What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-26 · 155 added, 211 removed, 880 unchanged (29% of the section changed)

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial condition and results of operations.

The information contained in this section should be read in conjunction with the Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements contained in Item IV of this Form 10-K.

Executive Overview

1 unchanged sentence

The Company’s longer term strategic initiatives continue to focus on originating high-quality assets and client acquisition, which we believe will continue to generate strong revenue while maintaining the Company’s moderate risk profile.

We strive to uphold our core values, which are to do the right thing for our clients, communities, colleagues, company and shareholders;

and to provide consistent and reliable strength through all economic cycles and change events.

2025 Financial Highlights

• Net interest margin, on a tax equivalent basis, was 3.96% compared to 3.75% in the prior year.

• Revenues were $660.7 million for the year ended December 31, 2025, compared to $608.6 million for the prior year.

• Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities and the net change in valuation of financial instruments) was $614.8 million or the year ended December 31, 2024, compared to $643.9 million for the prior year.

• Net income of $168.9 million, or $4.88 per diluted share, for the year ended December 31, 2024, compared to net income of $183.6 million, or $5.33 per diluted share for the prior year.

• Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities, the net change in valuation of financial instruments, and gains or losses incurred on building and lease exits) was $661.5 million for the year ended December 31, 2025, compared to $614.8 million for the prior year.

• Net interest income was $587.9 million for the year ended December 31, 2025, compared to $541.7 million for the prior year.

• Net interest margin, on a tax equivalent basis, was 3.75% compared to 4.01% in the prior year.

• Mortgage banking revenue was $13.2 million for the year ended December 31, 2025, compared to $12.2 million in the prior year.

• Income from deposit fees and other service charges was $43.2 million for the year ended December 31, 2025, compared to $43.4 million for the prior year.

• Non-interest expense was $391.5 million for the year ended December 31, 2024, compared to $382.5 million for the prior year.

• Return on average assets was 1.21% for year ended December 31, 2025, compared to 1.07% for the prior year.

• Efficiency ratio was 64.33%, compared to 61.66% in the prior year.

• Net loans receivable increased 3% to $11.56 billion at December 31, 2025, compared to $11.20 billion a year ago.

• Non-performing assets were $39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $30.1 million, or 0.19% of total assets, a year ago.

• The allowance for credit losses - loans was $155.5 million, or 1.37% of total loans receivable, at December 31, 2024, compared to $149.6 million, or 1.38% of total loans receivable a year ago.

• Total deposits were $13.74 billion at December 31, 2025, compared to $13.51 billion a year ago.

• Core deposits represented 89% of total deposits at December 31, 2025.

• Cash dividends paid to shareholders were $1.92 per share, consistent with the prior year.

• Non-performing assets were $51.2 million, or 0.31% of total assets, at December 31, 2025, compared to $39.6 million, or 0.24% of total assets, a year ago.

• The allowance for credit losses - loans was $160.3 million, or 1.37% of total loans receivable, at December 31, 2025, compared to $155.5 million, or 1.37% of total loans receivable a year ago.

• Cash dividends paid to shareholders were $1.94 per share, up from $1.92 per share paid in the prior year.

• Common shareholders’ equity per share increased to $57.08 at December 31, 2025, compared to $51.49 a year ago.

• Tangible common shareholders’ equity per share* decreased 1% to $40.57 at December 31, 2024, compared to $37.09 a year ago.

• Tangible common shareholders’ equity per share* increased 14% to $46.09 at December 31, 2025, compared to $40.57 a year ago.

* Represents a non-GAAP financial measure.

For a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.

T able of C onten ts

Selected Financial Data:

21 unchanged sentences

Mortgage banking operations revenue 13,244 12,207 11,817

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

Net gain (loss) on sale of securities 374 (5,190) (19,242)

Net change in valuation of financial instruments carried at fair value

25 unchanged sentences

Dividend payout ratio (diluted) 34.40 % 39.34 % 36.02 %

T able of C onten ts

As of December 31,

14 unchanged sentences

10.63 10.19 13.17

Return on average tangible common equity (7) (11)

13.16 12.73 15.87

Average common equity to average assets 11.48 10.80 9.88

7 unchanged sentences

60.19 62.29 57.89

Average interest-earning assets to funding liabilities 107.60 106.67 104.16

Average interest-earning assets to average funding liabilities 108.11 107.60 106.67

Loans to deposits ratio 85.60 84.26 83.05

1 unchanged sentence

Allowance for credit losses - loans as a percent of total loans at end of period 1.37 1.37 1.38

Net (charge-offs)/recoveries as a percent of average outstanding loans during the period (0.02) (0.03) 0.01

Net charge-offs as a percent of average outstanding loans during the period (0.06) (0.02) (0.03)

Non-performing assets as a percent of total assets (10)

0.31 0.24 0.19

Allowance for credit losses - loans as a percent of non-performing loans (10)

9 unchanged sentences

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

(2) Calculated using shares outstanding.

(2) Calculated using common shares outstanding at the end of the period.

(3) Net income divided by average assets.

2 unchanged sentences

(6) Adjusted earnings (non-GAAP) divided by average equity.

(7) Net income divided by average tangible common equity.

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

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

(9) Non-performing loans consist of nonaccrual and 90 days past due loans still accruing interest.

(10) Non-performing loans consist of nonaccrual loans and loans 90 days or more past due and still accruing interest.

Non-performing assets consist of non-performing loans and REO.

(11) Represents a non-GAAP financial measure.

1 unchanged sentence

Non-GAAP Financial Measures

Management has presented non-GAAP financial measures in this discussion and analysis because it believes that they provide useful and comparative information to assess trends in our core operations and to facilitate the comparison of our performance with the performance of our peers.

However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP.

Where applicable, we have also presented comparable earnings information using GAAP financial measures.

For a reconciliation of these non-GAAP financial measures, see the tables below.

Management has presented non-GAAP financial measures in this discussion and analysis because it believes that they provide useful information to assess trends in our core operations and to facilitate the comparison of our performance with our peers.

However, these non-GAAP financial measures are supplemental to, and not a substitute for, any analysis based on GAAP.

The most directly comparable GAAP financial measures are presented with equal or greater prominence.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, see the tables below.

Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies.

T able of C onten ts

Adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio are non-GAAP financial measures.

To calculate the adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations.

To calculate adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations.

Management believes that these non-GAAP financial measures provide information to investors that is useful in evaluating the operating performance and trends of financial services companies, including the Company, by excluding certain items that Management considers not reflective of core operating performance.

The following tables set forth reconciliations of these non-GAAP financial measures (dollars in thousands, except share and per share data):

5 unchanged sentences

Total revenue (GAAP) 660,733 608,604 620,414

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

Net (gain) loss on sale of securities (374) 5,190 19,242

Net change in valuation of financial instruments carried at fair value 1,384 982 4,218

Gain on sale of branches — — (7,804)

Gains incurred on building and lease exits (285) — —

Adjusted revenue (non-GAAP) $ 661,458 $ 614,776 $ 643,874

1 unchanged sentence

Net income (GAAP) $ 195,382 $ 168,898 $ 183,624

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

Net (gain) loss on sale of securities (374) 5,190 19,242

Net change in valuation of financial instruments carried at fair value 1,384 982 4,218

Gain on sale of branches — — (7,804)

Banner Forward expenses — — 1,334

— 1,334 5,293

Loss on extinguishment of debt — — 793

Building and lease exit costs 2,025 — —

Related tax benefit (728) (1,481) (5,951)

5 unchanged sentences

$ 5.70 $ 5.01 $ 5.88

AVERAGE TANGIBLE COMMON EQUITY:

Average common shareholder’s equity $ 1,859,831 $ 1,703,765 $ 1,537,403

Average goodwill and other intangible assets, net 375,318 377,408 380,567

Average tangible common equity $ 1,484,513 $ 1,326,357 $ 1,156,836

For the Years Ended December 31

3 unchanged sentences

Banner Forward expenses — — (1,334)

— (1,334) (5,293)

CDI amortization (1,567) (2,626) (3,756)

1 unchanged sentence

REO operations (491) (293) 538

Loss on extinguishment of debt — — (793)

Building and lease exit costs (2,310) — —

Adjusted non-interest expense (non-GAAP) $ 398,130 $ 382,971 $ 372,726

2 unchanged sentences

Total revenue (GAAP) 660,733 608,604 620,414

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

Net (gain) loss on sale of securities (374) 5,190 19,242

Net change in valuation of financial instruments carried at fair value 1,384 982 4,218

Gain on sale of branches — — (7,804)

Gains incurred on building and lease exits (285) — —

Adjusted revenue (non-GAAP) $ 661,458 $ 614,776 $ 643,874

1 unchanged sentence

Adjusted efficiency ratio (non-GAAP) 60.19 % 62.29 % 57.89 %

(1) Included in miscellaneous expenses in the Consolidated Statement of Operations.

T able of C onten ts

The ratio of tangible common shareholders’ equity to tangible assets is a non-GAAP financial measure.

1 unchanged sentence

We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets.

We believe this is consistent with the treatment by our bank regulatory agencies, which exclude goodwill and other intangible assets from the calculation of risk-based capital ratios.

Bank regulatory capital measures also exclude goodwill and certain intangible assets;

however, tangible common equity and tangible assets as presented here are non-GAAP financial measures and should not be considered substitutes for regulatory capital ratios.

The following table sets forth the reconciliation of tangible equity and tangible assets (dollars in thousands, except share and per share data).

19 unchanged sentences

Allowance for Credit Losses:

The allowance for credit losses reflects Management’s evaluation of our loans and their estimated loss potential, as well as the risk inherent in various components of the portfolio.

Significant judgment and assumptions are applied in estimating the allowance for credit losses.

The allowance for credit losses reflects Management’s evaluation of our loans and unfunded loan commitments along with their estimated loss potential, as well as the risk inherent in various components of the portfolio.

Significant judgments and assumptions are applied in estimating the allowance for credit losses.

These judgments, assumptions and estimates are susceptible to significant changes based on the current environment.

14 unchanged sentences

Some QE factors impact all loan segments equally while others may impact some loan segments more or less than others.

If Management’s judgment was different for a QE factor that impacts all loan segments equally, a five basis-point change in this QE factor would increase or decrease the allowance for credit losses by 3.7% as of December 31, 2024.

T able of C onten ts

Fair Value Accounting and Measurement:

9 unchanged sentences

C omparison of Financial Condition at December 31, 2025 and 2024

Total assets increased to $16.20 billion at December 31, 2024, compared to $15.67 billion at December 31, 2023.

The increase in assets was primarily due to loan growth and an increase in interest-bearing deposits, partially offset by the decrease in the securities portfolio in 2024.

Total assets increased to $16.35 billion at December 31, 2025, compared to $16.20 billion at December 31, 2024, primarily due to loan growth, partially offset by decreases in cash and securities.

Total loans receivable (gross loans less deferred fees and discounts and excluding loans held for sale) increased $367.0 million, or 3%, to $11.72 billion at December 31, 2025, from $11.35 billion at December 31, 2024.

The increase in total loans receivable primarily reflects growth in multifamily real estate, commercial business, commercial real estate and one- to four-family residential loan balances.

The aggregate of securities and interest-bearing deposits decreased $73.1 million, or 2%, to $3.40 billion at December 31, 2024, compared to $3.48 billion a year earlier, primarily due to a decrease in securities, partially offset by an increase in interest-bearing deposits.

Securities decreased to $3.11 billion at December 31, 2024, from $3.43 billion at December 31, 2023, primarily due to normal security portfolio cash flows.

Fair value adjustments for securities designated as available-for-sale reflected a decrease of $5.0 million for the year ended December 31, 2024, which was included net of the associated tax benefit as a component of other comprehensive income.

The increase in total loans receivable primarily reflects growth in commercial real estate, construction, land and land development, and consumer loan balances.

The aggregate of securities and interest-bearing cash deposits decreased $187.2 million, or 5%, to $3.22 billion at December 31, 2025, compared to $3.40 billion a year earlier, primarily due to decreases in available-for-sale securities.

Securities decreased to $2.98 billion at December 31, 2025, from $3.11 billion at December 31, 2024, due to normal security portfolio cash flows.

Fair value adjustments for securities designated as available-for-sale reflected an increase of $99.3 million for the year ended December 31, 2025, which was included, net of the associated tax expense, as a component of other comprehensive income.

The average effective duration of our securities portfolio was approximately 6.2 years at December 31, 2025, compared to 6.6 years at December 31, 2024.

Deposits increased $484.9 million, or 4%, to $13.51 billion at December 31, 2024, from $13.03 billion at December 31, 2023, with core deposits increasing $462.7 million and certificates of deposit increasing $22.2 million.

The increase in core deposits reflects increases in interest-bearing transaction and savings accounts.

Deposits increased $228.7 million, or 2%, to $13.74 billion at December 31, 2025, from $13.51 billion at December 31, 2024, with core deposits (which consist of non-interest-bearing checking accounts and interest-bearing transaction and savings accounts) increasing $196.1 million and certificates of deposit increasing $32.6 million.

The increase in core deposits reflects increases in interest-bearing transaction and savings accounts, partially offset by a decrease in non-interest bearing deposits.

Core deposits were 89% of total deposits at both December 31, 2025 and 2024.

Non-interest-bearing deposits decreased by $101.7 million, or 2%, to $4.49 billion from $4.59 billion at December 31, 2024, while interest-bearing transaction and savings accounts increased by $297.8 million, or 4%, to $7.72 billion at December 31, 2025, from $7.42 billion at December 31, 2024.

Certificates of deposit increased $22.2 million, or 2%, to $1.50 billion at December 31, 2024, from $1.48 billion at December 31, 2023, primarily due to clients moving funds from core deposit accounts to higher yielding certificates of deposit, partially offset by a $57.7 million decrease in brokered deposits.

We had $50.3 million of brokered deposits at December 31, 2024, compared to $108.1 million at December 31, 2023.

Certificates of deposit increased $32.6 million, or 2%, to $1.53 billion at December 31, 2025, from $1.50 billion at December 31, 2024, primarily due to clients moving funds to higher yielding certificates of deposit.

Brokered deposits totaled $50.0 million at December 31, 2025, compared to $50.3 million at December 31, 2024.

We had $150.0 million and $290.0 million of FHLB advances at December 31, 2025 and 2024, respectively.

Other borrowings, consisting of retail repurchase agreements primarily related to client cash management accounts, decreased $17.5 million to $107.7 million at December 31, 2025, compared to $125.3 million at December 31, 2024.

Junior subordinated debentures totaled $67.5 million at December 31, 2024, compared to $66.4 million at December 31, 2023.

Subordinated notes, net of issuance costs, were $80.3 million at December 31, 2024, compared to $92.9 million at December 31, 2023.

The decrease was due to the Bank’s purchase of $13.0 million of Banner’s outstanding subordinated debt during 2024.

Junior subordinated debentures increased to $79.2 million at December 31, 2025, compared to $67.5 million at December 31, 2024, primarily as a result of fair value adjustments.

The outstanding balance of the Company’s subordinated notes was fully repaid during the second quarter of 2025.

Subordinated notes, net of issuance costs, totaled $80.3 million at December 31, 2024.

Total shareholders’ equity increased $172.0 million, to $1.95 billion at December 31, 2025, compared to $1.77 billion at December 31, 2024.

The increase in shareholders’ equity primarily reflects $168.9 million of net income and an $11.9 million increase in AOCI.

The increase in shareholders’ equity primarily reflects $195.4 million of net income and a $69.3 million increase in AOCI, related primarily to unrealized gains on available-for-sale securities.

This increase was partially offset by $67.7 million of cash dividends paid or accrued to common shareholders.

There were no shares of common stock repurchased during the year ended December 31, 2024.

In addition, there were 499,975 shares of common stock repurchased during the year ended December 31, 2025, at an average price of $63.14 per share.

Common shareholder’s equity to total assets was 11.90% and 10.95% at December 31, 2025 and 2024, respectively.

3 unchanged sentences

See, “Executive Overview - Non-GAAP Financial Measures” above for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

T able of C onten ts

At December 31, 2025, our securities portfolio totaled $2.98 billion, consisting principally of mortgage-backed and mortgage-related securities.

Our investment levels may be increased or decreased depending upon Management’s projections as to the demand for funds to be used in our loan origination, deposit and other activities, and upon yields available on investment alternatives.

During the year ended December 31, 2024, our aggregate investment in securities decreased $326.8 million, primarily due to normal security portfolio cash flows and the sale of securities.

During the year ended December 31, 2025, our aggregate investment in securities decreased $128.6 million, primarily due to normal security portfolio cash flows.

Mortgage-backed securities decreased $113.1 million and U.S.

Government and agency obligations decreased $26.3 million, while municipal bonds decreased $6.8 million, corporate debt obligations decreased $23.1 million and asset-backed securities decreased $50.1 million.

Government and agency obligations decreased $1.8 million, while municipal bonds increased $11.7 million, corporate debt obligations decreased $7.5 million and asset-backed securities decreased $18.2 million.

Government and Agency Obligations:

1 unchanged sentence

Government and agency obligations had a carrying value of $6.4 million (with an amortized cost of $6.7 million) at December 31, 2025, a weighted average contractual maturity of 13.7 years and a weighted average coupon rate of 3.83%.

Many of the U.S.

Government and agency obligations we own include call features which allow the issuing agency the right to call the securities at various dates prior to the final maturity.

Many of these U.S.

Government and agency obligations include call features which allow the issuing agency to call the securities at various dates prior to the final maturity.

Mortgage-Backed Obligations:

At December 31, 2025, our mortgage-backed and mortgage-related securities had a carrying value of $2.12 billion ($2.36 billion at amortized cost, with a net unrealized loss adjustment of $230.9 million).

The weighted average coupon rate of these securities was 2.60% and the weighted average contractual maturity was 26 years, although we receive principal payments on these securities each month resulting in a much shorter expected average life.

The weighted average coupon rate of these securities was 2.60% and the weighted average contractual maturity was approximately 27 years, although we receive principal payments on these securities each month resulting in a much shorter expected average life.

As of December 31, 2025, 97% of the mortgage-backed and mortgage-related securities pay interest at a fixed rate.

13 unchanged sentences

At December 31, 2025, 100% of these securities had adjustable interest rates tied to three-month SOFR.

T able of C onten ts

The following tables set forth certain information regarding carrying values and percentage of total carrying values of our portfolio of securities—trading and securities—available-for-sale, both carried at estimated fair market value, and securities—held-to-maturity, carried at amortized cost, net of the allowance for credit losses - securities, as of December 31, 2024, 2023 and 2022 (dollars in thousands):

The following table sets forth certain information regarding carrying values and percentage of total carrying values of our portfolio of available-for-sale securities, carried at estimated fair market value, and held-to-maturity securities, carried at amortized cost, net of the allowance for credit losses - securities, as of December 31, 2025, 2024 and 2023 (dollars in thousands):

2025 2024 2023

Carrying Value Percent of Total Carrying Value Percent of Total Carrying Value Percent of Total

Corporate bonds (1)

$ — n/a $ — n/a $ 28,694 100 %

Total securities—trading $ — n/a $ — n/a $ 28,694 100 %

Available-for-Sale

4 unchanged sentences

Asset-backed securities 152,540 8 170,758 8 220,852 9

Total securities—available-for-sale $ 2,104,511 100 % $ 2,373,783 100 % $ 2,789,031 100 %

Total available-for-sale securities $ 2,016,261 100 % $ 2,104,511 100 % $ 2,373,783 100 %

Held-to-Maturity

3 unchanged sentences

Mortgage-backed or related securities 528,110 55 560,705 56 590,267 56

Total securities—held-to-maturity $ 1,001,564 100 % $ 1,059,055 100 % $ 1,117,967 100 %

Total held-to-maturity securities $ 961,196 100 % $ 1,001,564 100 % $ 1,059,055 100 %

Estimated market value $ 814,668 $ 825,528 $ 907,514

(1) In the fourth quarter of 2023, our corporate bonds classified as trading were transferred to available-for-sale.

T able of C onten ts

The following table shows the maturity or period to repricing of our available-for-sale and held-to-maturity securities as of December 31, 2025 (dollars in thousands):

12 unchanged sentences

Asset-backed securities — — % — — % 68,942 6.12 % 83,598 5.89 % 152,540 5.99 %

Total securities—available-for-sale and held-to-maturity - carrying value $ 26,782 3.77 % $ 147,426 3.46 % $ 422,621 4.11 % $ 2,509,246 2.94 % $ 3,106,075 3.13 %

Total securities—available-for-sale and held-to-maturity - estimated market value $ 26,777 $ 146,905 $ 420,152 $ 2,336,205 $ 2,930,039

Total available-for-sale and held-to-maturity securities - carrying value $ 24,220 4.31 % $ 181,005 2.57 % $ 297,929 4.18 % $ 2,474,303 3.03 % $ 2,977,457 3.13 %

Total available-for-sale and held-to-maturity securities - estimated market value $ 24,208 $ 180,867 $ 296,684 $ 2,329,170 $ 2,830,929

(1) Tax-exempt weighted average yield is calculated on a tax equivalent basis using a federal tax rate of 21% and a tax disallowance of 10%.

T able of C onten ts

Loans and Lending.

21 unchanged sentences

We are active originators of one- to four-family residential loans in the communities we serve.

Our balance of loans for one- to four-family residences increased by $73.2 million in 2024, compared to the prior year.

The increase in one- to four-family residential loans during 2024 was primarily the result of a higher percentage of one- to four-family construction loans converting to one- to four-family residential loans and a larger percentage of new production being held in portfolio.

The balance of loans for one- to four-family residences decreased by $18.1 million in 2025, compared to the prior year.

This decrease reflects that payoffs of existing permanent loans exceeded the combination of new originations and conversions of one- to four-family construction loans to permanent loans.

Construction, Land and Land Development Lending:

1 unchanged sentence

At December 31, 2025, construction, land and land development loans totaled $1.71 billion, or 15% of total loans.

The largest shifts in this portfolio occurred in commercial construction and land and land development loans.

Commercial construction loans decreased $47.6 million, or 28%, to $122.4 million at December 31, 2024, primarily due to the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase, partially offset by new loan production.

Commercial construction loans represented approximately 1% of our total loan portfolio at December 31, 2024, comprised primarily of retail property construction projects.

Land and land development loans increased $33.0 million , or 10% , to $369.7 million at December 31, 2024.

Land and land development loans represented approximately 3% of our total loan portfolio at December 31, 2024 and was comprised of residential properties for personal use and development.

Multifamily construction loans increased $9.7 million, or 2%, to $513.7 million at December 31, 2024.

Multifamily construction loans represented approximately 5% of our total loan portfolio at December 31, 2024 and was comprised of affordable housing projects and, to a lesser extent, market rate multifamily projects across our footprint.

One- to four-family construction loans decreased $12.2 million, or 2%, to $514.2 million at December 31, 2024.

The largest shifts in this portfolio occurred in one- to four-family construction, land and land development loans.

One- to four-family construction loans increased $93.2 million, or 18%, to $607.4 million at December 31, 2025, primarily due to new loan production and advances exceeding payoffs and the conversion of one- to four-family construction loans to permanent one- to four-family residential loans upon completion of construction.

One- to four-family construction loans represented approximately 5% of our total loan portfolio at December 31, 2025, and included speculative construction loans, as well as “all-in-one” construction loans made to owner occupants that convert to permanent loans upon completion of the homes that, depending on market conditions, may be subsequently sold into the secondary market.

Commercial construction loans increased $33.7 million, or 28%, to $156.0 million at December 31, 2025, primarily due to new loan production and advances exceeding the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase.

Commercial construction loans represented approximately 1% of our total loan portfolio at December 31, 2025, comprised primarily of retail and industrial property construction projects.

Land and land development loans increased $64.0 million , or 17% , to $433.7 million at December 31, 2025.

Land and land development loans represented approximately 4% of our total loan portfolio at December 31, 2025, and were comprised of residential properties for personal use and development.

Multifamily construction loans represented approximately 5% of our total loan portfolio at December 31, 2025, and were comprised of affordable housing projects and, to a lesser extent, market rate multifamily projects across our footprint.

Commercial and Multifamily Real Estate Lending:

2 unchanged sentences

At December 31, 2025, our loan portfolio included $4.05 billion of commercial real estate loans, or 35% of the total loan portfolio, and $850.8 million of multifamily real estate loans, or 7% of the total loan portfolio.

The increase in commercial real estate loans was primarily the result of new loan production and the conversion of commercial construction loans to commercial real estate loans upon the completion of the construction phase.

The increase in commercial real estate loans primarily reflected a combination of new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon completion of the construction phase.

Our commercial real estate portfolio consists of loans on a variety of property types with no significant concentrations by property type, borrowers or locations.

1 unchanged sentence

Within this portfolio, we have limited exposure to the office sector, with only 5% of total loans secured by office properties, nearly 45% of which are owner-occupied.

The increase in multifamily real estate loans was the result of the conversion of multifamily construction loans to multifamily real estate loans upon the completion of the construction phase.

T able of C onten ts

The decrease in multifamily real estate loans was primarily due to payoffs and paydowns exceeding new production, partially offset by the conversion of multifamily construction loans to the multifamily real estate portfolio upon completion of the construction phase.

Commercial Business Lending:

2 unchanged sentences

At December 31, 2025, commercial business loans, including small business scored, totaled $2.41 billion, or 21% of total loans.

Our commercial business loan portfolio at December 31, 2024 reflects an increase of 6% from December 31, 2023.

Our commercial business lending, to a lesser extent, includes participation in certain syndicated loans, including shared national credits, which totaled $195.6 million, or 2% of our loan portfolio, at December 31, 2025.

2 unchanged sentences

While agricultural loans are not a large part of our portfolio, we routinely make agricultural loans to borrowers with a strong capital base, sufficient management depth, proven ability to operate through agricultural cycles, reliable cash flows and adequate financial reporting.

Payments on agricultural loans depend, to a large degree, on the results of operation of the related farm entity.

Payments on agricultural loans depend, to a large degree, on the results of operations of the related farm entity.

The repayment is also subject to other economic and weather conditions as well as market prices for agricultural products, which can be highly volatile at times.

4 unchanged sentences

As of December 31, 2025, 88% of our consumer loans were secured by one- to four-family residences through home equity lines of credit.

Credit card balances totaled $45.2 million at December 31, 2024.

Loan Servicing Portfolio:

At December 31, 2025, we were servicing $3.14 billion of loans for others and held $14.3 million in escrow for our portfolio of loans serviced for others.

The loan servicing portfolio at December 31, 2024 was comprised of $1.36 billion of Freddie Mac residential mortgage loans, $1.00 billion of Fannie Mae residential mortgage loans, $430.7 million of Oregon Housing residential mortgage loans, $65.5 million of SBA loans and $314.5 million of other loans serviced for a variety of investors.

The loan servicing portfolio at December 31, 2025, was comprised of $1.39 billion of Freddie Mac residential mortgage loans, $958.9 million of Fannie Mae residential mortgage loans, $403.5 million of Oregon Housing residential mortgage loans, $78.6 million of SBA loans, and $309.2 million of other loans serviced for a variety of investors.

The portfolio included loans secured by property located primarily in the states of Washington, Oregon, Idaho, and California.

For the years ended December 31, 2025 and 2024, we recognized $8.1 million and $8.2 million of loan servicing income in our results of operations, respectively.

T able of C onten ts

The following table sets forth the composition of the Company’s loan portfolio, net of discounts and deferred fees and costs, by type of loan as of the dates indicated (dollars in thousands):

16 unchanged sentences

Commercial business 1,225,108 11 1,318,333 11 1,255,734 12

SBA PPP 2,012 — 3,646 — 7,594 —

Small business scored 1,187,360 10 1,104,117 10 1,022,154 9

1 unchanged sentence

Agricultural business, including secured by farmland 353,152 3 340,280 3 331,089 3

Agricultural business, including secured by farmland 340,280 3 331,089 3 294,743 3

SBA PPP — — — — 334 —

Total agricultural business, including secured by farmland 340,280 3 331,089 3 295,077 3

One- to four-family residential 1,573,191 13 1,591,260 14 1,518,046 14

6 unchanged sentences

Net loans $ 11,561,411 $ 11,199,135 $ 10,660,812

T able of C onten ts

The following table sets forth the Company’s loans by geographic concentration at December 31, 2025, 2024 and 2023 (dollars in thousands):

10 unchanged sentences

The geographic concentration of our commercial real estate portfolio, as of December 31, 2025, was 48% in Washington and 26% in California.

The following table sets forth certain information at December 31, 2024 regarding the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments.

The following table sets forth at December 31, 2025, the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments.

Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less.

28 unchanged sentences

The average life of mortgage loans tends to increase, however, when current mortgage loan market rates are substantially higher than rates on existing mortgage loans and, conversely, decreases when rates on existing mortgage loans are substantially higher than current mortgage loan market rates.

T able of C onten ts

The following table sets forth the dollar amount of all loans maturing after December 31, 2026, which have fixed interest rates and floating or adjustable interest rates (in thousands):

30 unchanged sentences

Core deposits were 89% of total deposits at both December 31, 2025 and 2024.

T able of C onten ts

The following table sets forth the balances of deposits in the various types of accounts offered by the Bank at the dates indicated (dollars in thousands):

18 unchanged sentences

Total deposits in excess of the FDIC insurance limit $ 4,402,384 32 % $ 22,896 $ 4,379,488 32 % $ 296,273 $ 4,083,215 31 %

T able of C onten ts

The following table indicates the amount of the Bank’s certificates of deposit with balances in excess of the FDIC insurance limit by time remaining until maturity as of December 31, 2024 (in thousands):

The following table indicates the certificates of deposit in excess of the FDIC insurance limit by time remaining until maturity as of December 31, 2025 (in thousands):

Maturity Period—Certificates of Deposit in Excess of the FDIC Insurance Limit

4 unchanged sentences

Maturing after 12 months 17,068

Total $ 466,014

Certificates of deposits in excess of FDIC insurance limit $ 513,352

The following table provides additional detail on geographic concentrations of our deposits at December 31, 2025, 2024 and 2023 (in thousands):

9 unchanged sentences

At that date, based on pledged collateral, the Bank had $3.65 billion of available credit capacity with the FHLB.

At December 31, 2024, based upon our available unencumbered collateral, the Bank was eligible to borrow $1.52 billion from the Federal Reserve Bank, however, at that date we had no funds borrowed under this arrangement.

At December 31, 2025, based upon our available unencumbered collateral, the Bank was eligible to borrow $1.55 billion from the Federal Reserve Bank;

however, at that date we had no funds borrowed under this arrangement.

Other borrowings, consisting of retail repurchase agreements, which are primarily associated with client sweep account arrangements, decreased $17.5 million to $107.7 million at December 31, 2025, from $125.3 million at December 31, 2024.

5 unchanged sentences

At December 31, 2025, the junior subordinated debentures had a weighted average rate of 5.67%.

Subordinated notes, net of issuance costs, were $80.3 million at December 31, 2024, compared to $92.9 million at December 31, 2023, and a weighted average interest rate of 5.00%.

The decrease was due to the Bank’s purchase of $13.0 million of Banner’s outstanding subordinated debt from third parties during the year ended December 31, 2024.

The outstanding balance of the Company’s subordinated notes was fully repaid during the second quarter of 2025.

Subordinated notes, net of issuance costs, were $80.3 million at December 31, 2024.

Asset Quality.

2 unchanged sentences

At December 31, 2025, our allowance for credit losses - loans was $160.3 million, or 351% of non-performing loans, compared to $155.5 million, or 421% of non-performing loans, at December 31, 2024.

T able of C onten ts

The following table sets forth information with respect to our non-performing assets at the dates indicated (dollars in thousands):

4 unchanged sentences

Commercial $ 525 $ 2,186 $ 2,677

Construction/land 3,963 3,105 181

Construction and land 5,175 3,963 3,105

One- to four-family 19,855 10,016 5,702

5 unchanged sentences

Secured by real estate:

Construction/land — 1,138 —

Construction and land 1,268 — 1,138

One- to four-family 2,698 369 1,205

9 unchanged sentences

Loans 30-89 days past due and on accrual $ 26,767 $ 26,824 $ 19,744

The increase in total non-performing loans was primarily due to increases in nonaccrual loans in the one- to four-family and agricultural business loan categories consisting of various borrowers with no meaningful concentrations.

The increases in these categories reflect loans transferred to nonaccrual, partially offset by payoffs of nonaccrual loans during 2024.

For the year ended December 31, 2024, interest income was reduced by $2.0 million as a result of nonaccrual loan activity, which includes the reversal of $826,000 of accrued interest as of the date the loans were placed on nonaccrual.

For the year ended December 31, 2023, interest income was reduced by $1.6 million as a result of nonaccrual loan activity, which includes the reversal of $569,000 of accrued interest as of the date the loans were placed on nonaccrual.

For the year ended December 31, 2022, interest income was reduced by $725,000 as a result of nonaccrual loan activity, which includes the reversal of $322,000 of accrued interest as of the date the loan was placed on nonaccrual.

There was no interest income recognized on nonaccrual loans during the years ended December 31, 2024, 2023 and 2022.

The increase in total non-performing loans was primarily due to an increase in nonaccrual loans in the one- to four-family category and an increase in loans 90 days or more past due and still accruing in both the one- to four-family category and the construction and land category, primarily reflecting one- to four-family custom construction loans.

The increases consisted of various borrowers with no meaningful concentrations and reflect loans transferred to nonaccrual, partially offset by payoffs of nonaccrual loans during 2025 and loans past due and still accruing at December 31, 2025, that were not previously reported as past due.

Interest income was reduced by $2.3 million, $2.0 million, and $1.6 million in 2025, 2024 and 2023, respectively, due to nonaccrual loan activity, including reversals of $748,000, $826,000 and $569,000 of accrued interest upon placement of loans on nonaccrual.

No interest income was recognized on nonaccrual loans during these years.

The following table presents the Company’s portfolio of risk-rated loans and non-risk-rated loans by grade at the dates indicated (in thousands):

5 unchanged sentences

Total $ 11,721,687 $ 11,354,656 $ 10,810,455

The increase in substandard loans during the year ended December 31, 2024 was primarily due to increases in adversely classified loans, primarily in the commercial business and agricultural loan segments, partially offset by payoffs and paydowns.

The increase in special mention loans during the year ended December 31, 2025, was primarily due to loan risk rating downgrades, primarily in the commercial business loan segment.

As of December 31, 2025, total substandard loans primarily consisted of loans within the commercial business, owner-occupied commercial real estate and agricultural loan segments.

T able of C onten ts

Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024

For the year ended December 31, 2025, net income was $195.4 million, or $5.64 per diluted share, compared to net income of $168.9 million, or $4.88 per diluted share for the year ended December 31, 2024.

Current year results included a decrease in net interest income and an increase in non-interest expense, partially offset by an increase in non-interest income and a decrease in the provision for credit losses.

Our operating results depend largely on net interest income which decreased $34.3 million to $541.7 million for the year ended December 31, 2024, compared to the prior year, primarily reflecting increased funding costs, partially offset by increased yields on loans due to new loans being originated at higher interest rates and adjustable rate loans repricing higher, as well as higher average loan balances.

Revenues (net interest income and non-interest income) decreased $11.8 million, or 2%, to $608.6 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to increased funding costs, partially offset by increased interest income on loans and a decrease in the net loss on the sale of securities during the year ended December 31, 2024.

Current year results included increases in net interest income and non-interest income, partially offset by increases in non-interest expense and the provision for credit losses.

Our operating results depend largely on net interest income, which increased $46.2 million to $587.9 million for the year ended December 31, 2025, compared to the prior year, primarily reflecting increased yields on loans due to adjustable rate loans repricing higher, as well as higher average loan balances and decreased funding costs.

Revenues (net interest income and non-interest income) increased $52.1 million, or 9%, to $660.7 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to increased interest income on loans, decreased funding costs and a net gain on the sale of securities during the year ended December 31, 2025, compared to a net loss on the sale of securities during the prior year.

We recorded a $13.0 million provision for credit losses for the year ended December 31, 2025, compared to a $7.6 million provision for credit losses for the year ended December 31, 2024.

The provision for credit losses for the year ended December 31, 2025, reflects risk rating downgrades, as well as growth in loan balances.

Total non-interest income for the year ended December 31, 2024 increased to $66.9 million compared to $44.4 million for the year ended December 31, 2023, primarily due to a decrease in the net loss on the sale of securities.

Total non-interest expense increased to $391.5 million for the year ended December 31, 2024, compared to $382.5 million for the year ended December 31, 2023, largely as a result of increases in salary and employee benefits and payment and card processing services expense, partially offset by decreases in professional and legal expense and the amortization of core deposit intangibles.

Total non-interest income for the year ended December 31, 2025, increased to $72.8 million compared to $66.9 million for the year ended December 31, 2024, primarily due to the recognition of a net gain on the sale of securities during the year ended December 31, 2025, compared to a net loss on the sale of securities during the prior year.

Total non-interest expense increased to $408.8 million for the year ended December 31, 2025, compared to $391.5 million for the year ended December 31, 2024, largely as a result of increases in salary and employee benefits, information and computer data services expense, payment and card processing services expense, and professional and legal expenses.

Net Interest Income.

Net interest income decreased $34.3 million, or 6%, to $541.7 million for the year ended December 31, 2024, compared to $576.0 million for the year ended December 31, 2023, primarily reflecting increased funding costs, partially offset by increased yields on loans due to new loans being originated at higher interest rates and adjustable rate loans repricing higher, as well as higher average loan balances.

The higher average yield on interest-earning assets, compared to the same period in the prior year, reflects the overall higher interest rate environment during 2024, despite the Federal Reserve reducing rates in late 2024.

While interest rate cuts during the year led to lower funding costs and yields on interest-earning assets in the fourth quarter, the overall results for the year were largely shaped by the elevated interest rates during most of 2024.

The net interest margin on a tax equivalent basis of 3.75% for the year ended December 31, 2024, was 26 basis points lower than the prior year.

The decrease in net interest margin reflects a 72 basis-point increase in the cost of funding liabilities, partially offset by a 39 basis-point increase in yields on average interest-earning assets.

The increase in the overall cost of funding liabilities was primarily due to the increase in rates across all deposit and borrowing categories due to higher market rates.

The higher funding costs was also impacted by a shift in the average balance of non-interest-bearing deposits to higher costing interest-bearing checking accounts, savings accounts and certificates of deposit.

The increase in average yields on interest-earning assets during the current year reflects the benefit of variable rate interest-earning assets repricing higher due to rising interest rates, as well as new loans being originated at higher interest rates.

Net interest income increased for the year ended December 31, 2025, compared to $541.7 million for the year ended December 31, 2024, primarily reflecting increased yields on loans due to adjustable rate loans repricing higher, as well as higher average loan balances and lower funding costs.

The higher average yield on interest-earning assets, compared to the same period in the prior year, reflects loans being a higher percentage of interest-earnings assets.

The net interest margin on a tax equivalent basis of 3.96% for the year ended December 31, 2025, was 21 basis points higher than the prior year.

The increase in net interest margin reflects a 13 basis-point increase in yields on average interest-earning assets and an eight basis-point decrease in the cost of funding liabilities.

The increase in average yields on interest-earning assets during the current year reflects the benefit of variable rate interest-earning assets repricing higher.

The decrease in the overall cost of funding liabilities was primarily due to the decrease in the overall rate paid on deposits and the decrease in the average balance of borrowings.

Interest Income.

1 unchanged sentence

This increase was a result of yields on interest-earning assets increasing 13 basis points to 5.39%, as well as the average balance of interest-earning assets increasing $367.6 million to $15.17 billion.

The increased yield on interest-earning assets primarily reflects increases in the average yields on loans.

The increased yield on interest-earning assets primarily reflects increases in the average yields on loans, with the increase concentrated in real estate loans, partially offset by a slight decline in commercial and agricultural loan yields.

Interest income on loans increased $46.4 million from the prior year to $702.0 million for the year ended December 31, 2025.

The increase was primarily due to the average loan yields increasing 39 basis points to 5.97%, reflecting the impact of higher interest rates.

Average loans receivable increased $639.9 million to $11.12 billion, primarily reflecting increases in the average balances of one- to four-family residential, construction, land and land development, and multifamily real estate loans.

Interest and dividend income on investment securities decreased $13.5 million for the year ended December 31, 2024 due to a decline in the average balance of the investment securities portfolio.

The increase was primarily due to the average loan yields increasing 15 basis points to 6.12%, reflecting the impact of market interest rates being higher than average portfolio interest rates.

Average loans receivable increased $508.2 million to $11.63 billion, primarily reflecting increases in the average balances of real estate secured loans.

Interest and dividend income on investment securities decreased $7.4 million for the year ended December 31, 2025, due to a decline in the average balance and average yield of the investment securities portfolio.

The combined average balance of total investment securities decreased $140.6 million to $3.54 billion (excluding the effect of fair value adjustments).

The average yield on the combined portfolio increased to 3.11%, reflecting a three basis-point increase in the average yield on mortgage-backed securities and a 19 basis-point increase in the yield on other securities.

The average yield on the combined portfolio decreased to 3.02%, reflecting a 37 basis-point decrease in the yield on other securities.

Interest Expense.

Interest expense for the year ended December 31, 2024 was $224.4 million, compared to $125.6 million for the prior year, an increase of $98.8 million, or 79%.

The increase occurred as a result of a 72 basis-point increase in the average cost of all funding liabilities to 1.63% as well as the average balance of funding liabilities increasing $27.9 million to $13.76 billion.

The increase in the average cost of our funding liabilities increased due to increases in the rates paid on our interest rate deposits to remain competitive in the elevated interest rate environment.

The increase in the average balance of funding liabilities reflects increases in interest-bearing transaction and savings accounts and certificates of deposit, partially offset by lower average balances of money market accounts and non-interest bearing deposits.

T able of C onten ts

Deposit interest expense increased $99.3 million to $199.5 million for the year ended December 31, 2024, compared to the prior year, as a result of the average cost of total deposits increasing 74 basis points to 1.50% and the average balance of interest-bearing deposits increasing by $897.8 million.

The increase in the average cost of deposits between the periods was primarily due to the average cost of interest-bearing deposits increasing 102 basis points to 2.32% for the year ended December 31, 2024, compared to 1.30% in the prior year.

The increase in the average cost of interest-bearing deposits was primarily the result of a 79 basis-point increase in the cost of interest-bearing checking accounts, a 116 basis-point increase in the cost of savings accounts, a 90 basis-point increase in the cost money market accounts and a 107 basis-point increase in the cost of certificates of deposit.

The increase in the average balance of total interest-bearing deposits was primarily due to increases in the average balances of interest-bearing transaction and savings accounts and certificates of deposit, partially offset by lower average balances of money market accounts.

The average rate paid on total borrowings increased 60 basis points to 4.97%, reflecting a 24 basis-point increase in the average cost of FHLB advances, 92 basis-point increase in the average cost of other borrowings, and 38 basis-point increase in the average cost of our subordinated debt.

The decrease in the average balance of total borrowings was largely due to a $36.9 million decrease in the average balance of FHLB advances and a $34.7 million decrease in the average balance of other borrowings.

Interest expense for the year ended December 31, 2025, was $217.0 million, compared to $224.4 million for the prior year, a decrease of $7.4 million, or 3%.

The decrease occurred as a result of an eight basis-point decrease in the average cost of all funding liabilities to 1.55%, partially offset by the average balance of funding liabilities increasing $274.7 million to $14.04 billion.

The decrease in the average cost of our funding liabilities was primarily due to lower average interest rates paid on deposits and borrowings, reflecting both the lower rates and the impact of changes in funding composition.

The increase in the average balance of funding liabilities reflects increases in interest-bearing transaction and savings accounts, partially offset by decreases in money market accounts and total borrowings.

Deposit interest expense increased $1.3 million to $200.8 million for the year ended December 31, 2025, compared to the prior year, as a result of the average balance of interest-bearing deposits increasing by $504.1 million, partially offset by the average cost of total deposits decreasing three basis points to 1.47%.

The increase in the average balance of total interest-bearing deposits was primarily due to increases in the average balances of interest-bearing transaction and savings accounts, partially offset by a decrease in the average balances of money market accounts.

The decrease in the average cost of deposits between the periods was primarily due to the average cost of interest-bearing deposits decreasing 12 basis points to 2.20% for the year ended December 31, 2025, compared to 2.32% in the prior year.

The decrease in the average cost of interest-bearing deposits was primarily the result of a five basis-point decrease in the cost of savings accounts, a 12 basis-point decrease in the cost of money market accounts and a 38 basis-point decrease in the cost of certificates of deposit, partially offset by a seven basis-point increase in the cost of interest-bearing checking accounts.

The average rate paid on total borrowings decreased 68 basis points to 4.29% for the year ended December 31, 2025, reflecting a 103 basis-point decrease in the average cost of FHLB advances, 37 basis-point decrease in the average cost of other borrowings, and 61 basis-point decrease in the average cost of our subordinated debt.

The decrease in the average balance of total borrowings was due to a $33.4 million decrease in the average balance of FHLB advances, a $41.8 million decrease in the average balance of other borrowings and a $48.5 million decrease in the average balance of our subordinated debt.

Table 13, Analysis of Net Interest Spread , presents, for the periods indicated, our condensed average balance sheet information, together with interest income and yields earned on average interest-earning assets and interest expense and rates paid on average interest-bearing liabilities.

Average balances are computed using daily average balances.

T able of C onten ts

The following table provides an analysis of our net interest spread for the last three years (dollars in thousands):

6 unchanged sentences

Held for sale loans $ 29,133 $ 1,878 6.45 % $ 27,627 $ 1,875 6.79 % $ 49,106 $ 2,621 5.34 %

Mortgage loans 9,094,276 526,842 5.79 % 8,513,487 460,664 5.41 % 7,731,195 364,499 4.71 %

Real estate secured loans 9,586,917 577,625 6.03 % 9,094,276 526,842 5.79 % 8,513,487 460,664 5.41 %

Commercial/agricultural loans 1,894,615 123,502 6.52 % 1,871,024 127,028 6.79 % 1,782,141 113,250 6.35 %

36 unchanged sentences

(footnotes follow)

T able of C onten ts

(1) Average balances include loans accounted for on a nonaccrual basis and loans 90 days or more past due.

17 unchanged sentences

Held for sale loans $ (97) $ 100 $ 3 $ 592 $ (1,338) $ (746)

Mortgage loans 33,661 32,517 66,178 57,068 39,097 96,165

Real estate secured loans 21,587 29,196 50,783 33,661 32,517 66,178

Commercial/agricultural loans (5,112) 1,586 (3,526) 7,967 5,811 13,778

25 unchanged sentences

The provision for credit losses - loans 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.

The provision for credit losses - loans for the current year reflects an increase in our substandard loans in addition to growth in the loan portfolio.

The prior year provision for credit losses - loans primarily reflected loan growth and a deterioration in forecasted economic conditions and indicators utilized to estimate credit losses, as well as increased charge-offs for the prior year.

The provision for credit losses - loans for the current year reflects growth in the loan portfolio and risk rating downgrades.

The prior year provision for credit losses - loans also primarily reflected loan growth and risk rating downgrades.

Future assessments of the expected credit losses will not only be impacted by changes to the reasonable and supportable forecast, but will also include an updated assessment of qualitative factors, as well as consideration of any required changes in the reasonable and supportable forecast reversion period.

T able of C onten ts

The following table sets forth an analysis of our allowance for credit losses - loans for the periods indicated (dollars in thousands):

20 unchanged sentences

Total charge-offs (9,814) (8,366) (5,707)

Net (charge-offs) recoveries (2,685) (2,919) 1,208

Net charge-offs (6,882) (2,685) (2,919)

Balance, end of period $ 160,276 $ 155,521 $ 149,643

4 unchanged sentences

Allowance for credit losses - loans as a percent of nonaccrual loans 386 % 425 % 557 %

T able of C onten ts

The following table sets forth the breakdown of the allowance for credit losses – loans by loan category at the dates indicated (dollars in thousands):

12 unchanged sentences

Total allowance for credit losses - loans $ 160,276 100 % 1.37 % $ 155,521 100 % 1.37 % $ 149,643 100 % 1.38 %

The allowance for credit losses - unfunded loan commitments was $13.6 million at December 31, 2024 compared to $14.5 million at December 31, 2023.

The decrease in the allowance for credit losses - unfunded loan commitments reflects a decrease in unfunded loan commitments.

The allowance for credit losses - unfunded loan commitments was $15.0 million as of December 31, 2025, compared to $13.6 million as of December 31, 2024.

The increase in the allowance for credit losses - unfunded loan commitments reflects an increase in unfunded loan commitments and credit downgrades, primarily within the construction, land and land development loan category.

The following table sets forth an analysis of our allowance for credit losses - unfunded loan commitments for the periods indicated (dollars in thousands):

3 unchanged sentences

Balance, beginning of period $ 13,562 $ 14,484 $ 14,721

(Recapture) provision for credit losses - unfunded loan commitments (922) (237) 2,289

Provision (recapture) for credit losses - unfunded loan commitments 1,423 (922) (237)

Balance, end of period $ 14,985 $ 13,562 $ 14,484

T able of C onten ts

Non-interest Income.

9 unchanged sentences

73,824 73,060 764 1 % 73,060 67,869 5,191 8 %

Net (loss) gain on sale of securities (5,190) (19,242) 14,052 (73) % (19,242) (3,248) (15,994) 492 %

Net gain (loss) on sale of securities 374 (5,190) 5,564 (107) % (5,190) (19,242) 14,052 (73) %

Net change in valuation of financial instruments carried at fair value (1,384) (982) (402) 41 % (982) (4,218) 3,236 (77) %

Gain on sale of branches, including related deposits — — — — % — 7,804 (7,804) (100) %

Total non-interest income $ 72,814 $ 66,888 $ 5,926 9 % $ 66,888 $ 44,409 $ 22,479 51 %

Non-interest income increased for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase was primarily due to decreases in the net loss recognized on the sale of securities and the net loss recognized on the valuation of financial instruments carried at fair value, as well as increases in miscellaneous income and deposit fees and other service charges.

Income from deposit fees and other service charges increased primarily as a result of an increase in fees related to overdrafts during the current year.

The increase was primarily due to the recognition of a net gain on the sale of securities during the year ended December 31, 2025, compared to a net loss on the sale of securities during the prior year.

Additionally, revenue from mortgage banking operations increased.

This was partially offset by a decrease in miscellaneous income.

A net gain of $374,000 was recognized in the current period on the sale of securities, compared to $5.2 million in strategic losses recorded during the year ended December 31, 2024.

The prior year losses were taken to mitigate rising interest rate risk in the securities portfolio.

Revenue from mortgage banking operations, including gains from one- to four-family and multifamily loan sales and loan servicing fees, increased for the year ended December 31, 2025, compared to the prior year.

3 unchanged sentences

Sales of one- to four-family loans held for sale for the year ended December 31, 2025, resulted in gains of $9.1 million, compared to $8.0 million for the year ended December 31, 2024.

The prior year period also reflected a downward lower of cost or market adjustment on multifamily loans held for sale.

In 2023, the Bank discontinued the origination of multifamily loans for sale into the secondary market.

All of the multifamily loans held for sale were transferred to the held for investment loan portfolio and the related lower of cost or market adjustment was reversed in the fourth quarter of 2023.

Miscellaneous income increased for the year ended December 31, 2024, compared to the year ended December 31, 2023 primarily as a result of an increase in the gain on sale of SBA loans and a gain recognized on the sale of a non-performing loan during the fourth quarter of 2024.

The net loss on sale of securities during the year ended December 31, 2024, reflects strategic sales of securities, mostly in the first quarter of 2024, to minimize the impact of increasing rates on our securities portfolio.

The net loss on the valuation of financial instruments carried at fair value were due to declines during 2024 in the market valuation of investment securities carried at fair value.

T able of C onten ts

Miscellaneous income decreased for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to losses incurred on the disposal of assets during 2025.

Non-interest Expense.

15 unchanged sentences

Amortization of core deposit intangibles 1,567 2,626 (1,059) (40) % 2,626 3,756 (1,130) (30) %

Loss on extinguishment of debt — — — — % — 793 (793) (100) %

Miscellaneous 25,661 24,414 1,247 5 % 24,414 23,723 691 3 %

1 unchanged sentence

Non-interest expense for the year ended December 31, 2025, increased compared to the same period in 2024.

The increase was primarily due to increases in salary and employee benefits and payment and card processing services, partially offset by a decrease in professional and legal expenses.

Salary and employee benefits increased for the year ended December 31, 2024, compared to the prior year, primarily as a result of normal annual salary and wage increases and an increase in loan production related commission expense, partially offset by lower medical expenses.

Payment and card processing services increased for the year ended December 31, 2024, compared to the prior year, primarily reflecting an increase in online banking costs and fraud losses.

Professional and legal expenses decreased for the year ended December 31, 2024, from the year ended December 31, 2023, primarily due to a reduction in legal and consulting expenses as well as a one-time reduction in litigation settlement costs.

The increase was primarily due to increases in salary and employee benefits, information and computer data services expense, payment and card processing services expense, and professional and legal expenses.

Salary and employee benefits increased for the year ended December 31, 2025, compared to the prior year, primarily due to normal annual salary and wage increases, an increase in loan and deposit related commission expense, and an increase in medical claims expense.

Information and computer data services expense increased for the year ended December 31, 2025, compared to the prior year, primarily due to an increase in software expenses related to additional software service contracts and the implementation of a new loan and deposit origination system during 2025.

Payment and card processing services increased for the year ended December 31, 2025, compared to the prior year, primarily reflecting increases in online banking costs and rewards program expenses.

Professional and legal expenses increased for the year ended December 31, 2025, from the year ended December 31, 2024, primarily due to an increase in legal expenses and a pending legal settlement accrual.

Income Taxes.

6 unchanged sentences

Our financial condition and operations are influenced significantly by general economic conditions, including the absolute level of interest rates as well as changes in interest rates and the slope of the yield curve.

Our profitability is dependent, to a large extent, on our net interest income, which is the difference between the interest received from our interest-earning assets and the interest expense incurred on our interest-bearing liabilities.

T able of C onten ts

Our profitability is dependent largely on our net interest income, which is the difference between the interest received from our interest-earning assets and the interest expense incurred on our interest-bearing liabilities.

Our activities, like those of all financial institutions, inherently involve the assumption of interest rate risk.

9 unchanged sentences

As of December 31, 2025, our loans with interest rate floors totaled $5.64 billion and had a weighted average floor rate of 4.97% compared to a current average note rate of 6.32%.

As of December 31, 2024, our loans with interest rates at their floors totaled $1.34 billion and had a weighted average note rate of 4.48%.

As of December 31, 2025, loans with interest rates at their floors totaled $1.38 billion and had a weighted average note rate of 5.00%.

The Company actively manages its exposure to interest rate risk through ongoing adjustments to the mix of interest-earning assets and funding sources that affect the repricing speeds of loans, investments, interest-bearing deposits and borrowings.

16 unchanged sentences

Nonetheless, the interest rate sensitivity of our net interest income and net economic value of equity could vary substantially if different assumptions were used or if actual experience differs from the assumptions used.

T able of C onten ts

The following tables set forth, as of December 31, 2025, the estimated changes in our net interest income over one-year and two-year time horizons for our rate ramp and rate shock interest rate sensitivity scenarios, and the estimated changes in economic value of equity for our rate shock interest rate sensitivity scenario based on the indicated interest rate environments (dollars in thousands):

28 unchanged sentences

The targeted Federal Funds Rate was between 3.5% and 3.75% at December 31, 2025.

At December 31, 2025, the Company’s interest rate risk profile reflected a moderately asset-sensitive position in the near term, with net interest income projected to increase under rising rate scenarios and decrease under falling rate scenarios.

In contrast, the estimated long-term economic value of the balance sheet was more sensitive to interest rate changes, declining under rising rate scenarios and changing less under falling rate scenarios.

This opposite directional behavior occurs because net interest income reflects the short-term repricing of assets and liabilities, whereas the economic value of equity measures the present value of all future cash flows;

higher interest rates reduce the present value of assets more than liabilities, decreasing economic value of equity, and vice versa.

Overall, the results indicate that near-term earnings are expected to benefit from higher interest rates, while the long-term economic value of equity is more sensitive to market rate movements.

Another monitoring tool for assessing interest rate risk is gap analysis.

8 unchanged sentences

For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market rates.

Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market rates, while interest rates on other types may lag behind changes in market rates.

Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market rates, while interest rates on other types may lag changes in market rates.

Additionally, certain assets, such as ARM loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset.

1 unchanged sentence

Finally, the ability of some borrowers to service their debt may decrease in the event of a severe change in market rates.

T able of C onten ts

Table 22, Interest Sensitivity Gap , presents our interest sensitivity gap between interest-earning assets and interest-bearing liabilities at December 31, 2025.

1 unchanged sentence

At December 31, 2025, total interest-earning assets maturing or repricing within one year exceeded total interest-bearing liabilities maturing or repricing in the same time period by $3.10 billion, representing a one-year cumulative gap to total assets ratio of 18.93%.

The interest rate risk indicators and interest sensitivity gaps as of December 31, 2024, are within our internal policy guidelines and Management considers that our current level of interest rate risk is reasonable.

T able of C onten ts

The interest rate risk indicators and interest sensitivity gaps as of December 31, 2025, are within our internal policy guidelines and Management considers our current level of interest rate risk is reasonable.

The following table provides a GAP analysis as of December 31, 2025 (dollars in thousands):

18 unchanged sentences

Interest-bearing liabilities:

Interest-bearing checking accounts 687,978 138,174 472,656 369,652 626,421 1,183,542 3,478,423

Regular savings 515,503 167,842 577,388 454,766 773,024 1,235,399 3,723,922

Interest-bearing checking accounts 319,394 110,089 389,427 319,192 568,777 902,201 2,609,080

Money market deposit accounts 188,504 110,796 347,068 232,951 302,590 206,092 1,388,001

12 unchanged sentences

(footnotes follow)

T able of C onten ts

(1) Adjustable-rate assets are included in the period in which interest rates are next scheduled to adjust rather than in the period in which they are due to mature, and fixed-rate assets are included in the period in which they are scheduled to be repaid based upon scheduled amortization, in each case adjusted to take into account estimated prepayments.

3 unchanged sentences

Although regular savings, demand, interest-bearing checking, and money market deposit accounts are subject to immediate withdrawal, based on historical experience, Management considers a substantial amount of such accounts to be core deposits having significantly longer maturities.

For the purpose of the gap analysis, these accounts have been assigned decay rates to reflect their longer effective maturities.

For the gap analysis, these accounts have been assigned decay rates to reflect their longer effective maturities.

If these accounts had been assumed to be short-term, the one-year cumulative gap of interest-sensitive assets would have been a negative $3.21 billion, or negative 19.65% of total assets at December 31, 2025.

1 unchanged sentence

Management is aware of the sources of interest rate risk and actively monitors and manages it to the extent possible.

The Bank’s 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 Bank uses interest rate swaps as part of its interest rate risk management strategy.

The Bank enters into interest rate swaps with certain qualifying commercial loan clients.

The Bank simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and terms.

The net result of these interest rate swaps is that the client pays a fixed rate of interest and the Bank receives a floating rate.

Based on our analysis of the interest rate risk scenarios and our strategies for managing our risk, Management believes our current level of interest rate risk is reasonable.

4 unchanged sentences

During the years ended December 31, 2025 and 2024, our loan originations, including originations of loans held for sale, exceeded our loan repayments by $852.6 million and $984.7 million, respectively.

There were $4.7 million of loans purchased during the year ended December 31, 2024, and no loans purchased during the year ended December 31, 2023.

There were $10.9 million of loans purchased during the year ended December 31, 2025, and $4.7 million loans purchased during the year ended December 31, 2024.

During the years ended December 31, 2025 and 2024, we received proceeds of $492.3 million and $435.3 million, respectively, from the sale of loans.

3 unchanged sentences

At December 31, 2025, core deposits totaled $12.21 billion, or 89%, of total deposits, compared with $12.01 billion, or 89% of total deposits at December 31, 2024.

The increase in core deposits compared to the prior year quarter primarily reflects increases in interest-bearing transaction and savings accounts.

The increase in core deposits compared to the prior year end primarily reflects increases in interest-bearing transaction and savings accounts.

Certificates of deposit are generally more vulnerable to competition and more price sensitive than other retail deposits and our pricing of those deposits varies significantly based upon our liquidity management strategies at any point in time.

At December 31, 2025, certificates of deposit totaled $1.53 billion, or 11% of our total deposits, including $1.48 billion which were scheduled to mature within one year.

Certificates of deposit totaled 11% of our total deposits at December 31, 2023.

We had $150.0 million of FHLB advances at December 31, 2025, compared to $290.0 million at December 31, 2024.

Other borrowings at December 31, 2025, decreased $17.5 million to $107.7 million from December 31, 2024.

Both the FHLB advances and other borrowings outstanding at December 31, 2024 mature during 2025.

Both the FHLB advances and other borrowings outstanding at December 31, 2025, are scheduled to mature during 2026.

We must maintain an adequate level of liquidity to ensure the availability of sufficient funds to accommodate deposit withdrawals, support loan growth, satisfy financial commitments and take advantage of investment opportunities.

2 unchanged sentences

While representing potential growth in the loan portfolio and lending activities, this level of commitments is proportionally consistent with our historical experience and does not represent a departure from normal operations.

For the year ending December 31, 2025, we have $18.9 million of purchase obligations under contracts with our key vendors to provide services, mainly information technology related contracts.

In addition, at December 31, 2024, we had $14.1 million of commitments under operating lease agreements.

T able of C onten ts

At December 31, 2025, we had $25.1 million of purchase obligations under contracts with our key vendors to provide services, mainly information technology related contracts.

In addition, at December 31, 2025, we had $12.6 million of commitments under operating lease agreements in the next 12 months.

We generally maintain sufficient cash and readily marketable securities to meet short-term liquidity needs;

12 unchanged sentences

Banner is a separate legal entity from the Bank and, on a stand-alone level, must provide for its own liquidity and pay its own operating expenses and cash dividends.

During 2024, Banner and the Bank entered into an intercompany loan agreement for $50.0 million, which reduced Banner’s cash balance while maintaining liquidity with the note receivable from the Bank.

The note has a term of one year, automatically renewable each quarter.

The note eliminates upon consolidation.

Banner’s primary sources of funds consist of capital raised through dividends or capital distributions from the Bank, although there are regulatory restrictions on the ability of the Bank to pay dividends.

We currently expect to continue our current practice of paying quarterly cash dividends on our common stock, subject to our Board of Directors’ discretion to modify or terminate this practice at any time and for any reason without prior notice.

Our current quarterly common stock dividend rate is $0.48 per share, as approved by our Board of Directors, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash to our shareholders.

Assuming continued dividend payments during 2025 at this rate of $0.48 per share, our average total dividend paid each quarter would be approximately $16.5 million based on the number of outstanding shares at December 31, 2024.

Our current quarterly common stock dividend rate is $0.50 per share, as approved by our Board of Directors, which we believe is a dividend rate per share that enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash to our shareholders.

Assuming continued quarterly dividend payments during 2026 at this rate of $0.50 per share, our average total dividend paid each quarter would be approximately $17.0 million based on the number of outstanding shares at December 31, 2025.

At December 31, 2025, Banner (on an unconsolidated basis) had liquid assets of $69.0 million.

During the year ended December 31, 2024, total shareholders’ equity increased $121.6 million to $1.77 billion.

During the year ended December 31, 2025, total shareholders’ equity increased $172.0 million to $1.95 billion, representing 11.90% of total assets.

At December 31, 2025, tangible common shareholders’ equity, a non-GAAP financial measure which excludes goodwill and other intangible assets, was $1.57 billion, or 9.84% of tangible assets.

18 unchanged sentences

See pages 58 – 62 of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

T able of C onten ts

ITEM 8 – Financial Statements and Supplementary Data

For financial statements, see index on page 72 .

ITEM 9 – Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

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 7. Management’s Discussion and Analysis