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Banner is a bank holding company incorporated in the State of Washington which wholly owns one subsidiary bank, Banner Bank.
−Removed: The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington and, as of December 31, 2024, it had 135 branch offices and 13 loan production offices located in Washington, Oregon, California, Idaho and Utah.
+Added: The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington and, as of December 31, 2025, it had 135 branch offices and 15 loan production offices located in Washington, Oregon, California, Idaho, Utah and Nevada.
Banner is subject to regulation by the Federal Reserve.
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The Bank is a regional bank that offers a wide variety of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas.
−Removed: The Bank’s primary business is that of traditional banking institutions, accepting deposits and originating loans in locations surrounding our offices in Washington, Oregon, California, Idaho and Utah.
+Added: The Bank’s primary business is that of traditional banking institutions — accepting deposits and originating loans in locations surrounding our offices in Washington, Oregon, California, Idaho, Utah and Nevada.
The Bank is also an active participant in secondary loan markets, engaging in mortgage banking operations through the origination and sale of one- to four-family residential loans.
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Banner anticipates this shift in client service delivery channel preference will continue and we strive to provide digital tools that support our client’s banking needs.
−Removed: We also focus on expanding our product offerings and investing heavily in marketing campaigns designed to significantly increase the brand awareness for the Bank.
+Added: We also focus on expanding our product offerings and investing in marketing campaigns designed to significantly increase brand awareness for the Bank.
These marketing investments are a significant element in our strategy to grow client relationships and increase our market presence, while allowing us to better serve existing and future clients.
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In addition, our strategic initiatives relate to efficiency, talent retention and technology improvements.
−Removed: Our operating results depend primarily on our net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of loans and investment securities, and interest expense on interest-bearing liabilities, composed primarily of client deposits, Federal Home Loan Bank of Des Moines (FHLB) advances, other borrowings, subordinated notes, and junior subordinated debentures.
+Added: Our operating results depend primarily on our net interest income, which is the difference between interest income on interest-earning assets, consisting primarily of loans and investment securities — and interest expense on interest-bearing liabilities — composed primarily of client deposits and supplemented by Federal Home Loan Bank of Des Moines (FHLB) advances, other borrowings, and junior subordinated debentures.
Net interest income is a function of our interest rate spread, which is the difference between the yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, as well as a function of the average balances of interest-earning assets, interest-bearing liabilities and non-interest-bearing funding sources including non-interest-bearing deposits.
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The relative amount of fixed-rate loans and adjustable-rate loans that can be originated at any time is largely determined by the demand for each in a competitive environment.
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Our lending activities are primarily directed toward the origination of commercial real estate and business loans.
Commercial real estate loans include owner-occupied, investment properties and multifamily real estate.
−Removed: We also originate one- to four-family residential and construction, and land and land development loans, of which a significant component are one- to four-family residential construction loans.
+Added: We also originate one- to four-family residential and construction, land and land development loans, of which a significant component are one- to four-family residential construction loans.
Throughout 2025, sales of completed homes continued to outpace new originations due to constrained housing inventories.
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To a lesser extent, our commercial business lending has also included participation in certain national syndicated loans.
−Removed: Typically, most of the one- to four-family residential loans that we originate are sold in the secondary markets with net gains on sales and loan servicing fees reflected in our revenues from mortgage banking.
−Removed: However, demand for these loans slowed in 2023 and 2024 due to high interest rates, which reduced refinance activity.
−Removed: Additionally, the higher rate environment has impacted the refinancing of custom construction loans into the secondary market upon project completion, leading to a significant increase in the retention of one- to four-family residential loan production held in the portfolio.
−Removed: Our consumer lending is primarily directed at meeting demand from our existing deposit clients.
+Added: We typically sell most of the one- to four-family residential loans we originate into the secondary market, with net gains on sales and loan servicing fees recognized as mortgage banking revenue.
+Added: However, demand for these loans slowed in 2024 and 2025 due to elevated interest rates, which reduced refinance activity and overall origination volumes.
At December 31, 2025, our net loan portfolio totaled $11.72 billion compared to $11.35 billion at December 31, 2024.
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Government insured loans are underwritten and documented in accordance with the guidelines established by the Department of Housing and Urban Development and the Department of Veterans Affairs.
−Removed: In the loan approval process, we assess the borrower’s ability to repay the loan, the adequacy of the proposed security, the employment stability of the borrower and the creditworthiness of the borrower.
+Added: In the loan approval process, we assess the borrower’s ability to repay the loan, the adequacy of the proposed security and the employment stability and creditworthiness of the borrower.
For ARM loans, our standard practice provides for underwriting based upon fully indexed interest rates and payments.
Generally, we will lend up to 95% of the lesser of the appraised value or purchase price of the property on conventional loans, although higher loan-to-value ratios are available on secondary market programs.
−Removed: We require private mortgage insurance on conventional residential loans with a loan-to-value ratio at origination exceeding 80%.
+Added: We require private mortgage insurance on conventional residential loans with a loan-to-value ratio exceeding 80% at origination.
Construction, Land and Land Development Lending:
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We regularly monitor our construction and land loan portfolios and the economic conditions and housing inventory in each of our markets and increase or decrease this type of lending as we observe market conditions change.
−Removed: Our residential construction and land and land development lending has been increasing recently in select markets and has made a meaningful contribution to our net interest income and profitability.
+Added: Our residential construction, land and land development lending has been increasing recently in select markets and has made a meaningful contribution to our net interest income and profitability.
We also originate construction loans for commercial and multifamily real estate.
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Construction and land lending, however, involves a higher degree of risk than other lending opportunities.
−Removed: We attempt to address these risks by adhering to strict underwriting policies, disbursement procedures and monitoring practices, and the portfolio remains well diversified with respect to sub-markets, price ranges and borrowers.
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+Added: We attempt to address these risks by adhering to strict underwriting policies, disbursement procedures and monitoring practices, and by maintaining portfolio diversification with respect to sub-markets, price ranges and borrowers.
Commercial and Multifamily Real Estate Lending:
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In the approval process, we assess the borrower’s willingness and ability to manage the property and repay the loan and the adequacy of the collateral in relation to the loan amount.
−Removed: Our multifamily real estate portfolio, totaling $894.4 million as of December 31, 2024, is well diversified and consists mostly of affordable housing projects.
−Removed: Our commercial real estate portfolio, totaling $3.86 billion as of December 31, 2024, is granular in nature and geographically diversified.
+Added: Our multifamily real estate portfolio, totaling $850.8 million as of December 31, 2025, is diversified and consists mostly of affordable housing projects.
+Added: Our commercial real estate portfolio, totaling $4.05 billion as of December 31, 2025, is diversified, with exposure spread across numerous loans and multiple geographic markets.
Multifamily and commercial real estate loans originated by us are both fixed- and adjustable-rate loans with intermediate terms of generally five to 10 years.
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We also originate smaller balance business loans, principally through our retail branch network, using our QuickStep business loan program, which is closely aligned with our consumer lending operations and relies on centralized underwriting procedures.
−Removed: QuickStep business loans are available up to $1.0 million, business lines of credit are available up to $500,000 and owner-occupied real estate loans are available up to $2.0 million.
+Added: QuickStep business loans are available up to $1.0 million.
+Added: Business lines of credit are available up to $500,000 and owner-occupied real estate loans are available up to $2.0 million.
Commercial business loans may entail greater risk than other types of loans.
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Payments on agricultural loans depend, to a large degree, on the results of operations of the related farm entity.
−Removed: The repayment is also subject to other economic and weather conditions and market prices for agricultural products, which can be highly volatile.
+Added: Repayment is also subject to other economic and weather conditions and market prices for agricultural products, which can be highly volatile.
Agricultural operating loans generally are made as a percentage of the borrower’s anticipated income to support budgeted operating expenses.
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Because these loans are made to finance a farm’s or ranch’s annual operations, they are usually written on a one-year review and renewable basis.
−Removed: The renewal is dependent upon the prior year’s performance and the forthcoming year’s projections as well as the overall financial strength of the borrower.
+Added: Renewal is dependent upon the prior year’s performance, the forthcoming year’s projections and the overall financial strength of the borrower.
We carefully monitor these loans and related variance reports on income and expenses compared to budget estimates.
To meet the seasonal operating needs of a farm, borrowers may qualify for single payment notes, revolving lines of credit and/or non-revolving lines of credit.
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In underwriting agricultural operating loans, we consider the cash flow of the borrower based upon the expected operating results and the value of collateral used to secure the loans.
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In addition to considering cash flow and obtaining a blanket security interest in the farm’s cash crop, we may also collateralize an operating loan with the farm’s operating equipment, breeding stock, real estate and federal agricultural program payments to the borrower.
−Removed: We also originate loans to finance the purchase of farm equipment.
−Removed: Loans to purchase farm equipment are made for terms of up to seven years.
+Added: We also originate loans to finance the purchase of farm equipment with terms of up to seven years.
On occasion, we also originate agricultural real estate loans secured primarily by first liens on farmland and improvements thereon located in our market areas, although generally only to service the needs of our existing clients.
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While consumer lending has traditionally been a small part of our business, with loans made primarily to accommodate our existing client base, it has received consistent emphasis in recent years.
−Removed: Part of this emphasis includes a Banner Bank-owned credit card program.
−Removed: Similar to other consumer loan programs, we focus this credit card program on our existing client base to add to the depth of our client relationships.
+Added: Similar to other consumer loan programs, we also offer our credit card program mostly to our existing client base to add to the depth of our client relationships.
In addition to earning balances, credit card accounts produce non-interest revenues through interchange fees and other activity-based revenues.
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In addition to commercial real estate loans, our commercial bankers solicit commercial and agricultural business loans through call programs focused on local businesses and farmers.
−Removed: While commercial bankers are delegated reasonable lending authority based upon their qualifications, credit decisions on significant commercial and agricultural loans are made by senior credit officers based on their lending authority or, if required, by the Credit Risk Committee of the Board of Directors of the Bank.
+Added: While commercial bankers are delegated reasonable lending authority based upon their qualifications, credit decisions on significant commercial and agricultural loans are made by senior credit officers based on their lending authority or, if required, escalated for further approval, including by Management’s Senior Loan Committee.
We originate consumer loans and small business (including QuickStep) commercial business loans through various marketing efforts directed primarily toward our existing deposit and loan clients.
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We sell many of our newly originated one- to four-family residential loans to secondary market purchasers as part of our interest rate risk management strategy.
−Removed: We previously originated multifamily real estate loans for sale in the secondary market, but discontinued this line of business during the fourth quarter of 2023.
Sales of loans generally are beneficial to us because these sales may generate income at the time of sale, provide funds for additional lending and other investments, increase liquidity or reduce interest rate risk.
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however, the loans may be located outside of our normal lending area.
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Loan Servicing
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The Bank’s Credit Policy Division reviews detailed information with respect to the composition and performance of the loan portfolios, including information on risk concentrations, delinquencies and classified assets for the Bank.
−Removed: The Credit Policy Division approves all recommendations for new classified loans or, in the case of smaller-balance homogeneous loans including residential real estate and consumer loans, it has approved policies governing such classifications, or changes in classifications, and develops and monitors action plans to resolve the problems associated with the assets.
+Added: The Credit Policy Division approves all recommendations for new classified loans.
+Added: In the case of smaller-balance homogeneous loans including residential real estate and consumer loans, the Credit Policy Division has approved policies governing classifications, or changes in classifications, and develops and monitors action plans to resolve the problems associated with the assets.
The Credit Policy Division also approves recommendations for establishing the appropriate level of the allowance for credit losses.
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All of our investment securities, including those with a credit rating, are subject to market risk in so far as a change in market rates of interest or other conditions may cause a change in an investment’s earnings performance and/or market value.
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We are party to various derivative instruments that are used for asset and liability management and client financing needs.
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Borrowings may also be used on a longer-term basis to fund loans and investments, and to manage interest rate risk.
−Removed: We face competition from various financial institutions and intermediaries for deposits.
−Removed: Competition is particularly intense for transaction balances and savings deposits, with commercial banks, credit unions, and non-bank entities such as securities brokerage firms, mutual funds, and large corporations with nationwide office networks, actively competing for market share.
−Removed: Our efforts, including acquisitions, branch relocations, renovations, and marketing campaigns, are primarily focused on expanding deposit client relationships and balances.
−Removed: Additionally, our electronic and digital banking services, such as debit card and ATM programs, internet banking, remote deposit, and mobile banking, are designed to enhance client engagement, drive deposit growth, and generate fee income.
−Removed: Core deposits, consisting of non-interest-bearing checking accounts and interest-bearing transaction and savings accounts, constitute a fundamental element of our business strategy.
−Removed: As of December 31, 2024 and 2023, core deposits represented 89% of total deposits.
+Added: We compete for deposits with a wide range of financial institutions and other intermediaries.
+Added: Competition is particularly strong for transaction and savings deposits, with commercial banks, credit unions, and nonbank providers, such as securities brokerage firms, mutual funds, and large corporations with nationwide office networks, actively competing for market share.
+Added: Our efforts, including acquisitions, branch relocations and renovations, and targeted marketing campaigns, are primarily aimed at expanding deposit client relationships and balances.
+Added: In addition, our electronic and digital banking services, such as debit card and ATM programs, online banking, remote deposit capture, and mobile banking, are designed to enhance client engagement, support deposit growth, and generate fee income.
+Added: Core deposits, which consist of non-interest-bearing checking accounts and interest-bearing transaction and savings accounts, are a fundamental component of our business strategy.
+Added: At December 31, 2025 and 2024, core deposits represented 89% of total deposits.
Deposit Accounts:
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Between 2002 and 2007, we issued junior subordinated debentures in conjunction with the sale of trust preferred securities (TPS).
−Removed: These securities were sold through special purpose business trusts established by Banner and were privately offered to pooled investment vehicles.
−Removed: The proceeds from the junior subordinated debentures issuances were predominantly invested as additional paid-in capital at the Bank.
−Removed: In addition, through acquisitions, Banner acquired additional junior subordinated debentures.
−Removed: During 2020, we issued and sold 5.0% fixed-to-floating subordinated notes, which are callable in 2025 and mature in 2030.
−Removed: The subordinated notes become floating-rate notes based on SOFR in June 2025.
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+Added: These securities were issued through special purpose business trusts established by Banner and were privately offered to pooled investment vehicles.
+Added: The proceeds from the junior subordinated debentures issuances were primarily contributed to the Bank as additional paid-in capital.
+Added: In addition, Banner assumed additional junior subordinated debentures through acquisitions.
+Added: In 2020, we issued 5.0% fixed-to-floating rate subordinated notes, which became callable in 2025 and had a stated maturity date in 2030.
+Added: The balance of our outstanding subordinated notes was repaid during the second quarter of 2025.
Human Capital
At Banner, our employees are a critical component of our success.
−Removed: Because our business success depends on our ability to retain, develop and attract top talent, we seek to provide a work environment that offers professional development opportunities, career growth, competitive compensation and comprehensive benefits.
−Removed: Employing the best talent we can—including individuals who possess a broad range of experiences, backgrounds and skills—better positions us to anticipate and meet the needs of our business and our clients.
+Added: Because our business depends on our ability to retain, develop and attract top talent, we seek to provide a work environment that offers professional development opportunities, career growth, competitive compensation and comprehensive benefits.
+Added: Employing the best talent we can—including individuals who possess a broad range of professional experiences and skills—better positions us to anticipate and meet the needs of our business and our clients.
As our business grows and evolves, the demand for qualified candidates continues to grow.
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Our Board of Directors, through its Compensation and Human Capital Committee, provides oversight for our human capital strategies and compensation programs.
−Removed: Talent Acquisition and Attrition.
+Added: Talent Acquisition and Workforce Stability.
To cultivate and recruit hard-to-fill positions, we partner closely with several colleges and universities with well-known programs relevant to our business.
In 2025, we continued our Flexible Workplace Program that was formally launched in 2022, which provides hybrid and remote career opportunities.
−Removed: The program aims to support hiring from an expanded group of candidates, improve the work experience for our employees, strengthen our leadership pipeline and promote employee retention.
−Removed: Our voluntary employee turnover rate in 2024 decreased to 13%, compared to 15% in 2023.
+Added: As of December 31, 2025, approximately 39% of our workforce was working hybrid or remote.
+Added: Our willingness to accommodate flexible work arrangements underscores our commitment to supporting employee engagement and retention, and strengthening our leadership pipeline.
+Added: Our voluntary employee turnover rate in 2025 was 14.6%.
Our employment application and hiring processes do not solicit prior compensation information from candidates.
This approach helps ensure our new hire compensation is based on individual qualifications and roles, rather than being influenced by a candidate’s previous compensation history.
−Removed: We also accept relevant experience as an alternative to formal education requirements for many roles, to support expanded candidate pools.
−Removed: In 2023, Banner initiated a partnership with BankWork$, an organization dedicated to assisting young adults from under-resourced communities in building meaningful careers in banking.
−Removed: This partnership continued in 2024 with an expansion of the program to additional geographic areas.
−Removed: This collaboration includes a free, eight-week career training program, placement assistance, and ongoing coaching.
In 2025, we hired 337 new employees into our workforce.
−Removed: As of December 31, 2024, approximately 39% of our workforce was working hybrid or remotely.
−Removed: Our willingness to accommodate flexible work arrangements underscores our commitment to fostering an inclusive workplace.
−Removed: Talent Development.
+Added: We also accept relevant experience as an alternative to formal education requirements for many roles, to support expanded candidate pools.
+Added: Talent Development and Leadership Pipeline.
We invest significant resources developing the talent needed to meet our business goals and to make us an employer of choice.
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To foster a culture of growth and professional development, we launched a new leadership development program in 2024.
−Removed: This comprehensive program represents a significant investment in our leaders and aims to align our leadership skills with the Bank’s strategic goals.
−Removed: It’s also part of our dedication to building a strong talent pipeline that develops talent, drives vision and purpose, cultivates innovation and a strategic mindset, and encourages continuous learning through experimentation.
−Removed: Centered around eight core competencies, the program is designed to equip leaders with the skills needed to navigate the evolving financial landscape and support the Bank’s long-term objectives.
+Added: This comprehensive, 12-month program represents a significant investment in our leaders and is intentionally aligned with the Bank’s strategic goals.
+Added: In 2025, our inaugural class of 93 leaders successfully completed the program, and we welcomed a second class of 72 participants.
+Added: This initiative reflects our commitment to building a robust talent pipeline—one that develops capable leaders, drives vision and purpose, cultivates innovation and strategic thinking, and supports continuous learning through experimentation.
+Added: Grounded in eight core leadership competencies, the program equips leaders with the capabilities needed to navigate an evolving financial landscape and advance the Bank’s long‑term objectives.
To encourage advancement and growth within our organization, we provide information and guides to help individuals design their own career paths.
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These include both job-specific and general courses covering regulatory compliance, cybersecurity, fraud prevention, workplace standards, and ethics.
−Removed: We also encourage employees to enroll in outside education programs to broaden their knowledge and enhance job performance and facilitate career growth by providing tuition assistance to help employees obtain bachelor’s and master’s degrees.
+Added: We also encourage employees to enroll in outside education programs to broaden their knowledge and enhance job performance and we facilitate career growth by providing tuition assistance to help employees obtain bachelor’s and master’s degrees.
This comprehensive approach underscores our dedication to nurturing a skilled and empowered workforce.
−Removed: Succession Planning.
+Added: Succession Planning and Leadership Continuity.
Recognizing the critical significance of succession planning for our CEO and other key executives, our Board of Directors takes an active role in overseeing and monitoring these efforts.
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To facilitate this oversight, the Board’s Compensation and Human Capital Committee provides dedicated governance of talent development and succession planning for senior leadership roles.
−Removed: T able of C onten ts
−Removed: Employee Engagement.
+Added: Employee Engagement and Culture.
+Added: Throughout 2025, we held quarterly virtual meetings with employees to communicate results and progress on strategic initiatives.
We use anonymous employee surveys to gather valuable feedback on key initiatives, leveraging the results to enhance existing programs and develop new ones.
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Additionally, senior leadership analyzes areas of progress or opportunities for improvement, prioritizing responsive actions and activities.
−Removed: In 2024, we conducted a company-wide engagement survey, achieving an overall engagement score of 86%, with 77% of employees participating.
−Removed: The survey results indicated that our employees demonstrate ethical conduct in business dealings, are knowledgeable about our clients’ needs, and understand their own contributions to the Bank’s goals.
−Removed: Beyond a formal engagement survey, we provide regular opportunities for managers and employees to ask questions, raise concerns and provide suggestions for ways to build a better and stronger company.
−Removed: Throughout 2024, this initiative included quarterly virtual meetings with employees to communicate results and progress on strategic initiatives.
−Removed: Additionally, in-person employee townhalls provided opportunities for employees to directly engage with Company leaders.
−Removed: This multifaceted approach supports open communication channels and strengthens our commitment to continuous improvement and employee satisfaction.
+Added: In 2025, we earned Great Place to Work® certification with an overall engagement score of 86%.
+Added: Beyond the formal engagement survey, we provide ongoing opportunities for managers and employees to ask questions, raise concerns and suggest ways to build a better and stronger company.
Total Rewards (Compensation and Benefits).
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This comprehensive benefits package reflects our commitment to the well-being and work-life balance of our valued employees.
−Removed: Pay equity and pay transparency are fundamental to our compensation philosophy and core values.
−Removed: We began conducting thorough pay equity studies in 2017 in collaboration with external experts to methodically assess employee groups in similar roles.
+Added: Pay equity and pay transparency are foundational to our compensation philosophy and core values.
+Added: We began conducting pay equity studies in 2017 in collaboration with external experts to methodically assess employee groups in similar roles.
These studies consider various factors such as job location and experience to promote fair and objective pay comparisons.
−Removed: In 2024, we engaged a global workplace equity organization that provides a technology platform to measure, achieve and sustain pay and workplace equity.
−Removed: This technology enables us to embed workplace equity into our core business by conducting analyses as frequently as our business model and strategic goals necessitate.
−Removed: Through continuous monitoring, we remain committed to identifying and addressing any pay disparities, to support pay equity across our organization.
+Added: In 2025, we began leveraging a technology platform designed to measure, achieve and sustain pay equity.
+Added: This technology enables us to integrate pay equity analyses into our core business processes, allowing us to conduct reviews as frequently as needed to support our strategic goals.
+Added: Through continuous monitoring, we remain committed to identifying and addressing pay disparities, in alignment with our compensation philosophy and applicable laws.
Incentive Compensation Risk Management.
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We develop, execute and govern all incentive compensation plans to discourage imprudent or excessive risk-taking and balance financial reward in a manner that supports our clients, employees and Company.
−Removed: Inclusion, Diversity, Equity, and Advocacy.
−Removed: We seek to hire the best and brightest—including individuals who possess a broad range of experiences, backgrounds and skills.
−Removed: We believe that diverse perspectives and inclusive environments result in better outcomes for all our stakeholders and empower our employees to make more meaningful contributions within our Company and communities.
+Added: Workplace Environment.
+Added: We seek to hire the best and brightest—including individuals who possess a broad range of professional experiences and skills.
+Added: We believe that a workplace that values collaboration, respect and diverse perspectives results in better outcomes for all our stakeholders and empowers our employees to make more meaningful contributions within our Company and communities.
We aim to maintain a work environment where every employee is treated with dignity and respect, is free from discrimination and harassment, and is allowed to devote their full attention and best efforts to performing their job to the best of their ability.
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We have always championed the principles of fairness, respect, and opportunity, ensuring that all employees are recognized and rewarded based on their merit, talent, contributions, and performance.
−Removed: Our cross-functional, employee-led IDEAs Council provides leadership and serves as a catalyst for inclusion initiatives across our organization.
−Removed: The council is intended to help develop effective strategies to attract, develop and retain top talent.
−Removed: T able of C onten ts
−Removed: In 2024, we worked with the Department of Defense as a new employer partner in its Military Spouse Employment Partnership (MSEP).
+Added: We are an employer partner in the Department of Defense’s Military Spouse Employment Partnership (MSEP).
This partnership connects military spouses with employers committed to recruiting, hiring, promoting and retaining military spouses.
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We also committed to tracking and reporting military spouse employment data.
−Removed: As part of a multi-year employee engagement strategy, we launched our LGBTQ+ Employee Resource Group (ERG) to complement our four established groups:
−Removed: Black, Indigenous, People of Color (BIPOC), Veterans, Women in Leadership, and Working Parents and Caregivers.
−Removed: Our ERGs give employees the opportunity to discuss issues important to the group and are designed to support our business goals, while promoting an inclusive and supportive culture.
+Added: In 2025, we continued our employee engagement efforts through five employee-led networking and resource groups.
+Added: Our groups are open to all employees and provide opportunities for connection, discussion and professional growth.
We have a strong team collectively capable of professionally operating the business and fulfilling our vision.
−Removed: The following tables illustrate our workforce composition by level as of December 31, 2024:
+Added: The following tables illustrate our workforce composition by level as of December 31, 2025, presented for transparency regarding our workforce profile:
Workforce Composition:
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We provide employees and their families with access to a variety of programs to support their physical and mental health.
−Removed: We offer a wellness coach benefit (which can also be shared with up to five friends and family) that provides unlimited free one-on-one personal coaching in several different categories such as fitness, nutrition, life coaching, and financial coaching, as well as a range of tools to improve sleep quality.
−Removed: Volunteerism.
+Added: We offer a wellness benefit that provides unlimited free one-on-one personal coaching in several different categories such as fitness, nutrition, life, and finances, as well as a range of tools to improve sleep quality.
+Added: Most wellness benefits can be shared with up to five friends and family.
+Added: Community Engagement.
We strive to be a good corporate citizen by encouraging employees to engage in the communities where they live and work.
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We are proud to support many local community organizations through financial contributions and employee-driven volunteerism, including Junior Achievement, United Way and hundreds of others.
−Removed: Human Capital Metrics.
+Added: Human Capital Metrics and Reporting.
We capture critical metrics regarding human capital management on a quarterly basis and report them to the Compensation and Human Capital Committee of the Board of Directors.
−Removed: The Human Capital Management Dashboard includes a mixture of trending and point-in-time metrics designed to provide information and analysis of workforce demographics;
−Removed: talent acquisition;
−Removed: workforce stability (retention, turnover, etc.);
−Removed: employee engagement;
−Removed: learning and development;
−Removed: and total rewards.
+Added: The Human Capital Management Dashboard includes a mixture of trending and point-in-time metrics designed to provide information and analysis of workforce composition, talent acquisition, workforce stability (retention, turnover, etc.), employee engagement, learning and development, and total rewards.
As of December 31, 2025, we employed 1,930 full- and part-time employees and 4 temporary employees across our four-state footprint.
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We also have employees working in Oregon (20%), California (16%) and other states (8%).
−Removed: As of December 31, 2024, four generations were represented in our workplace with Millennials having the greatest representation (38%), followed by Gen-X (37%), Boomer (14%) and Gen-Z (11%).
−Removed: T able of C onten ts
+Added: As of December 31, 2025, four generations were represented in our workplace with Millennials having the greatest representation (38%), followed by Gen-X (37%), Gen-Z (13%), and Boomers (12%).
Tax-Sharing Agreement
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The payment is made on or about the time the subsidiary would be required to make such tax payments to the United States Treasury or the applicable State or Local Departments of Revenue.
−Removed: In the event the computation of the subsidiary’s federal or state income tax liability, after considering any estimated tax payments made, would result in a refund if the subsidiary were filing income tax returns as a separate entity, then Banner pays to the subsidiary an amount equal to the hypothetical refund.
−Removed: Banner is an agent for each subsidiary with respect to all matters related to the consolidated tax returns and refund claims.
−Removed: If Banner’s consolidated federal or state income tax liability is adjusted for any period, the liability of each party under the tax-sharing agreement is recomputed to give effect to such adjustments, and any additional payments required as a result of the adjustments are made within a reasonable time after the corresponding additional tax payments are made or refunds are received.
+Added: In the event the computation of the subsidiary’s federal or state income tax liability, after considering any estimated tax payments, would result in a refund had the subsidiary filed on a separate-company basis, Banner may either apply the refund amount to the subsidiary’s tax liability for the following year or pay the subsidiary an amount equal to the hypothetical refund.
+Added: Banner acts as agent for each subsidiary with respect to all matters relating to consolidated tax returns and refund claims.
+Added: If Banner’s consolidated federal or state income tax liability is adjusted for any period, the liability of each party under the tax-sharing agreement is recomputed to reflect those adjustments.
+Added: Any additional payments required as a result are made within a reasonable time after the related tax payments are made or refunds are received.
Federal Taxation
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We are subject to a Business and Occupation (B&O) tax which is imposed by the State of Washington on gross receipts.
−Removed: Interest received on loans secured by mortgages or deeds of trust on residential properties, residential mortgage-backed securities, and certain U.S.
+Added: Interest received on loans secured by mortgages or deeds of trust on residential properties, residential mortgage-backed securities meeting certain required criteria, and certain U.S.
Government and agency securities is not subject to this tax.
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We also experience competition from securities firms, insurance companies, money market and mutual funds, and other investment vehicles.
−Removed: We expect continued strong competition from such financial institutions and investment vehicles in the foreseeable future, including competition from online banking competitors and “FinTech” companies that rely on technology to provide financial services.
−Removed: Our ability to attract and retain deposits depends on our ability to provide transaction services and investment opportunities that satisfy the requirements of depositors.
−Removed: We compete for deposits by offering a variety of accounts and financial services, including electronic banking capabilities, with competitive rates and terms, at convenient locations and business hours, and delivered with a high level of personal service and expertise.
+Added: We expect competition from these institutions to remain strong, including from online banks and financial technology (FinTech) companies that leverage technology to deliver financial services.
+Added: In addition, new technological developments, including the development and use of generative and agentic artificial intelligence, are rapidly evolving;
+Added: we expect these technologies will continue to impact the competitive landscape, possibly to an increasing extent.
+Added: Competition for both deposits and loans is influenced by prevailing interest rates and competitors’ pricing strategies.
+Added: Our ability to attract and retain deposits also depends on our ability to provide transaction services and investment options that meet client needs.
+Added: We compete by offering a broad range of deposit products and financial services, including electronic banking capabilities, with competitive rates and terms, convenient locations and hours, and a high level of personal service and expertise.
+Added: We also compete by developing long-term client relationships and delivering a relationship-based banking model tailored to local markets.
+Added: We continue to invest in technology and digital delivery channels to enhance client experience and remain competitive.
+Added: Certain nonbank competitors are not subject to the same regulatory framework as banks, which may provide them with greater operational flexibility.
Competition for loans comes principally from other commercial banks, loan brokers, mortgage banking companies, savings banks and credit unions and for agricultural loans from the Farm Credit Administration.
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The Bank’s relationship with depositors and borrowers is also regulated to a great extent by both federal and state law, especially in such matters as the ownership of deposit accounts and the form and content of mortgage and other loan documents.
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Federal and state banking laws and regulations govern all areas of the operation of the Bank, including reserves, loans, investments, deposits, capital, issuance of securities, payment of dividends and establishment of branches.
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If the FDIC determines that an institution fails to meet any of these guidelines, it may require an institution to submit to the FDIC an acceptable plan to achieve compliance.
−Removed: In October 2023, considering recent and historical bank failures, the FDIC proposed guidelines aimed at establishing corporate governance and risk management expectations for all insured state-chartered banks, excluding those who are members of the Federal Reserve, with total assets exceeding $10 billion.
−Removed: This initiative, conducted through rulemaking under Section 39 of the Federal Deposit Insurance Act, empowers the FDIC to set forth enforceable standards, incorporated as an appendix to Part 364 of its regulations.
−Removed: The guidelines focus on defining obligations of the board of directors, specifying board composition and committee structures, and outlining expectations for an independent risk management function.
−Removed: The FDIC aims to enhance a bank’s safety and soundness, minimizing the likelihood of failure and mitigating potential losses.
−Removed: The FDIC has not yet finalized the proposed guidelines and continues to evaluate the proposed guidelines in light of the comments received during the public comment period.
Capital Requirements:
Bank holding companies, such as Banner, and federally insured financial institutions, such as the Bank, are required to maintain a minimum level of regulatory capital.
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Banner and the Bank are subject to minimum required ratios for Common Equity Tier 1 (CET1) capital, Tier 1 capital, total capital and the leverage ratio and a required capital conservation buffer over the required capital ratios.
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To be considered “well capitalized,” a depository institution must have a Tier 1 risk-based capital ratio of at least 8.0%, a total risk-based capital ratio of at least 10.0%, a CET1 capital ratio of at least 6.5% and a leverage ratio of at least 5.0% and not be subject to an individualized order, directive or agreement under which its primary federal banking regulator requires it to maintain a specific capital level.
−Removed: Upon adoption of CECL, a banking organization must record a one-time adjustment to its credit loss allowances as of the beginning of the fiscal year of adoption equal to the difference, if any, between the amount of credit loss allowances under the prior methodology and the amount required under CECL.
−Removed: Concurrent with enactment of the CARES Act, federal banking agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL.
−Removed: The interim final rule provided banking organizations that implemented CECL before the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.
−Removed: The changes in the final rule applied only to those banking organizations that elected the CECL transition relief provided under the rule.
−Removed: Banner and the Bank elected this option, and 2024 was the last year of our three- year transition period.
Prompt Corrective Action:
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As of December 31, 2025, Banner and the Bank met the requirements to be “well capitalized” and the capital conservation buffer requirements.
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Commercial Real Estate Lending Concentrations:
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The guidance provides that the strength of an institution’s lending and risk management practices with respect to such concentrations will be taken into account in supervisory guidance on evaluation of capital adequacy.
−Removed: As of December 31, 2024, the Bank’s aggregate recorded loan balances for construction, land development and land loans were 81% of total regulatory capital.
+Added: As of December 31, 2025, the Bank’s aggregate recorded loan balances for construction, land and land development loans were 88% of total regulatory capital.
In addition, at December 31, 2025, the Bank’s loans secured by commercial real estate represent 258% of total regulatory capital.
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Federal law generally limits the activities and equity investments of FDIC insured, state-chartered banks to those that are permissible for national banks.
−Removed: An insured state bank is not prohibited from, among other things, (1) acquiring or retaining a majority interest in a subsidiary, (2) investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets, (3) acquiring up to 10% of the voting stock of a company that solely provides or re-insures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions, and (4) acquiring or retaining the voting shares of a depository institution if certain requirements are met.
+Added: An insured state bank is not prohibited from, among other things:
+Added: (1) acquiring or retaining a majority interest in a subsidiary;
+Added: (2) investing as a limited partner in a partnership the sole purpose of which is direct or indirect investment in the acquisition, rehabilitation or new construction of a qualified housing project, provided that such limited partnership investments may not exceed 2% of the bank’s total assets;
+Added: (3) acquiring up to 10% of the voting stock of a company that solely provides or re-insures directors’, trustees’ and officers’ liability insurance coverage or bankers’ blanket bond group insurance coverage for insured depository institutions;
+Added: and (4) acquiring or retaining the voting shares of a depository institution if certain requirements are met.
Washington State has enacted laws regarding financial institution parity.
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Federal law also requires that covered transactions and certain other transactions listed in Section 23B of the Federal Reserve Act between a bank and its affiliates be on terms as favorable to the bank as transactions with non-affiliates.
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Community Reinvestment Act:
The Bank is subject to the Community Reinvestment Act of 1977 (CRA), which requires that federal banking regulatory agencies assess a bank’s performance in meeting the credit needs of its community, including low- and moderate-income neighborhoods.
−Removed: The regulatory agency’s assessment of the bank’s record is made available to the public and is considered when a bank applies to establish a new branch, relocate an existing office, merge, or acquire another federally regulated financial institution.
+Added: The regulatory agency’s assessment of the bank’s record is made available to the public and is considered when a bank applies to establish a new branch, relocate an existing office, or merge or acquire another federally regulated financial institution.
The Bank received an “outstanding” rating in its most recent CRA examination.
On October 24, 2023, federal banking agencies, including the FDIC, issued a final rule to strengthen and modernize CRA regulations.
−Removed: The rule encourages banks to expand access to credit, investment, and banking services in low- and moderate-income communities;
−Removed: adapts to changes in the banking industry, such as mobile and internet banking;
−Removed: provides greater clarity and consistency in applying CRA regulations;
−Removed: and tailors CRA evaluations and data collection to bank size and type.
−Removed: The final rule establishes a new Retail Lending Test for institutions with total assets of $600 million or more, evaluating their record in originating and purchasing loans, including residential mortgage, multifamily, small business, small farm, and, in certain cases, automobile loans.
−Removed: Banks with total assets exceeding $2 billion will be subject to additional performance tests.
−Removed: The rule maintains the requirement for banks to delineate specific facility-based assessment areas around their main office, branches, and deposit-taking remote service facilities.
−Removed: It also allows banks to receive CRA credit for qualified community development activities, regardless of location.
−Removed: The final rule took effect on April 1, 2024, with staggered compliance dates;
−Removed: most provisions become applicable on January 1, 2026.
+Added: The final rule was published with an April 1, 2024, effective date and staggered compliance dates;
+Added: however, implementation of the 2023 final rule was stayed by a preliminary injunction.
+Added: In 2025, the federal banking agencies issued a Joint Notice of Proposed Rulemaking to rescind the 2023 final rule and reinstate the prior CRA regulations.
+Added: As a result, the Bank will continue to be evaluated under the pre-2023 CRA regulatory framework.
The amount of dividends payable by the Bank to the Company depends upon its earnings and capital position, and is limited by federal and state laws, regulations and policies, including the capital conservation buffer requirement.
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The Bank and its affiliates and subsidiaries are subject to CFPB supervisory and enforcement authority.
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+Added: In early 2025, CFPB leadership significantly scaled back the agency’s rulemaking, enforcement and supervisory activities, including pausing major enforcement actions, rescinding guidance, and narrowing priorities which has significantly reduced active oversight of financial institutions.
+Added: Although statutory consumer protection requirements remain in force, the agency’s diminished operations have created regulatory uncertainty with respect to the supervision and enforcement of the existing consumer financial protection laws.
The Bank is subject to a broad array of federal and state consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers.
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Bank holding companies are subject to comprehensive regulation by the Federal Reserve under the Bank Holding Company Act of 1956, as amended, or the BHCA, and the regulations of the Federal Reserve.
−Removed: We are required to file quarterly reports with the Federal Reserve and provide additional information as the Federal Reserve may require.
−Removed: The Federal Reserve may examine us, and any of our subsidiaries.
+Added: Banner is required to file quarterly reports with the Federal Reserve and provide additional information as the Federal Reserve may require.
+Added: The Federal Reserve may examine Banner, and any of its subsidiaries.
The Federal Reserve also has extensive enforcement authority over bank holding companies, including, among other things, the ability to assess civil money penalties, to issue cease and desist or removal orders and to require that a holding company divest subsidiaries (including its bank subsidiaries).
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and (iv) disclose the ratio of the Chief Executive Officer’s annual total compensation to the median annual total compensation of all other employees.
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The regulations to implement the provisions of Section 619 of the Dodd-Frank Act, commonly referred to as the Volcker Rule, contain prohibitions and restrictions on the ability of financial institutions holding companies and their affiliates to engage in proprietary trading and hold certain interests in, or have certain relationships with, various types of investment funds, including hedge funds and private equity funds.
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Under the Dodd-Frank Act, the federal banking agencies may generally approve interstate de novo branching.
−Removed: The Federal Reserve has issued a policy statement on cash dividend payments by bank holding companies, which expresses its view that, although there are no specific regulations restricting dividend payments by bank holding companies other than state corporate laws, a bank holding company must maintain an adequate capital position and generally should not pay cash dividends unless the company’s net income for the past year is sufficient to fully fund the cash dividends and that the prospective rate of earnings appears consistent with the company’s capital needs, asset quality, and overall financial condition.
+Added: The Federal Reserve issued a policy statement on cash dividend payments by bank holding companies, which expresses its view that, although there are no specific regulations restricting dividend payments by bank holding companies other than state corporate laws, a bank holding company must maintain an adequate capital position and generally should not pay cash dividends unless the company’s net income for the past year is sufficient to fully fund the cash dividends and that the prospective rate of earnings appears consistent with the company’s capital needs, asset quality, and overall financial condition.
The Federal Reserve policy statement also indicates that it would be inappropriate for a company experiencing serious financial problems to borrow funds to pay dividends.
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Our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, are available free of charge through our website, as soon as reasonably practicable after we have electronically filed such material with, or furnished such material to, the SEC.
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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.