Banner Corporation (NASDAQ: BANR) to acquire Pacific Financial in $177M all‑stock bank merger
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Banner Corporation announced a definitive agreement to acquire Pacific Financial Corporation in an all‑stock merger, combining their community banking franchises across Washington and Oregon. Each Pacific Financial share will convert into 0.2633 shares of Banner common stock, valuing the deal at about $177 million based on a Banner price of $66.25 per share.
The combined company is expected to have roughly $18 billion in assets, adding Bank of the Pacific’s low‑cost deposits and commercially focused loan portfolio to Banner Bank’s existing $16.34 billion asset base as of March 31, 2026. Pacific Financial shareholders are expected to own about 7% of the combined company, with Banner shareholders owning about 93%. Banner projects the transaction to be immediately accretive to 2027 earnings per share, excluding one‑time costs, with approximately 3.2% fully phased‑in EPS accretion, around 2% tangible book value dilution and a tangible book earnback period of about 2.8 years.
The merger is subject to Pacific Financial shareholder approval, multiple banking regulatory approvals, maintenance of Pacific Financial’s Adjusted Equity at or above $124.269 million, and customary conditions, with closing targeted for the third quarter of 2026. Bank of the Pacific will be merged into Banner Bank, and Bank of the Pacific CEO Denise Portmann is expected to join Banner Bank’s executive team following completion.
Positive
- EPS accretion and disciplined pricing: Banner projects approximately 3.2% 2027 EPS accretion with fully phased‑in cost savings, limited tangible book value dilution of about 2% and a 2.8‑year tangible book earnback, from a transaction valued at roughly $177 million (1.54x tangible book, 6.3x 2027E earnings).
- Strategic low‑cost deposit franchise: The merger adds about $1.1 billion of deposits and $762 million of loans at Bank of the Pacific as of March 31, 2026, including 38% non‑interest‑bearing deposits and a 1.03% deposit cost, supporting Banner’s funding profile in core Washington and Oregon markets.
Negative
- Dilution and execution risk: The all‑stock structure increases Banner’s share count and management explicitly notes potential negative impacts from dilution, while warning that integration, regulatory approvals, customer and employee retention, and realization of estimated cost savings may be more difficult, time‑consuming or costly than expected.
Insights
Banner’s stock merger adds low‑cost deposits and is modeled as EPS‑accretive, but brings dilution and execution risks.
Banner plans to acquire Pacific Financial in an all‑stock deal valued at $177 million, issuing 0.2633 shares of Banner for each Pacific Financial share. The combination would lift assets to about $18 billion, expanding Banner’s presence in Western Washington and Oregon and adding a granular, low‑cost deposit base, where Pacific Financial’s cost of deposits was 1.03% at March 31, 2026.
Management models roughly 3.2% EPS accretion in 2027 once cost saves are fully phased in, driven by an estimated 40% reduction in Pacific Financial’s non‑interest expense and modest revenue adjustments. They also project about 2% tangible book value dilution with a 2.8‑year earnback period and an internal rate of return above 25%, while keeping the CET1 ratio neutral according to the investor presentation.
The transaction is priced at 1.54x tangible book value and 6.3x projected 2027 earnings with full cost savings, which is disciplined for an in‑market deal. However, completion depends on regulatory and shareholder approvals, and integration carries risks explicitly highlighted by management, including achieving targeted synergies, retaining customers and employees, and managing dilution from new share issuance. The merger agreement also requires Pacific Financial’s Adjusted Equity to remain at or above $124.269 million and limits dissenters to under 10% of Pacific shares.
8-K Event Classification
3 items: 1.01, 7.01, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Exchange ratio: 0.2633 Banner shares per PFLC share
Implied per-share consideration: $17.44 per PFLC share
Aggregate deal value: $177 million
+5 more
8 metrics
Exchange ratio
0.2633 Banner shares per PFLC share
Merger consideration terms
Implied per-share consideration
$17.44 per PFLC share
Based on $66.25 Banner price on April 29, 2026
Aggregate deal value
$177 million
Total consideration for Pacific Financial
Combined assets
$18 billion
Expected assets of combined company at closing
Banner assets
$16.34 billion
Banner assets as of March 31, 2026
Bank of the Pacific assets
$1.29 billion
Bank of the Pacific assets as of March 31, 2026
Projected EPS accretion
3.2% in 2027
Fully phased‑in cost savings, excluding one‑time expenses
Termination fee
$6.3 million
Payable by Pacific Financial to Banner under certain terminations
Key Terms
Exchange Ratio, Adjusted Equity, Burdensome Condition, Material Adverse Effect, +2 more
6 terms
Exchange Ratio financial
"will be converted into the right to receive 0.2633 shares (the “Exchange Ratio”) of common stock"
The exchange ratio is the number used to decide how many shares of one company you get for each share you own in another company during a merger or acquisition. It’s like a recipe that tells you how to swap shares fairly, ensuring both companies’ values are balanced. This ratio matters because it determines how ownership divides between the companies' shareholders.
Adjusted Equity financial
"Pacific Financial’s Adjusted Equity (as defined in the Merger Agreement)... be equal to or greater than $124,269,000"
Burdensome Condition regulatory
"no required regulatory approval may contain or may have resulted in... the imposition of a Burdensome Condition"
Material Adverse Effect regulatory
"would reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement)"
A material adverse effect is a significant negative change or event that substantially reduces a company’s business, financial condition, or future prospects — think of it like a sudden major engine failure that makes a car unreliable. Investors care because such an event can lower expected profits, trigger contract clauses (allowing counterparties to renegotiate or walk away), and prompt swift stock-price reassessment based on the higher risk and uncertainty.
tax-free reorganization financial
"The merger is expected to qualify as a tax-free reorganization for Pacific Financial shareholders"
A tax-free reorganization is a corporate restructuring—such as a merger, acquisition, or stock-for-stock exchange—structured so that shareholders do not have to pay immediate income tax on gains from the transaction. Think of it like swapping houses under a rule that lets you avoid a tax bill until you later sell; it matters to investors because it affects the timing of taxes, the adjusted cost basis of their holdings, and the net economic benefit they actually receive from the deal.
core deposit intangible financial
"Core Deposit Intangible: 3.00% of core deposits"
Core deposit intangible is an accounting asset that represents the value of customer deposits a bank gains, usually through an acquisition, because those deposits provide a stable, low-cost source of funding. Think of it like paying for a loyal customer list that will save the bank money over time; it is written down over several years and affects reported earnings and the apparent cost of acquiring new funds, so investors watch it to understand future profitability and capital impact.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 30, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (509 ) 527-3636
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[X ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On April 30, 2026, Banner Corporation, a Washington corporation (“Banner”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Pacific Financial Corporation, a Washington corporation (“Pacific Financial”), pursuant to which Pacific Financial will merge with and into Banner (the “Merger”), with Banner as the surviving corporation in the Merger. The Merger Agreement was unanimously approved and adopted by the Board of Directors of each of Banner and Pacific Financial.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, $1.00 par value, of Pacific Financial (“Pacific Financial Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares held by Banner or any holder of Pacific Financial Common Stock who properly exercises dissenters’ rights under the Washington Business Corporation Act, will be converted into the right to receive 0.2633 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Banner (“Banner Common Stock”). Any fractional shares of Banner Common Stock that would be issued in the Merger will instead be paid in cash based upon the average closing price per share of Banner Common Stock as reported on the Nasdaq Global Select Market for the 15 consecutive trading days immediately preceding the closing date (the “Banner Closing Stock Price”).
If any holder of a Pacific Financial stock option that may by its terms be exercised provides a notice of exercise to Pacific Financial on or before the 30th calendar day prior to the Effective Time (such date, the “Option Exercise Notice Deadline”), Pacific Financial will issue shares of Pacific Financial Common Stock upon proper exercise of the Pacific Financial stock option in accordance with the terms of the such stock option and relevant Pacific Financial plan. Each share of Pacific Financial Common Stock received upon proper exercise of a Pacific Financial stock option prior to the Option Exercise Notice Deadline will be treated in the Merger in the same manner as other outstanding shares of Pacific Financial Common Stock at the Effective Time. However, no exercise of a Pacific Financial stock option will be permitted if an option holder fails to provide notice of exercise to Pacific Financial by the Option Exercise Notice Deadline. At the Effective Time, each Pacific Financial stock option that is outstanding as of immediately prior to the Effective Time will fully vest and will be cancelled and converted into the right to receive a cash payment equal to the product of (i) the excess, if any, of (A) the product of the Exchange Ratio multiplied by the Banner Closing Stock Price over (B) the applicable exercise price of such Pacific Financial stock option; and (ii) the number of shares of Pacific Financial Common Stock subject to such Pacific Financial stock option, less any required withholding taxes.
At the Effective Time, each Pacific Financial restricted stock unit (“RSU”) award that is outstanding as of immediately prior to the Effective Time will fully vest and any restrictions or risk of forfeiture will lapse. The shares of Pacific Financial Common Stock issuable upon the vesting and settlement of the Pacific Financial RSUs will be deemed to be issued and outstanding as of immediately prior to the Effective Time and will be treated in the Merger in the same manner as other outstanding shares of Pacific Financial Common Stock at the Effective Time.
The Merger Agreement provides that Bank of the Pacific, Pacific Financial’s wholly-owned Washington state-chartered commercial bank subsidiary (“Bank of the Pacific”), will be merged with and into Banner’s wholly-owned Washington state-chartered commercial bank subsidiary, Banner Bank (“Banner Bank”), immediately following the completion of the Merger. Banner Bank will be the surviving entity in the bank merger.
None of the directors or officers of Banner will change as a result of the Merger. At the effective time of the bank merger described above, Denise Portmann, currently the Chief Executive Officer and President of Bank of the Pacific, is expected to become an executive vice president of Banner Bank, subject to her accepting the position with Banner Bank.
The Merger Agreement contains representations and warranties of both parties. Each party has also agreed to affirmative and negative covenants during the interim period between the execution of the Merger Agreement and the Effective Time, which, in the case of Pacific Financial, generally requires it to, and cause each of its subsidiaries to, conduct its business in the ordinary course of business. In the case of Pacific Financial, these covenants provide that Pacific Financial will call a meeting of its shareholders to consider and approve the Merger Agreement, and, subject to certain exceptions, the Board of Directors of Pacific Financial will maintain its recommendation that its shareholders vote in favor of approval of the Merger Agreement. Pacific Financial also has agreed not to solicit an Acquisition Proposal (as defined in the Merger Agreement).
The completion of the Merger is subject to conditions, including, among others (1) receipt of the requisite approval by Pacific Financial shareholders, which under Washington corporate law applicable to Pacific Financial requires the affirmative vote of holders of two-thirds of the outstanding shares of Pacific Financial Common Stock, (2) receipt of all required regulatory approvals, including the approval of the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Washington State Department of Financial Institutions, Division of Banks, and no required regulatory approval may contain or may have resulted in, or would reasonably be expected to result in, the imposition of a Burdensome Condition (as defined in the Merger Agreement) as it relates to Banner, and (3) other closing conditions as set forth in the Merger Agreement, including without limitation, conditions relating to the listing of the shares of Banner Common Stock to be issued in the Merger on the Nasdaq Global Select Market and the effectiveness of a registration statement on Form S-4 to be filed with the Securities and Exchange Commission (“SEC”) covering such shares, the absence of certain legal proceedings challenging, or seeking damages or other relief in connection with, the transactions contemplated by the Merger Agreement that would reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) on Banner, and the absence of any change, since the date of the Merger Agreement, in the financial condition, assets or business of either party that would reasonably be expected to have a Material Adverse Effect on Pacific Financial or Banner, respectively. Banner’s obligation to complete the Merger is also subject to the condition that Pacific Financial’s Adjusted Equity (as defined in the Merger Agreement), as calculated 10 business days prior to the anticipated closing, be equal to or greater than $124,269,000, which was its Adjusted Equity as of March 31, 2026, and that holders of less than 10% of the outstanding shares of Pacific Financial Common Stock shall have exercised their dissenters’ rights.
Each party’s obligation to complete the Merger is also subject to certain additional conditions, including (1) the receipt of a tax opinion from the applicable party’s counsel to the effect that the Merger will qualify as a “reorganization” for tax purposes, (2) the accuracy of the other party’s representations and warranties, subject to certain qualifications and exceptions, as of the date of the Merger Agreement and as of the closing date, and (3) the performance by the other party of its covenants, agreements and obligations in all material respects under the Merger Agreement.
The parties anticipate completing the Merger in the third quarter of 2026.
The Merger Agreement provides certain termination rights for both Banner and Pacific Financial and further provides that a termination fee of $6,300,000 would be payable by Pacific Financial to Banner upon termination of the Merger Agreement under certain circumstances, including termination following a withdrawal or change in the recommendation of the Pacific Financial Board of Directors that Pacific Financial shareholders vote in favor of the Merger Agreement, Pacific Financial’s material breach or failure to perform its covenants relating to its shareholder meeting or a subsequent acquisition proposal, or a determination by the Pacific Financial Board of Directors, after specified conditions have been satisfied, to enter into a definitive agreement providing for a Superior Proposal (as defined in the Merger Agreement).
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Effective April 30, 2026, Banner, Pacific Financial and the directors and executive officers of Pacific Financial, in their capacities as shareholders of Pacific Financial, executed a Voting and Support Agreement (the “Voting and Support Agreement”) in which they have agreed to vote their shares of Pacific Financial Common Stock in favor of approval of the Merger Agreement. The foregoing information relating to the Voting and Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Voting and Support Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for purposes of, and were and are solely for the benefit of the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (i) will not survive the consummation of the Merger, and (ii) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Merger Agreement is included with this report only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding Banner or Pacific Financial, their respective subsidiaries or affiliates, or their respective businesses. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Banner, Pacific Financial, their respective subsidiaries or affiliates, or their respective businesses, the Merger Agreement and the Merger that will be contained in, or incorporated by reference into, the Registration Statement on Form S-4 to be filed by Banner that will include a proxy statement of Pacific Financial and a prospectus of Banner, and in the Forms 10-K, Forms 10-Q, Forms 8-K and other documents that Banner files with or furnishes to the SEC.
Item 7.01. Regulation FD Disclosure.
On April 30, 2026, Banner and Pacific Financial issued a joint press release announcing the execution of the Merger Agreement. A copy of the press release is attached to this report as Exhibit 99.1, which is incorporated herein by reference.
On April 30, 2026, Banner posted on its investor relations website, https://investor.bannerbank.com, under “Events and Presentations” an investor presentation relating to the Merger. A copy of the investor presentation is attached to this report as Exhibit 99.2, which is incorporated herein by reference. Banner may use this presentation with current and potential investors (including Pacific Financial shareholders), analysts, business partners, customers, employees, and others with an interest in Banner.
Beginning April 30, 2026, the Chief Executive Officer of Pacific Financial sent an email to the employees of Pacific Financial, along with a question-and-answer document relating to Banner and the Merger, which is attached to this report as Exhibit 99.4 and incorporated herein by reference.
The information furnished pursuant to this Item and the related exhibits are being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Banner for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Caution Regarding Forward-Looking Statements
This filing and the exhibits hereto contain forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These forward-looking statements include, but are not limited to, statements relating to the expected timing of the Merger and expectations, goals, projections and benefits relating to the Merger, as well as other statements regarding Banner’s goals, intentions and expectations, business plan and growth strategies, and the anticipated future performance of Banner, whether with respect to the Merger or otherwise.
Forward-looking statements are not historical facts but instead express only Banner management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. Actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements because of risks and uncertainties, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully or such integration may be more difficult, time-consuming or costly than expected; (2) any of the anticipated benefits of the proposed Merger may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the Merger or the announcement of the Merger, and the parties may be challenged in retaining key relationships both during the pendency of the Merger and following the completion of the Merger if that occurs; (4) the parties may not meet expectations regarding the timing of the proposed Merger; (5) required regulatory approvals or the approval of Pacific Financial shareholders may not be obtained or such approvals may be more difficult, time-consuming or costly than expected; (6) there may be challenges in satisfying the other conditions to completion of the Merger or the Merger may fail to close for any other reason; (7) management’s attention may be diverted from ongoing business operations and opportunities due to the proposed Merger; and (8) there may be potential negative impacts caused by the dilution resulting from Banner’s issuance of shares of Banner Common Stock in connection with the Merger. Please refer to Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 25, 2026, as well as Banner’s other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements. Forward-looking statements speak only as of the date they are made. All subsequent written and oral forward-looking statements concerning the proposed Merger or other matters attributable to Banner or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, Banner does not undertake any obligation to update any forward-looking information contained in this report, whether as a result of new information, future events, or otherwise.
Additional Information and Where to Find It
Banner will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Pacific Financial that also constitutes a prospectus of Banner. After the registration statement is declared effective by the SEC, Pacific Financial will mail a definitive proxy statement/prospectus to its shareholders.
Before making any voting decision, the shareholders of Pacific Financial are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about Banner, Pacific Financial, the Merger Agreement and the Merger. When filed, this document and other documents relating to the Merger filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge from Banner upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the proxy statement/prospectus.
Participants in the Solicitation
This report does not constitute a solicitation of proxy, an offer to sell or a solicitation of an offer to sell any securities. Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed Merger under SEC rules. Information about the directors and executive officers of Banner and Pacific Financial will be included in the proxy statement/prospectus for the proposed transaction filed with the SEC. These documents (when available) may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by its directors or executive officers have changed since the amounts set forth in Banner’s proxy statement for its 2026 annual meeting of shareholders, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | ||||
| 2.1 | Agreement and Plan of Merger, by and between Banner Corporation and Pacific Financial Corporation, dated April 30, 2026* | ||||
| 10.1 | Form of Voting and Support Agreement, entered into as of April 30, 2026, by and among Banner Corporation, Pacific Financial Corporation and the directors and/or officers of Pacific Financial Corporation identified therein. | ||||
| 99.1 | Joint press release of Banner Corporation and Pacific Financial Corporation issued April 30, 2026. | ||||
| 99.2 | Investor Presentation by Banner Corporation dated April 30, 2026. | ||||
| 99.3 | Email from Chief Executive Officer of Pacific Financial Corporation to employees, with Employee Q&A dated April 30, 2026. | ||||
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) | ||||
* Banner has omitted schedules and similar attachments to the subject agreement pursuant to Item 601(b) of Regulation S-K. Banner will furnish a copy of any omitted schedule or similar attachment to the SEC upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| BANNER CORPORATION | |||||
| Date: April 30, 2026 | By: /s/ Mark J. Grescovich | ||||
| Mark J. Grescovich | |||||
| President and Chief Executive Officer | |||||
MEDIA RELEASE
FOR IMMEDIATE RELEASE
April 30, 2026
Contact: Kelly McPhee, Banner Bank Senior Vice President, PR & Communications, 509-232-1968 or Kelly.mcphee@bannerbank.com
Banner Corporation to Acquire Pacific Financial Corporation
WALLA WALLA and ABERDEEN, WASH. Banner Corporation (“Banner”) (NASDAQ: BANR), the holding company for Banner Bank, and Pacific Financial Corporation (“Pacific Financial”) (OTCQX: PFLC), the holding company for Bank of the Pacific, today jointly announced that they have entered into a definitive merger agreement. Under the terms of the agreement, Banner will acquire Pacific Financial in an all-stock transaction, subject to the terms and conditions set forth therein. Following closing, the combined company is expected to have approximately $18 billion in assets.
Bank of the Pacific is a 55-year-old Washington state-chartered commercial bank serving business and consumer clients at 18 branches and offices in Western Washington and Northern Oregon. At March 31, 2026, Bank of the Pacific had assets of $1.29 billion, a high-quality loan portfolio of $762 million, and a low-cost deposit base of $1.14 billion. Upon completion of the merger, Denise Portmann, President and CEO, is expected to join the Banner Bank executive team.
Banner Bank is also a Washington state-chartered commercial bank that has been serving businesses and consumers for more than 135 years through a network of locations in Washington, Oregon, Idaho and California. Banner had assets of $16.34 billion as of March 31, 2026.
“Bank of the Pacific is a highly-respected, financially strong community bank with exceptional core deposits, and we’re pleased they selected Banner as their merger partner,” said Mark Grescovich, Banner President and CEO. “This transaction expands our presence and density in attractive Western Washington and Western Oregon markets while offering Bank of the Pacific customers broader product offerings and technology tools, increased commercial lending limits and an expanded branch delivery system. We look forward to Denise joining our executive team and are pleased to welcome their employees, customers and shareholders to Banner.”
Portmann, Bank of the Pacific President and CEO added, “I am extremely proud of our team and all that we have achieved together. Combining with Banner represents an exciting next chapter, creating tremendous opportunities for our employees, customers and shareholders. Our organizations share many important values—we are both financially strong, take a relationship-based approach to banking, are deeply committed to the communities we serve, trust and empower our employees, and take great care in delivering outstanding customer service.”
Under the terms of the merger agreement, Pacific Financial shareholders will receive 0.2633 shares of Banner common stock in exchange for each share of Pacific Financial common stock. Based on the closing price of $66.25 per share of Banner common stock on April 29, 2026, the implied value of the merger consideration to be received by Pacific Financial shareholders is equal to $17.44 per share or approximately $177 million in aggregate. The merger is expected to qualify as a tax-free reorganization for Pacific Financial shareholders. Following closing, based on the number of issued and outstanding shares of Banner common stock and shares of Pacific Financial common stock currently outstanding, Pacific Financial shareholders are expected to own approximately 7%, and Banner shareholders will own approximately 93%, of the combined company.
Banner expects the transaction, once closed, to be immediately accretive to 2027 earnings per share, excluding one-time transaction expenses.
The boards of directors of Banner and Pacific Financial each unanimously approved the merger agreement and the merger. The transaction is subject to approval by Pacific Financial shareholders, regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2026. For more information concerning the merger, please see the investor presentation posted April 30, 2026 in the “Events and Presentations” section of Banner’s investor relations website (https://investor.bannerbank.com).
Pacific Financial was advised by Piper Sandler as financial advisor, and Miller Nash LLP as legal counsel. Banner was advised by BofA Securities as financial advisor, and Ballard Spahr LLP as legal counsel.
About Banner Corporation
Banner Corporation is a $16.34 billion bank holding company operating a commercial bank in four Western states through a network of branches. For more than 136 years, Banner Bank has offered a full range of deposit and cash management services as well as business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank at www.bannerbank.com. Banner’s investor relations website is https://investor.bannerbank.com. The contents of Banner’s websites are not deemed to be incorporated by reference into this press release.
About Pacific Financial Corporation
Pacific Financial Corporation of Aberdeen, Washington, is the bank holding company for Bank of the Pacific, a state chartered and federally insured commercial bank. Bank of the Pacific offers banking products and services to small-to-medium sized businesses and professionals in western Washington and Oregon and operates 15 branches in the communities of Grays Harbor, Pacific, Thurston, Whatcom, Skagit, Clark and Wahkiakum counties in the State of Washington, and three branches in the communities of Clatsop and Clackamas counties in Oregon. Bank of the Pacific also operates loan production offices in the communities of Burlington, Washington and Salem, Oregon. Visit Bank of the Pacific’s website at www.bankofthepacific.com. Pacific Financial Corporation’s investor relations website is https://ir.bankofthepacific.com. The contents of Pacific Financial’s websites are not deemed to be incorporated by reference into this press release.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions or future or conditional verbs such as “will”, “would”, “should”, “could”, “might”, “can”, “may”, or similar expressions. These forward-looking statements include, but are not limited to, statements relating to the expected timing of the merger with Pacific Financial and expectations, goals, projections and benefits relating to the merger, as well as other statements regarding Banner’s goals, intentions and expectations, business plan and growth strategies, and the anticipated future performance of Banner, whether with respect to the merger or otherwise.
Forward-looking statements are not historical facts but instead express only Banner management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. Actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements because of risks and uncertainties, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully or such integration may be more difficult, time-consuming or costly than expected; (2) any of the anticipated benefits of the proposed merger may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the merger or the announcement of the merger, and the parties may be challenged in retaining key relationships both during the pendency of the merger and following the completion of the merger if that occurs; (4) the parties may not meet expectations regarding the timing of the proposed merger; (5) required regulatory approvals or the approval of Pacific Financial shareholders may not be obtained or such approvals may be more difficult, time-consuming or costly than expected; (6) there may be challenges in satisfying the other conditions to completion of the merger or the merger may fail to close for any other reason; (7) management’s attention may be diverted from ongoing business operations and opportunities due to the proposed merger; and (8) there may be potential negative impacts caused by the dilution resulting from Banner’s issuance of shares of Banner common stock in connection with the merger. Please refer to Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 25, 2026, as well as Banner’s other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements. Forward-looking statements speak only as of the date they are made. All subsequent written and oral forward-looking statements concerning the proposed merger or other matters attributable to Banner or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, Banner does not undertake any obligation to update any forward-looking information contained in this press release, whether as a result of new information, future events, or otherwise.
Additional Information and Where to Find It
Banner will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Pacific Financial that also constitutes a prospectus of Banner. After the registration statement is declared effective by the SEC, Pacific Financial will mail a definitive proxy statement/prospectus to its shareholders.
Before making any voting decision, the shareholders of Pacific Financial are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about Banner, Pacific Financial, the merger agreement and the merger. When filed, this document and other documents relating to the merger filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge from Banner upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the proxy statement/prospectus.
Participants in the Solicitation
This press release does not constitute a solicitation of proxy, an offer to sell or a solicitation of an offer to sell any securities. Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed merger under SEC rules. Information about the directors and executive officers of Banner and Pacific Financial will be included in the proxy statement/prospectus for the proposed transaction filed with the SEC. These documents (when available) may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by its directors or executive officers have changed since the amounts set forth in Banner’s proxy statement for its 2026 annual meeting of shareholders, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
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A c q u i s i t i o n o f Pa c i f i c F i n a n c i a l C o r p o ra t i o n Since 1890 A p r i l 3 0 , 2 0 2 6
2 This presentation includes forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often, but not always, be identified by the use of words like “believe”, “continue”, “pattern”, “estimate”, “project”, “intend”, “anticipate”, “expect” and similar expressions. These forward-looking statements include, but are not limited to, statements relating to the expected timing of the merger and expectations, goals, projections and benefits relating to the merger, as well as other statements regarding Banner’s goals, intentions and expectations, business plan and growth strategies, and the anticipated future performance of Banner, whether with respect to the merger or otherwise. Additional forward-looking statements may be made in the question-and-answer period following the presentation. Forward-looking statements are not historical facts but instead express only Banner management’s beliefs regarding future results or events, many of which, by their nature, are inherently uncertain and outside of management’s control. Actual results and outcomes may differ, possibly materially, from the anticipated results or outcomes indicated in these forward-looking statements because of risks and uncertainties, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully or such integration may be more difficult, time-consuming or costly than expected; (2) any of the anticipated benefits of the proposed merger may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the merger or the announcement of the merger, and the parties may be challenged in retaining key relationships both during the pendency of the merger and following the completion of the merger if it occurs; (4) the parties may not meet expectations regarding the timing of the proposed merger; (5) required regulatory approvals or the approval of Pacific Financial shareholders may not be obtained or such approvals may be more difficult, time-consuming or costly than expected; (6) there may be challenges in satisfying the other conditions to completion of the merger or the merger may fail to close for any other reason; (7) management’s attention may be diverted from ongoing business operations and opportunities due to the proposed merger; and (8) there may be potential negative impacts cause by the dilution resulting from Banner’s issuance of shares of Banner common stock in connection with the merger. Please refer to Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 25, 2026, as well as Banner’s other filings with the SEC, for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements. Forward-looking statements speak only as of the date they are made. All subsequent written and oral forward-looking statements concerning the proposed merger or other matters attributable to Banner or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Except as required by law, Banner does not undertake any obligation to update any forward-looking information contained in this communication, whether as a result of new information, future events, or otherwise. Caution Regarding Forward-Looking Statements
3 Additional Information and Where to Find It Banner will file a registration statement on Form S-4 with the SEC in connection with the proposed transaction. The registration statement will include a proxy statement of Pacific Financial that also constitutes a prospectus of Banner. After the registration statement is declared effective by the SEC, Pacific Financial will mail a definitive proxy statement/prospectus to its shareholders. Before making any voting decision, the shareholders of Pacific Financial are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about Banner, Pacific Financial, the merger agreement and the merger. When filed, this document and other documents relating to the merger filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge from Banner upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the proxy statement/prospectus. Participants in the Solicitation This communication does not constitute a solicitation of proxy, an offer to sell or a solicitation of an offer to sell any securities. Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed merger under SEC rules. Information about the directors and executive officers of Banner and Pacific Financial will be included in the proxy statement/prospectus for the proposed transaction filed with the SEC. These documents (when available) may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.” Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by its directors or executive officers have changed since the amounts set forth in Banner’s proxy statement for its 2026 annual meeting of shareholders, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information and Where to Find It.” Important Information
4 In-Market Transaction of Attractive Deposit Franchise with Low Execution Risk Attractive Deposit Franchise Low Risk, In-Market Transaction Positive Financial Impact ✓ Disciplined pricing ✓ ~3.2% EPS accretion with fully phased-in cost savings ✓ Limited TBV dilution with <3 year earnback ✓ Attractive use of capital with >25% IRR; neutral to CET1 capital ratio ✓ In-market transaction with identified cost savings opportunities ✓ Successful history of operating in Washington & Oregon with 21 client service locations (15 full-service branches and 6 commercial banking centers) ✓ Conservative balance sheet with commercially focused loan portfolio ✓ Operates in diverse industry lines similar to Banner’s super community banking model ✓ Plan for retention of selected leadership post-close supports continuity and integration ✓ Adds ~$1.1bn deposits in core Washington / Oregon markets ✓ Granular deposit franchise with 38% non-interest bearing and a 1.03% cost of deposits (0.70% excl. time) ✓ Strong liquidity position – 68% loans / deposits – provides additional upside to drive growth
CEO Denise Portmann, who brings over two decades of leadership experience at Pacific, is expected to continue as part of the Banner team Pacific Financial Corporation Overview 5 Loan Composition (2) 3/31/2026 Deposit Composition (2) 3/31/2026 Pacific Financial Corporation (“PFLC”) was formed in 1997 as the holding company for Bank of the Pacific, founded in 1971 and headquartered in Aberdeen, Washington #1 community bank by deposit share in Pacific and Wahkiakum counties within its core Washington footprint(1) Low-cost, relationship-driven funding base, with 38% non-interest-bearing deposits and a 1.03% cost of deposits(2) Key Franchise / Financial Highlights Franchise & Market Data CEO Denise J. Portmann HQ Aberdeen, WA Branches 15 Profitability (Q1’26) (2) ROAA 0.97% NIM 4.04% Efficiency Ratio 73.9% Balance Sheet, Capital and Asset Quality (Q1’26) (2) Assets $1,291 Gross Loans $771 Deposits $1,139 CET1 16.2% NPA / Assets 0.05% Loan Yield: 5.89% Cost of Deposits: 1.03% 1. Source: S&P Capital IQ Pro. Community banks defined as banks with total assets <$65bn. Deposit market share data as of 6/30/2025. 2. Deposit, loan and financial data from PFLC as of 3/31/2026. 3. Bank level. 38% 11% 28% 10% 13% Non-Interest- Bearing Interest-Bearing Demand Money Market Savings Account Time Deposits (dollars in millions) C&D Farmland Multi- family CRE Owner Occupied CRE Non-Owner Occupied Consumer Resi 1-4 family Commercial and Agricultural 4% 4% 11% 24% 23% 6% 14% 14% (3)
0.25% 5.50% 0.08% 0.75% Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Fed-Funds Rate (Top End) PFLC Cost of Deposits Attractive Deposit Franchise That Adds Complementary Washington Coast Density 6 Presence in Attractive Markets Granular, Low-Cost & In-Market Deposit Franchise Review of Last Hike Cycle; Valuable Low Beta Deposits 1.03% Cost of Deposits Incl. Time 0.70% Cost of Deposits Excl. Time 38.0% Non-Interest Bearing Deposits No Borrowings or Wholesale Deposits 8.0% NIB Deposit Growth in 2025 13% Upcycle Beta $2.8k Median Account Balance $36.6k Average Account Balance (1) (1) (1) (3) (2) BANR PFLC BANR PFLC BANR PFLC 1. Financial Data as of 3/31/2026 from PFLC. 2. Upcycle beta calculated over the time period from 9/30/2021 to 12/31/2023 per PFLC earnings releases and Federal Reserve Bank of St. Louis (FRED). 3. Federal Funds Rate data per the Federal Reserve Bank of St. Louis (FRED). (1) (1)
Key Transaction Assumptions 7 Consideration & Deal Value • Consideration Mix: 100% stock consideration(1) • Exchange Ratio: 0.2633 shares of Banner common stock for each share of Pacific Financial common stock • Transaction Value: $177mm deal value(2) • Price / TBV: 1.54x • Price / 2027E Earnings with Fully Phased-In Cost Savings: 6.3x Cost Savings & Earnings Adjustments • Cost Savings: 40% ($16.4mm) ’27E cost savings on Pacific Financial’s non-interest expense • Phase-In Period: 75% through 2027 calendar year and 100% thereafter • Durbin Impact and Fee-Income Dis-Synergies: $1.4mm pre-tax reduction in projected fee income Key Merger Assumptions • One-Time Merger Expenses: $25.5mm pre-tax • Loan Credit Mark: 1.18% of Pacific Financial Loans • Core Deposit Intangible: 3.00% of core deposits • FV Marks: +$4.4mm in net pre-tax FV marks • Closing: Estimated close in third quarter 2026 1. Excluding cash-out of PFLC options outstanding at closing. 2. Based upon BANR closing price of $66.25 on 4/29/2026 and 10,144,298 PFLC fully diluted shares outstanding.
Attractive Financial Impact 8 P / TBV Core Deposit Premium Fully-Phased EPS Acc. TBVPS Acc. / (Dil.) TBV Earnback (Yrs) IRR Target as % of Combined Assets Disciplined Pricing Resulting in… …Attractive Financial Impact 1.54x 6.0% 3.2% ~(2.0%) 2.8 Yrs >25% 7% Attractive Proforma Franchise 6.3x P / 27E Synergized Earnings Proforma Deposit Mix (1) Proforma Loan Mix (1) Commercial RE Multi- familyC&D Commercial Agricultural Resi 1-4 Family Consumer 37% 6% 14% 20% 3% 13% 7% Total Loans: $12.5bn Interest-bearing demand Money market Savings Time Deposits (CDs) Non- interest bearing 18% 11% 27% 11% 33% Total Deposits: $15.0bn 1. Financial Data as of 3/31/2026.
Key Takeaways 9 Strengthens Banner’s franchise in attractive Washington and Oregon markets, adding strong local relationships and a well-established community banking presence Compelling financial profile with near-term earnings uplift, driven by Pacific Financial’s low funding costs, strong core deposit mix, and cost synergies High strategic and cultural alignment enabling a straightforward integration with low execution risk, retaining Banner’s optionality to explore additional attractive opportunities
Exhibit 99.3
Dear Bank of the Pacific Team:
I am pleased to announce that today we signed a definitive agreement whereby our holding company, Pacific Financial Corporation, will merge with Banner Corporation (BANR) in an all-stock transaction valued at approximately $177 million. As a result, after closing of the merger, Bank of the Pacific will become a part of Banner Bank. Attached you will find the press release and investor presentation with more details on the transaction.
I am extremely proud of what we have built and accomplished together, and this deal is a testament to that. Combining with Banner represents an exciting next chapter, creating tremendous opportunities for you, our employees, as well as our customers and shareholders. Banner is looking to our team to deliver our exceptional culture and talent to bolster the combined company. We are confident we selected a partner that shares our commitment to relationship‑based banking, deep community engagement, and exceptional customer service. I will be joining Banner’s executive team in a leadership position and continue to support our markets, our operations, and our people.
Many of you already know Banner as a friendly competitor. Founded more than 135 years ago, Banner Bank is headquartered in Walla Walla, Washington with more than $16 billion in assets and over 140 branches and offices in Washington, Oregon, California and Idaho. Banner has a track record of top-notch financial performance. Combined we are expected to have approximately $18 billion in assets with a strong presence in great markets. Like us, they serve large urban markets as well as rural towns and everything in between, and Banner values how these diverse markets bring balance to the organization. Customers will have access to more resources, expanded product and service offerings, additional technology tools, higher lending limits and more locations to choose from as they travel throughout the West. Shareholders will receive stock in a company with a strong history of building long-term shareholder value. BANR delivered a 59% cumulative total shareholder return over the past five years, and in the last year their Board of Directors approved two separate 4% increases in its regular quarterly cash dividend.
In this larger organization, we believe our employees will find greater opportunities for career advancement, as well as a competitive benefits package (with credit for the time you have served with us). Banner trusts and empowers their employees with core values built on “do the right thing.” This is in alignment with how we do business, which is just one indicator that our cultures are highly compatible. But I also understand that, with any change, comes challenges and opportunities for growth and I ask that you assume good intent and keep an open mind during this transition.
Closing of this merger is subject to approval by our shareholders and the appropriate banking regulatory agencies, as well as other closing conditions. We anticipate it will close in the 3rd quarter with systems conversion expected to occur in the 4th quarter, but the exact date has not yet been set. We will keep you updated as we make progress on completing the merger. Until closing, it is business as usual and we will continue to operate as separate, independent companies, so please continue to serve our customers and one another as you always have.
As you digest this news, you and our customers will no doubt have questions and we will do our best to provide you with helpful, timely information. Attached to this email is a collection of FAQs that I hope you will find useful. In addition, please join me for our scheduled Coffee Talk tomorrow at 8:30 am. Banner CEO Mark Grescovich will be joining me as he would like to welcome you, too. Further, Banner representatives will be on site in our offices in the coming days to make introductions and respond to your questions. If you have questions that remain unanswered, please feel free to reach out to the executive team at any time. Please be patient and remember that we are still working through many specific elements, and we may not have answers to all your questions right away.
Lastly, it is possible that you will receive questions from the media or shareholders. If that is the case, it is important that you refer those directly to me or a member of the executive team.
Thank you all for your hard work and dedication. It is because of your contributions that our customers come back each day, and why we are an attractive partner for a successful community bank like Banner Bank. On behalf of the Board and leadership team, thank you for all you have done to make this company the special place it is.
Sincerely,
Denise
Caution Regarding Forward-Looking Statements
This communication relating to the proposed all-stock merger (the “merger”) by which Banner Corporation (“Banner”) will acquire Pacific Financial Corporation (“Pacific Financial”) pursuant to an Agreement and Plan of Merger dated April 30, 2026 (the “merger agreement”) contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act. Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: (1) the required regulatory approvals, the Pacific Financial shareholder approval, satisfaction of other closing conditions, integration of Pacific Financial with Banner, and anticipated benefits of the merger may not be achieved or may be more difficult, time-consuming or costly than expected; (2) customer and employee relationships and business operations may be disrupted, or challenging to maintain; (3) the merger may not occur when expected; and (4) management’s attention may be diverted; as well as the risks described in Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 and Banner’s other filings with the SEC. Except as required by law, Banner is not obligated to update any forward-looking statement as a result of new information, future events, or otherwise.
Additional Information and Where to Find It
Banner will file a registration statement on Form S-4 with the SEC that will include a proxy statement of Pacific Financial that also constitutes a prospectus of Banner. After the registration statement is declared effective by the SEC, Pacific Financial will mail a definitive proxy statement/prospectus to its shareholders. Before making any voting decision, the shareholders of Pacific Financial are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about Banner, Pacific Financial, the merger agreement and the merger. When filed, this document and other documents filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The websites referenced above are not deemed to be incorporated by reference into any Banner SEC filing.
Participants in the Solicitation
This communication does not constitute a solicitation of proxy, an offer to sell or a solicitation of an offer to sell any securities. Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed merger. Information about the directors and executive officers of Banner and Pacific Financial will be included in the proxy statement/prospectus filed with the SEC. These documents (when available) may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.” Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by Banner’s directors or executive officers have changed since the amounts set forth in such proxy statement, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
Our Proposed Merger with Banner Bank
Bank of the Pacific Employee Q&A
We are excited to announce Pacific Financial Corporation has entered into an agreement to merge with Banner Corporation.
Key Facts
•Pacific Financial Corporation will merge into Banner Corporation in an all stock transaction
•At the closing of the merger, the holders of Pacific Financial common stock will become entitled to receive 0.2633 shares of Banner common stock
•The closing of the merger, expected in third quarter 2026, is subject to regulatory approval and Pacific Financial shareholder approval and satisfaction of other closing conditions
•After the holding company merger, Bank of the Pacific will merge into Banner Bank.
•Both are financially strong, Washington-based banks.
•Both banks take a relationship-based approach to serving customers with expertise in business and personal banking, and a strong commitment to being active in the local communities we serve.
•We expect the transaction to close in the third quarter, subject to approval by our Pacific Financial Corporation shareholders and regulators as well as satisfaction of other customary closing conditions.
•Following closing, Denise Portmann is expected to join Banner’s executive team and Terri McKinnis is expected to stay on to assist with integration through systems conversion.
•The combined company is expected to have approximately $18 billion in assets at closing.
•As a part of Banner Bank, our customers also will have access to all of Banner’s 140 branches and commercial banking centers in Washington, Oregon, Idaho and California to choose from when doing their banking.
About Banner Bank
Banner has been serving customers for more than 135 years with a robust variety of products and services for businesses and individuals. They serve large urban markets as well as rural towns and everything in between with over 140 branches and commercial banking centers in Washington, Oregon, California and Idaho. They have deep expertise serving businesses and know our markets well—we’ve been friendly competitors for many years.
Recognized nationally for their financial strength and customer service, Banner Bank is part of Banner Corporation with more than $16 billion in assets as of March 31, 2026. The company trades on NASDAQ under the symbol BANR with a history of delivering strong shareholder value.
The Banner team operates according to a set of values that expands on their core motto: “Do the right thing,” all of which is quite similar to our values, including:
•Honesty and integrity
•Mutual respect
•Quality
•Trust
•Teamwork
Often referenced alongside these values is accountability. They emphasize these values guide how they interact with customers and each other on a daily basis–not just a slogan, but as an expectation for behavior and decision-making.
Answers to Commonly Asked Questions
NOTE: It’s natural that you will have questions about the merger. The answers below are just the start of the conversations we will have over the coming weeks. More detailed information will be shared in a number of ways (i.e. meetings with leaders, market visits with Banner, etc). Please pose any specific questions with your manager and if we don’t have the answers, we will engage all the best experts to get them for you.
Overall Merger Questions:
Why are we choosing to merge with Banner?
Pacific’s Board of Directors and Executives are tasked with determining the best strategic path for our company. While Pacific has been having steady success, after thorough consideration, the Pacific Board of Directors determined that a strategic combination would best serve our shareholders and other key stakeholders. We chose Banner as a merger partner to deliver value to the shareholders and expand the resources and capabilities we can offer clients, employees and the communities we serve.
Other key considerations include:
•Opportunity to create a larger collective presence in Western Washington and Oregon—markets Banner knows and values already.
•Complementary footprints and both companies have a long history operating as a community bank in rural and urban market areas.
•Compatible cultures with strong commitment to employees.
•Our approach to serving customers is very similar and both organizations place a high value on community engagement.
•Expanded products and services including access to more technology tools and broader scope of products and services, such as mortgage lending, wealth management and international banking.
•Higher lending limits for commercial clients while maintaining decision-making close to our customers, where understanding the local markets is vital to the loan process.
•Shareholders join a company with a strong history of building long-term shareholder value and an attractive dividend yield.
We’ve built a strong bank with great customer relationships—the Banner team recognizes and values that.
This merger places an emphasis on customer retention and growth. It will combine the strengths of both banks to provide an even better experience for our customers, career growth for employees and reward our shareholders.
For employees, we believe this will provide you with access to expanded resources, including more opportunities for training and career development, as well as a competitive benefits package.
Will Bank of the Pacific’s name change?
Yes. After closing, we will operate as one unified bank: Banner Bank.
When will the merger be finalized?
As is the case with any merger, we must receive regulatory and shareholder approval and satisfy other closing conditions. We anticipate the transaction will close in the third quarter. You can expect to receive updates and communication throughout the process.
What will happen between now and when the transaction is complete?
Until the merger is complete, we will continue operating independently in a “business as usual” fashion. During this time, we will continue with the same branch, department and management structure, and the same approach to daily business. As we approach the closing date, we will work closely with counterparts from Banner on integration activities. When the transaction is complete, we will be one organization with one executive team and one board of directors. Integration activities take time, so as more information becomes available, we will let you know, including sharing relevant details on the On Becoming Banner portal (see below for more details about this communication channel).
How will the operational systems convert?
Our operating systems will convert to Banner after the transaction is complete, on a date that is yet to be set. An Implementation Team will be formed with employees from both companies who will work together to ensure the conversion process goes smoothly with a focus on minimizing customer disruption.
How will products convert?
The Implementation Team, comprised of experts from both Banks, will be charged with carefully reviewing every Bank of the Pacific product to ensure the most appropriate mapping to Banner’s suite of products. Prior to converting, customers will receive communications to inform them of any account changes and employees will receive training on the product conversion.
Will branches be consolidated?
The majority of our locations will not be impacted, although there are four in the northern region in close proximity. In the coming weeks, we will carefully evaluate these locations to ensure we’re providing the combined organization with the best opportunity to serve customers. We will communicate any decisions and changes as they are made, and customers can expect to receive advance notice of any branch consolidation. If there are branch consolidations, they will not occur until systems integration which is likely to be in the fourth quarter.
What is Banner’s commitment to the community?
Like us, Banner places a very high value on community involvement, in fact it’s a core value. In 2025, they gave more than $2 million to non-profit organizations and causes and employees volunteered over 16,500 hours. One great example of how Banner leadership encourages employees to get involved is through Community Connections, a unique program providing employees (full and part-time) paid time off each year to volunteer with the charities of their choice during regular business hours.
Banner’s leadership has committed to honoring our 2026 corporate giving commitments and continuing our strong legacy of community support.
After the merger closes, where will the combined company be headquartered?
The combined company’s official headquarters will be located in Walla Walla, Washington, but that will not result in changes to our offices through Washington and Oregon. As a relationship bank, operating within and alongside the community is a fundamental value of our business, and that commitment remains absolutely central to our operations going forward.
Employment Questions
Will there be immediate changes to my job and hours?
No. Until the merger is complete, which is expected in the third quarter, each company will continue operating as a separate, independent company. You will continue to report to your current manager, at your current location with the same hours and schedule and retain your current job responsibilities. We are committed to communicating frequently throughout the process as it relates to any organizational changes.
Will my position be affected? Will there be layoffs?
We recognize answering employee questions about your future with the organization is very important, yet Banner leaders want to get to know you and learn about your skills and talents before decisions are made. It is their intention to ensure all employees know their go-forward status within 45 days of the initial announcement. If positions are eliminated due to this merger, employees will receive severance compensation and outplacement services. Additionally, Banner will offer employees preferred status for open positions.
Will Bank of the Pacific employees receive priority when it comes to job postings?
Yes. If your position is affected, the Banner team is encouraging you to apply for open positions and you will receive preferred status during the selection process. Keep in mind, with a larger organization there will be additional opportunities for you to grow your career, so we’ll have HR assistance available to answer any questions you have about open positions.
Will I have to interview for my job?
No. Bank of the Pacific Employees become Banner Bank employees on the close date. Not all positions perfectly align with duties and responsibilities so some positions may be evaluated as part of the integration process to help us better understand your skills and desires in order to better understand where you may best fit in the combined company. If your position is eliminated and you apply for an open position at Banner, you should expect to interview.
Will there be severance for employees who do not receive go-forward positions?
Yes. If positions are eliminated due to this merger, severance compensation and outplacement services will be available (severance will be based upon our severance policy). Additionally, employees are encouraged to apply for Banner open positions and you will receive preferred status during the selection process.
Will my current pay and/or incentive program be impacted?
Our incentive plans will operate as they always have through the close of the merger. A full review is underway now of all pay, incentives and benefits. We know this is an important question, yet taking the time for this full review will serve us well in making thoughtful decisions. You can expect information to be available about this very soon.
How will my years of service with Bank of the Pacific be treated?
For employees who continue with Banner, your original hire date with us will be honored and will generally remain your hire date for purposes of Banner Bank benefit plans.
How will this merger affect my benefits?
Based on our expected third quarter closing date, we anticipate your benefit plans will remain the same through the end of the month following the closing date. You will have the opportunity to complete an open enrollment into Banner’s benefit plan. Banner has a comprehensive total rewards program. There will be no gaps in coverage. You can view more about Banner’s 2026 benefit offerings on the Career pages of Banner’s website. More detailed benefits will be available on the On Becoming Banner portal (see below for details about this communication channel).
What will happen to my 401(k) Savings Plan
The Bank of the Pacific 401(k) plan will operate as usual until the closing of the transaction. You can continue to contribute to it until that time. Banner also offers a strong 401 (k) plan with a corporate match—watch for more information coming soon about it will be shared along with the full benefit details available.
What about my vacation/scheduled time off?
Continue with any scheduled time-off as you normally would. Banner offers sick, vacation, holiday and personal leave policies. More specific details will be shared with you in the coming weeks.
Questions on Next Steps
What happens next?
This announcement is just the first step in bringing our two companies together. The proposed merger was unanimously approved by the Board of Directors of both companies. In the coming weeks, both companies will begin working together on an integration plan to ensure a coordinated transition.
What can I tell my clients about this merger?
The merger is about continuing to build a better bank to serve our customers. Nothing will change now. Once the merger is complete, Customers should expect to continue working with many of the same people with the same commitment to community banking, but with more resources and additional products, services and locations to choose from. Banner already serves Western Washington and Oregon so they know and respect the communities we serve. And like us, they are committed to relationship banking. Any changes to accounts and products will take place after closing and there will be lots of communication ahead of any changes that impact customers.
Please refer to the Customer & Community Conversation Guide for detailed information when talking to your clients and community members.
What can I do to help?
Until the merger is complete, it is business as usual and each Bank will continue to operate as a separate, independent company. Please continue to do what you already do so well–use your banking expertise and knowledge to take care of customers. This includes continuing to be active in the community, providing the level of service to customers that you do today and continuing to closely manage the loan portfolio and grow deposits. Please ask questions of your manager and share any customer feedback so we can make sure we are taking care of you and the customers as we move forward.
How will information be shared with employees going forward?
While information will be shared a number of ways (i.e. meetings with leaders, market visits with Banner leaders, etc.), Banner expect to activate On Becoming Banner, a secure web-based portal available only to employees via our Intranet. This will serve as a central location to share information and updates as they become available. In a few weeks you will receive information about how to access On Becoming Banner.
What if I am contacted by the media about the merger?
Please follow the existing Bank of the Pacific protocol, and kindly route any media inquiries to CEO Denise Portmann.
Can I post about the merger on my social media pages?
Please follow our existing social media policy regarding this topic.
Caution Regarding Forward-Looking Statements
This communication relating to the proposed all-stock merger (the “merger”) by which Banner Corporation (“Banner”) will acquire Pacific Financial Corporation (“Pacific Financial”) pursuant to an Agreement and Plan of Merger dated April 30, 2026 (the “merger agreement”) contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act. Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include: (1) the required regulatory approvals, the Pacific Financial shareholder approval, satisfaction of other closing conditions, integration of Pacific Financial with Banner, and anticipated benefits of the merger may not be achieved or may be more difficult, time-consuming or costly than expected; (2) customer and employee relationships and business operations may be disrupted, or challenging to maintain; (3) the merger may not occur when expected; and (4) management’s attention may be diverted; as well as the risks described in Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 and Banner’s other filings with the SEC. Except as required by law, Banner is not obligated to update any forward-looking statement as a result of new information, future events, or otherwise.
Additional Information and Where to Find It
Banner will file a registration statement on Form S-4 with the SEC that will include a proxy statement of Pacific Financial that also constitutes a prospectus of Banner. After the registration statement is declared effective by the SEC, Pacific Financial will mail a definitive proxy statement/prospectus to its shareholders. Before making any voting decision, the shareholders of Pacific Financial are advised to read the proxy statement/prospectus when it becomes available because it will contain important information about Banner, Pacific Financial, the merger agreement and the merger. When filed, this document and other documents filed by Banner can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge through Banner’s investor relations website at https://investor.bannerbank.com by clicking on “SEC Filings” under the “Financials” tab. Alternatively, these documents, when available, can be obtained free of charge upon written request to Banner Corporation, Attn: Investor Relations, 10 South First Avenue, Walla Walla, Washington 99362 or by calling (509) 527-3636. The websites referenced above are not deemed to be incorporated by reference into any Banner SEC filing.
Participants in the Solicitation
This communication does not constitute a solicitation of proxy, an offer to sell or a solicitation of an offer to sell any securities. Banner, Pacific Financial, and certain of their directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Financial in connection with the proposed merger. Information about the directors and executive officers of Banner and Pacific Financial will be included in the proxy statement/prospectus filed with the SEC. These documents (when available) may be obtained free of charge in the manner described above under “Additional Information and Where to Find It.” Information about such directors and executive officers of Banner and their direct or indirect interests, by security holdings or otherwise, can be found in Banner’s proxy statement in connection with its 2026 annual meeting of shareholders, as filed with the SEC on April 6, 2026, and other documents subsequently filed by Banner with the SEC. To the extent holdings of common stock by Banner’s directors or executive officers have changed since the amounts set forth in such proxy statement, such changes have been or will be reflected in filings with the SEC on Forms 3, 4, and 5. These documents can be obtained free of charge in the manner described above under “Additional Information and Where to Find It.”
FAQ
What are the key terms of Banner (BANR) acquiring Pacific Financial?
Banner will acquire Pacific Financial in an all‑stock merger. Pacific shareholders receive 0.2633 shares of Banner common stock per Pacific share, implying about $17.44 per share and roughly $177 million total value, based on Banner’s $66.25 closing price on April 29, 2026.
How large will Banner (BANR) be after the Pacific Financial merger closes?
The combined company is expected to have approximately $18 billion in assets at closing. Banner reported $16.34 billion in assets as of March 31, 2026, while Bank of the Pacific contributed $1.29 billion in assets at that same date, including a sizable low‑cost deposit base.
What financial impact does Banner (BANR) expect from the Pacific Financial merger?
Banner expects the transaction to be immediately accretive to 2027 earnings per share, excluding one‑time costs, with about 3.2% fully phased‑in EPS accretion. Management projects limited tangible book value dilution of around 2% and an earnback period of about 2.8 years after closing.
When is the Banner and Pacific Financial merger expected to close and what approvals are needed?
The parties anticipate closing in the third quarter of 2026. Completion requires approval by Pacific Financial shareholders, approvals from the Federal Reserve Board, FDIC and Washington regulators, satisfaction of conditions such as minimum Adjusted Equity of $124.269 million, and other customary closing requirements.
What happens to Bank of the Pacific and its leadership after the transaction?
After the holding company merger, Bank of the Pacific will merge into Banner Bank, with Banner Bank as the surviving institution. Denise Portmann, currently President and CEO of Bank of the Pacific, is expected to join Banner Bank’s executive team, supporting markets, operations and personnel after closing.
Filing Exhibits & Attachments
9 documentsPress Releases
Agreements & Contracts
Other Documents
- EX-2.1 AGREEMENT AND PLAN OF MERGER, BANNER CORP AND PACIFIC FINANCIAL CORP 787.1 KB
- EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 2.0 KB
- EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT 14.1 KB
- EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 24.7 KB
- EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 14.7 KB