10	%			1,510,966			13,448			3.53	%
Total interest-bearing deposits		9,716,624			50,022			2.04	%			9,216,979			45,554			1.98	%			9,218,556			52,251			2.25	%
Non-interest-bearing deposits		4,655,219			—			—	%			4,523,594			—			—	%			4,573,009			—			—	%
Total deposits		14,371,843			50,022			1.38	%			13,740,573			45,554			1.33	%			13,791,565			52,251			1.50	%
Other interest-bearing liabilities:
FHLB advances		65,141			653			3.98	%			145,176			1,426			3.94	%			133,380			1,527			4.54	%
Other borrowings		108,036			695			2.55	%			116,146			732			2.53	%			119,727			694			2.30	%
Junior subordinated debentures and subordinated notes		91,491			1,317			5.71	%			89,178			1,234			5.55	%			89,178			1,387			6.17	%
Total borrowings		264,668			2,665			3.99	%			350,500			3,392			3.88	%			342,285			3,608			4.18	%
Total funding liabilities		14,636,511			52,687			1.43	%			14,091,073			48,946			1.39	%			14,133,850			55,859			1.57	%
Other non-interest-bearing liabilities (2)		317,543										290,601										296,036
Total liabilities		14,954,054										14,381,674										14,429,886
Shareholders’ equity		2,058,691										1,978,560										1,873,496
Total liabilities and shareholders’ equity	$	17,012,745									$	16,360,234									$	16,303,382
Net interest income/rate spread (tax equivalent)					165,423			4.03	%						157,183			4.02	%						153,442			3.86	%
Net interest margin (tax equivalent)								4.14	%									4.13	%									3.98	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis					(3,530	)									(3,443	)									(3,453	)
Net interest income and margin, as reported				$	161,893			4.05	%					$	153,740			4.04	%					$	149,989			3.89	%

(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 $2.4 million, $2.3 million and $2.4 million for the quarters ended September 30, 2026, June 30, 2026 and September 30, 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.2 million for the quarter ended September 30, 2026, and $1.1 million for both the quarters ended June 30, 2026, and September 30, 2025.

ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD	Nine Months Ended
	Sep 30, 2026										Sep 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	$	29,268		$	1,325			6.05	%		$	28,203		$	1,391			6.59	%
Real estate secured loans		9,990,880			450,621			6.03	%			9,528,868			429,315			6.02	%
Commercial/agricultural loans		1,876,124			89,262			6.36	%			1,900,225			93,072			6.55	%
Consumer and other loans		120,803			6,387			7.07	%			120,735			6,293			6.97	%
Total loans (1)		12,017,075			547,595			6.09	%			11,578,031			530,071			6.12	%
Mortgage-backed securities		2,320,187			43,998			2.54	%			2,494,794			46,740			2.50	%
Other securities		927,502			29,301			4.22	%			883,330			28,313			4.29	%
Interest-bearing deposits with banks		153,029			3,876			3.39	%			144,974			4,114			3.79	%
FHLB stock		13,034			627			6.43	%			17,214			834			6.48	%
Total investment securities		3,413,752			77,802			3.05	%			3,540,312			80,001			3.02	%
Total interest-earning assets		15,430,827			625,397			5.42	%			15,118,343			610,072			5.40	%
Non-interest-earning assets		1,114,707										1,007,862
Total assets	$	16,545,534									$	16,126,205
Deposits:
Interest-bearing checking accounts	$	2,686,656			29,921			1.49	%		$	2,489,219			28,833			1.55	%
Savings accounts		3,862,559			57,673			2.00	%			3,521,141			57,110			2.17	%
Money market accounts		1,372,422			18,426			1.80	%			1,506,171			23,388			2.08	%
Certificates of deposit		1,488,968			35,234			3.16	%			1,510,594			40,973			3.63	%
Total interest-bearing deposits		9,410,605			141,254			2.01	%			9,027,125			150,304			2.23	%
Non-interest-bearing deposits		4,550,490			—			—	%			4,526,898			—			—	%
Total deposits		13,961,095			141,254			1.35	%			13,554,023			150,304			1.48	%
Other interest-bearing liabilities:
FHLB advances		71,692			2,119			3.95	%			168,663			5,757			4.56	%
Other borrowings		111,904			2,124			2.54	%			125,517			2,063			2.20	%
Junior subordinated debentures and subordinated notes		89,958			3,785			5.63	%			142,255			6,380			6.00	%
Total borrowings		273,554			8,028			3.92	%			436,435			14,200			4.35	%
Total funding liabilities		14,234,649			149,282			1.40	%			13,990,458			164,504			1.57	%
Other non-interest-bearing liabilities (2)		309,638										298,056
Total liabilities		14,544,287										14,288,514
Shareholders’ equity		2,001,247										1,837,691
Total liabilities and shareholders’ equity	$	16,545,534									$	16,126,205
Net interest income/rate spread (tax equivalent)					476,115			4.02	%						445,568			3.83	%
Net interest margin (tax equivalent)								4.13	%									3.94	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis					(10,313	)									(10,097	)
Net interest income and margin, as reported				$	465,802			4.04	%					$	435,471			3.85	%

(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 $6.9 million and $7.0 million for the nine months ended September 30, 2026 and 2025, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $3.4 million and $3.1 million for the nine months ended September 30, 2026 and 2025, respectively.

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, 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												Nine Months Ended
	Sep 30, 2026				Jun 30, 2026				Sep 30, 2025				Sep 30, 2026				Sep 30, 2025
Net interest income (GAAP)	$	161,893			$	153,740			$	149,989			$	465,802			$	435,471
Non-interest income (GAAP)		15,386				18,222				20,730				52,769				57,589
Total revenue (GAAP)		177,279				171,962				170,719				518,571				493,060
Exclude: Net loss (gain) on sale of securities		2,102				(8	)			(377	)			3,336				(374	)
Net change in valuation of financial instruments carried at fair value		(313	)			157				(223	)			(1,818	)			(626	)
Losses incurred on building and lease exits		—				—				(1,373	)			—				(454	)
Adjusted revenue (non-GAAP)	$	179,068			$	172,111			$	168,746			$	520,089			$	491,606

ADJUSTED EARNINGS	Quarters Ended												Nine Months Ended
	Sep 30, 2026				Jun 30, 2026				Sep 30, 2025				Sep 30, 2026				Sep 30, 2025
Net income (GAAP)	$	47,709			$	48,886			$	53,502			$	151,311			$	144,133
Exclude: Net loss (gain) on sale of securities		2,102				(8	)			(377	)			3,336				(374	)
Net change in valuation of financial instruments carried at fair value		(313	)			157				(223	)			(1,818	)			(626	)
Merger and acquisition-related expenses		5,177				238				—				5,415				—
Building and lease exit costs		63				47				(331	)			119				1,422
Related net tax (benefit) expense		(1,688	)			(104	)			224				(1,693	)			(101	)
Total adjusted earnings (non-GAAP)	$	53,050			$	49,216			$	52,795			$	156,670			$	144,454
Diluted earnings per share (GAAP)	$	1.36			$	1.43			$	1.54			$	4.39			$	4.15
Diluted adjusted earnings per share (non-GAAP)	$	1.51			$	1.44			$	1.52			$	4.54			$	4.16
Return on average assets		1.11	%			1.20	%			1.30	%			1.22	%			1.19	%
Adjusted return on average assets (1)		1.24	%			1.21	%			1.28	%			1.27	%			1.20	%
Return on average equity		9.19	%			9.91	%			11.33	%			10.11	%			10.49	%
Adjusted return on average equity (2)		10.22	%			9.98	%			11.18	%			10.47	%			10.51	%
AVERAGE TANGIBLE COMMON EQUITY	Quarters Ended												Nine Months Ended
	Sep 30, 2026				Jun 30, 2026				Sep 30, 2025				Sep 30, 2026				Sep 30, 2025
Net Income (GAAP)	$	47,709			$	48,886			$	53,502			$	151,311			$	144,133
Exclude: Amortization of intangibles, net of tax	$	524			$	202			$	269			$	928			$	989
Tangible net income available to common shareholders (non-GAAP)	$	48,233			$	49,088			$	53,771			$	152,239			$	145,122
Average common shareholder’s equity	$	2,058,691			$	1,978,560			$	1,873,496			$	2,001,247			$	1,837,691
Exclude: Average goodwill and other intangible assets, net		405,947				374,225				375,093				384,999				375,504
Average tangible common equity	$	1,652,744			$	1,604,335			$	1,498,403			$	1,616,248			$	1,462,187
Return on average tangible common equity (3)		11.58	%			12.27	%			14.24	%			12.59	%			13.27	%

(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												Nine Months Ended
		Sep 30, 2026				Jun 30, 2026				Sep 30, 2025				Sep 30, 2026				Sep 30, 2025
Non-interest expense (GAAP)		$	115,676			$	107,990			$	102,022			$	326,274			$	304,629
Exclude: CDI amortization			(663	)			(256	)			(341	)			(1,175	)			(1,252	)
State/municipal tax expense			(1,919	)			(1,773	)			(1,655	)			(5,512	)			(4,525	)
REO operations			(1,261	)			(165	)			(203	)			(1,535	)			(534	)
Merger and acquisition-related expenses			(5,177	)			(238	)			—				(5,415	)			—
Building and lease exit costs			(63	)			(47	)			(1,042	)			(119	)			(1,876	)
Adjusted non-interest expense (non-GAAP)		$	106,593			$	105,511			$	98,781			$	312,518			$	296,442
Net interest income (GAAP)		$	161,893			$	153,740			$	149,989			$	465,802			$	435,471
Non-interest income (GAAP)			15,386				18,222				20,730				52,769				57,589
Total revenue (GAAP)			177,279				171,962				170,719				518,571				493,060
Exclude: Net loss (gain) on sale of securities			2,102				(8	)			(377	)			3,336				(374	)
Net change in valuation of financial instruments carried at fair value			(313	)			157				(223	)			(1,818	)			(626	)
Losses incurred on building and lease exits			—				—				(1,373	)			—				(454	)
Adjusted revenue (non-GAAP)		$	179,068			$	172,111			$	168,746			$	520,089			$	491,606
Efficiency ratio (GAAP)			65.25	%			62.80	%			59.76	%			62.92	%			61.78	%
Adjusted efficiency ratio (non-GAAP) (1)			59.53	%			61.30	%			58.54	%			60.09	%			60.30	%

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

TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
		Sep 30, 2026				Jun 30, 2026				Dec 31, 2025				Sep 30, 2025
Shareholders’ equity (GAAP)		$	2,133,903			$	1,999,263			$	1,946,297			$	1,912,892
Exclude goodwill and other intangible assets, net			463,231				374,100				374,612				374,927
Tangible common shareholders’ equity (non-GAAP)		$	1,670,672			$	1,625,163			$	1,571,685			$	1,537,965
Total assets (GAAP)		$	18,083,437			$	16,593,547			$	16,354,488			$	16,563,081
Exclude goodwill and other intangible assets, net			463,231				374,100				374,612				374,927
Total tangible assets (non-GAAP)		$	17,620,206			$	16,219,447			$	15,979,876			$	16,188,154
Common shareholders’ equity to total assets (GAAP)			11.80	%			12.05	%			11.90	%			11.55	%
Tangible common shareholders’ equity to tangible assets (non-GAAP)			9.48	%			10.02	%			9.84	%			9.50	%
TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
Shareholders’ equity (GAAP)		$	2,133,903			$	1,999,263			$	1,946,297			$	1,912,892
Tangible common shareholders’ equity (non-GAAP)		$	1,670,672			$	1,625,163			$	1,571,685			$	1,537,965
Common shares outstanding at end of period			36,442,062				33,984,909				34,097,856				34,335,297
Common shareholders’ equity (book value) per share (GAAP)		$	58.56			$	58.83			$	57.08			$	55.71
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP)		$	45.84			$	47.82			$	46.09			$	44.79

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261021709187/en/

MARK J. GRESCOVICH, PRESIDENT & CEO
ROBERT G. BUTTERFIELD, CFO
(509) 527-3636

Source: Banner Corporation

Key Terms

net interest margin financial

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

provision for credit losses financial

Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.

acquisition method of accounting financial

An accounting method used when one company obtains control of another; the acquirer records the purchase by measuring the fair value of the consideration it gives up, identifying and measuring the acquiree’s identifiable assets and liabilities at their fair values, and recognizing either goodwill for excess purchase price or a gain if the fair value of net assets exceeds consideration. Measurement-period adjustments are allowed to revise provisional amounts as more information becomes available; the method applies only when control is obtained and replaces earlier approaches that combined owners’ interests without fair-value measurement.

goodwill financial

Goodwill is the extra value a buyer pays for a company above the measurable worth of its buildings, inventory and other tangible items, reflecting things like brand reputation, customer loyalty and expected future profits. Think of paying more for a café because of its famous name and regulars rather than its furniture alone. It matters to investors because changes in goodwill — for example a write-down if expected benefits don’t materialize — can reduce reported earnings and signal that past acquisitions aren’t delivering as hoped.

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