Banner Corporation Reports Net Income of $46.4 Million, or $1.34 Per Diluted Share, for Fourth Quarter 2024; Declares Quarterly Cash Dividend of $0.48 Per Share

WALLA WALLA, Wash.--(BUSINESS WIRE)--Banner Corporation (NASDAQ:BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $46.4 million, or $1.34 per diluted share, for the fourth quarter of 2024, compared to $45.2 million, or $1.30 per diluted share, for the preceding quarter and $42.6 million, or $1.24 per diluted share, for the fourth quarter of 2023. Net interest income was $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago. The increase in net interest income compared to the preceding quarter reflects a decrease in funding costs and an increase in interest-earning assets, partially offset by a decrease in yields on interest earning assets. The increase in net interest income compared to the prior year quarter reflects an increase in both the yield and average balance of interest earning assets, partially offset by an increase in funding costs. Fourth quarter 2024 results included a $3.0 million provision for credit losses, up from $1.7 million in the preceding quarter and $2.5 million in the fourth quarter of 2023. Net income was $168.9 million, or $4.88 per diluted share, for the year ended December 31, 2024, compared to $183.6 million, or $5.33 per diluted share, for the year ended December 31, 2023. Net interest income for the year ended December 31, 2024 decreased to $541.7 million from $576.0 million for the year ended December 31, 2023, primarily due to the rise of deposit costs of $99.3 million, partially offset by a $77.7 million increase in interest income on loans. Results for the year ended December 31, 2024 included a $7.6 million provision for credit losses, a $5.2 million net loss on the sale of securities and a $1.0 million net decrease in the valuation of financial instruments carried at fair value, compared to a $10.8 million provision for credit losses, a $19.2 million net loss on the sale of securities and a $4.2 million net decrease in the valuation of financial instruments carried at fair value during the same period in 2023. Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.48 per share payable February 14, 2025, to common shareholders of record on February 4, 2025. “Banner’s fourth quarter financial performance reflects the continued successful execution of our super community bank strategy, which emphasizes growing new client relationships, maintaining our core funding position, promoting client loyalty and advocacy through our responsive service model, and sustaining a moderate risk profile,” said Mark Grescovich, President and CEO. “Our earnings for the fourth quarter of 2024 benefited from our solid year over year loan growth as well as margin expansion during the fourth quarter as a result of lower funding costs. This benefit was partially offset by the declining interest rate environment and its effect on loan yields. Additionally, Banner’s credit metrics continue to be strong, our reserve for loan losses remained solid, and our capital base continues to be robust. We continue to benefit from a strong core deposit base that has been resilient in a highly competitive environment, with core deposits representing 89% of total deposits at quarter end. Banner has upheld its core values for the past 134 years, which are to do the right thing for our clients, communities, colleagues, company and shareholders; and to provide consistent and reliable strength through all economic cycles and change events.” At December 31, 2024, Banner, on a consolidated basis, had $16.20 billion in assets, $11.20 billion in net loans and $13.51 billion in deposits. Banner operates 135 full-service branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population. Fourth Quarter 2024 Highlights Revenue was $160.6 million for the fourth quarter of 2024, compared to $153.7 million in the preceding quarter and $152.5 million in the fourth quarter a year ago. Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities and the net change in valuation of financial instruments) was $160.1 million in the fourth quarter of 2024, compared to $153.7 million in the preceding quarter and $157.1 million in the fourth quarter a year ago. Net interest income was $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago. Net interest margin, on a tax equivalent basis, was 3.82%, compared to 3.72% in the preceding quarter and 3.83% in the fourth quarter a year ago. Mortgage banking operations revenue was $3.7 million for the fourth quarter of 2024, compared to $3.2 million in the preceding quarter and $5.4 million in the fourth quarter a year ago. Return on average assets was 1.15%, compared to 1.13% in the preceding quarter and 1.09% in the fourth quarter a year ago. Net loans receivable increased 1% to $11.20 billion at December 31, 2024, compared to $11.07 billion at September 30, 2024, and increased 5% compared to $10.66 billion at December 31, 2023. Non-performing assets were $39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $45.2 million, or 0.28% of total assets, at September 30, 2024 and $30.1 million, or 0.19% of total assets, at December 31, 2023. The allowance for credit losses - loans was $155.5 million, or 1.37% of total loans receivable, as of December 31, 2024, compared to $154.6 million, or 1.38% of total loans receivable, as of September 30, 2024 and $149.6 million, or 1.38% of total loans receivable, as of December 31, 2023. Total deposits were $13.51 billion at December 31, 2024, compared to $13.54 billion at September 30, 2024, and $13.03 billion at December 31, 2023. Core deposits represented 89% of total deposits at December 31, 2024. Dividends paid to shareholders were $0.48 per share in the quarter ended December 31, 2024. Common shareholders’ equity per share decreased 1% to $51.49 at December 31, 2024, compared to $52.06 at the preceding quarter end, and increased 7% from $48.12 at December 31, 2023. Tangible common shareholders’ equity per share* decreased 1% to $40.57 at December 31, 2024, compared to $41.12 at the preceding quarter end, and increased 9% from $37.09 at December 31, 2023. *Non-GAAP (Generally Accepted Accounting Principles) financial measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. Income Statement Review Net interest income was $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago. Net interest margin on a tax equivalent basis increased ten basis points to 3.82% for the fourth quarter of 2024, compared to 3.72% in the preceding quarter, and decreased compared to 3.83% in the fourth quarter a year ago. Net interest margin for the current quarter, compared to the preceding quarter, benefited from decreased funding costs, partially offset by lower yields on interest earning assets, primarily due to decreases in the targeted federal funds rate in the third and fourth quarters of 2024. Average yields on interest-earning assets decreased two basis points to 5.31% for the fourth quarter of 2024, compared to 5.33% for the preceding quarter, and increased compared to 5.06% in the fourth quarter a year ago. On September 18, 2024, the Federal Open Market Committee (“FOMC”) of the Federal Reserve System lowered the target range for the federal funds rate 50 basis points, followed by a 25 basis-point decrease on November 7, 2024 and another 25 basis-point decrease on December 18, 2024, resulting in a target range of 4.25% to 4.50% at December 31, 2024. Average loan yields decreased two basis points to 6.02%, compared to 6.04% in the preceding quarter, and increased compared to 5.77% in the fourth quarter a year ago. The decrease in average loan yields during the current quarter primarily reflects the decrease in interest rates, partially offset by the benefits of a balance sheet hedge that matured during the quarter. Total deposit costs decreased eight basis points to 1.53% in the fourth quarter of 2024, compared to 1.61% in the preceding quarter, and increased compared to 1.18% in the fourth quarter a year ago. The decrease in deposit costs in the current quarter was primarily due to a decrease in interest rates, partially offset by an increase in the average balance of interest-bearing deposits. The average rate paid on borrowings decreased 51 basis points to 4.57% in the fourth quarter of 2024, compared to 5.08% in the preceding quarter, and decreased compared to 4.77% in the fourth quarter a year ago due to lower wholesale borrowings in the current quarter. The total cost of funding liabilities decreased 13 basis points to 1.60% in the fourth quarter of 2024, compared to 1.73% in the preceding quarter, and increased compared to 1.31% in the fourth quarter a year ago. A $3.0 million provision for credit losses was recorded in the current quarter (comprised of a $3.2 million provision for credit losses - loans, a $203,000 recapture of provision for credit losses - unfunded loan commitments and a $16,000 recapture of provision for credit losses - held-to-maturity debt securities). This compares to a $1.7 million provision for credit losses in the prior quarter (comprised of a $2.0 million provision for credit losses - loans, a $262,000 recapture of provision for credit losses - unfunded loan commitments and a $13,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $2.5 million provision for credit losses in the fourth quarter a year ago (comprised of a $3.8 million provision for credit losses - loans, a $526,000 recapture of provision for credit losses - unfunded loan commitments, a $750,000 recapture of provision for credit losses - available for sale securities and a $23,000 recapture of provision for credit losses - held-to-maturity debt securities). The provision for credit losses for the current quarter primarily reflected risk rating downgrades as well as growth in loan balances. Total non-interest income was $20.0 million in the fourth quarter of 2024, compared to $18.1 million in the preceding quarter and $14.1 million in the fourth quarter a year ago. The increase in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $506,000 increase in mortgage banking operations revenue and a $1.1 million increase in miscellaneous income, primarily due to a gain recognized on the sale of a non-performing loan during the fourth quarter of 2024. The increase in non-interest income during the current quarter compared to the prior year quarter was primarily due to a $5.1 million decrease in the net loss recognized on the sale of securities. Total non-interest income was $66.9 million for the year ended December 31, 2024, compared to $44.4 million a year earlier related mostly to the losses on the sale of investment securities in 2023. Mortgage banking operations revenue was $3.7 million in the fourth quarter of 2024, compared to $3.2 million in the preceding quarter and $5.4 million in the fourth quarter a year ago. While the volume of one- to four-family loans sold during the current quarter increased compared to both the preceding and prior year quarters, volumes remained low due to reduced refinancing and purchase activity in the current rate environment. The increase from the preceding quarter reflects a $508,000 gain related to the pooled loan sale of $34.8 million of one- to four-family loans during the fourth quarter of 2024. The decrease from the prior year quarter primarily reflects a $3.5 million reversal of the lower of cost or market adjustment on multifamily loans held for sale, recognized during the fourth quarter of 2023, partially offset by higher pricing and volumes of one- to four-family loans sold during the current quarter compared to the fourth quarter of 2023. The reversal was due to the transfer of all remaining multifamily loans held for sale to the held for investment loan portfolio during the same period. Home purchase activity accounted for 79% of one- to four-family mortgage loan originations in the fourth quarter of 2024, 88% in the preceding quarter and 92% in the fourth quarter of 2023. Total non-interest expense was $99.5 million in the fourth quarter of 2024, compared to $96.3 million in the preceding quarter and $96.6 million in the fourth quarter of 2023. The increase in non-interest expense for the current quarter compared to the prior quarter reflects a $691,000 increase in salary and employee benefits, primarily resulting from increased incentive accruals, partially offset by decreased medical premiums expense, a $923,000 increase in professional and legal expenses, primarily due to increased consultant expenses, and a $550,000 increase in advertising and marketing expenses, primarily due to increases in printed media marketing and community development expenses. The increase in non-interest expense for the current quarter compared to the same quarter a year ago primarily reflects increases in salary and employee benefits and professional and legal expenses. For the year ended December 31, 2024, total non-interest expense was $391.5 million, compared to $382.5 million for the year ended December 31, 2023. Banner’s efficiency ratio was 61.95% for the fourth quarter of 2024, compared to 62.63% in the preceding quarter and 63.37% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 60.74% for the fourth quarter of 2024, compared to 61.27% in the preceding quarter and 60.04% 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 to $16.20 billion at December 31, 2024, compared to $16.19 billion at September 30, 2024, and $15.67 billion at December 31, 2023. Securities and interest-bearing deposits held at other banks totaled $3.40 billion at December 31, 2024, compared to $3.50 billion at September 30, 2024 and $3.48 billion at December 31, 2023. The decrease compared to the prior quarter was primarily due to a decrease in securities - available for sale. The average effective duration of the securities portfolio was approximately 6.6 years at December 31, 2024, compared to 6.5 years at December 31, 2023. Total loans receivable increased to $11.35 billion at December 31, 2024, compared to $11.22 billion at September 30, 2024, and $10.81 billion at December 31, 2023. Commercial real estate loans increased 2% to $3.86 billion at December 31, 2024, compared to $3.79 billion at September 30, 2024, and increased 6% compared to $3.64 billion at December 31, 2023. The increase in commercial real estate loans from September 30, 2024 and December 31, 2023 was primarily the result of new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase. Commercial business loans increased 2% to $2.42 billion at December 31, 2024, compared to $2.37 billion at September 30, 2024 and increased 6% compared to $2.28 billion at December 31, 2023, primarily due to new loan production. One- to four-family residential loans increased 1% to $1.59 billion at December 31, 2024, compared to $1.58 billion at September 30, 2024, and increased 5% compared to $1.52 billion at December 31, 2023. The increase in one- to four-family residential loans was primarily the result of one- to four-family construction loans converting to one- to four-family portfolio loans upon the completion of the construction phase and new loan production. Multifamily real estate loans increased 1% to $894.4 million at December 31, 2024, compared to $889.9 million at September 30, 2024, and increased 10% compared to $811.2 million at December 31, 2023. The increase in multifamily real estate loans from September 30, 2024 and December 31, 2023 was primarily the result of the conversion of multifamily construction loans to the multifamily portfolio upon the completion of the construction phase. Loans held for sale were $32.0 million at December 31, 2024, compared to $78.8 million at September 30, 2024 and $11.2 million at December 31, 2023. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $153.2 million, compared to $95.0 million in the preceding quarter and $65.6 million in the fourth quarter a year ago. The decrease in loans held for sale compared to the prior quarter was primarily the result of the pooled loan sale of $34.8 million of one- to four-family residential loans during the current quarter. Total deposits were $13.51 billion at December 31, 2024, compared to $13.54 billion at September 30, 2024 and $13.03 billion a year ago. Core deposits decreased slightly to $12.01 billion at December 31, 2024, compared to $12.02 billion at September 30, 2024, and increased 4% compared to $11.55 billion at December 31, 2023. The increase in core deposits compared to the prior year quarter primarily reflects increases in interest-bearing transaction and savings accounts. Core deposits were 89% of total deposits at December 31, 2024, September 30, 2024 and December 31, 2023. Certificates of deposit decreased 1% to $1.50 billion at December 31, 2024, compared to $1.52 billion at September 30, 2024, and increased 2% compared to $1.48 billion a year earlier. The decrease in certificates of deposit during the current quarter compared to the preceding quarter was primarily the result of clients moving funds from certificates of deposits to interest-bearing transaction and savings accounts. The increase in certificates of deposit during the current quarter compared to the fourth quarter a year ago was principally due to clients seeking higher yields moving funds from core deposit accounts to higher yielding certificates of deposit, partially offset by a $57.7 million decrease in brokered deposits. FHLB advances were $290.0 million at December 31, 2024, compared to $230.0 million at September 30, 2024 and $323.0 million a year ago. At December 31, 2024, off-balance sheet liquidity included additional borrowing capacity of $2.95 billion at the FHLB and $1.52 billion at the Federal Reserve as well as federal funds line of credit agreements with other financial institutions of $125.0 million. At December 31, 2024, total common shareholders’ equity was $1.77 billion or 10.95% of total assets, compared to $1.79 billion or 11.08% of total assets at September 30, 2024, and $1.65 billion or 10.55% of total assets at December 31, 2023. The decrease in total common shareholders’ equity at December 31, 2024 compared to September 30, 2024 was due to an increase in accumulated other comprehensive loss of $51.7 million as the result of a decrease in the fair value of the security portfolio, partially offset by a $29.6 million increase in retained earnings as a result of $46.4 million in net income, partially offset by the accrual of $16.8 million of cash dividends during the fourth quarter of 2024. At December 31, 2024, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.40 billion, or 8.84% of tangible assets, compared to $1.42 billion, or 8.96% of tangible assets, at September 30, 2024, and $1.27 billion, or 8.33% of tangible assets, a year ago. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At December 31, 2024, Banner’s estimated common equity Tier 1 capital ratio was 12.44%, its estimated Tier 1 leverage capital to average assets ratio was 11.05%, and its estimated total capital to risk-weighted assets ratio was 15.04%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports. Credit Quality The allowance for credit losses - loans was $155.5 million, or 1.37% of total loans receivable and 421% of non-performing loans, at December 31, 2024, compared to $154.6 million, or 1.38% of total loans receivable and 359% of non-performing loans, at September 30, 2024, and $149.6 million, or 1.38% of total loans receivable and 506% of non-performing loans, at December 31, 2023. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $13.6 million at December 31, 2024, compared to $13.8 million at September 30, 2024, and $14.5 million at December 31, 2023. Net loan charge-offs totaled $2.3 million in the fourth quarter of 2024, compared to $230,000 in the preceding quarter and $1.1 million in the fourth quarter a year ago. Non-performing loans were $37.0 million at December 31, 2024, compared to $43.0 million at September 30, 2024, and $29.6 million a year ago. An increase in adversely classified loans, offset in part by payoffs and paydowns, resulted in total substandard loans of $192.5 million as of December 31, 2024. This compares to $150.1 million as of September 30, 2024 and $125.4 million a year ago. Total non-performing assets were $39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $45.2 million, or 0.28% of total assets, at September 30, 2024, and $30.1 million, or 0.19% of total assets, a year ago. Conference Call Banner will host a conference call on Thursday, January 23, 2025, at 8:00 a.m. PST, to discuss its fourth quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (833) 470-1428 using access code 347551 to participate in the call. A replay of the call will be available at www.bannerbank.com. About the Company Banner Corporation is a $16.20 billion bank holding company operating a commercial bank in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com. Forward-Looking Statements When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner’s operating and stock price performance. Factors that could cause Banner’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: (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 employment levels, labor shortages and the effects of inflation, a recession or slowed economic growth, or increased political instability due to acts of war; (2) changes in the interest rate environment, including increases or decreases in the Board of Governors of the Federal Reserve System (the “Federal Reserve”) benchmark rate and duration at which such interest rate levels are maintained, which could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; (3) the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; (4) the effects of any federal government shutdown; (5) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (6) expectations regarding key growth initiatives and strategic priorities; (7) the credit risks of 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; (8) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner’s activities; (9) competitive pressures among depository institutions, including repricing and competitors’ pricing initiatives, and their impact on Banner's market position, loan, and deposit products; (10) the effect of inflation on interest rate movements and their impact on client behavior and net interest margin; (11) fluctuations in real estate values; (12) the ability to adapt successfully to technological changes to meet clients’ needs and developments in the market place; (13) the ability to access cost-effective funding; (14) disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (15) changes in financial markets; (16) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (17) the costs, effects and outcomes of litigation; (18) legislation or regulatory changes, including but not limited to changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (19) the potential imposition of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors including, but not limited to, our agriculture based lending; (20) changes in accounting principles, policies or guidelines; (21) future acquisitions by Banner of other depository institutions or lines of business, and associated risks of goodwill impairment due to changes in Banner’s business or market conditions; (22) 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; (23) environmental, social and governance goals and targets; (24) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (25) other risks detailed from time to time in Banner’s other reports filed with and furnished to the Securities and Exchange Commission including Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K. RESULTS OF OPERATIONS Quarters Ended Year Ended (in thousands except shares and per share data) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 INTEREST INCOME: Loans receivable $ 169,586 $ 168,338 $ 154,532 $ 655,590 $ 577,891 Mortgage-backed securities 16,086 16,357 17,398 66,085 72,352 Securities and cash equivalents 10,764 11,146 11,808 44,428 51,329 Total interest income 196,436 195,841 183,738 766,103 701,572 INTEREST EXPENSE: Deposits 52,217 53,785 39,342 199,465 100,126 Federal Home Loan Bank (FHLB) advances 85 2,263 1,870 8,941 10,524 Other borrowings 817 1,147 1,125 4,299 3,376 Subordinated debt 2,781 2,971 2,992 11,682 11,541 Total interest expense 55,900 60,166 45,329 224,387 125,567 Net interest income 140,536 135,675 138,409 541,716 576,005 PROVISION FOR CREDIT LOSSES 3,000 1,692 2,522 7,581 10,789 Net interest income after provision for credit losses 137,536 133,983 135,887 534,135 565,216 NON-INTEREST INCOME: Deposit fees and other service charges 11,018 10,741 9,560 43,371 41,638 Mortgage banking operations 3,686 3,180 5,391 12,207 11,817 Bank-owned life insurance 2,144 2,445 2,609 9,193 9,245 Miscellaneous 2,751 1,658 1,159 8,289 5,169 19,599 18,024 18,719 73,060 67,869 Net gain (loss) on sale of securities 275 — (4,806 ) (5,190 ) (19,242 ) Net change in valuation of financial instruments carried at fair value 161 39 139 (982 ) (4,218 ) Total non-interest income 20,035 18,063 14,052 66,888 44,409 NON-INTEREST EXPENSE: Salary and employee benefits 62,523 61,832 60,111 250,555 244,563 Less capitalized loan origination costs (4,188 ) (4,354 ) (3,871 ) (16,857 ) (16,257 ) Occupancy and equipment 12,141 12,040 12,200 48,771 47,886 Information and computer data services 7,471 7,134 7,098 29,165 28,445 Payment and card processing services 5,771 5,346 6,088 22,518 20,547 Professional and legal expenses 3,025 2,102 2,267 7,858 9,830 Advertising and marketing 1,711 1,161 1,686 5,149 4,794 Deposit insurance 2,857 2,874 2,926 11,398 10,529 State and municipal business and use taxes 1,518 1,432 1,372 5,648 5,260 Real estate operations, net 113 103 47 293 (538 ) Amortization of core deposit intangibles 589 590 858 2,626 3,756 Miscellaneous 5,947 6,031 5,839 24,414 23,723 Total non-interest expense 99,478 96,291 96,621 391,538 382,538 Income before provision for income taxes 58,093 55,755 53,318 209,485 227,087 PROVISION FOR INCOME TAXES 11,702 10,602 10,694 40,587 43,463 NET INCOME $ 46,391 $ 45,153 $ 42,624 $ 168,898 $ 183,624 Earnings per common share: Basic $ 1.34 $ 1.31 $ 1.24 $ 4.90 $ 5.35 Diluted $ 1.34 $ 1.30 $ 1.24 $ 4.88 $ 5.33 Cumulative dividends declared per common share $ 0.48 $ 0.48 $ 0.48 $ 1.92 $ 1.92 Weighted average number of common shares outstanding: Basic 34,501,016 34,498,830 34,381,780 34,470,057 34,344,142 Diluted 34,743,024 34,650,322 34,472,155 34,628,710 34,450,412 Increase in common shares outstanding 3,144 936 2,420 111,463 154,351 FINANCIAL CONDITION Percentage Change (in thousands except shares and per share data) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Prior Qtr Prior Yr Qtr ASSETS Cash and due from banks $ 203,402 $ 226,568 $ 209,634 (10 )% (3 )% Interest-bearing deposits 298,456 252,227 44,830 18 % 566 % Total cash and cash equivalents 501,858 478,795 254,464 5 % 97 % Securities - available for sale, amortized cost $2,460,262, $2,523,968, and $2,729,980, respectively 2,104,511 2,237,939 2,373,783 (6 )% (11 )% Securities - held to maturity, fair value $825,528, $879,278, and $907,514, respectively 1,001,564 1,013,903 1,059,055 (1 )% (5 )% Total securities 3,106,075 3,251,842 3,432,838 (4 )% (10 )% FHLB stock 22,451 19,751 24,028 14 % (7 )% Loans held for sale 32,021 78,841 11,170 (59 )% 187 % Loans receivable 11,354,656 11,224,606 10,810,455 1 % 5 % Allowance for credit losses – loans (155,521 ) (154,585 ) (149,643 ) 1 % 4 % Net loans receivable 11,199,135 11,070,021 10,660,812 1 % 5 % Accrued interest receivable 60,885 66,981 63,100 (9 )% (4 )% Property and equipment, net 124,589 125,256 132,231 (1 )% (6 )% Goodwill 373,121 373,121 373,121 — % — % Other intangibles, net 3,058 3,647 5,684 (16 )% (46 )% Bank-owned life insurance 312,549 310,400 304,366 1 % 3 % Operating lease right-of-use assets 39,998 38,192 43,731 5 % (9 )% Other assets 424,297 371,829 364,846 14 % 16 % Total assets $ 16,200,037 $ 16,188,676 $ 15,670,391 — % 3 % LIABILITIES Deposits: Non-interest-bearing $ 4,591,543 $ 4,688,244 $ 4,792,369 (2 )% (4 )% Interest-bearing transaction and savings accounts 7,423,183 7,328,051 6,759,661 1 % 10 % Interest-bearing certificates 1,499,672 1,521,853 1,477,467 (1 )% 2 % Total deposits 13,514,398 13,538,148 13,029,497 — % 4 % Advances from FHLB 290,000 230,000 323,000 26 % (10 )% Other borrowings 125,257 154,533 182,877 (19 )% (32 )% Subordinated notes, net 80,278 80,170 92,851 — % (14 )% Junior subordinated debentures at fair value 67,477 66,257 66,413 2 % 2 % Operating lease liabilities 43,472 42,318 48,659 3 % (11 )% Accrued expenses and other liabilities 258,070 237,128 228,428 9 % 13 % Deferred compensation 46,759 46,401 45,975 1 % 2 % Total liabilities 14,425,711 14,394,955 14,017,700 — % 3 % SHAREHOLDERS’ EQUITY Common stock 1,307,509 1,304,792 1,299,651 — % 1 % Retained earnings 744,091 714,472 642,175 4 % 16 % Accumulated other comprehensive loss (277,274 ) (225,543 ) (289,135 ) 23 % (4 )% Total shareholders’ equity 1,774,326 1,793,721 1,652,691 (1 )% 7 % Total liabilities and shareholders’ equity $ 16,200,037 $ 16,188,676 $ 15,670,391 — % 3 % Common Shares Issued: Shares outstanding at end of period 34,459,832 34,456,688 34,348,369 Common shareholders’ equity per share (1) $ 51.49 $ 52.06 $ 48.12 Common shareholders’ tangible equity per share (1) (2) $ 40.57 $ 41.12 $ 37.09 Common shareholders’ equity to total assets 10.95 % 11.08 % 10.55 % Common shareholders’ tangible equity to tangible assets (2) 8.84 % 8.96 % 8.33 % Consolidated Tier 1 leverage capital ratio 11.05 % 10.91 % 10.56 % (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 Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Prior Qtr Prior Yr Qtr Commercial real estate (CRE): Owner-occupied $ 1,027,426 $ 990,516 $ 915,897 4 % 12 % Investment properties 1,623,672 1,583,863 1,541,344 3 % 5 % Small balance CRE 1,213,792 1,218,822 1,178,500 — % 3 % Multifamily real estate 894,425 889,866 811,232 1 % 10 % Construction, land and land development: Commercial construction 122,362 124,051 170,011 (1 )% (28 )% Multifamily construction 513,706 524,108 503,993 (2 )% 2 % One- to four-family construction 514,220 507,350 526,432 1 % (2 )% Land and land development 369,663 370,690 336,639 — % 10 % Commercial business: Commercial business 1,318,333 1,281,615 1,255,734 3 % 5 % Small business scored 1,104,117 1,087,714 1,022,154 2 % 8 % Agricultural business, including secured by farmland: Agricultural business, including secured by farmland 340,280 346,686 331,089 (2 )% 3 % One- to four-family residential 1,591,260 1,575,164 1,518,046 1 % 5 % Consumer: Consumer—home equity revolving lines of credit 625,680 622,615 588,703 — % 6 % Consumer—other 95,720 101,546 110,681 (6 )% (14 )% Total loans receivable $ 11,354,656 $ 11,224,606 $ 10,810,455 1 % 5 % Loans 30 - 89 days past due and on accrual $ 26,824 $ 13,030 $ 19,744 Total delinquent loans (including loans on non-accrual), net $ 55,432 $ 44,656 $ 43,164 Total delinquent loans / Total loans receivable 0.49 % 0.40 % 0.40 % LOANS BY GEOGRAPHIC LOCATION Percentage Change Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Prior Qtr Prior Yr Qtr Amount Percentage Amount Amount Washington $ 5,245,886 46 % $ 5,203,637 $ 5,095,602 1 % 3 % California 2,861,435 25 % 2,796,965 2,670,923 2 % 7 % Oregon 2,113,229 19 % 2,108,229 1,974,001 — % 7 % Idaho 665,158 6 % 652,148 610,064 2 % 9 % Utah 82,459 1 % 85,316 68,931 (3 )% 20 % Other 386,489 3 % 378,311 390,934 2 % (1 )% Total loans receivable $ 11,354,656 100 % $ 11,224,606 $ 10,810,455 1 % 5 % ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) LOAN ORIGINATIONS Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Commercial real estate $ 124,554 $ 114,372 $ 76,277 $ 408,546 $ 309,022 Multifamily real estate 3,120 314 5,360 6,593 57,046 Construction and land 303,345 472,506 382,905 1,759,799 1,541,383 Commercial business 250,515 179,871 166,984 752,269 585,047 Agricultural business 17,177 5,877 15,058 79,715 84,072 One-to four-family residential 29,531 24,488 37,446 106,085 167,951 Consumer 73,791 96,137 57,427 356,543 300,913 Total loan originations (excluding loans held for sale) $ 802,033 $ 893,565 $ 741,457 $ 3,469,550 $ 3,045,434 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Balance, beginning of period $ 154,585 $ 152,848 $ 146,960 $ 149,643 $ 141,465 Provision for credit losses – loans 3,219 1,967 3,821 8,563 11,097 Recoveries of loans previously charged off: Commercial real estate 1,215 65 129 2,767 557 Construction and land — — — — 29 One- to four-family real estate 124 14 18 171 230 Commercial business 245 613 237 1,963 1,283 Agricultural business, including secured by farmland 2 1 16 304 146 Consumer 164 41 131 476 543 1,750 734 531 5,681 2,788 Loans charged off: Commercial real estate (4 ) — — (351 ) — Construction and land (5 ) (145 ) (933 ) (150 ) (1,089 ) One- to four-family real estate — — (8 ) — (42 ) Commercial business (3,595 ) (414 ) (310 ) (5,955 ) (2,650 ) Agricultural business, including secured by farmland — — — — (564 ) Consumer (429 ) (405 ) (418 ) (1,910 ) (1,362 ) (4,033 ) (964 ) (1,669 ) (8,366 ) (5,707 ) Net charge-offs (2,283 ) (230 ) (1,138 ) (2,685 ) (2,919 ) Balance, end of period $ 155,521 $ 154,585 $ 149,643 $ 155,521 $ 149,643 Net charge-offs / Average loans receivable (0.020 )% (0.002 )% (0.011 )% (0.024 )% (0.028 )% ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Commercial real estate $ 40,830 $ 40,040 $ 44,384 Multifamily real estate 10,308 10,233 9,326 Construction and land 29,038 28,322 28,095 One- to four-family real estate 20,807 20,463 19,271 Commercial business 38,611 39,779 35,464 Agricultural business, including secured by farmland 5,727 5,340 3,865 Consumer 10,200 10,408 9,238 Total allowance for credit losses – loans $ 155,521 $ 154,585 $ 149,643 Allowance for credit losses - loans / Total loans receivable 1.37 % 1.38 % 1.38 % Allowance for credit losses - loans / Non-performing loans 421 % 359 % 506 % CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Balance, beginning of period $ 13,765 $ 14,027 $ 15,010 $ 14,484 $ 14,721 Recapture of provision for credit losses - unfunded loan commitments (203 ) (262 ) (526 ) (922 ) (237 ) Balance, end of period $ 13,562 $ 13,765 $ 14,484 $ 13,562 $ 14,484 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) NON-PERFORMING ASSETS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Loans on non-accrual status: Secured by real estate: Commercial $ 2,186 $ 2,127 $ 2,677 Construction and land 3,963 4,286 3,105 One- to four-family 10,016 9,592 5,702 Commercial business 7,067 10,705 9,002 Agricultural business, including secured by farmland 8,485 7,703 3,167 Consumer 4,835 4,636 3,204 36,552 39,049 26,857 Loans more than 90 days delinquent, still on accrual: Secured by real estate: Commercial — 2,258 — Construction and land — 380 1,138 One- to four-family 369 961 1,205 Commercial business — — 1 Consumer 35 359 401 404 3,958 2,745 Total non-performing loans 36,956 43,007 29,602 REO 2,367 2,221 526 Other repossessed assets 300 — — Total non-performing assets $ 39,623 $ 45,228 $ 30,128 Total non-performing assets to total assets 0.24 % 0.28 % 0.19 % LOANS BY CREDIT RISK RATING Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Pass $ 11,118,744 $ 11,022,014 $ 10,671,281 Special Mention 43,451 52,497 13,732 Substandard 192,461 150,095 125,442 Total $ 11,354,656 $ 11,224,606 $ 10,810,455 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) DEPOSIT COMPOSITION Percentage Change Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Prior Qtr Prior Yr Qtr Non-interest-bearing $ 4,591,543 $ 4,688,244 $ 4,792,369 (2 )% (4 )% Interest-bearing checking 2,393,864 2,344,561 2,098,526 2 % 14 % Regular savings accounts 3,478,423 3,339,859 2,980,530 4 % 17 % Money market accounts 1,550,896 1,643,631 1,680,605 (6 )% (8 )% Total interest-bearing transaction and savings accounts 7,423,183 7,328,051 6,759,661 1 % 10 % Total core deposits 12,014,726 12,016,295 11,552,030 — % 4 % Interest-bearing certificates 1,499,672 1,521,853 1,477,467 (1 )% 2 % Total deposits $ 13,514,398 $ 13,538,148 $ 13,029,497 — % 4 % GEOGRAPHIC CONCENTRATION OF DEPOSITS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Percentage Change Amount Percentage Amount Amount Prior Qtr Prior Yr Qtr Washington $ 7,441,413 55 % $ 7,413,414 $ 7,247,392 — % 3 % Oregon 2,981,327 22 % 2,997,843 2,852,677 (1 )% 5 % California 2,392,573 18 % 2,423,295 2,269,557 (1 )% 5 % Idaho 699,085 5 % 703,596 659,871 (1 )% 6 % Total deposits $ 13,514,398 100 % $ 13,538,148 $ 13,029,497 — % 4 % INCLUDED IN TOTAL DEPOSITS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Public non-interest-bearing accounts $ 165,667 $ 141,541 $ 146,916 Public interest-bearing transaction & savings accounts 248,746 246,332 209,699 Public interest-bearing certificates 25,423 28,144 52,048 Total public deposits $ 439,836 $ 416,017 $ 408,663 Collateralized public deposits $ 336,376 $ 317,960 $ 305,306 Total brokered deposits $ 50,346 $ 50,333 $ 108,058 AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Number of deposit accounts 460,004 459,127 463,750 Average account balance per account $ 30 $ 30 $ 29 ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) ESTIMATED REGULATORY CAPITAL RATIOS AS OF DECEMBER 31, 2024 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 $ 2,024,046 15.04 % $ 1,076,652 8.00 % $ 1,345,814 10.00 % Tier 1 capital to risk-weighted assets 1,760,065 13.08 % 807,489 6.00 % 807,489 6.00 % Tier 1 leverage capital to average assets 1,760,065 11.05 % 636,913 4.00 % n/a n/a Common equity tier 1 capital to risk-weighted assets 1,673,565 12.44 % 605,616 4.50 % n/a n/a Banner Bank: Total capital to risk-weighted assets 1,890,438 14.03 % 1,077,725 8.00 % 1,347,157 10.00 % Tier 1 capital to risk-weighted assets 1,726,457 12.82 % 808,294 6.00 % 1,077,725 8.00 % Tier 1 leverage capital to average assets 1,726,457 10.83 % 637,392 4.00 % 796,740 5.00 % Common equity tier 1 capital to risk-weighted assets 1,726,457 12.82 % 606,221 4.50 % 875,652 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 Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 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 $ 61,585 $ 1,049 6.78 % $ 26,954 $ 453 6.69 % $ 31,148 $ 447 5.69 % Mortgage loans 9,267,076 136,831 5.87 % 9,207,468 135,497 5.85 % 8,770,029 123,382 5.58 % Commercial/agricultural loans 1,900,337 31,873 6.67 % 1,879,215 32,547 6.89 % 1,822,069 30,447 6.63 % Consumer and other loans 124,726 2,078 6.63 % 128,548 2,154 6.67 % 138,049 2,237 6.43 % Total loans (1) 11,353,724 171,831 6.02 % 11,242,185 170,651 6.04 % 10,761,295 156,513 5.77 % Mortgage-backed securities 2,576,908 16,228 2.51 % 2,623,399 16,498 2.50 % 2,798,647 17,541 2.49 % Other securities 919,742 10,281 4.45 % 943,310 11,120 4.69 % 1,035,842 11,993 4.59 % Interest-bearing deposits with banks 107,404 1,043 3.86 % 51,604 493 3.80 % 45,286 506 4.43 % FHLB stock 9,887 316 12.71 % 16,664 412 9.84 % 15,326 215 5.57 % Total investment securities 3,613,941 27,868 3.07 % 3,634,977 28,523 3.12 % 3,895,101 30,255 3.08 % Total interest-earning assets 14,967,665 199,699 5.31 % 14,877,162 199,174 5.33 % 14,656,396 186,768 5.06 % Non-interest-earning assets 1,016,366 981,290 875,719 Total assets $ 15,984,031 $ 15,858,452 $ 15,532,115 Deposits: Interest-bearing checking accounts $ 2,377,179 9,279 1.55 % $ 2,295,723 9,497 1.65 % $ 2,060,226 5,907 1.14 % Savings accounts 3,441,196 19,447 2.25 % 3,268,647 19,299 2.35 % 2,885,167 12,560 1.73 % Money market accounts 1,584,092 8,510 2.14 % 1,611,543 9,184 2.27 % 1,723,426 7,644 1.76 % Certificates of deposit 1,513,966 14,981 3.94 % 1,540,637 15,805 4.08 % 1,477,474 13,231 3.55 % Total interest-bearing deposits 8,916,433 52,217 2.33 % 8,716,550 53,785 2.45 % 8,146,293 39,342 1.92 % Non-interest-bearing deposits 4,640,557 — — % 4,601,755 — — % 5,036,523 — — % Total deposits 13,556,990 52,217 1.53 % 13,318,305 53,785 1.61 % 13,182,816 39,342 1.18 % Other interest-bearing liabilities: FHLB advances 7,522 85 4.50 % 161,413 2,263 5.58 % 129,630 1,870 5.72 % Other borrowings 143,097 817 2.27 % 159,439 1,147 2.86 % 185,518 1,125 2.41 % Junior subordinated debentures and subordinated notes 169,678 2,781 6.52 % 179,075 2,971 6.60 % 182,678 2,992 6.50 % Total borrowings 320,297 3,683 4.57 % 499,927 6,381 5.08 % 497,826 5,987 4.77 % Total funding liabilities 13,877,287 55,900 1.60 % 13,818,232 60,166 1.73 % 13,680,642 45,329 1.31 % Other non-interest-bearing liabilities (2) 324,447 311,803 311,539 Total liabilities 14,201,734 14,130,035 13,992,181 Shareholders’ equity 1,782,297 1,728,417 1,539,934 Total liabilities and shareholders’ equity $ 15,984,031 $ 15,858,452 $ 15,532,115 Net interest income/rate spread (tax equivalent) $ 143,799 3.71 % $ 139,008 3.60 % $ 141,439 3.75 % Net interest margin (tax equivalent) 3.82 % 3.72 % 3.83 % Reconciliation to reported net interest income: Adjustments for taxable equivalent basis (3,263 ) (3,333 ) (3,030 ) Net interest income and margin, as reported $ 140,536 3.74 % $ 135,675 3.63 % $ 138,409 3.75 % Additional Key Financial Ratios: Return on average assets 1.15 % 1.13 % 1.09 % Adjusted return on average assets (4) 1.15 % 1.13 % 1.18 % Return on average equity 10.35 % 10.39 % 10.98 % Adjusted return on average equity (4) 10.28 % 10.39 % 11.89 % Average equity/average assets 11.15 % 10.90 % 9.91 % Average interest-earning assets/average interest-bearing liabilities 162.05 % 161.42 % 169.55 % Average interest-earning assets/average funding liabilities 107.86 % 107.66 % 107.13 % Non-interest income/average assets 0.50 % 0.45 % 0.36 % Non-interest expense/average assets 2.48 % 2.42 % 2.47 % Efficiency ratio 61.95 % 62.63 % 63.37 % Adjusted efficiency ratio (4) 60.74 % 61.27 % 60.04 % (1) Average balances include loans accounted for on a nonaccrual basis and accruing loans 90 days or more past due. Amortization of net deferred loan fees/costs is included with interest on loans. (2) Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures. (3) Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.2 million, $2.3 million and $2.0 million for the quarters ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.0 million for each of the quarters ended December 31, 2024, September 30, 2024 and December 31, 2023. (4) Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) (rates / ratios annualized) ANALYSIS OF NET INTEREST SPREAD Year Ended Dec 31, 2024 Dec 31, 2023 Average Balance Interest and Dividends Yield / Cost (3) Average Balance Interest and Dividends Yield / Cost (3) Interest-earning assets: Held for sale loans $ 27,627 $ 1,875 6.79 % $ 49,106 $ 2,621 5.34 % Mortgage loans 9,094,276 526,842 5.79 % 8,513,487 460,664 5.41 % Commercial/agricultural loans 1,871,024 127,028 6.79 % 1,782,141 113,250 6.35 % Consumer and other loans 129,929 8,584 6.61 % 138,196 8,715 6.31 % Total loans (1) 11,122,856 664,329 5.97 % 10,482,930 585,250 5.58 % Mortgage-backed securities 2,650,010 66,652 2.52 % 2,927,650 72,927 2.49 % Other securities 951,515 44,083 4.63 % 1,173,637 52,148 4.44 % Interest-bearing deposits with banks 65,650 2,573 3.92 % 46,815 2,200 4.70 % FHLB stock 16,658 1,302 7.82 % 17,903 847 4.73 % Total investment securities 3,683,833 114,610 3.11 % 4,166,005 128,122 3.08 % Total interest-earning assets 14,806,689 778,939 5.26 % 14,648,935 713,372 4.87 % Non-interest-earning assets 967,122 917,018 Total assets $ 15,773,811 $ 15,565,953 Deposits: Interest-bearing checking accounts $ 2,233,902 33,113 1.48 % $ 1,921,326 13,334 0.69 % Savings accounts 3,231,631 71,225 2.20 % 2,674,936 27,739 1.04 % Money market accounts 1,632,092 35,206 2.16 % 1,908,983 24,089 1.26 % Certificates of deposit 1,514,726 59,921 3.96 % 1,209,261 34,964 2.89 % Total interest-bearing deposits 8,612,351 199,465 2.32 % 7,714,506 100,126 1.30 % Non-interest-bearing deposits 4,647,100 — — % 5,436,953 — — % Total deposits 13,259,451 199,465 1.50 % 13,151,459 100,126 0.76 % Other interest-bearing liabilities: FHLB advances 159,954 8,941 5.59 % 196,819 10,524 5.35 % Other borrowings 164,613 4,299 2.61 % 199,291 3,376 1.69 % Junior subordinated debentures and subordinated notes 177,361 11,682 6.59 % 185,883 11,541 6.21 % Total borrowings 501,928 24,922 4.97 % 581,993 25,441 4.37 % Total funding liabilities 13,761,379 224,387 1.63 % 13,733,452 125,567 0.91 % Other non-interest-bearing liabilities (2) 308,667 295,098 Total liabilities 14,070,046 14,028,550 Shareholders’ equity 1,703,765 1,537,403 Total liabilities and shareholders’ equity $ 15,773,811 $ 15,565,953 Net interest income/rate spread (tax equivalent) $ 554,552 3.63 % $ 587,805 3.96 % Net interest margin (tax equivalent) 3.75 % 4.01 % Reconciliation to reported net interest income: Adjustments for taxable equivalent basis (12,836 ) (11,800 ) Net interest income and margin, as reported $ 541,716 3.66 % $ 576,005 3.93 % Additional Key Financial Ratios: Return on average assets 1.07 % 1.18 % Adjusted return on average assets (4) 1.10 % 1.30 % Return on average equity 9.91 % 11.94 % Adjusted return on average equity (4) 10.19 % 13.17 % Average equity/average assets 10.80 % 9.88 % Average interest-earning assets/average interest-bearing liabilities 162.46 % 176.57 % Average interest-earning assets/average funding liabilities 107.60 % 106.67 % Non-interest income/average assets 0.42 % 0.29 % Non-interest expense/average assets 2.48 % 2.46 % Efficiency ratio 64.33 % 61.66 % Adjusted efficiency ratio (4) 62.29 % 57.89 % (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 $8.7 million and $7.4 million for the years ended December 31, 2024 and 2023, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.1 million and $4.4 million for the years ended December 31, 2024 and 2023, respectively. (4) Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) * Non-GAAP Financial Measures In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this earnings release contains certain non-GAAP financial measures. Tangible common shareholders’ equity per share and the ratio of tangible common equity to tangible assets, and references to adjusted revenue, adjusted earnings, the adjusted return on average assets, the adjusted return on average equity and the adjusted efficiency ratio represent non-GAAP financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below: ADJUSTED REVENUE Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Net interest income (GAAP) $ 140,536 $ 135,675 $ 138,409 $ 541,716 $ 576,005 Non-interest income (GAAP) 20,035 18,063 14,052 66,888 44,409 Total revenue (GAAP) 160,571 153,738 152,461 608,604 620,414 Exclude: Net (gain) loss on sale of securities (275 ) — 4,806 5,190 19,242 Net change in valuation of financial instruments carried at fair value (161 ) (39 ) (139 ) 982 4,218 Adjusted revenue (non-GAAP) $ 160,135 $ 153,699 $ 157,128 $ 614,776 $ 643,874 ADJUSTED EARNINGS Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Net income (GAAP) $ 46,391 $ 45,153 $ 42,624 $ 168,898 $ 183,624 Exclude: Net (gain) loss on sale of securities (275 ) — 4,806 5,190 19,242 Net change in valuation of financial instruments carried at fair value (161 ) (39 ) (139 ) 982 4,218 Banner Forward expenses (1) — — — — 1,334 Related net tax expense (benefit) 105 9 (1,121 ) (1,481 ) (5,951 ) Total adjusted earnings (non-GAAP) $ 46,060 $ 45,123 $ 46,170 $ 173,589 $ 202,467 Diluted earnings per share (GAAP) $ 1.34 $ 1.30 $ 1.24 $ 4.88 $ 5.33 Diluted adjusted earnings per share (non-GAAP) $ 1.33 $ 1.30 $ 1.34 $ 5.01 $ 5.88 Return on average assets 1.15 % 1.13 % 1.09 % 1.07 % 1.18 % Adjusted return on average assets (2) 1.15 % 1.13 % 1.18 % 1.10 % 1.30 % Return on average equity 10.35 % 10.39 % 10.98 % 9.91 % 11.94 % Adjusted return on average equity (3) 10.28 % 10.39 % 11.89 % 10.19 % 13.17 % (1) Included in miscellaneous expenses in results of operations. (2) Adjusted earnings (non-GAAP) divided by average assets. (3) Adjusted earnings (non-GAAP) divided by average equity. ADDITIONAL FINANCIAL INFORMATION (dollars in thousands) ADJUSTED EFFICIENCY RATIO Quarters Ended Year Ended Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Non-interest expense (GAAP) $ 99,478 $ 96,291 $ 96,621 $ 391,538 $ 382,538 Exclude: Banner Forward expenses (1) — — — — (1,334 ) CDI amortization (589 ) (590 ) (858 ) (2,626 ) (3,756 ) State/municipal tax expense (1,518 ) (1,432 ) (1,372 ) (5,648 ) (5,260 ) REO operations (113 ) (103 ) (47 ) (293 ) 538 Adjusted non-interest expense (non-GAAP) $ 97,258 $ 94,166 $ 94,344 $ 382,971 $ 372,726 Net interest income (GAAP) $ 140,536 $ 135,675 $ 138,409 $ 541,716 $ 576,005 Non-interest income (GAAP) 20,035 18,063 14,052 66,888 44,409 Total revenue (GAAP) 160,571 153,738 152,461 608,604 620,414 Exclude: Net (gain) loss on sale of securities (275 ) — 4,806 5,190 19,242 Net change in valuation of financial instruments carried at fair value (161 ) (39 ) (139 ) 982 4,218 Adjusted revenue (non-GAAP) $ 160,135 $ 153,699 $ 157,128 $ 614,776 $ 643,874 Efficiency ratio (GAAP) 61.95 % 62.63 % 63.37 % 64.33 % 61.66 % Adjusted efficiency ratio (non-GAAP) (2) 60.74 % 61.27 % 60.04 % 62.29 % 57.89 % (1) Included in miscellaneous expenses in results of operations. (2) Adjusted non-interest expense (non-GAAP) divided by adjusted revenue. TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Shareholders’ equity (GAAP) $ 1,774,326 $ 1,793,721 $ 1,652,691 Exclude goodwill and other intangible assets, net 376,179 376,768 378,805 Tangible common shareholders’ equity (non-GAAP) $ 1,398,147 $ 1,416,953 $ 1,273,886 Total assets (GAAP) $ 16,200,037 $ 16,188,676 $ 15,670,391 Exclude goodwill and other intangible assets, net 376,179 376,768 378,805 Total tangible assets (non-GAAP) $ 15,823,858 $ 15,811,908 $ 15,291,586 Common shareholders’ equity to total assets (GAAP) 10.95 % 11.08 % 10.55 % Tangible common shareholders’ equity to tangible assets (non-GAAP) 8.84 % 8.96 % 8.33 % TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE Shareholders’ equity (GAAP) $ 1,774,326 $ 1,793,721 $ 1,652,691 Tangible common shareholders’ equity (non-GAAP) $ 1,398,147 $ 1,416,953 $ 1,273,886 Common shares outstanding at end of period 34,459,832 34,456,688 34,348,369 Common shareholders’ equity (book value) per share (GAAP) $ 51.49 $ 52.06 $ 48.12 Tangible common shareholders’ equity (tangible book value) per share (non-GAAP) $ 40.57 $ 41.12 $ 37.09

Banner Corporation Reports Net Income of $46.4 Million, or $1.34 Per Diluted Share, for Fourth Quarter 2024; Declares Quarterly Cash Dividend of $0.48 Per Share

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