What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-26 compared with 2024-02-23 · 431 added, 319 removed, 2009 unchanged (27% of the section changed)

14 unchanged sentences

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we included a report of Management’s assessment of the effectiveness of its internal controls beginning on page 74 of this Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s independent registered public accounting firm, Moss Adams LLP, which audited the consolidated financial statements as of and for the year ended December 31, 2024 (included in Item 8 of this annual report), has issued an audit report on the Company’s internal control over financial reporting beginning on page 75 of this Annual Report on Form 10-K.

ITEM 9B – Other Information

2 unchanged sentences

Not applicable.

T able of C onten ts

ITEM 10 – Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to the sections captioned “Proposal 1– Election of Directors,” “Meetings and Committees of the Board of Directors” and “Shareholder Proposals” in the Company’s 2024 Proxy Statement for the Annual Meeting of Shareholders (the Proxy Statement), which will be filed with the SEC no later than 120 days after the end of our fiscal year.

Information regarding the executive officers of the Registrant is incorporated herein by reference to the section captioned “Information about our Executive Officers” in Part I, Item 1 hereof.

The information regarding our Audit Committee and Financial Expert is incorporated herein by reference to the sections captioned “Meetings and Committees of the Board of Directors” and “Audit Committee Matters” in the Proxy Statement.

The information required by this item is incorporated herein by reference to the sections captioned “Proposal 1– Election of Directors,” “Corporate Governance” and “Shareholder Proposals” in the Company’s 2025 Proxy Statement for the Annual Meeting of Shareholders (the Proxy Statement), which will be filed with the SEC no later than 120 days after the end of our fiscal year.

Information regarding the executive officers of the Registrant is incorporated herein by reference to the section captioned “Information about our Executive Officers” in the Proxy Statement.

The information regarding our Audit Committee and Financial Expert is incorporated herein by reference to the sections captioned “Corporate Governance” and “Audit Committee Matters” in the Proxy Statement.

There have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors since last disclosed to stockholders.

Banner has adopted Policies and Procedures Governing Trading in Securities and Confidentiality of Insider Information for Directors, Officers and Employees (“Insider Trading Policy”).

The Insider Trading Policy governs the purchase, sale and/or other disposition of our securities by directors, officers and employees and is reasonably designed to promote compliance with insider trading laws, rules and regulations and Nasdaq listing standards.

A copy of our Insider Trading Policy is files as Exhibit 19 to this report.

Information regarding our policies and practices relating to equity awards is incorporated herein by reference to the section captioned “Compensation Discussion and Analysis” in the Proxy Statement.

Code of Ethics

The Board of Directors has adopted a Code of Ethics and Business Conduct for our directors, officers (including its senior financial officers) and employees.

The Code of Ethics and Business Conduct was most recently approved by the Board of Directors on July 25, 2023 and the Code of Ethics and Business Conduct is reviewed by the Board on an annual basis.

The Code of Ethics and Business Conduct is reviewed by the Board on an annual basis and was most recently approved by the Board of Directors on July 23, 2024.

A copy of the Code of Ethics and Business Conduct in substantially its current form was filed as an exhibit with Form 8-K on September 18, 2023 and is available without charge, upon request to Investor Relations, Banner Corporation, P.O.

13 unchanged sentences

Banner is not aware of any arrangements, including any pledge by any person of securities of Banner, the operation of which may at a subsequent date result in a change in control of Banner.

T able of C onten ts

(d) Equity Compensation Plan Information

12 unchanged sentences

The information required by this item is incorporated herein by reference to the section captioned “Proposal 4– Ratification of Selection of Independent Registered Public Accounting Firm” in the Proxy Statement.

T able of C onten ts

ITEM 15 – Exhibits and Financial Statement Schedules

(a) (1) Financial Statements

(1) Financial Statements

See Index to Consolidated Financial Statements on page 72 .

1 unchanged sentence

All financial statement schedules are omitted because they are not applicable or not required, or because the required information is included in the Consolidated Financial Statements or the Notes thereto or in Part 1, Item 1.

See Index of Exhibits on page 140 .

(3) The exhibits filed as part of this Annual Report on Form 10-K and incorporated herein by reference to other documents are listed on the Index of Exhibits to this Annual Report on Form 10-K, immediately before the signatures.

T able of C onten ts

Item 16 - Form 10-K Summary.

BANNER CORPORATION

Exhibit Index of Exhibits

3{a} Restated Articles of Incorporation of Banner Corporation [incorporated by reference to Exhibit 3.1 (b) to the Registrant’s Current Report on Form 8-K filed on May 24, 2022 (File No.

3{b} Amended and Restated Bylaws of Banner Corporation [incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 24, 2022 (File No.

4.2 Description of Capital Stock .

4.3 Issuance of base indenture, first supplemental indenture and subordinated note [incorporated by reference to the exhibits filed with Form 8-K on June 30, 2020 (File No.

000-26584)] .

10{a}* Amended and Restated Employment Agreement, with Mark J.

Grescovich [incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 4, 2013 (File No.

10{b}* Form of Supplemental Executive Retirement Program Agreement with Gary Sirmon, Michael K.

Larsen, Lloyd W.

Baker, Cynthia D.

Purcell and Richard B.

Barton [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 and the exhibits filed with the Form 8-K on May 6, 2008 (File No.

10{c}* Form of Employment Contract entered into with Peter J.

Conner, Cynthia D.

Purcell and Judith A.

Steiner [incorporated by reference to exhibits filed with the Form 8-K on June 25, 2014 (File No.

10{d}* 2005 Executive Officer and Director Stock Account Deferred Compensation Plan [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2008 (File No.

10{e}* Entry into an Indemnification Agreement with each of the Registrant’s Directors [incorporated by reference to exhibits filed with the Form 8-K on January 29, 2010 (File No.

10{f}* 2014 Omnibus Incentive Plan [incorporated by reference as Appendix C to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 24, 2014 (File No.

000-26584)] and amendments [incorporated by reference to the Form 8-K filed on March 25, 2015 (File No.

10{g}* Forms of Equity-Based Award Agreements:

Incentive Stock Option Award Agreement, Non-Qualified Stock Option Award Agreement, Restricted Stock Award Agreement, Restricted Stock Unit Award Agreement, Stock Appreciation Right Award Agreement, and Performance Unit Award Agreement [incorporated by reference to Exhibits 10.2 - 10.7 included in the Registration Statement on Form S-8 dated May 9, 2014 (File No.

333-195835)].

10{h}* 2018 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.1 included in the Registration Statement on Form S-8 dated May 4, 2018 (File No.

333-224693)].

10{i}* Amended and Restated Executive Severance and Change in Control Plan and Summary Plan Description (Amended and Restated effective as of July 1, 2023) [incorporated by reference to exhibit 10{j} included in the Form 10-Q dated June 30, 2023 (File No.

10{j}* 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.1 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

333-274273)].

10{k}* Form of Director Restricted Stock Award Agreement under the Banner Corporation 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.2 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

333-274273)].

10{l}* Form of Director Restricted Stock Unit Award Agreement under the Banner Corporation 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.3 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

333-274273)].

10{m}* Form of Employee Restricted Stock Unit Award Agreement under the Banner Corporation 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.4 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

333-274273)].

10{n}* Form of Executive Restricted Stock Unit Performance Award Agreement under the Banner Corporation 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.5 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

333-274273)].

10{o}* 2020 Banner Corporation Amended and Restated Deferred Compensation Plan [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2023 (File No.

14 Code of Ethics [Registrant elects to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at https://investor.bannerbank.com/ in the section titled Corporate Overview:

Governance Documents].

19 Insider T rading P olicies and P rocedures.

21 Subsidiaries of the Registrant.

T able of C onten ts

23.1 Consent of Registered Independent Public Accounting Firm – Moss Adams LLP.

31.1 Certification of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97 Policy Relating to Recovery of Erroneously Awarded Compensation.

[incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2023 (File No.

101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document.

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, formatted in Inline XBRL (included in Exhibit 101).

* Compensatory plan or arrangement.

T able of C onten ts

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

39 unchanged sentences

February 26, 2025

T able of C onten ts

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Management Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm ( Moss Adams LLP , Spokane, Washington , PCAOB ID:

Consolidated Statements of Financial Condition as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021

Report of Independent Registered Public Accounting Firm ( Moss Adams LLP , Portland, Oregon , PCAOB ID:

Consolidated Statements of Financial Condition

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

T able of C onten ts

February 26, 2025

19 unchanged sentences

Butterfield, Chief Financial Officer

T able of C onten ts

Management Report on Internal Control over Financial Reporting

13 unchanged sentences

The audit report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

T able of C onten ts

Report of Independent Registered Public Accounting Firm

26 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

T able of C onten ts

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Notes 1 and 4 to the consolidated financial statements, the balance of the Company’s consolidated allowance for credit losses – loans, was $155.5 million at December 31, 2024.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of loans held for investment to present the net carrying value at the amount expected to be collected on such financial assets.

The allowance for credit losses – loans is a valuation account that is deducted from the amortized cost basis of loans held for investment to present the net carrying value at the amount expected to be collected on such financial assets.

The measurement of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts.

The allowance for credit losses – loans is maintained at a level sufficient to provide for expected credit losses over the life of the loan based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio.

The allowance for credit losses – loans is maintained at a level sufficient to provide for expected credit losses based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current loan portfolio.

Management considers qualitative and environmental factors for each loan category to adjust for differences between the historical periods used to calculate historical loss rates and expected conditions over the remaining lives of the loans in the portfolio.

These factors include, among others, changes in the size and composition of the loan portfolio, differences in underwriting standards, delinquency rates, actual loss experience and current economic conditions.

These factors include, among others, changes in the size and composition of the loan portfolio, differences in underwriting standards, delinquency rates, and economic conditions.

We identified the estimation of qualitative and environmental factors used in the allowance for credit losses – loans as a critical audit matter.

1 unchanged sentence

Auditing management’s judgments regarding the qualitative and environmental factors applied to the allowance for credit losses - loans involved especially challenging and subjective auditor judgment when performing audit procedures and evaluating the results of those procedures.

The primary procedures we performed to address this critical audit matter included:

• Testing the design, implementation, and operating effectiveness of controls relating to management’s calculation of the allowance for credit losses, including controls over the identification and assessment of the qualitative and environmental factors used.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Our audit procedures related to the critical audit matter included the following, among others:

• Testing the design, implementation, and operating effectiveness of controls relating to management’s calculation of the allowance for credit losses – loans, including controls over the identification and assessment of the qualitative and environmental factors used.

• Obtaining management’s analysis and supporting documentation related to the qualitative and environmental factors and testing whether the environmental and qualitative factors used in the calculation of the allowance for credit losses – loans are supported by the analysis provided by management.

• Testing the appropriateness of the methodology and assumptions used in the calculation of the allowance for credit losses, testing completeness and accuracy of the data used in the calculation, testing estimation and application of the environmental and qualitative factors determined by management and used in the calculation, and recalculating the allowance for credit losses balance.

• Testing the appropriateness of the methodology and assumptions used in the calculation of the allowance for credit losses – loans, testing completeness and accuracy of the data used in the calculation, testing estimation and application of the environmental and qualitative factors determined by management and used in the calculation, and recalculating the balance of allowance for credit losses – loans.

/s/ Moss Adams LLP

Spokane, Washington

Portland, Oregon

February 26, 2025

We have served as the Company’s auditor since 2004.

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

7 unchanged sentences

Total cash and cash equivalents 501,858 254,464

Securities—trading — 28,694

Securities—available-for-sale;

5 unchanged sentences

Federal Home Loan Bank (FHLB) stock 22,451 24,028

Securities purchased under agreements to resell — 300,000

Loans held for sale (includes $ 26,185 and $ 9,105 , at fair value, respectively)

44 unchanged sentences

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

17 unchanged sentences

Net interest income 541,716 576,005 553,179

PROVISION (RECAPTURE) FOR CREDIT LOSSES 10,789 10,364 ( 33,388 )

Net interest income after provision (recapture) for credit losses 565,216 542,815 530,279

PROVISION FOR CREDIT LOSSES 7,581 10,789 10,364

Net interest income after provision for credit losses 534,135 565,216 542,815

NON-INTEREST INCOME

4 unchanged sentences

73,060 67,869 69,892

Net (loss) gain on sale of securities ( 19,242 ) ( 3,248 ) 482

Net loss on sale of securities ( 5,190 ) ( 19,242 ) ( 3,248 )

Net change in valuation of financial instruments carried at fair value ( 982 ) ( 4,218 ) 807

16 unchanged sentences

Miscellaneous 24,414 23,723 24,869

382,538 377,295 379,005

COVID-19 expenses — — 436

Merger and acquisition - related expenses — — 660

Total non-interest expense

11 unchanged sentences

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

5 unchanged sentences

OTHER COMPREHENSIVE INCOME (LOSS), NET OF INCOME TAXES:

Unrealized holding gain (loss) on securities—available-for-sale arising during the period 54,307 ( 418,827 ) ( 80,073 )

Income tax (expense) benefit related to securities—available-for-sale unrealized holding losses ( 13,034 ) 100,518 19,217

Reclassification for net loss (gain) on securities—available-for-sale realized in earnings 19,242 3,248 ( 498 )

Income tax (benefit) expense related to securities—available-for-sale realized in earnings ( 4,618 ) ( 780 ) 120

Unrealized holding (loss) gain on securities—available-for-sale arising during the period ( 5,047 ) 54,307 ( 418,827 )

Income tax benefit (expense) related to securities—available-for-sale unrealized holding losses 1,211 ( 13,034 ) 100,518

Reclassification for net loss on securities—available-for-sale realized in earnings 5,493 19,242 3,248

Income tax benefit related to securities—available-for-sale realized in earnings ( 1,318 ) ( 4,618 ) ( 780 )

Unrealized loss on securities transferred from available-for-sale to held-to-maturity — — ( 34,596 )

5 unchanged sentences

Changes in fair value of junior subordinated debentures related to instrument specific credit risk ( 1,064 ) 8,444 ( 5,560 )

Income tax (expense) benefit related to junior subordinated debentures ( 2,027 ) 1,334 2,501

Income tax benefit (expense) related to junior subordinated debentures 255 ( 2,027 ) 1,334

Reclassification of fair value of junior subordinated debentures redeemed — — 765

3 unchanged sentences

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

2 unchanged sentences

For the Years Ended December 31, 2024, 2023 and 2022

Common Stock and Paid in Capital Retained Earnings Accumulated Other Comprehensive Income Total Shareholders’ Equity

Common Stock and Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Shareholders’ Equity

Shares Amount

1 unchanged sentence

Net income 195,378 195,378

Other comprehensive income, net of income tax ( 68,885 ) ( 68,885 )

Other comprehensive loss, net of income tax ( 362,953 ) ( 362,953 )

Accrual of dividends on common stock ($ 1.76 /share-cumulative)

7 unchanged sentences

Net income 183,624 183,624

Other comprehensive loss, net of income tax ( 362,953 ) ( 362,953 )

Other comprehensive income, net of income tax 73,634 73,634

Accrual of dividends on common stock ($ 1.92 /share-cumulative)

( 66,691 ) ( 66,691 )

Repurchase of common stock

( 200,000 ) ( 10,960 ) ( 10,960 )

Amortization of stock-based compensation related to restricted stock grants, net of shares surrendered

10 unchanged sentences

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

10 unchanged sentences

Amortization of core deposit intangibles 2,626 3,756 5,279

Loss (gain) on sale of securities, net 19,242 3,248 ( 482 )

Loss on sale of securities, net 5,190 19,242 3,248

Net change in valuation of financial instruments carried at fair value 982 4,218 ( 807 )

1 unchanged sentence

Decrease in deferred taxes 762 1,514 7,624

(Decrease) increase in current taxes payable ( 3,170 ) 8,250 ( 3,643 )

Increase (decrease) in current taxes payable 6,297 ( 3,170 ) 8,250

Stock-based compensation 10,031 9,169 8,870

2 unchanged sentences

(Gain) loss on disposal of real estate held for sale and property and equipment, net ( 318 ) ( 352 ) 102

Provision (recapture) for credit losses 10,789 10,364 ( 33,388 )

Provision for credit losses 7,581 10,789 10,364

Loss on extinguishment of debt — — 765

11 unchanged sentences

Principal repayments and maturities of securities—held-to-maturity 57,656 58,406 56,056

Purchases of equity securities — — ( 4,750 )

Proceeds from sales of equity securities — — 4,796

Loan (originations) repayments, net ( 686,508 ) ( 643,959 ) ( 897,505 )

7 unchanged sentences

Proceeds from maturity of securities purchased under agreements to resell — 300,000 —

Purchase of securities purchased under agreements to resell — — ( 300,000 )

Investment in bank-owned life insurance ( 47 ) ( 66 ) ( 50,053 )

Other 686 1,693 3,459

Net cash provided from (used by) investing activities 191,929 ( 1,444,557 ) ( 1,015,426 )

Net cash (used by) provided from investing activities ( 371,170 ) 191,929 ( 1,444,557 )

(Continued on next page)

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

4 unchanged sentences

FINANCING ACTIVITIES:

(Decrease) increase in deposits, net ( 590,562 ) ( 528,672 ) 1,759,638

Increase (decrease) in deposits, net 484,901 ( 590,562 ) ( 528,672 )

Repayment of long term FHLB borrowing — — ( 50,000 )

Advances of overnight and short-term FHLB borrowings, net 273,000 50,000 —

(Decrease) increase in other borrowings, net ( 49,923 ) ( 31,690 ) 79,704

(Repayment) advances of overnight and short-term FHLB borrowings, net ( 33,000 ) 273,000 50,000

Decrease in other borrowings, net ( 57,619 ) ( 49,923 ) ( 31,690 )

Repayment of junior subordinated debentures — — ( 50,518 )

3 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 2,172 ) ( 3,476 ) ( 3,332 )

Net cash (used by) provided from financing activities ( 437,726 ) ( 684,732 ) 1,613,965

Net cash provided from (used by) financing activities 325,377 ( 437,726 ) ( 684,732 )

NET CHANGE IN CASH AND CASH EQUIVALENTS 247,394 11,402 ( 1,891,238 )

8 unchanged sentences

Dividends accrued but not paid until after period end 1,334 1,084 1,158

Loans, held for sale, transferred to portfolio 27,929 35,466 —

Loans, held for sale, transferred (from) to portfolio ( 131,294 ) 27,929 35,466

Securities, held-for-trading, transferred to available-for-sale — 25,298 —

4 unchanged sentences

See Notes to Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

15 unchanged sentences

The Trusts are not consolidated in the Company’s consolidated financial statements.

Operating Segments:

The Company’s operations are managed, and financial performance is evaluated, by our chief operating decision maker on a Company-wide basis.

The Bank’s primary business is that of a traditional banking institution, gathering deposits and originating loans for portfolio in its primary market areas.

The Bank offers a wide variety of deposit products to its consumer and commercial clients.

Lending activities include the origination of real estate, commercial/agriculture business and consumer loans.

The performance of the Company is reviewed monthly by the Company’s executive management and Board of Directors.

As resource allocation and performance decisions are not made based on discrete financial information of individual lines of business, the Company considers its current business and operations as a single reportable operating segment.

Subsequent Events:

13 unchanged sentences

Various elements of the Company’s accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.

In particular, Management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of Banner’s Consolidated Financial Statements.

These policies relate to (i) determination of the provision and allowance for credit losses, (ii) the valuation of financial assets and liabilities recorded at fair value, (iii) the valuation of intangible assets, such as goodwill, (iv) the valuation or recognition of deferred tax assets and liabilities and (v) the determination of estimated losses from legal proceedings and other contingent matters pending.

Management has identified several accounting policies that, due to the judgments, estimates and assumptions inherent in those policies, are critical to an understanding of Banner’s Consolidated Financial Statements.

These policies relate to (i) determination of the provision and allowance for credit losses, (ii) the valuation of financial assets and liabilities recorded at fair value, and (iii) the valuation or recognition of deferred tax assets and liabilities.

Management believes that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate based on the factual circumstances at the time.

1 unchanged sentence

Further, subsequent changes in economic or market conditions could have a material impact on these estimates and the Company’s financial condition and operating results in future periods.

T able of C onten ts

Debt securities are classified as held-to-maturity when the Company has the ability and positive intent to hold them to maturity.

18 unchanged sentences

The Company uses industry historical credit loss information adjusted for current conditions to establish the allowance for credit losses on the municipal bond portfolio.

The expected credit losses on these bonds is similar to Banner’s commercial business loan portfolio.

The expected credit losses on these bonds are similar to Banner’s commercial business loan portfolio.

Therefore, the Company uses the commercial business loan portfolio loss rates to establish the allowance for credit losses on the collateralized bonds and its own loss history to establish a loss rate on bonds that are not collateralized.

6 unchanged sentences

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized as a charge to AOCI.

The remaining impairment related to all other factors, the difference between the present value of the cash flows expected to be collected and fair value, is recognized in AOCI.

Changes in the allowance for credit losses are recorded as provision (recapture) for credit losses.

10 unchanged sentences

Loans Receivable :

The Bank originates residential one- to four-family mortgage loans for both portfolio investment and sale in the secondary market.

The Bank originates one- to four-family residential loans for both portfolio investment and sale in the secondary market.

The Bank also originates construction and land development, multifamily mortgage, commercial real estate, commercial business, agricultural and consumer loans for portfolio investment.

3 unchanged sentences

Premiums, discounts and deferred loan fees are amortized to maturity using the level-yield methodology.

T able of C onten ts

Loans Held for Sale:

Residential one- to four-family loans originated with the intent to be sold in the secondary market are considered held for sale.

Residential one- to four-family loans under best effort delivery commitments are carried at the lower of aggregate cost or estimated market value.

Residential one- to four-family loans expected to be delivered under mandatory commitments are carried at fair value to match changes in the value of the loans with the value of the related economic hedges on the loans.

One- to four-family residential loans originated with the intent to be sold in the secondary market are considered held for sale.

One- to four-family residential loans under best effort delivery commitments are carried at the lower of aggregate cost or estimated market value.

One- to four-family residential loans expected to be delivered under mandatory commitments are carried at fair value to match changes in the value of the loans with the value of the related economic hedges on the loans.

Fair values for residential mortgage loans held for sale are determined by comparing actual loan rates to current secondary market prices for similar loans.

2 unchanged sentences

Gains and losses on sales of loans held for sale are determined using the aggregate method and are recorded in the mortgage banking operations component of non-interest income.

Non-refundable fees and direct loan origination costs related to loans held for sale carried at the lower of cost or market are recognized as part of the cost basis of the loan.

Loans Acquired in Business Combinations :

6 unchanged sentences

The initial allowance for credit losses, determined on a collective basis, is allocated to individual loans.

The loan’s fair value is grossed up for the allowance for credit losses and becomes its initial amortized cost basis.

A loan’s fair value is grossed up for the allowance for credit losses and becomes its initial amortized cost basis.

The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan.

23 unchanged sentences

The allowance for credit losses - loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans.

The Bank has elected to exclude accrued interest receivable from the amortized cost basis in their estimate of the allowance for credit losses - loans.

The Company has elected to exclude accrued interest receivable from the amortized cost basis in their estimate of the allowance for credit losses - loans.

The provision for credit losses reflects the amount required to maintain the allowance for credit losses - loans at an appropriate level based upon Management’s evaluation of the adequacy of collective and individual loss reserves.

4 unchanged sentences

Recoveries on previously charged off loans are credited to the allowance for credit losses - loans.

T able of C onten ts

Management estimates the allowance for credit losses - loans using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

4 unchanged sentences

For loans evaluated collectively, the allowance for credit losses is calculated using life of loan historical losses adjusted for economic forecasts and current conditions.

For commercial real estate, multifamily real estate, construction and land, commercial business and agricultural loans with risk rating segmentation, historical credit loss assumptions are estimated using a model that categorizes loan pools based on loan type and risk rating.

For commercial real estate, multifamily real estate, construction and land and land development, commercial business and agricultural loans with risk rating segmentation, historical credit loss assumptions are estimated using a model that categorizes loan pools based on loan type and risk rating.

For one- to four- family residential loans, consumer loans, home equity lines of credit, small business loans, and small balance commercial real estate loans, historical credit loss assumptions are estimated using a model that categorizes loan pools based on loan type and delinquency status.

20 unchanged sentences

Subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported.

Troubled Loan Modifications:

Some of the Bank’s loans are reported as troubled loan modification.

Loans are reported as troubled loan modifications when the Bank grants a concession to a borrower experiencing financial difficulties that it would not otherwise consider.

Examples of such concessions include providing principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or any combination of these.

T able of C onten ts

Loan Origination and Commitment Fees:

16 unchanged sentences

Property and equipment is carried at cost less accumulated depreciation.

Depreciation is based upon the straight-line method applied to individual assets and groups of assets acquired in the same year over the lesser of their estimated useful lives or the related lease terms of the assets:

Buildings and leased improvements 10 – 39 years

7 unchanged sentences

Depreciation is not recorded on held for sale property.

The Company leases retail space, office space, storage space, and equipment under operating leases.

The Company leases retail, office and storage space, and equipment under operating leases.

Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs in addition to the base rent.

11 unchanged sentences

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

T able of C onten ts

Goodwill represents the excess of the purchase consideration paid over the fair value of the assets acquired, net of the fair values of liabilities assumed in a business combination and is not amortized but is reviewed annually or more frequently as current circumstances and conditions warrant, for impairment.

40 unchanged sentences

Derivatives include “off-balance-sheet” financial products, the value of which is dependent on the value of underlying financial assets, such as stock, bonds, foreign currency, or a reference rate or index.

Such derivatives include “forwards,” “futures,” “options” or “swaps.” The Bank uses an interest rate swap program which involves the receipt of fixed-rate amounts from a counterparty in exchange for variable-rate payments over the life of the agreements without exchange of the underlying notional amount.

Such derivatives are used to hedge the variable cash flows associated with existing variable-rate assets.

These interest rate swaps qualify as cash flow hedging instruments so gains and losses are recorded in AOCI to the extent the hedge is effective.

Gains and losses on the interest rate swaps are reclassified from AOCI to earnings in the period the hedged transaction affects earnings and are included in interest income.

Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate assets.

The related cash flows are recognized as cash flows from operating activities on the Consolidated Statement of Cash Flows.

In addition, the Bank uses an interest rate swap program for commercial loan clients that provides the client with a variable-rate loan and enters into an interest rate swap allowing them to effectively fix their loan interest rates.

Such derivatives include “forwards,” “futures,” “options” or “swaps.” The Bank used an interest rate swap program which involves the receipt of fixed-rate amounts from a counterparty in exchange for variable-rate payments over the life of the agreements without exchange of the underlying notional amount.

Such derivatives were used to hedge the variable cash flows associated with existing variable-rate assets.

These interest rate swaps qualified as cash flow hedging instruments so gains and losses were recorded in AOCI to the extent the hedge was effective.

Gains and losses on the interest rate swaps were reclassified from AOCI to earnings in the period the hedged transaction affected earnings and were included in interest income.

Amounts reported in AOCI related to derivatives were reclassified to interest income as interest payments were received on the Company’s variable-rate assets.

The related cash flows were recognized as cash flows from operating activities on the Consolidated Statement of Cash Flows.

These cash flow hedges matured in 2024.

The Bank offers an interest rate swap program for commercial loan clients that provides the client with a variable-rate loan and enters into an interest rate swap allowing them to effectively fix their loan interest rates.

These client swaps are matched with third party swaps with qualified broker/dealer or banks to offset the risk.

The fair value adjustments for these swaps are reflected in other assets or other liabilities as appropriate.

The fair value adjustments for these swaps are recorded in either other assets or other liabilities, as appropriate.

T able of C onten ts

Further, as a part of its mortgage banking activities, the Company issues “rate lock” commitments to one- to four-family loan borrowers and obtains offsetting “best efforts” delivery commitments from purchasers of loans.

The Company uses forward contracts for the sale of mortgage-backed securities and mandatory delivery commitments for the sale of loans to hedge one- to four-family loan “rate lock” commitments and one- to four-family loans held for sale.

The commitments to originate mortgage loans held for sale and the related delivery contracts are considered derivatives.

13 unchanged sentences

A valuation allowance is recognized as a reduction to deferred tax assets when Management determines it is more likely than not that deferred tax assets will not be available to offset future income tax liabilities.

Accounting standards for income taxes prescribe a recognition threshold and measurement process for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return, and also provides guidance on the de-recognition of previously recorded benefits and their classification, as well as the proper recording of interest and penalties, accounting in interim periods, disclosures and transition.

Accounting standards for income taxes prescribe a recognition threshold and measurement process for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return, and provides guidance on the de-recognition of previously recorded benefits and their classification, as well as the proper recording of interest and penalties, accounting in interim periods, disclosures and transition.

The Company periodically reviews its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate.

18 unchanged sentences

In addition, certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, unrealized gains and losses on interest rate swaps used in cash flow hedges and changes in fair value of junior subordinated debentures related to instrument specific credit risk, are reported as a separate component of the equity section of the Consolidated Statements of Financial Condition, and such items, along with net income, are components of comprehensive income which is reported in the Consolidated Statements of Comprehensive Income.

Business Segments:

The Company is managed by legal entity and not by lines of business.

The Bank is a community oriented commercial bank chartered in Washington state.

The Bank’s primary business is that of a traditional banking institution, gathering deposits and originating loans for portfolio in its respective primary market areas.

The Bank offers a wide variety of deposit products to its consumer and commercial clients.

Lending activities include the origination of real estate, commercial/agriculture business and consumer loans.

The Bank is also an active participant in the secondary market, originating residential loans for sale on both a servicing released and servicing retained basis.

In addition to interest income on loans and investment securities, the Bank receives other income from deposit service charges, loan servicing fees and from the sale of loans and investments.

The performance of the Bank is reviewed monthly by the Company’s executive management and Board of Directors.

All the executive officers of the Company are members of the Bank’s management team.

The Company has determined that its current business and operations consist of a single business segment and a single reporting unit.

Reclassification:

2 unchanged sentences

These reclassifications had no effect on retained earnings or net income as previously presented and the effect of these reclassifications is considered immaterial.

T able of C onten ts

ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)

In November 2024, the Financial Accounting Standards Board (FASB) issued guidance within Accounting Standards Update (ASU) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The amendments in the ASU require public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period.

Specifically, they will be required to:

• Disclose the amounts of (a) purchases of inventory;

(b) employee compensation;

(d) intangible asset amortization;

and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption.

• Include certain amounts that are already required to be disclosed under GAAP in the same disclosure as the other disaggregation requirements.

• Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

• Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments should be applied prospectively.

The Company is evaluating the adoption of this ASU, but does not expect this ASU to have a material impact on the Company’s consolidated financial statements.

Compensation—Stock Compensation (Topic 718)

In March 2024, the FASB issued guidance within ASU 2024-01, Compensation—Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards .

The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with the company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company.

The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic 718:

Compensation—Stock Compensation.

The amendment in ASC paragraph 718-10-15-3 is solely intended to improve the overall clarity and does not change the guidance.

This ASU does not have a material impact on the Company’s Consolidated Financial Statements, as the Company does not currently provide these types of awards.

Income Taxes (Topic 740)

In December 2023, the Financial Accounting Standards Board (FASB) issued guidance within Accounting Standards Update (ASU) 2023-09, I ncome Taxes (Topic 740):

In December 2023, the FASB issued guidance within ASU 2023-09, I ncome Taxes (Topic 740):

Improvements to Income Tax Disclosures .

4 unchanged sentences

• Income tax expense (or benefit) from continuing operations disaggregated by federal and state jurisdictions.

The ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The amendments should be applied on a prospective basis.

The Company is evaluating the adoption of this ASU, as it will require additional disclosures in the notes to our Consolidated Financial Statements.

The Company early adopted and applied this ASU prospectively and new disclosures have been added as applicable.

Segment Reporting (Topic 280)

2 unchanged sentences

This ASU requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this ASU and all existing disclosures in Topic 280.

The Company has determined that its current business and operations consist of a single business segment and a single reporting unit.

The Company has determined that its current business and operations consist of a single operating segment and a single reporting unit.

The amendments in this Update are intended to improve segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

3 unchanged sentences

• Clarify that if the CODM uses more than one measure of the segment’s profit or loss in assessing performance, one or more of those additional measures may be reported.

T able of C onten ts

• Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact on the Company’s Consolidated Financial Statements as the Company has a single reportable segment.

Financial Instruments – Credit Losses (Topic 326)

On January 1, 2023, the Company adopted FASB ASU 2022-02, Financial Instruments – Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures .

The ASU eliminated the troubled debt restructuring recognition and measurement guidance and, instead, requires that a creditor evaluate (consistent with the accounting for other loan modifications) whether the modification represents a new loan or a continuation of an existing loan.

The ASU also introduced new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty.

In addition, the ASU requires vintage disclosures to include current-period gross write-offs by year of origination for financing receivables.

The Company applied the ASU prospectively and new disclosures have been added when applicable.

Reference Rate Reform (Topic 848)

In 2020, 2021 and 2022, the FASB issued guidance in response to the scheduled discontinuation of LIBOR.

within ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of Sunset Date of Topic 848, ASU 2021-01, Reference Rate Reform (Topic 848):

The amendments in these ASUs provided optional guidance designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform.

The publication cessation of U.S.

dollar LIBOR was on June 30, 2023.

The optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance:

1) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate;

2) modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts;

3) modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract;

and 4) the amendments in this ASU also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination.

The Company used the expedients in the Reference Rate Reform guidance to manage through the transition from LIBOR, specifically as they relate to loans, leases and hedging relationships.

The adoption of this accounting guidance did not have a material impact on the Company’s Consolidated Financial Statements.

Fair Value Measurement (Topic 820)

In June 2022, the FASB issued guidance within ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .

The ASU affects all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction.

These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities at December 31, 2023 and December 31, 2022 are summarized as follows (in thousands):

The Company applied this ASU retrospectively and new disclosures have been added as applicab le for a single reportable operating segment.

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities at December 31, 2024 and 2023, are summarized as follows (in thousands):

December 31, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Available-for-Sale:

14 unchanged sentences

December 31, 2023

Amortized Cost Fair Value

Corporate bonds $ 27,203 $ 28,694

$ 27,203 $ 28,694

December 31, 2022

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Available-for-Sale:

5 unchanged sentences

$ 2,729,980 $ 2,074 $ ( 358,271 ) $ 2,373,783

T able of C onten ts

December 31, 2023

6 unchanged sentences

$ 1,059,387 $ 687 $ ( 152,228 ) $ 907,514 $ ( 332 )

Accrued interest receivable on held-to-maturity debt securities was $ 4.5 million and $ 4.8 million as of December 31, 2023 and December 31, 2022, and was $ 10.8 million and $ 12.4 million on available-for-sale debt securities at December 31, 2023 and December 31, 2022, respectively.

Accrued interest receivable on held-to-maturity debt securities was $ 4.2 million and $ 4.5 million as of December 31, 2024 and 2023, and was $ 9.0 million and $ 10.8 million on available-for-sale debt securities at December 31, 2024 and 2023, respectively.

Accrued interest receivable on securities is reported in accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the calculation of the allowance for credit losses.

At December 31, 2023 and December 31, 2022 , the gross unrealized losses and the fair value for securities available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):

At December 31, 2024 and 2023 , the gross unrealized losses and the fair value for securities—available-for-sale aggregated by the length of time that individual securities have been in a continuous unrealized loss position were as follows (in thousands):

December 31, 2024

19 unchanged sentences

At December 31, 2024, there were 201 securities—available-for-sale with unrealized losses, compared to 224 at December 31, 2023.

Management does not believe that any individual unrealized loss as of December 31, 2023 or December 31, 2022 resulted from credit loss.

Management does not believe that any individual unrealized loss as of December 31, 2024 or 2023 resulted from credit loss.

The decline in fair market value of these securities was generally due to changes in interest rates and changes in market-desired spreads subsequent to their purchase.

There were no sales of securities—trading for the years ended December 31, 2023, 2022 or 2021.

There were no securities—trading in a nonaccrual status at December 31, 2023 or December 31, 2022.

Net unrealized holding losses of $ 3.4 million were recognized in 2023 and net unrealized holding gains of $ 1.7 million were recognized in 2022.

All securities—trading were transferred to securities—available-for-sale during the fourth quarter of 2023.

Net unrealized holding losses of $ 3.4 million were recognized in 2023.

T able of C onten ts

The following table presents gross gains and losses on sales and partial calls of securities—available-for-sale (in thousands):

6 unchanged sentences

There were no securities—available-for-sale in a nonaccrual status at December 31, 2024 and 2023.

The Company did not sell any held-to-maturity securities and had no partial calls of securities during the years ended December 31, 2023 and December 31, 2022.

The Company sold one held-to-maturity security with a resulting net gain of $ 3,000 and had partial calls of securities that resulted in a net loss of $ 65,000 for the year ended December 31, 2021.

The Company did not sell any held-to-maturity securities during the years ended December 31, 2024, 2023 and 2022.

There were no securities—held-to-maturity in a nonaccrual status at December 31, 2024 and 2023.

During the years ended December 31, 2023 and December 31, 2022, the Company sold no equity securities.

During the year ended December 31, 2021, the Company sold a $ 4.8 million equity security with a resulting net gain of $ 46,000 .

The following table presents the amortized cost and estimated fair value of securities at December 31, 2024, by contractual maturity and does not reflect any required periodic payments (in thousands).

13 unchanged sentences

State and local governments public deposits $ 281,954 $ 296,238 $ 250,692

Federal Reserve 115,007 115,007 98,259

Interest rate swap counterparties 959 959 769

2 unchanged sentences

Total pledged securities $ 500,812 $ 515,096 $ 424,255

The Company monitors the credit quality of held-to-maturity debt securities through the use of credit ratings which are reviewed and updated quarterly.

T able of C onten ts

The Company monitors the credit quality of held-to-maturity debt securities using credit ratings which are reviewed and updated quarterly.

The Company’s non-rated held-to-maturity debt securities are primarily United States government sponsored enterprise debentures carrying minimal to no credit risk.

2 unchanged sentences

This municipal debt is predominately essential service or unlimited general obligation backed debt.

The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at December 31, 2023 and December 31, 2022 (in thousands):

The following tables summarize the amortized cost of held-to-maturity debt securities by credit rating at December 31, 2024 and 2023 (in thousands):

December 31, 2024

8 unchanged sentences

$ 307 $ 466,032 $ 2,781 $ 590,267 $ 1,059,387

The following tables present the activity in the allowance for credit losses for held-to-maturity debt securities by major type for the year ended December 31, 2023 and December 31, 2022 (in thousands):

The following tables present the activity in the allowance for credit losses for held-to-maturity debt securities by major type for the year ended December 31, 2024 and 2023 (in thousands):

For the Year Ended December 31, 2024

Government and agency obligations Municipal bonds Corporate bonds Mortgage-backed or related securities Total

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

4 unchanged sentences

For the Year Ended December 31, 2023

Government and agency obligations Municipal bonds Corporate bonds Mortgage-backed or related securities Total

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

4 unchanged sentences

For the Year Ended December 31, 2022

Government and agency obligations Municipal bonds Corporate bonds Mortgage-backed or related securities Total

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

Beginning balance $ 203 $ 230 $ 433

Provision for credit losses — 144 445 — 589

Securities charged-off — — ( 250 ) — ( 250 )

Recapture of provision for credit losses ( 20 ) ( 63 ) ( 83 )

Recoveries — 29 29

Ending balance $ 183 $ 196 $ 379

T able of C onten ts

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES

14 unchanged sentences

Commercial business 1,318,333 11 1,255,734 12

1,255,734 11 1,283,407 13

Small business scored 1,104,117 10 1,022,154 9

7 unchanged sentences

Net loans $ 11,199,135 $ 10,660,812

(1) Includes $ 3.6 million and $ 7.6 million of SBA Paycheck Protection Program (PPP) loans as of December 31, 2023 and December 31, 2022, respectively.

Loan amounts are net of unearned loan fees in excess of unamortized costs of $ 15.5 million as of December 31, 2024 and $ 12.1 million as of December 31, 2023.

4 unchanged sentences

The Company’s loans to directors, executive officers and related entities are on substantially the same terms and underwriting as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectability.

Such loans had balances of $ 708,000 and $ 683,000 at December 31, 2023 and 2022, respectively.

These loans had balances of $ 682,600 and $ 708,000 at December 31, 2024 and 2023 respectively.

Purchased credit-deteriorated and purchased non-credit-deteriorated loans.

Loans acquired in business combinations are recorded at their fair value at the acquisition date.

Loans purchased or acquired in business combinations are recorded at their fair value at the acquisition date.

Acquired loans are evaluated upon acquisition and classified as either purchased credit-deteriorated (PCD) or purchased non-credit-deteriorated.

There were no PCD loans at December 31, 2023 or 2022.

There were no PCD loans at December 31, 2024 and 2023.

T able of C onten ts

Troubled Loan Modifications.

3 unchanged sentences

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses - loans is adjusted by the same amount.

The allowance for credit losses on modified loans is measured using the same credit loss estimation methods used to determine the allowance for credit losses for all other loans held for investment.

The allowance for credit losses on modified loans is measured using similar credit loss estimation methods used to determine the allowance for credit losses for all other loans held for investment.

These methods incorporate the post-modification loan terms, as well as defaults and charge-offs associated with historical modified loans.

The following table presents the amortized cost basis and financial effect of loans at December 31, 2023, that were both experiencing financial difficulty and modified during the year ended December 31, 2023 (in thousands):

The following tables present the amortized cost basis and financial effect of loans that were experiencing financial difficulty and modified during the year ended December 31, 2024 and 2023 (in thousands):

December 31, 2024

Payment Delay Term Extension Total

Commercial business $ 2,889 $ 1,480 $ 4,369

Total $ 2,889 $ 1,480 $ 4,369

December 31, 2023

Payment Delay Term Extension Total

One- to four-family construction $ — $ 4,911 $ 4,911

3 unchanged sentences

Total $ 2,761 $ 4,911 $ 7,672

The Company has not committed to lend any additional amounts to borrowers included in the previous table.

The Company had no commitments to lend additional amounts to the borrowers included in the previous tables as of December 31, 2024 .

The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

The following table presents the performance of such loans that have been modified in the last 12 months at December 31, 2023 (in thousands):

The following tables present the performance at December 31, 2024 and 2023, of loans that had been modified in the previous 12 months (in thousands).

December 31, 2024

Past Due 60-89 Days

Past Due 90 Days or More

Past Due Total

30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Nonaccrual Total

Commercial business $ — $ — $ — $ 2,889 $ 2,889

Total $ — $ — $ — $ 2,889 $ 2,889

December 31, 2023

30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Nonaccrual Total

Commercial business $ — $ — $ — $ 121 $ 121

Agricultural business, including secured by farmland — — — 1,580 1,580

1 unchanged sentence

Total $ — $ — $ — $ 2,761 $ 2,761

The following table presents the financial effect of the loan modifications presented above for borrowers experiencing financial difficulty for the year ended December 31, 2023:

The following tables present the financial effect of the loan modifications presented above for borrowers experiencing financial difficulty for December 31, 2024 and 2023:

For the Year Ended December 31, 2024

1 unchanged sentence

(in months) Weighted Average Term Extension

Commercial business 9 3

T able of C onten ts

For the Year Ended December 31, 2023

Weighted Average Payment Delay Period (in months) Weighted-Average Term Extension (in months)

One- to four-family construction n/a 14

17 unchanged sentences

Credits with risk ratings of 1 to 5 meet the definition of a pass risk rating.

The strength of credits vary within the pass risk ratings, ranging from a risk rated 1 being an exceptional credit to a risk rated 5 being an acceptable credit that requires a more than normal level of supervision.

The strength of credits varies within the pass risk ratings, ranging from a risk rated 1 being an exceptional credit to a risk rated 5 being an acceptable credit that requires a more than normal level of supervision.

Risk Rating 6:

19 unchanged sentences

Taking a loss does not mean that a credit has absolutely no recovery or salvage value but, rather, it is not practical or desirable to defer writing off the credit, even though partial recovery may occur in the future.

The following tables present the Company’s portfolio of risk-rated loans by class and by grade as of December 31, 2023 and December 31, 2022 (in thousands).

T able of C onten ts

The following tables present the Company’s portfolio of risk-rated loans by class and by grade as of December 31, 2024 and 2023 (in thousands).

In addition, the tables include the gross charge-offs for the year ended December 31, 2024.

28 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

T able of C onten ts

December 31, 2024

25 unchanged sentences

Current period gross charge-offs $ — $ — $ 150 $ — $ — $ — $ — $ 150

T able of C onten ts

December 31, 2024

25 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

T able of C onten ts

December 31, 2023

22 unchanged sentences

Total Multifamily real estate $ 96,865 $ 177,907 $ 215,220 $ 101,336 $ 46,886 $ 169,733 $ 3,285 $ 811,232

T able of C onten ts

December 31, 2023

22 unchanged sentences

Total One- to four- family construction $ 454,533 $ 43,816 $ 27,373 $ — $ 329 $ — $ 381 $ 526,432

T able of C onten ts

December 31, 2023

22 unchanged sentences

Total Agricultural business, including secured by farmland $ 53,227 $ 35,520 $ 25,937 $ 17,658 $ 31,704 $ 40,854 $ 126,189 $ 331,089

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of December 31, 2023 and December 31, 2022 (in thousands).

T able of C onten ts

The following tables present the Company’s portfolio of non-risk-rated loans by class and delinquency status as of December 31, 2024 and 2023 (in thousands).

In addition, the tables include the gross charge-offs for the year ended December 31, 2024.

28 unchanged sentences

Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

T able of C onten ts

December 31, 2024

17 unchanged sentences

Current period gross charge-offs $ 9 $ 50 $ 105 $ 71 $ 37 $ 211 $ 1,247 $ 1,730

T able of C onten ts

December 31, 2023

22 unchanged sentences

Total One- to four- family residential $ 362,703 $ 590,494 $ 265,485 $ 57,527 $ 32,059 $ 209,569 $ 209 $ 1,518,046

T able of C onten ts

December 31, 2023

15 unchanged sentences

Total Consumer-other $ 10,773 $ 31,894 $ 10,027 $ 6,936 $ 4,471 $ 18,007 $ 28,573 $ 110,681

The following tables provide the amortized cost basis of collateral-dependent loans as of December 31, 2023 and December 31, 2022 (in thousands).

T able of C onten ts

The following tables provide the amortized cost basis of collateral-dependent loans as of December 31, 2024 and 2023 (in thousands).

Our collateral dependent loans presented in the tables below have no significant concentrations by property type or location.

3 unchanged sentences

Owner-occupied $ 2,182 $ — $ — $ — $ 2,182

Small balance CRE 755 — — — 755

One- to four-family construction 1,834 — — — 1,834

Land and land development 1,622 — — — 1,622

Commercial business:

Commercial business — 1,789 1,660 427 3,876

Small business scored 623 — — — 623

Agricultural business, including secured by farmland

2 unchanged sentences

Consumer—home equity revolving lines of credit 977 — — — 977

821 — — — 821

Total $ 17,625 $ 1,789 $ 5,107 $ 427 $ 24,948

December 31, 2023

Real Estate Equipment Total

Real Estate Accounts Receivable Equipment Inventory Total

Commercial real estate:

Owner-occupied $ 1,391 $ — $ — $ — $ 1,391

Small balance CRE $ 755 — $ — — $ 755

Commercial business

One- to four-family construction 8,859 — — — 8,859

Commercial business — 1,059 5,085 812 6,956

Small business scored — 307 307

Agricultural business, including secured by farmland

2,576 — — — 2,576

One- to four-family residential 1,954 — — — 1,954

Consumer—home equity revolving lines of credit 821 — — — 821

Total $ 16,356 $ 1,059 $ 5,085 $ 812 $ 23,312

T able of C onten ts

The following tables provide additional detail on the age analysis of the Company’s past due loans as of December 31, 2024 and 2023 (in thousands):

21 unchanged sentences

Total $ 20,739 $ 8,102 $ 26,591 $ 55,432 $ 11,299,224 $ 11,354,656 $ 15,382 $ 36,552 $ 404

T able of C onten ts

December 31, 2023

20 unchanged sentences

Total $ 15,936 $ 10,280 $ 16,948 $ 43,164 $ 10,767,291 $ 10,810,455 $ 11,714 $ 26,857 $ 2,745

(1) The Company did not recognize any interest income on non-accrual loans during both the years ended December 31, 2023 and 2022.

(1) The Company did not recognize any interest income on non-accrual loans during the years ended December 31, 2024 and 2023.

T able of C onten ts

Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.

Management considers QE factors for each loan category to adjust for differences between the historical periods used to calculate historical loss rates and expected conditions over the remaining lives of the loans in the portfolio.

Management uses a scale to assign QE factor adjustments based on the level of estimated impact which requires a significant amount of judgment.

The Company evaluated each qualitative factor as of December 31, 2024 and concluded that the models adequately reflected the significant changes in credit conditions and overall portfolio risk.

The qualitative adjustments in the allowance for credit losses during 2024 were primarily related to environmental, collateral and concentration related factors.

This evaluation resulted in a 35 basis-point increase in the construction and land category.

All other loan categories had nominal changes in their qualitative factor adjustments.

The following tables provide the activity in the allowance for credit losses - loans by portfolio segment for the years ended December 31, 2024, 2023 and 2022 (in thousands):

16 unchanged sentences

Ending balance $ 44,384 $ 9,326 $ 28,095 $ 35,464 $ 3,865 $ 19,271 $ 9,238 $ 149,643

Net loan recoveries as a percent of average outstanding loans during the period — % — % — % — % — % — % — % 0.01 %

Net loan recoveries (charge-offs) as a percent of average outstanding loans during the period 0.01 % — % ( 0.01 ) % ( 0.01 ) % — % — % ( 0.01 ) % ( 0.03 ) %

T able of C onten ts

For the Year Ended December 31, 2022

6 unchanged sentences

Ending balance $ 44,086 $ 7,734 $ 29,171 $ 33,299 $ 3,475 $ 14,729 $ 8,971 $ 141,465

Net loan charge-offs as a percent of average outstanding loans during the period ( 0.02 ) % — % — % — % — % — % — % ( 0.02 ) %

Net loan recoveries as a percent of average outstanding loans during the period — % — % — % — % — % — % — % 0.01 %

T able of C onten ts

PROPERTY AND EQUIPMENT, NET

7 unchanged sentences

Property and equipment, net $ 124,589 $ 132,231

(1) The Company had $ 1.9 million and $ 4.5 million of properties held for sale that were included in land and buildings at December 31, 2023 and 2022, respectively.

(1) The Company had $ 29,000 and $ 1.9 million of properties held for sale that were included in land and buildings at December 31, 2024 and 2023, respectively.

The Company’s depreciation expense related to property and equipment was $ 18.1 million, $ 17.9 million and $ 16.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

16 unchanged sentences

Deposits at December 31, 2024 and 2023 included deposits from the Company’s directors, executive officers and related entities totaling $ 10.2 million and $ 9.2 million, respectively.

T able of C onten ts

Scheduled maturities and weighted average interest rates of certificates of deposits at December 31, 2024 are as follows (dollars in thousands):

25 unchanged sentences

The Bank has the right to pledge or sell these securities, but it must replace them with substantially the same securities.

The Bank had no borrowings under wholesale repurchase agreements at December 31, 2023 or December 31, 2022.

The Bank had no borrowings under wholesale repurchase agreements at December 31, 2024 and 2023.

Federal Reserve Bank of San Francisco and fed fund lines:

The Bank periodically borrows funds on an overnight basis from the Federal Reserve Bank through the Borrower-In-Custody program.

Such borrowings are secured by a pledge of eligible loans.

At December 31, 2023, based upon available unencumbered collateral, the Bank was eligible to borrow $ 1.44 billion from the Federal Reserve Bank, although, at that date, as well as at December 31, 2022, the Bank had no funds borrowed under this arrangement.

These borrowings are secured by a pledge of eligible loans.

At December 31, 2024, based upon available unencumbered collateral, the Bank was eligible to borrow $ 1.52 billion from the Federal Reserve Bank.

However, as of that date, as well as December 31, 2023, the Bank had no funds borrowed under this arrangement.

At December 31, 2024, the Bank had uncommitted federal funds lines of credit agreements with other financial institutions totaling $125.0 million.

2 unchanged sentences

These lines are intended to support short-term liquidity needs and the agreements may restrict consecutive day usage.

T able of C onten ts

A summary of all other borrowings at December 31, 2024 and 2023, by the period remaining to maturity is as follows (dollars in thousands):

5 unchanged sentences

Maximum outstanding at any month-end $ 183,928 n/a $ 229,727 n/a

T able of C onten ts

SUBORDINATED DEBT AND MANDATORILY REDEEMABLE TRUST PREFERRED SECURITIES

At December 31, 2024, the Company had five wholly-owned subsidiary grantor trusts (the Trusts), which had issued $ 86.5 million of Trust Preferred Securities (TPS) to third parties, as well as $ 2.7 million of common capital securities, carried as other assets, which were issued to the Company.

TPS and common capital securities accrue and pay distributions periodically at specified annual rates, as provided in the indentures, and based on a spread over SOFR (Secured Overnight Financing Rate).

TPS and common capital securities accrue and pay distributions periodically at specified annual rates, as provided in the indentures, based on a spread over SOFR (Secured Overnight Financing Rate).

The Trusts used the proceeds from the offerings to purchase a like amount of junior subordinated debentures (the Debentures) of the Company.

3 unchanged sentences

The Company has the right to redeem the Debentures in whole on or after specific dates, at a redemption price specified in the indentures plus any accrued but unpaid interest to the redemption date.

During the year ended December 31, 2023, no debentures were redeemed.

The Company redeemed $ 50.5 million in TPS resulting in a loss of $ 793,000 during the year ended December 31, 2022.

During the years ended December 31, 2024 and 2023, no debentures were redeemed.

At December 31, 2024, the remaining Trusts comprised $ 86.5 million or 4.3 % of the Company’s total risk-based capital.

11 unchanged sentences

(1) All of the Company’s TPS are eligible for redemption.

(2) The Company has elected to use fair value accounting on its TPS.

(2) The Company has elected to use fair value accounting on the Debentures.

(3) The interest rate spread includes a 0.26% upward adjustment for the transition from LIBOR to SOFR.

3 unchanged sentences

On or after June 30, 2025, the Company may redeem the Notes, in whole or in part.

During 2023, the Bank purchased a portion of these notes as an available-for-sale investment, which are eliminated upon consolidation.

During 2023 and 2024, the Bank purchased a portion of these notes as an available-for-sale investment, which are eliminated upon consolidation.

The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of the Company’s current and future subsidiaries, including the Bank’s deposits as well as the Company’s subsidiaries’ liabilities to general creditors and liabilities arising during the ordinary course of business.

The Notes are included in Tier 2 capital for the Company under current regulatory guidelines and interpretations.

T able of C onten ts

The following table presents the components of the provision for income taxes included in the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 (in thousands):

8 unchanged sentences

Provision for income taxes $ 40,587 $ 43,463 $ 45,397

The following table presents the reconciliation of the federal statutory rate to the actual effective rate for the years ended December 31, 2023, 2022 and 2021:

Years Ended December 31

2023 2022 2021

The following table presents the reconciliation of the provision for income taxes based on the federal statutory rate to the actual effective rate by amount and percent for the year ended December 31, 2024 (amounts in thousands):

Year Ended December 31

Amount Percent

Federal income tax statutory rate $ 43,992 21.0 %

Increase (decrease) in tax rate due to:

State income taxes, net of federal tax offset (1)

State audits and amended returns 4 —

Tax credits ( 9,597 ) ( 4.6 )

Low income housing tax credit partnerships, net of amortization 6,791 3.2

Nontaxable and nondeductible items:

Tax-exempt interest ( 6,914 ) ( 3.3 )

Investment in life insurance ( 1,930 ) ( 0.9 )

Other 2,067 1.0

Provision for income taxes and effective income tax rate $ 40,587 19.4 %

(1) State taxes in California and Oregon made up the majority (greater than 50 percent) of the tax effect in this category.

T able of C onten ts

The following table presents the reconciliation of the federal statutory rate to the actual effective rate by percent for the years ended December 31, 2023 and 2022:

Years Ended December 31

Percent Percent

Federal income tax statutory rate 21.0 % 21.0 %

State Income taxes, net of federal tax offset 2.6 2.3

State audits and amended returns — ( 0.1 )

Tax credits ( 2.7 ) ( 1.9 )

Low income housing partnerships, net of amortization 2.0 1.4

Nontaxable and nondeductible items:

Tax-exempt interest ( 3.6 ) ( 3.6 )

Investment in life insurance ( 0.9 ) ( 0.7 )

Other 0.7 0.5

Effective income tax rate 19.1 % 18.9 % 18.5 %

Provision for income taxes and effective income tax rate 19.1 % 18.9 %

The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2024 (in thousands):

Income Taxes Paid

US federal $ 20,000

US state and local

California 2,705

Total $ 24,194

T able of C onten ts

The following table reflects the effect of temporary differences that gave rise to the components of the net deferred tax asset as of December 31, 2024 and 2023 (in thousands):

27 unchanged sentences

The Company also has federal alternative minimum tax credit carryforwards of $ 538,000 , which are available to reduce future federal regular income taxes, if any, over an indefinite period.

At December 31, 2022, the Company had federal and state net operating loss carryforwards of approximately $ 73.7 million and $ 64.6 million, respectively, and federal general business credits carryforwards of $ 219,000 .

At that same date, the Company also had federal alternative minimum tax credit carryforwards of approximately $ 1.2 million.

The Company had $ 100,000 of state credits at December 31, 2022, which were reversed in 2023.

At December 31, 2023, the Company had federal and state net operating loss carryforwards of approximately $ 61.7 million and $ 56.8 million, respectively, and federal general business credits carryforwards of $ 219,000 and federal alternative minimum tax credit carryforwards of approximately $ 538,000 .

As a consequence of the Company’s 2015 acquisition of Starbuck Bancshares, Inc., the Company experienced a change in control within the meaning of Section 382 of the Code.

9 unchanged sentences

Certain state net operating losses subject to the change of control limitations are still outstanding.

T able of C onten ts

As a consequence of the Company’s 2019 acquisition of AltaPacific and AltaPacific Bank, the Company did not experience a change in control within the meaning of Section 382 of the Code.

3 unchanged sentences

Retained earnings at December 31, 2024 and 2023 included approximately $ 5.4 million in tax basis bad debt reserves for which no income tax liability has been recorded.

In the future, if this tax bad debt reserve is used for purposes other than to absorb bad debts or the Company no longer qualifies as a bank or is completely liquidated, the Company will incur a federal tax liability at the then-prevailing corporate tax rate, established as $ 1.1 million at December 31, 2023.

A reconciliation of the beginning and ending amount of total unrecognized state tax benefits for the years ended December 31, 2024 and 2023, is as follows (in thousands):

12 unchanged sentences

The Company invests in low income housing tax credit funds that are designed to generate a return primarily through the realization of federal tax credits.

The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and tax credit investment amortization expense is a component of the provision for income taxes.

The Company accounts for these investments by amortizing the cost of tax credit investments over the life of the investment using a proportional amortization method and this tax credit investment amortization expense is a component of the provision for income taxes.

The current balance of these tax credit investments is included in other assets, while the unfunded commitments are included in accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

The following table presents the balances of the Company’s tax credit investments and related unfunded commitments at December 31, 2024 and 2023 (in thousands):

1 unchanged sentence

Tax Credit Investments:

Unfunded commitments—tax credit investments 62,594 44,563

Total commitments $ 153,618 $ 103,453

Unfunded commitments 94,416 62,594

The following table presents other information related to the Company’s tax credit investments for the years ended December 31, 2024, 2023 and 2022 (in thousands):

10 unchanged sentences

During 2024, the Board of Directors elected to make a matching contribution of 4 % of eligible compensation.

T able of C onten ts

Supplemental Retirement and Salary Continuation Plans:

31 unchanged sentences

The Company reserved 900,000 shares of its common stock for issuance under the 2014 Plan in connection with the exercise of awards.

As of December 31, 2023, 277,304 restricted stock shares and 442,886 restricted stock units have been granted under the 2014 Plan of which 4,809 restricted stock shares and 20,858 restricted stock units are unvested.

As of December 31, 2024, a total of 277,304 restricted stock shares and 597,096 restricted stock units have been granted under the 2014 Plan, of which no restricted stock shares and 158,478 restricted stock units were unvested.

2018 Omnibus Incentive Plan

2 unchanged sentences

The Company reserved 900,000 shares of common stock for issuance under the 2018 Plan in connection with the exercise of awards.

As of December 31, 2023, 730,671 restricted stock units have been granted under the 2018 Plan of which 331,913 restricted stock units are unvested.

As of December 31, 2024, 814,182 restricted stock units have been granted under the 2018 Plan, of which 270,679 were unvested.

T able of C onten ts

2023 Omnibus Incentive Plan

2 unchanged sentences

The Company reserved 625,000 shares of common stock for issuance under the 2023 Plan in connection with the exercise of awards.

As of December 31, 2023, no shares had been granted under the 2023 Plan.

The expense associated with all restricted stock and unit grants was $ 9.2 million, $ 8.9 million and $ 9.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2024, 4,927 restricted stock shares and 9,798 restricted stock units have been granted under the 2023 Plan, all of which were

The expense associated with all restricted stock grants (including restricted stock shares and restricted stock units) was $ 10.0 million, $ 9.2 million and $ 8.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Unrecognized compensation expense for these awards as of December 31, 2024 was $ 13.5 million and will be recognized over a weighted average period of 11 months.

18 unchanged sentences

443,882 $ 50.82

T able of C onten ts

REGULATORY CAPITAL REQUIREMENTS

39 unchanged sentences

The CDI assets shown in the table below represent the value ascribed to the long-term deposit relationships acquired in various bank acquisitions.

T able of C onten ts

The following table summarizes the changes in the Company’s goodwill and other intangibles for the years ended December 31, 2024, 2023 and 2022 (in thousands):

2 unchanged sentences

Amortization — ( 5,279 ) ( 5,279 )

Balance, December 31, 2021 373,121 14,855 387,976

Amortization — ( 5,279 ) ( 5,279 )

Other Changes (1)

3 unchanged sentences

Balance, December 31, 2023 373,121 5,684 378,805

Amortization — ( 2,626 ) ( 2,626 )

Balance, December 31, 2024 $ 373,121 $ 3,058 $ 376,179

(1) Acquired CDI was adjusted for the sale of branches in 2022.

1 unchanged sentence

Estimated Amortization

Thereafter 35

Net carrying amount $ 3,058

22 unchanged sentences

(1) Amortization of mortgage servicing rights is recorded as a reduction of loan servicing income within mortgage banking operations and any unamortized balance is fully amortized if the loan repays in full.

(2) There was no valuation allowance on mortgage servicing rights as of both December 31, 2023 and 2022.

(2) Fair value adjustments relate to SBA servicing rights.

These adjustments are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing SBA loans.

T able of C onten ts

FAIR VALUE OF FINANCIAL INSTRUMENTS

3 unchanged sentences

Cash and cash equivalents 1 $ 501,858 $ 501,858 $ 254,464 $ 254,464

Securities—trading 3 — — 28,694 28,694

Securities—available-for-sale 2 2,078,826 2,078,826 2,348,479 2,348,479

2 unchanged sentences

Securities—held-to-maturity 3 6,327 6,298 7,027 6,992

Securities purchased under agreements to resell 2 — — 300,000 300,000

Loans held for sale 2 32,021 32,215 11,170 11,219

28 unchanged sentences

This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.

T able of C onten ts

Items Measured at Fair Value on a Recurring Basis:

22 unchanged sentences

$ — $ 30,190 $ 67,479 $ 97,669

T able of C onten ts

December 31, 2023

Level 1 Level 2 Level 3 Total

Securities—trading

Corporate bonds (TPS securities) $ — $ — $ 28,694 $ 28,694

Securities—available-for-sale

18 unchanged sentences

$ — $ 30,012 $ 66,437 $ 96,449

(1) The unpaid principal balance of residential mortgage loans held for sale carried at fair value on a recurring basis was $ 8.8 million and $ 2.2 million at December 31, 2023 and 2022, respectively.

(1) The unpaid principal balance of one- to four family residential loans held for sale carried at fair value on a recurring basis was $ 25.7 million and $ 8.8 million at December 31, 2024 and 2023, respectively.

The following methods were used to estimate the fair value of each class of financial instruments above:

2 unchanged sentences

These measurements are considered Level 2.

Due to the continued limited activity in the trust preferred markets that have limited the observability of market spreads for some of the Company’s TPS securities, Management has classified these securities as a Level 3 fair value measure.

Management periodically reviews the pricing information received from third-party pricing services and tests those prices against other sources to validate the reported fair values.

8 unchanged sentences

The SBA servicing portfolio is stratified by loan type and fair value estimates are adjusted up or down based on the serviced loan interest rates versus current rates on new loan originations since the most recent independent analysis.

T able of C onten ts

Junior Subordinated Debentures:

16 unchanged sentences

The following table provides a description of the valuation technique, unobservable inputs and quantitative and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and non-recurring basis at December 31, 2024 and 2023:

Financial Instruments Valuation Technique Unobservable Inputs Weighted Average Rate Weighted Average Rate

Weighted Average Rate or Range

Financial Instruments Valuation Technique Unobservable Inputs 2024 2023

Corporate bonds (TPS) Discounted cash flows Discount rate 9.57 % 10.84 %

Junior subordinated debentures Discounted cash flows Discount rate 9.57 % 10.84 %

Loans individually evaluated Collateral valuations Discount to appraised value 8.75% to 25% n/a

REO Appraisals Discount to appraised value 59.71 % 68.35 %

Loans individually evaluated Collateral valuations Discount to appraised value 0% to 75% 8.75% to 25%

Interest rate lock commitments Pricing model Pull-through rate 92.34 % 88.24 %

14 unchanged sentences

An increase in the CPR would result in a negative fair value adjustment, where a decrease in CPR would result in a positive fair value adjustment.

T able of C onten ts

The following table provides a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the years ended December 31, 2024 and 2023 (in thousands):

5 unchanged sentences

Purchases, issuances and settlements — — — 1,767 —

Redemptions — ( 50,518 ) — — —

Balance, December 31, 2023 25,304 66,413 251 13,475 740

3 unchanged sentences

Balance, December 31, 2024 $ 25,685 $ 67,477 $ 108 $ 13,955 $ 869

Interest income and dividends from TPS are recorded as a component of interest income.

Interest income, dividends and amortization related to TPS are recorded as a component of interest income.

Interest expense related to the junior subordinated debentures is measured based on contractual interest rates and reported in interest expense.

The change in fair value of the junior subordinated debentures, which represents changes in instrument specific credit risk, is recorded in other comprehensive income.

The change in fair value of the investment in limited partnerships and the SBA servicing asset are recorded as a component of non-interest income.

The change in fair value of the interest rate lock and forward sales commitments are included in mortgage banking operations in non-interest income.

The change in fair value of the junior subordinated debentures, which represents changes in instrument specific credit risk.

The change in fair value of the TPS was recorded as a component of non-interest income when it was held for trading.

After the transfer of the TPS to available-for-sale in late 2023, the change in fair value is recorded in other comprehensive income.

The change in fair value of the investment in limited partnerships and the SBA servicing asset are recorded as a component of non-interest income.

The change in fair value of the interest rate lock and forward sales commitments are included in mortgage banking operations in non-interest income.

Items Measured at Fair Value on a Non-recurring Basis

8 unchanged sentences

REO — — 526 526

Loans held for sale — 49,474 — 49,474

The following table presents the gains and losses resulting from non-recurring fair value adjustments for the years ended December 31, 2024, 2023 and 2022 (in thousands):

3 unchanged sentences

Loans held for sale (1)

— 2,538 ( 2,538 )

Total loss from non-recurring measurements $ (1,483) $ 1,605 $ (3,164)

(1) Gains and losses related to loans held for sale were due to the multifamily real estate loans held for sale until the loans were transferred to loans held in portfolio in the fourth quarter of 2023.

T able of C onten ts

Loans individually evaluated :

10 unchanged sentences

The individual carrying values of these assets are reviewed for impairment at least annually and any additional impairment charges are expensed.

Loans held for sale :

Multifamily loans held for sale were carried at the lower of cost or market value prior to their transfer to loans held in portfolio in the fourth quarter of 2023.

Lower of cost or market adjustments for multifamily loans held for sale were calculated based on discounted cash flows using a discount rate that was a combination of market spreads for similar loan types added to selected index rates.

If the fair value of the multifamily loans held for sale was lower than the amortized cost basis of the loans, a net unrealized loss was recognized through the valuation allowance as a charge against income.

At December 31, 2023, we had no multifamily loans held for sale.

BANNER CORPORATION (PARENT COMPANY ONLY)

4 unchanged sentences

Investment in subsidiaries 1,813,001 1,709,153

Note receivable from subsidiary 50,000 —

Other assets 11,446 10,467

11 unchanged sentences

Interest-bearing deposits $ 2,919 $ 844 $ 80

Note receivable from subsidiary 1,559 — —

OTHER INCOME (EXPENSE):

2 unchanged sentences

Other income 186 1 96

Interest on other borrowings ( 11,568 ) ( 8,400 ) ( 8,780 )

Interest expense on other borrowings ( 11,764 ) ( 11,568 ) ( 8,400 )

Other expenses ( 5,801 ) ( 5,491 ) ( 6,092 )

2 unchanged sentences

NET INCOME $ 168,898 $ 183,624 $ 195,378

T able of C onten ts

Statements of Cash Flows Years Ended December 31

15 unchanged sentences

Reduction in investment in subsidiaries — — ( 3,072 )

Net cash provided (used) by investing activities 488 ( 4,621 ) ( 228 )

Increase in note receivables from subsidiaries ( 50,000 ) — —

Net cash (used by) provided investing activities ( 51,155 ) 488 ( 4,621 )

FINANCING ACTIVITIES:

19 unchanged sentences

Diluted $ 4.88 $ 5.33 $ 5.67

There were 21,865 anti-dilutive weighted shares outstanding as of December 31, 2023 and none as of December 31, 2022.

Anti-dilutive restricted stock excluded from the diluted average outstanding share calculation (1)

1,929 21,865 —

(1) Anti-dilution occurs when the unrecognized compensation cost per share of restricted stock exceeds the current market price of the Company’s stock.

T able of C onten ts

COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

These financial instruments include commitments to extend credit, commitments related to standby letters of credit, commitments to originate loans, commitments to sell loans, and commitments to buy or sell securities.

These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved in on-balance sheet items recognized in our Consolidated Statements of Financial Condition.

These instruments involve, to varying degrees, elements of credit and interest rate risk similar to the risk involved in on-balance sheet items.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument from commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments.

We use the same credit policies in making commitments and conditional obligations as on-balance sheet instruments.

Outstanding commitments for which no asset or liability for the notional amount has been recorded consisted of the following at the dates indicated (in thousands):

Outstanding commitments consisted of the following at the dates indicated (in thousands):

Contract or Notional Amount

8 unchanged sentences

Commitments to sell securities related to mortgage banking activities 37,500 17,000

In addition to the commitments disclosed in the table above, the Company is committed to funding its unfunded tax credit investments, as discussed previously in Note 10, Income Taxes.

The Company has also entered into agreements to invest in several limited partnerships.

As of December 31, 2023 and December 31, 2022, the funded balances and remaining outstanding commitments of these limited partnership investments were as follows (in thousands):

In addition to the commitments disclosed in the table above, the Company is also committed to funding the unfunded portion of its tax credit investments, as discussed previously in Note 10, Income Taxes, as well as the remaining unfunded portion of its investments in limited partnerships.

As of December 31, 2024 and 2023, the remaining outstanding commitments related to the unfunded tax credit investments and limited partnership investments were as follows (in thousands):

Unfunded commitment balance for:

December 31, 2024 December 31, 2023

Funded Balance Unfunded Balance Funded Balance Unfunded Balance

Tax credit investments $ 94,416 $ 62,594

Limited partnerships investments $ 14,706 $ 10,462

10 unchanged sentences

Under a risk participation agreement, the Bank guarantees the financial performance of a borrower on the participated portion of an interest rate swap on a loan.

Interest rates on residential one- to four-family mortgage loan applications are typically rate locked (committed) to clients during the application stage for periods ranging from 30 to 60 days, the most typical period being 45 days.

Traditionally, these loan applications with rate lock commitments had the pricing for the sale of these loans locked with various qualified investors under a best-efforts delivery program at or near the time the interest rate is locked with the client.

Interest rates on one- to four-family residential loan applications are typically rate locked (committed) to clients during the application stage for periods ranging from 30 to 60 days, the most typical period being 45 days.

Traditionally, these loan applications with rate lock commitments have the pricing for the sale of these loans locked with various qualified investors under a best-efforts delivery program at or near the time the interest rate is locked with the client.

The Bank then attempts to deliver these loans before their rate locks expire.

This arrangement generally required delivery of the loans prior to the expiration of the rate lock.

Delays in funding the loans would require a lock extension.

The cost of a lock extension at times was borne by the client and at times by the Bank.

This arrangement generally requires delivery of the loans prior to the expiration of the rate lock.

Delays in funding the loans may require a lock extension.

The cost of a lock extension is sometimes covered by the client and other times by the Bank.

These lock extension costs have not had a material impact to the Company’s operations.

2 unchanged sentences

The purpose of these forward commitments is to offset the movement in interest rates between the execution of its residential mortgage rate lock commitments with borrowers and the sale of those loans to the secondary market investor.

There were no counterparty default losses on forward contracts during 2023 or 2022.

There were no counterparty default losses on forward contracts during 2024 and 2023.

Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates.

2 unchanged sentences

Changes in the value of rate lock commitments are recorded as assets and liabilities.

T able of C onten ts

In the normal course of business, the Company and/or its subsidiaries have various legal proceedings and other contingent matters outstanding.

1 unchanged sentence

These claims and counterclaims typically arise during the course of collection efforts on problem loans or with respect to action to enforce liens on properties in which the Bank holds a security interest.

Based upon the information known to Management at this time, the Company has accrued $ 14.8 million related to outstanding legal proceedings.

There are no other legal proceedings that Management believes would have a material adverse effect on the results of operations or consolidated financial position at December 31, 2023.

Based upon the information known to Management, there were no legal proceedings, pending or threatened, that Management believes would have a material adverse effect on the results of operations or consolidated financial position at December 31, 2024.

In connection with certain asset sales, the Bank typically makes representations and warranties about the underlying assets conforming to specified guidelines.

3 unchanged sentences

DERIVATIVES AND HEDGING

Banner is party to various derivative instruments that are used for asset and liability management and client financing needs.

The Company is party to various derivative instruments that are used for asset and liability management and client financing needs.

Derivative instruments are contracts between two or more parties that have a notional amount and an underlying variable, require no net investment and allow for the net settlement of positions.

5 unchanged sentences

Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors.

As of December 31, 2023 and December 31, 2022, the notional values or contractual amounts and fair values of the Company’s derivatives were as follows (in thousands):

As of December 31, 2024 and 2023, the notional values or contractual amounts and fair values of the Company’s derivatives were as follows (in thousands):

Asset Derivatives Liability Derivatives

12 unchanged sentences

Interest Rate Swaps used in Cash Flow Hedges:

The Company’s floating rate loans result in exposure to losses in value or net interest income as interest rates change.

The risk management objectives in using interest rate derivatives are to reduce volatility in net interest income and to manage its exposure to interest rate movements.

To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.

During the fourth quarter of 2021, the Company entered into interest rate swaps designated as cash flow hedges to hedge the variable cash flows associated with existing floating rate loans.

These hedge contracts involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making floating-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period during which the hedged transaction affects earnings.

Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are made on the Company’s variable-rate assets.

During the next 12 months, the Company estimates that an additional $ 13.9 million will be reclassified as a decrease to interest income.

These hedge contracts involved the receipt of fixed-rate payments from a counterparty in exchange for the Company making floating-rate payments over the life of the agreements without the exchange of the underlying notional amount.

In late 2024, these interest rate swap derivatives matured.

Since the derivatives were designated and qualified as cash flow hedges, the unrealized gains and losses on these derivatives were recorded in AOCI and subsequently reclassified into interest income in the same period that the hedged transaction affected earnings.

Amounts reported in AOCI related to the derivatives were reclassified to interest income as interest payments were made on the Company’s variable-rate assets.

As these derivatives have matured, no additional amounts will be reclassified as a decrease to interest income.

T able of C onten ts

The following table presents the effect of cash flow hedge accounting on AOCI for the years ended December 31, 2024 and 2023 (in thousands):

5 unchanged sentences

Interest rate swaps $ ( 4,398 ) $ ( 4,398 ) $ — Interest Income $ ( 16,955 ) $ ( 16,955 ) $ —

At December 31, 2023 and December 31, 2022, we recorded total net unrealized losses on cash flow hedges in AOCI of $ 10.6 million and $ 20.1 million, respectively.

At December 31, 2024, no net unrealized gains or losses on cash flow hedges remain in AOCI, compared to a loss of $ 10.6 million at December 31, 2023.

Interest Rate Swaps:

The Bank uses an interest rate swap program for commercial loan clients that provides the client with a variable-rate loan and enters into an interest rate swap in which the client receives a variable-rate payment in exchange for a fixed-rate payment.

The Bank offers an interest rate swap program for commercial loan clients that provides the client with a variable-rate loan and enters into an interest rate swap in which the client receives a variable-rate payment in exchange for a fixed-rate payment.

The Bank offsets its risk exposure by entering into an offsetting interest rate swap with a dealer counterparty for the same notional amount and length of term as the client interest rate swap providing the dealer counterparty with a fixed-rate payment in exchange for a variable-rate payment.

5 unchanged sentences

Mortgage Loan Commitments:

The Company sells originated one- to four-family mortgage loans into the secondary mortgage loan markets.

During the period of loan origination and prior to the sale of the loans in the secondary market, the Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one- to four-family loans that are intended to be sold and for closed one- to four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market.

The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one- to four-family mortgage loans or mortgage-backed securities to broker/dealers at specific prices and dates.

The Company sells originated one- to four-family residential loans into the secondary mortgage loan markets.

During the period of loan origination and prior to the sale of the loans in the secondary market, the Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one- to four-family residential loans that are intended to be sold and for closed one- to four-family residential loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market.

The Company economically hedges the risk of changing interest rates associated with these one- to four-family residential loan commitments by entering into forward sales contracts to sell these loans or mortgage-backed securities to broker/dealers at specific prices and dates.

Gains (losses) recognized in income within mortgage banking operations on non-designated hedging instruments for the years ended December 31, 2024, 2023 and 2022, were as follows (in thousands):

6 unchanged sentences

Credit risk of the financial contract is controlled through the credit approval, limits, and monitoring procedures and Management does not expect the counterparties to fail their obligations.

T able of C onten ts

In connection with the interest rate swaps between the Bank and the dealer counterparties, the agreements contain a provision where if the Bank fails to maintain its status as a well or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Bank would be required to settle its obligations.

Similarly, the Bank could be required to settle its obligations under certain of its agreements if specific regulatory events occur, such as a publicly issued prompt corrective action directive, cease and desist order, or a capital maintenance agreement that required the Bank to maintain a specific capital level.

If the Bank had breached any of these provisions at December 31, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value.

As of December 31, 2023 and December 31, 2022, the Company had no obligations to dealer counterparties related to these agreements.

If the Bank had breached any of these provisions, it could have been required to settle its obligations under the agreements at the termination value.

As of December 31, 2024 and 2023, the Company had no obligations to dealer counterparties related to these agreements.

The Company generally posts collateral against derivative liabilities in the form of cash, government agency-issued bonds, mortgage-backed securities, or commercial mortgage-backed securities.

5 unchanged sentences

These clearing houses characterize the variation margin payments as settlements of the derivative’s market exposure and not as collateral.

The variation margin is treated as an adjustment to our cash collateral, as well as a corresponding adjustment to our derivative liability.

As of December 31, 2023 and December 31, 2022, the variation margin adjustment was a negative adjustment of $ 529,000 and $ 8.7 million, respectively.

The following presents additional information related to the Company’s interest rate swaps, both designated and non-designated as hedged, as of December 31, 2023 and December 31, 2022 (in thousands):

The variation margin is treated as an adjustment to our cash collateral, as well as a corresponding adjustment to our derivative asset or liability.

As of December 31, 2024 and 2023, the variation margin adjustment was a positive adjustment of $ 15.6 million and negative adjustment of $ 529,000 , respectively.

The following presents additional information related to the Company’s interest rate swaps, both designated and non-designated as hedged, as of December 31, 2024 and 2023 (in thousands):

December 31, 2024

16 unchanged sentences

$ 44,267 $ ( 14,458 ) $ 29,809 $ — $ ( 13,124 ) $ 16,685

T able of C onten ts

REVENUE FROM CONTRACTS WITH CLIENTS

12 unchanged sentences

Deposit fees and other service charges include transaction and non-transaction based deposit fees.

Transaction based fees on deposit accounts are charged to deposit clients for specific services provided to the client.

Transaction based fees on deposit accounts are charged to deposit clients for specific services provided to them.

These fees include such items as wire fees, official check fees, and overdraft fees.

25 unchanged sentences

Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term.

The table below presents the lease ROU assets and lease liabilities recorded on the balance sheet at December 31, 2023 and December 31, 2022 (dollars in thousands):

The table below presents the lease ROU assets and lease liabilities recorded on the balance sheet at December 31, 2024 and 2023 (dollars in thousands):

December 31, 2024 December 31, 2023

1 unchanged sentence

Operating lease liabilities $ 43,472 $ 48,659

Weighted average remaining lease term

Operating leases 4.5 years 5.1 years

Weighted average discount rate

Operating leases 3.3 % 3.0 %

Weighted average remaining lease term - operating leases 4.4 years 4.5 years

Weighted average discount rate - operating leases 4.0 % 3.3 %

T able of C onten ts

The table below presents certain information related to the lease costs for operating leases for the years ended December 31, 2024, 2023 and 2022 (in thousands):

18 unchanged sentences

As of December 31, 2024 and 2023, the Company had no undiscounted lease payments under an operating lease that had not yet commenced.

BANNER CORPORATION

Exhibit Index of Exhibits

3{a} Restated Articles of Incorporation of Banner Corporation [incorporated by reference to Exhibit 3.1 (b) to the Registrant’s Current Report on Form 8-K filed on May 24, 2022 (File No.

3{b} Amended and Restated Bylaws of Banner Corporation [incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 24, 2022 (File No.

4.2 Description of Capital Stock .

4.3 Issuance of base indenture, first supplemental indenture and subordinated note [incorporated by reference to the exhibits filed with Form 8-K on June 30, 2020 (File No.

000-26584)] .

10{a}* Amended and Restated Employment Agreement, with Mark J.

Grescovich [incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 4, 2013 (File No.

10{b}* Form of Supplemental Executive Retirement Program Agreement with Gary Sirmon, Michael K.

Larsen, Lloyd W.

Baker, Cynthia D.

Purcell and Richard B.

Barton [incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2001 and the exhibits filed with the Form 8-K on May 6, 2008 (File No.

10{c}* Form of Employment Contract entered into with Peter J.

Conner, Cynthia D.

Purcell and Judith A.

Steiner [incorporated by reference to exhibits filed with the Form 8-K on June 25, 2014 (File No.

10{e}* Entry into an Indemnification Agreement with each of the Registrant’s Directors [incorporated by reference to exhibits filed with the Form 8-K on January 29, 2010 (File No.

10{f}* 2014 Omnibus Incentive Plan [incorporated by reference as Appendix C to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on March 24, 2014 (File No.

000-26584)] and amendments [incorporated by reference to the Form 8-K filed on March 25, 2015 (File No.

10{g}* Forms of Equity-Based Award Agreements:

333-195835)].

10{h}* 2018 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.1 included in the Registration Statement on Form S-8 dated May 4, 2018 (File No.

333-224693)].

10{j}* 2023 Omnibus Incentive Plan [incorporated by reference to Exhibit 10.1 included in the Registration Statement on Form S-8 dated August 30, 2023 (File No.

T able of C onten ts

SEGMENT DISCLOSURES

The Company is managed by legal entity, rather than by lines of business, and its activities are considered a single operating segment for financial reporting purposes.

The Bank is engaged in the single line of business of community banking, which involves gathering deposits and originating loans in its primary market areas.

The Bank manages its operations, allocates resources, and monitors and reports its financials as a single operating segment.

Banner’s Chief Executive Officer is considered the Chief Operating Decision Maker (CODM).

The CODM assesses performance based on net income that is reported on our Consolidated Statements of Operations.

The CODM uses consolidated net income as the primary measure to evaluate resource allocations.

In addition to our consolidated financial statements, specifically the statement of operations and the statement of cash flows, the operating and financial condition data below is used to monitor budget versus actual results and assess performance:

OPERATING DATA:

For the Year Ended December 31

(In thousands) 2024 2023 2022

Interest income $ 766,103 $ 701,572 $ 572,569

Interest expense 224,387 125,567 19,390

Net interest income 541,716 576,005 553,179

Provision for credit losses 7,581 10,789 10,364

Non-interest income 66,888 44,409 75,255

Non-interest expense 391,538 382,538 377,295

Net income $ 168,898 $ 183,624 $ 195,378

FINANCIAL CONDITION DATA:

(In thousands) 2024 2023 2022

Cash and securities (1)

$ 3,607,933 $ 3,687,302 $ 4,178,375

Loans receivable, net 11,199,135 10,660,812 10,005,259

Total assets 16,200,037 15,670,391 15,833,431

Core deposits 12,014,726 11,552,030 12,896,529

Total deposits 13,514,398 13,029,497 13,620,059

KEY FINANCIAL RATIOS:

For the Years Ended December 31

2024 2023 2022

Performance Ratios:

Return on average assets (2)

1.07 % 1.18 % 1.18 %

Net interest margin (tax equivalent) (3)

3.75 4.01 3.68

Non-interest expense to average assets 2.48 2.46 2.29

Efficiency ratio (4)

64.33 61.66 60.04

10{o}* 2020 Banner Corporation Amended and Restated Deferred Compensation Plan .

14 Code of Ethics [Registrant elects to satisfy Regulation S-K §229.406(c) by posting its Code of Ethics on its website at https://investor.bannerbank.com/ in the section titled Corporate Overview:

Governance Documents].

21 Subsidiaries of the Registrant.

23.1 Consent of Registered Independent Public Accounting Firm – Moss Adams LLP.

31.1 Certification of Chief Executive Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to the Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certificate of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97 Policy Relating to Recovery of Erroneously Awarded Compensation.

101.INS Inline XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document.

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (included in Exhibit 101).

* Compensatory plan or arrangement.

(1) Includes available-for-sale and held-to-maturity securities.

(2) Net income divided by average assets.

(3) Net interest income as a percent of average interest-earning assets on a tax equivalent basis.

(4) Non-interest expenses divided by the total of net interest income and non-interest income.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures