What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-25 compared with 2025-02-26 · 17 added, 2288 removed, 152 unchanged (94% of the section changed)

ITEM 9A – Controls and Procedures

The Management of Banner is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities Exchange Act of 1934 (Exchange Act).

A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that its objectives are met.

Also, because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Additionally, in designing disclosure controls and procedures, our Management was necessarily required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Management of Banner is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934 (Exchange Act).

A control procedure, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives are met.

Also, because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues or instances of fraud, if any, within the Company have been detected.

Additionally, in designing disclosure controls and procedures, Management applies judgment in evaluating the cost-benefit relationship of potential disclosure controls and procedures.

The design of any disclosure controls and procedures is also based, in part, upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

2 unchanged sentences

(a) Evaluation of Disclosure Controls and Procedures:

An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) was carried out under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and several other members of our senior management as of the end of the period covered by this report.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) was carried out under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and other members of our senior management as of the end of the period covered by this report.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) accumulated and communicated to management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b) Changes in Internal Controls Over Financial Reporting:

1 unchanged sentence

Management’s Annual Report on Internal Control over Financial Reporting:

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

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

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, the Company included a report of Management’s assessment of the effectiveness of its internal controls beginning on page 66 of this Annual Report on Form 10-K for the year ended December 31, 2025.

The Company’s independent registered public accounting firm, Baker Tilly US, LLP, which audited the consolidated financial statements as of and for the year ended December 31, 2025 (included in Item 8 of this annual report), has issued an audit report on the Company’s internal control over financial reporting beginning on page 67 of this Annual Report on Form 10-K.

ITEM 9B – Other Information

2 unchanged sentences

Not applicable.

T able of C onten ts

ITEM 10 – Directors, Executive Officers and Corporate Governance

5 unchanged sentences

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

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

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

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

17 unchanged sentences

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

T able of C onten ts

(d) Equity Compensation Plan Information

11 unchanged sentences

ITEM 14 – Principal Accountant Fees and Services

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

T able of C onten ts

The information required by this item is incorporated herein by reference to the section captioned “Proposal 3– Ratification of Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.

ITEM 15 – Exhibits and Financial Statement Schedules

4 unchanged sentences

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

T able of C onten ts

Item 16 - Form 10-K Summary.

38 unchanged sentences

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

10{p}* 2025 Employee Stock Purchase Plan [incorporated by reference to Exhibit 10.1 included in the Registration Statement on Form S-8 dated November 5, 2025 (File No.

333-274273)].

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

Governance Documents].

19 Insider T rading P olicies and P rocedures.

19 Insider Trading Policies and Procedures.

[incorporated by reference to exhibits filed with the Annual Report on Form 10-K for the year ended December 31, 2024 (File No.

21 Subsidiaries of the Registrant.

T able of C onten ts

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

23.1 Consent of Registered Independent Public Accounting Firm – Baker Tilly US, LLP.

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

11 unchanged sentences

* Compensatory plan or arrangement.

T able of C onten ts

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

23 unchanged sentences

/s/ Margot J.

Copeland /s/ David A.

Copeland David A.

Copeland /s/Millicent Tracey

Copeland Millicent Tracey

Director Director

12 unchanged sentences

February 25, 2026

T able of C onten ts

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

BANNER CORPORATION AND SUBSIDIARIES

(Item 8 and Item 15(a)(1))

Report of Management

Management Report on Internal Control Over Financial Reporting

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

Consolidated Statements of Financial Condition

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Shareholders’ Equity

Consolidated Statements of Cash Flows

Notes to the Consolidated Financial Statements

T able of C onten ts

February 26, 2025

Report of Management

To the Shareholders:

The management of Banner Corporation (the Company) is responsible for the preparation, integrity, and fair presentation of its published financial statements and all other information presented in this annual report.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, as such, include amounts based on informed judgments and estimates made by Management.

In the opinion of Management, the financial statements and other information herein present fairly the financial condition and operations of the Company at the dates indicated in conformity with accounting principles generally accepted in the United States of America.

Management is responsible for establishing and maintaining an effective system of internal control over financial reporting.

The internal control system is augmented by written policies and procedures and by audits performed by an internal audit staff (assisted in certain instances by contracted external audit resources other than the independent registered public accounting firm), which reports to the Audit Committee of the Board of Directors.

Internal auditors monitor the operation of the internal and external control system and report findings to Management and the Audit Committee.

When appropriate, corrective actions are taken to address identified control deficiencies and other opportunities for improving the system.

The Audit Committee provides oversight to the financial reporting process.

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and circumvention or overriding of controls.

Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation.

Further, because of changes in conditions, the effectiveness of an internal control system may vary over time.

The Audit Committee of the Board of Directors is comprised entirely of outside directors who are independent of the Company’s management.

The Audit Committee is responsible for the selection of the independent auditors.

It meets periodically with Management, the independent auditors and the internal auditors to ensure that they are carrying out their responsibilities.

The Committee is also responsible for performing an oversight role by reviewing and monitoring the financial, accounting, and auditing procedures of the Company in addition to reviewing the Company’s financial reports.

The independent auditors and the internal auditors have full and free access to the Audit Committee, with or without the presence of Management, to discuss the adequacy of the internal control structure for financial reporting and any other matters which they believe should be brought to the attention of the Committee.

Grescovich, Chief Executive Officer

Butterfield, Chief Financial Officer

T able of C onten ts

Management Report on Internal Control over Financial Reporting

February 26, 2025

The management of Banner Corporation is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934.

The Company’s internal control system is designed to provide reasonable assurance to our Management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with the authorizations of Management and directors of the Company;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, including the possibility of human error and circumvention or overriding of controls, internal control over financial reporting may not prevent or detect misstatements.

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

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

This assessment was based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013) .

Based on this assessment and those criteria, Management believes that, as of December 31, 2024, the Company maintained effective internal control over financial reporting.

The Company’s independent registered public accounting firm has audited the Company’s Consolidated Financial Statements that are included in this annual report and the effectiveness of our internal control over financial reporting as of December 31, 2024, and issued their Report of Independent Registered Public Accounting Firm, appearing under Item 8.

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

T able of C onten ts

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Banner Corporation and Subsidiaries

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial condition of Banner Corporation and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

T able of C onten ts

Critical Audit Matter

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

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

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

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

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

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

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

The qualitative and environmental factors are used to estimate credit losses related to matters that are not captured in the historical loss rates and are based on management’s evaluation of available internal and external data.

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

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

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

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

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

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

/s/ Moss Adams LLP

Portland, Oregon

February 26, 2025

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

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except shares and per share amounts)

December 31, 2024 and 2023

ASSETS December 31,

2024 December 31,

Cash and due from banks $ 203,402 $ 209,634

Interest-bearing deposits 298,456 44,830

Total cash and cash equivalents 501,858 254,464

Securities—available-for-sale;

amortized cost $ 2,460,262 and $ 2,729,980 , respectively

2,104,511 2,373,783

Securities—held-to-maturity, net of allowance for credit losses of $ 297 and $ 332 , respectively

1,001,564 1,059,055

Total securities 3,106,075 3,432,838

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

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

32,021 11,170

Loans receivable 11,354,656 10,810,455

Allowance for credit losses – loans ( 155,521 ) ( 149,643 )

Net loans receivable

11,199,135 10,660,812

Accrued interest receivable 60,885 63,100

Property and equipment, net 124,589 132,231

Goodwill 373,121 373,121

Other intangibles, net 3,058 5,684

Bank-owned life insurance (BOLI) 312,549 304,366

Deferred tax assets, net 148,858 153,365

Operating lease right-of-use assets 39,998 43,731

Other assets 275,439 211,481

$ 16,200,037 $ 15,670,391

Non-interest-bearing $ 4,591,543 $ 4,792,369

Interest-bearing transaction and savings accounts 7,423,183 6,759,661

Interest-bearing certificates 1,499,672 1,477,467

Total deposits

13,514,398 13,029,497

Advances from FHLB 290,000 323,000

Other borrowings 125,257 182,877

Subordinated notes, net 80,278 92,851

Junior subordinated debentures at fair value (issued in connection with Trust Preferred Securities) 67,477 66,413

Operating lease liabilities 43,472 48,659

Accrued expenses and other liabilities 258,070 228,428

Deferred compensation 46,759 45,975

Total liabilities

14,425,711 14,017,700

COMMITMENTS AND CONTINGENCIES (Note 18)

SHAREHOLDERS’ EQUITY

Preferred stock - $ 0.01 par value per share, 500,000 shares authorized;

no shares outstanding at December 31, 2024 and December 31, 2023

Common stock and paid in capital - $ 0.01 par value per share, 50,000,000 shares authorized;

34,459,832 shares issued and outstanding at December 31, 2024;

34,348,369 shares issued and outstanding at December 31, 2023

1,307,509 1,299,651

Common stock (non-voting) and paid in capital - $ 0.01 par value per share, 5,000,000 shares authorized;

no shares issued and outstanding at December 31, 2024 and December 31, 2023

Retained earnings 744,091 642,175

Carrying value of shares held in trust for stock-based compensation plans ( 6,194 ) ( 6,563 )

Liability for common stock issued to stock related compensation plans 6,194 6,563

Accumulated other comprehensive loss ( 277,274 ) ( 289,135 )

Total shareholders’ equity 1,774,326 1,652,691

Total liabilities and shareholders’ equity $ 16,200,037 $ 15,670,391

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except for shares and per share amounts)

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

2024 2023 2022

INTEREST INCOME:

Loans receivable $ 655,590 $ 577,891 $ 450,916

Mortgage-backed securities 66,085 72,352 67,585

Securities and cash equivalents 44,428 51,329 54,068

Total interest income

766,103 701,572 572,569

INTEREST EXPENSE:

Deposits 199,465 100,126 10,124

FHLB advances 8,941 10,524 489

Other borrowings 4,299 3,376 377

Subordinated debt 11,682 11,541 8,400

Total interest expense

224,387 125,567 19,390

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

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

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

NON-INTEREST INCOME

Deposit fees and other service charges 43,371 41,638 44,459

Mortgage banking operations 12,207 11,817 10,834

BOLI 9,193 9,245 7,794

Miscellaneous 8,289 5,169 6,805

73,060 67,869 69,892

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

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

Gain on sale of branches, including related deposits — — 7,804

Total non-interest income

66,888 44,409 75,255

NON-INTEREST EXPENSE:

Salary and employee benefits 250,555 244,563 242,266

Less capitalized loan origination costs ( 16,857 ) ( 16,257 ) ( 24,313 )

Occupancy and equipment 48,771 47,886 52,018

Information and computer data services 29,165 28,445 25,986

Payment and card processing services 22,518 20,547 21,195

Professional and legal expenses 7,858 9,830 14,005

Advertising and marketing 5,149 4,794 3,959

Deposit insurance 11,398 10,529 6,649

State and municipal business and use taxes 5,648 5,260 4,693

Real estate operations, net 293 ( 538 ) ( 104 )

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

Loss on extinguishment of debt — — 793

Miscellaneous 24,414 23,723 24,869

Total non-interest expense

391,538 382,538 377,295

Income before provision for income taxes 209,485 227,087 240,775

PROVISION FOR INCOME TAXES 40,587 43,463 45,397

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

Earnings per common share:

Basic $ 4.90 $ 5.35 $ 5.70

Diluted $ 4.88 $ 5.33 $ 5.67

Cumulative dividends declared per common share $ 1.92 $ 1.92 $ 1.76

Weighted average number of common shares outstanding:

Basic 34,470,057 34,344,142 34,264,322

Diluted 34,628,710 34,450,412 34,459,922

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

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

2024 2023 2022

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

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

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

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

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

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

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

Income tax benefit related to securities transferred from available-for-sale to held-to-maturity — — 8,303

Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity 2,296 2,338 2,625

Income tax benefit related to amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity ( 551 ) ( 561 ) ( 630 )

Net unrealized gain (loss) on interest rate swaps used in cash flow hedges 13,929 12,557 ( 25,223 )

Income tax (expense) benefit related to interest rate swaps used in cash flow hedges ( 3,343 ) ( 3,014 ) 6,054

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

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

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

Income tax expense related to junior subordinated debentures redeemed — — ( 184 )

Other comprehensive income (loss) 11,861 73,634 ( 362,953 )

COMPREHENSIVE INCOME (LOSS) $ 180,759 $ 257,258 $ ( 167,575 )

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except shares and per share amounts)

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

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

Shares Amount

Balance, January 1, 2022 34,252,632 $ 1,299,381 $ 390,762 $ 184 $ 1,690,327

Net income 195,378 195,378

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

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

( 60,898 ) ( 60,898 )

Repurchase of common stock

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

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

141,386 5,538 5,538

Balance, December 31, 2022 34,194,018 $ 1,293,959 $ 525,242 $ ( 362,769 ) $ 1,456,432

Balance, January 1, 2023 34,194,018 $ 1,293,959 $ 525,242 $ ( 362,769 ) $ 1,456,432

Net income 183,624 183,624

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

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

( 66,691 ) ( 66,691 )

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

154,351 5,692 5,692

Balance, December 31, 2023 34,348,369 $ 1,299,651 $ 642,175 $ ( 289,135 ) $ 1,652,691

Balance, January 1, 2024 34,348,369 $ 1,299,651 $ 642,175 $ ( 289,135 ) $ 1,652,691

Net income 168,898 168,898

Other comprehensive income, net of income tax 11,861 11,861

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

( 66,982 ) ( 66,982 )

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

111,463 7,858 7,858

Balance, December 31, 2024 34,459,832 $ 1,307,509 $ 744,091 $ ( 277,274 ) $ 1,774,326

See Notes to the Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

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

2024 2023 2022

OPERATING ACTIVITIES:

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

Adjustments to reconcile net income to net cash provided from operating activities:

Depreciation 18,076 17,873 16,933

Deferred income and expense, net of amortization ( 7,999 ) ( 4,194 ) ( 3,757 )

Capitalized loan servicing rights, net of amortization 1,372 1,830 1,326

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

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

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

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

Decrease in deferred taxes 762 1,514 7,624

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

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

Net change in cash surrender value of BOLI ( 9,032 ) ( 8,742 ) ( 7,100 )

Gain on sale of loans, excluding capitalized servicing rights ( 6,180 ) ( 6,151 ) ( 4,556 )

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

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

Loss on extinguishment of debt — — 765

Origination of loans held for sale ( 298,184 ) ( 242,844 ) ( 406,915 )

Proceeds from sales of loans held for sale 414,807 266,540 415,635

Net change in:

Other assets ( 35,288 ) ( 8,968 ) ( 39,028 )

Other liabilities 13,566 13,065 34,244

Net cash provided from operating activities 293,187 257,199 238,051

INVESTING ACTIVITIES:

Purchases of securities—available-for-sale ( 63,170 ) ( 58,173 ) ( 659,905 )

Principal repayments and maturities of securities—available-for-sale 241,427 173,055 368,996

Proceeds from sales of securities—available-for-sale 70,777 368,945 214,335

Purchases of securities—held-to-maturity — — ( 190,645 )

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

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

Purchases of loans and participating interest in loans ( 4,666 ) — ( 126,556 )

Proceeds from sales of other loans 20,522 14,038 14,034

Net cash paid related to branch divestiture — — ( 168,137 )

Purchases of property and equipment ( 13,747 ) ( 14,651 ) ( 14,724 )

Proceeds from sale of real estate held for sale and sale of other property 4,323 4,669 6,088

Proceeds from FHLB stock repurchase program 146,162 153,397 15,080

Purchase of FHLB stock ( 144,585 ) ( 165,425 ) ( 15,080 )

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

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

Other 686 1,693 3,459

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

(Continued on next page)

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(continued) (in thousands)

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

2024 2023 2022

FINANCING ACTIVITIES:

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

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

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

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

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

Proceeds from redemption of trust preferred securities related to junior subordinated debentures — — 1,518

Cash dividends paid ( 66,733 ) ( 66,765 ) ( 61,078 )

Cash paid for repurchase of common stock — — ( 10,960 )

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

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

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

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 254,464 243,062 2,134,300

CASH AND CASH EQUIVALENTS, END OF YEAR $ 501,858 $ 254,464 $ 243,062

2024 2023 2022

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid in cash $ 224,808 $ 110,845 $ 18,583

Taxes paid 24,194 38,671 24,885

NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Transfer of loans to real estate owned and other repossessed assets 2,832 1,185 —

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

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

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

Securities, available-for-sale, transferred to held-to-maturity — — 462,159

DISPOSITIONS:

Assets divested — — ( 1,539 )

Liabilities divested — — ( 178,209 )

See Notes to Consolidated Financial Statements

T able of C onten ts

BANNER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business:

Banner Corporation (Banner or the Company) is a bank holding company incorporated in the State of Washington.

The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, Banner Bank (the Bank).

The Bank is a Washington-chartered commercial bank that conducts business from its headquarters in Walla Walla, Washington and its 135 branch offices located in Washington, Oregon, California and Idaho.

The Bank also has 13 loan production offices located in Washington, Oregon, California, Idaho and Utah.

Banner is subject to regulation by the Board of Governors of the Federal Reserve System (the Federal Reserve Board).

The Bank is subject to regulation by the Washington State Department of Financial Institutions, Division of Banks (the DFI) and the Federal Deposit Insurance Corporation (the FDIC).

Basis of Presentation and Principles of Consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary.

All material intercompany transactions, profits and balances have been eliminated.

The consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and under the rules and regulations of the U.S.

Securities and Exchange Commission (the SEC).

At December 31, 2024, the Company had five wholly-owned subsidiary grantor trusts (the Trusts), each of which issued trust preferred securities (TPS) and common securities.

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

Operating Segments:

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

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

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

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

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

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

Subsequent Events:

The Company has evaluated events and transactions subsequent to December 31, 2024 through the date that the consolidated financial statements were issued for potential recognition or disclosure.

Cash and Cash Equivalents:

Cash and cash equivalents include cash and due from banks and temporary investments which are federal funds sold and interest bearing balances due from other banks.

Cash and cash equivalents generally have maturities of three months or less at the date of purchase.

Business Combinations:

Business combinations are accounted for using the acquisition method of accounting and, accordingly, assets acquired and liabilities assumed, both tangible and intangible, and consideration exchanged are recorded at acquisition date fair values.

The excess purchase consideration over fair value of net assets acquired is recorded as goodwill.

In the event that the fair value of net assets acquired exceeds the purchase price, including fair value of liabilities assumed, a bargain purchase gain is recorded on that acquisition.

Expenses incurred in connection with a business combination are expensed as incurred, except for those items permitted to be capitalized.

Changes in deferred tax asset valuation allowances related to acquired tax uncertainties are recognized in net income after the measurement period.

Use of Estimates:

In the opinion of Management, the accompanying Consolidated Statements of Financial Condition and related Consolidated Statements of Operations, Comprehensive Income (Loss), Changes in Shareholders’ Equity and Cash Flows reflect all adjustments (which include reclassification and normal recurring adjustments) that are necessary for a fair presentation in conformity with GAAP.

The preparation of financial statements in conformity with GAAP requires Management to make estimates and assumptions that affect amounts reported in the financial statements.

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

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

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

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

However, given the sensitivity of the Consolidated Financial Statements to these critical accounting estimates, the use of judgments, estimates and assumptions could result in material differences in the Company’s results of operations or financial condition.

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

T able of C onten ts

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

Debt securities classified as available-for-sale are available for future liquidity requirements and may be sold prior to maturity.

Debt securities classified as trading are also available for future liquidity requirements and may be sold prior to maturity.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Debt securities classified as held-to-maturity are carried at cost, net of the allowance for credit losses - securities, adjusted for amortization of premiums to the earliest callable date and accretion of discounts to maturity.

Debt securities classified as available-for-sale are measured at fair value.

Unrealized holding gains and losses on debt securities classified as available-for-sale are excluded from earnings and are reported net of tax as accumulated other comprehensive income (AOCI), a component of shareholders’ equity, until realized.

Debt securities classified as trading are also measured at fair value.

Unrealized holding gains and losses on securities classified as trading are included in earnings.

Realized gains and losses on sale are computed on the specific identification method and are included in earnings on the trade date sold.

Equity securities are measured at fair value with changes in the fair value recognized through net income.

Allowance for Credit Losses - Securities:

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type.

The Company’s held-to maturity portfolio contains mortgage-backed securities issued by U.S.

government entities and agencies.

These securities are either explicitly or implicitly guaranteed by the U.S.

government and have a long history of no credit losses.

The Company’s held-to-maturity portfolio also contains municipal bonds that are typically rated by major rating agencies as Aa or better.

The Company has never incurred a loss on a municipal bond, therefore the expectation of credit losses on these securities is insignificant.

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

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

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

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis.

If the Company intends to sell the security or it is more likely than not that the Company will be required to sell the security before recovering its cost basis, the entire impairment loss would be recognized in earnings.

If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, Management considers the extent to which fair value is less than amortized costs, any changes to the rating of the security by a rating agency and adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.

Projected cash flows are discounted by the current effective interest rate.

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

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

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

Losses are charged against the allowance when Management believes the non-collectability of an available-for-sale or held-to-maturity security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Investment in FHLB Stock:

FHLB stock does not have a readily determinable fair value.

The Bank’s investment in FHLB stock is carried at cost or par value ($ 100 per share) and evaluated for impairment based on the Bank’s expectations of the ultimate recoverability of the stock’s par value.

Ownership of FHLB stock is restricted to the FHLB and member institutions and can only be purchased and redeemed at par, therefore there has been no observable changes in market prices.

As a member of the FHLB system, the Bank is required to maintain a minimum level of investment in FHLB stock based on specific percentages of its outstanding FHLB advances.

Management periodically evaluates FHLB stock for impairment.

Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value.

The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared to the capital stock amount for the FHLB and the length of time this situation has persisted, (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB, (3) the impact of legislative and regulatory changes on institutions and, accordingly, the client base of the FHLB, and (4) the liquidity position of the FHLB.

The Company has determined there is no impairment on the FHLB stock investment as of December 31, 2024 and 2023.

Loans Receivable :

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

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

Loans receivable not designated as held for sale are recorded at amortized cost, net of the allowance for credit losses.

Amortized cost is the principal amount outstanding, net of deferred fees, discounts and premiums.

Accrued interest on loans is reported in accrued interest receivable on the Consolidated Statements of Financial Condition.

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

T able of C onten ts

Loans Held for Sale:

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

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

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

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

Net unrealized losses on loans held for sale that are carried at lower of cost or market are recognized through the valuation allowance as charges to income.

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

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

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

Loans Acquired in Business Combinations :

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

Establishing the fair value of acquired loans involves a significant amount of judgment, including determining the credit discount based upon historical data adjusted for current economic conditions and other factors.

If any of these assumptions are inaccurate, actual credit losses could vary significantly from the credit discount used to calculate the fair value of the acquired loans.

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

Purchased credit-deteriorated (PCD) loans have experienced more than insignificant credit deterioration since origination.

For PCD loans, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment.

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

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

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

Subsequent changes to the allowance for credit losses are recorded through a provision (recapture) for credit losses.

For purchased non-credit-deteriorated loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loan.

While credit discounts are included in the determination of the fair value for non-credit-deteriorated loans, since these discounts are expected to be accreted over the life of the loans, they cannot be used to offset the allowance for credit losses that must be recorded at the acquisition date.

As a result, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment and is recognized as a provision for credit losses.

Any subsequent deterioration (improvement) in credit quality is recognized by recording a provision (recapture) for credit losses.

Income Recognition on Nonaccrual Loans and Securities :

Interest on loans and securities is accrued as earned unless Management doubts the collectability of the asset or the unpaid interest.

Interest accruals on loans are generally discontinued when loans become 90 days past due for payment of interest or principal and the loans are then placed on nonaccrual status.

All previously accrued but uncollected interest is deducted from interest income upon transfer to nonaccrual status.

For any future payments collected, interest income is recognized only upon Management’s assessment that there is a strong likelihood that the full amount of a loan will be repaid or recovered.

Management’s assessment of the likelihood of full repayment involves judgment, including determining the fair value of the underlying collateral which can be impacted by the economic environment.

A loan may be put on nonaccrual status sooner than this policy would dictate if, in Management’s judgment, the amounts owed, principal or interest may be uncollectable.

While less common, similar interest reversal and nonaccrual treatment is applied to investment securities if their ultimate collectability becomes questionable.

Provision and Allowance for Credit Losses - Loans :

The methodology for determining the allowance for credit losses - loans is considered a critical accounting estimate by Management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the economic environment that could result in changes to the amount of the recorded allowance for credit losses - loans.

Among the material estimates required to establish the allowance for credit losses - loans are:

a reasonable and supportable forecast;

a reasonable and supportable forecast period and reversion period;

value of collateral;

strength of guarantors;

the amount and timing of future cash flows for loans individually evaluated;

and determination of the qualitative loss factors.

All of these estimates are susceptible to significant change.

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

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

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

The Company has established systematic methodologies for the determination of the adequacy of the Company’s allowance for credit losses - loans.

The methodologies are set forth in a formal policy and take into consideration the need for a valuation allowance for loans evaluated on a collective (pool) basis which have similar risk characteristics as well as allowances that are tied to individual loans that do not share risk characteristics.

The Company increases its allowance for credit losses - loans by charging the provision for credit losses.

Losses related to specific assets are applied as a reduction of the carrying value of the assets and charged against the allowance for credit loss reserve when Management believes the uncollectibility of a loan balance is confirmed.

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

T able of C onten ts

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

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

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

The allowance for credit losses - loans is measured on a collective (pool) basis when similar risk characteristics exist.

In estimating the component of the allowance for credit losses for loans that share common risk characteristics, loans are pooled based on loan type and areas of risk concentration.

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

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

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

These models calculate an expected life-of-loan loss percentage for each loan category by calculating the probability of default, based on the migration of loans from performing to loss by risk rating or delinquency categories using historical life-of-loan analysis and the severity of loss, based on the aggregate net lifetime losses incurred for each loan pool.

For credit cards, historical credit loss assumptions are estimated using a model that calculates an expected life-of-loan loss percentage for each loan category by considering the historical cumulative losses based on the aggregate net lifetime losses incurred for each loan pool.

For loans evaluated collectively, Management uses economic indicators to adjust the historical loss rates so that they better reflect Management’s expectations of future conditions over the remaining lives of the loans in the portfolio based on reasonable and supportable forecasts.

These economic indicators are selected based on correlation to the Company’s historical credit loss experience and are evaluated for each loan category.

The economic indicators evaluated include the unemployment rate, gross domestic product, real estate price indices and growth, industrial employment, corporate profits, the household consumer debt service ratio, the household mortgage debt service ratio, and single family median home price growth.

Management considers various economic scenarios and forecasts when evaluating the economic indicators and weighs the probability of various scenarios to arrive at the forecast that most reflects Management’s expectations of future conditions.

The allowance for credit losses is then adjusted for the period in which those forecasts are considered to be reasonable and supportable.

To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, the adjustments discontinue to be applied so that the model reverts back to the historical loss rates using a straight-line reversion method.

Management selected a reasonable and supportable forecast period of 12 months with a reversion period of 12 months.

Both the reasonable and supportable forecast period and the reversion period are periodically reviewed by Management.

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

In determining the aggregate adjustment needed, Management considers the financial condition of the borrowers, the nature and volume of the loans, the remaining terms and the extent of prepayments on the loans, the volume and severity of past due and classified loans as well as the value of the underlying collateral on loans in which the collateral dependent practical expedient has not been used.

Management also considers the Company’s lending policies, the quality of the Company’s credit review system, the quality of the Company’s management and lending staff, and the regulatory and economic environments in the areas in which the Company’s lending activities are concentrated.

Loans that do not share risk characteristics with other loans in the portfolio are individually evaluated for impairment and are not included in the collective evaluation.

Factors involved in determining whether a loan should be individually evaluated include, but are not limited to, the financial condition of the borrower and the value of the underlying collateral.

Expected credit losses for loans evaluated individually are primarily measured based on the fair market value of the collateral as of the reporting date, less estimated selling costs, as applicable.

Under certain circumstances, the Bank may use observable market value of collateral or the present value of the expected future cash flows discounted at the loan’s original effective interest rate.

As a practical expedient, the Bank measures the expected credit loss for a loan using the fair value of the collateral, if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Bank’s assessment as of the reporting date.

In both cases, if the fair value of the collateral is less than the amortized cost basis of the loan, the Bank will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan.

If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off.

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

T able of C onten ts

Loan Origination and Commitment Fees:

Loan origination fees, net of certain specifically defined direct loan origination costs, are deferred and recognized as an adjustment of the loans’ interest yield using the level-yield method over the contractual term of each loan adjusted for actual loan prepayment experience.

Loan commitment fees are deferred until the expiration of the commitment period unless Management believes there is a remote likelihood that the underlying commitment will be exercised, in which case the fees are amortized to fee income using the straight-line method over the commitment period.

If a loan commitment is exercised, the deferred commitment fee is accounted for in the same manner as a loan origination fee.

Deferred commitment fees associated with expired commitments are recognized as fee income.

Allowance for Credit Losses - Unfunded Loan Commitments:

An allowance for credit losses - unfunded loan commitments is maintained at a level that, in the opinion of Management, is adequate to absorb expected credit losses associated with the contractual life of the Bank’s commitments to lend funds under existing agreements such as letters or lines of credit.

The Bank uses a methodology for determining the allowance for credit losses - unfunded loan commitments that applies the same segmentation and loss rate to each pool as the funded exposure adjusted for probability of funding.

Draws on unfunded loan commitments that are considered uncollectible at the time funds are advanced are charged to the allowance for credit losses on off-balance sheet exposures.

Changes in the allowance for credit losses - unfunded loan commitments are recognized as provision for (or recapture of) credit loss expense and added to the allowance for credit losses - unfunded loan commitments, which is included in other liabilities in the Consolidated Statements of Financial Condition.

Real Estate Owned:

Property acquired by foreclosure or deed in-lieu-of foreclosure is recorded at the estimated fair value of the property, less expected selling costs.

Development and improvement costs relating to the property may be capitalized, while other holding costs are expensed.

The carrying value of the property is periodically evaluated by Management and, if necessary, allowances are established to reduce the carrying value to net realizable value.

Gains or losses at the time the property is sold are charged or credited to operations in the period in which they are realized.

The amounts the Bank will ultimately recover from real estate held for sale may differ substantially from the carrying value of the assets because of market factors beyond the Bank’s control or because of changes in the Bank’s strategies for recovering the investment.

Property and Equipment:

Property and equipment is carried at cost less accumulated depreciation.

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

Buildings and leased improvements 10 – 39 years

Furniture and equipment 3 – 10 years

Routine maintenance, repairs and replacement costs are expensed as incurred.

Expenditures which significantly increase values or extend useful lives are capitalized.

The Company reviews buildings, leasehold improvements and equipment for impairment whenever events or changes in circumstances indicate that the undiscounted cash flows for the property are less than its carrying value.

If identified, an impairment loss is recognized through a charge to earnings based on the fair value of the property.

Property is classified as held for sale when the Company commits to a plan to sell the property and is actively marketing the property for sale.

Held for sale property is recorded at the lower of the estimated fair value of the property, less expected selling costs, or the book value at the date the property is transferred to held for sale.

Depreciation is not recorded on held for sale property.

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

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

Certain leases also contain lease incentives, such as tenant improvement allowances and rent abatement.

Variable lease payments are recognized as lease expense as they are incurred.

We record an operating lease right of use (ROU) asset and an operating lease liability (lease liability) for operating leases with a lease term greater than 12 months.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Accordingly, ROU assets are reduced by tenant improvement allowances from landlords plus any prepaid rent.

We do not separate lease and non-lease components of contracts.

As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.

Many of our leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule which are factored into our determination of lease payments when appropriate.

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

The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

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

T able of C onten ts

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

The Company completes its annual review of goodwill as of December 31.

An assessment of qualitative factors is completed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

The qualitative assessment involves judgment by Management on determining whether there have been any triggering events that have occurred which would indicate potential impairment.

If the qualitative analysis concludes that further analysis is required, then a quantitative impairment test would be completed.

The quantitative goodwill impairment test is used to identify the existence of impairment and the amount of impairment loss and compares the reporting unit’s estimated fair values, including goodwill, to its carrying amount.

If the fair value exceeds the carrying amount, then goodwill is not considered impaired.

If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill allocated to the reporting unit.

The impairment loss would be recognized as a charge to earnings.

The disposal of a portion of a reporting unit that meets the definition of a business requires goodwill to be allocated for purposes of determining the gain or loss on disposal .

Other Intangible Assets:

Other intangible assets consist primarily of core deposit intangibles (CDI) which are amounts recorded in business combinations or deposit purchase transactions related to the value of transaction-related deposits and the value of the client relationships associated with the deposits.

CDI is being amortized on an accelerated basis over a weighted average estimated useful life of eight to 10 years.

These assets are reviewed at least annually for events or circumstances that could impact their recoverability.

These events could include loss of the underlying core deposits, increased competition or adverse changes in the economy.

To the extent other identifiable intangible assets are deemed unrecoverable, impairment losses are recorded in other non-interest expense to reduce the carrying amount of the assets.

Mortgage and Small Business Administration (SBA) Servicing Rights:

Servicing assets are recognized as separate assets when rights are acquired through purchase or sale of loans.

Generally, purchased servicing rights are capitalized at the cost to acquire the rights.

For sales of mortgage and SBA loans, the fair value of the servicing right is estimated and capitalized.

Fair values are estimated based on an independent dealer analysis of discounted cash flows.

Capitalized mortgage servicing rights are reported in other assets and are amortized into mortgage banking operations in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Capitalized SBA servicing rights are reported in other assets and are carried at fair value.

Changes in the fair value of SBA servicing rights are recognized into miscellaneous non-interest income.

Mortgage servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost.

Impairment is determined by stratifying rights into tranches based on predominant risk characteristics for the underlying loans, such as interest rate, balance outstanding, loan type, age and remaining term, and investor type.

Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche.

If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income.

Servicing fee income is recorded for fees earned for servicing loans.

Servicing fee income is reflected in mortgage banking operations for mortgage servicing rights and in miscellaneous non-interest income for SBA servicing rights on the Consolidated Statements of Operations.

The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned.

The amortization of mortgage servicing rights is netted against loan servicing fee income.

Bank-Owned Life Insurance:

The Bank has purchased, or acquired through mergers, life insurance policies in connection with the implementation of certain executive supplemental income, salary continuation and deferred compensation retirement plans.

These policies provide protection against the adverse financial effects that could result from the death of a key employee and provide tax-exempt income to offset expenses associated with the plans.

It is the Bank’s intent to hold these policies as a long-term investment;

however, there may be an income tax impact if the Bank chooses to surrender certain policies.

Although the lives of individual, current or former management-level employees are insured, the Bank is the respective owner and sole or partial beneficiary.

BOLI is carried at the cash surrender value (CSV) of the underlying insurance contract.

Changes in the CSV and any death benefits received in excess of the CSV are recognized as non-interest income.

Derivative Instruments:

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

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

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

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

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

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

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

These cash flow hedges matured in 2024.

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

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

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

T able of C onten ts

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

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

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

The Company recognizes all derivatives as either assets or liabilities in the balance sheet and requires measurement of those instruments at fair value through adjustments to current earnings.

None of these residential mortgage loan related derivatives are designated as hedging instruments for accounting purposes.

Rather, they are accounted for as free-standing derivatives, or economic hedges, and the Company reports changes in fair values of its derivatives in current period net income.

The fair values for these instruments, which generally change as a result of changes in the level of market interest rates, are estimated based on dealer quotes and secondary market sources.

Assumptions used include rate assumptions based on historical information, current mortgage interest rates, the stage of completion of the underlying application and underwriting process, the time remaining until the expiration of the derivative loan commitment, and the expected net future cash flows related to the associated servicing of the loan.

Transfers of Financial Assets:

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered.

Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Bank, (2) the transferee has the right to pledge or exchange the transferred assets beyond a trivial benefit, and (3) the Bank does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Income Taxes:

The Company files a consolidated income tax return including all of its wholly-owned subsidiaries on a calendar year basis.

Income taxes are accounted for using the asset and liability method.

Under this method, a deferred tax asset or liability is determined based on the enacted tax rates which are expected to be in effect when the differences between the financial statement carrying amounts and tax basis of existing assets and liabilities are expected to be reported in the Company’s income tax returns.

The effect on deferred taxes of a change in tax rates is recognized in income in the period of change.

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

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

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

This review takes into consideration the status of current taxing authorities’ examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment.

Stock-Based Compensation:

Under the Company’s stock-based incentive plans, the Company compensates employees and directors with time-based restricted stock and restricted stock unit grants.

Some restricted stock awards include performance-based and market-based goals that impact the number of shares that ultimately vest based on the level of goal achievement.

The Company measures the cost of employee or director services received in exchange for an award of equity instruments based on the fair value of the award, which is the intrinsic value on the grant date.

This cost is recognized as expense in the Consolidated Statements of Operations ratably over the vesting period of the award with forfeitures of nonvested awards recognized as they occur.

Any tax benefit or deficiency is recorded as income tax benefit or expense in the period the shares vest.

Excess tax benefits are classified, along with other income tax cash flows, as an operating activity.

The Company issues restricted stock and restricted stock unit awards which vest over a one- or three-year period during which time, the employee or director accrues or receives dividends and may have full voting rights depending on the terms of the grant.

Earnings Per Share:

Earnings per common share is computed under the two-class method.

Pursuant to the two-class method, non-vested stock-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and are included in the computation of earnings per share.

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings.

Application of the two-class method resulted in the equivalent earnings per share to the treasury method.

Basic earnings per common share is computed by dividing net earnings allocated to common shareholders by the weighted average number of common shares outstanding during the applicable period, excluding outstanding participating securities.

Diluted earnings per common share is computed using the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation, using the treasury stock method.

Comprehensive Income:

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income.

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

Reclassification:

Certain reclassifications have been made to the prior years’ consolidated financial statements and/or schedules to conform to the current year’s presentation.

These reclassifications may have an impact on certain reported amounts and ratios for the prior periods.

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

T able of C onten ts

ACCOUNTING STANDARDS RECENTLY ISSUED OR ADOPTED

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

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

Disaggregation of Income Statement Expenses.

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

Specifically, they will be required to:

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

(b) employee compensation;

(d) intangible asset amortization;

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

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

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

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

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

Early adoption is permitted.

The amendments should be applied prospectively.

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

Compensation—Stock Compensation (Topic 718)

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

Scope Application of Profits Interest and Similar Awards .

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

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

Compensation—Stock Compensation.

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

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

Income Taxes (Topic 740)

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

Improvements to Income Tax Disclosures .

The amendments in the Update are intended to provide more transparency about income tax information through improvements to income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

The ASU requires disclosure in the rate reconciliation of specific categories as well as provide additional information for reconciling items that meet a quantitative threshold.

Those amendments require disclosure of the following information about income taxes paid on an annual basis:

• Income taxes paid (net of refunds received), disaggregated by federal and state taxes and by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net of refunds received).

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

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

Segment Reporting (Topic 280)

In November 2023, the FASB issued guidance within ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

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

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

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

The key amendments included in this Update:

• Require disclosure on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and are included within each reported measure of segment profit and loss.

• Require disclosure on an annual and interim basis, an amount for other segment items (defined in the ASU) and a description of its composition.

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

T able of C onten ts

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

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

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

December 31, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Available-for-Sale:

Government and agency obligations $ 8,492 $ — $ ( 559 ) $ 7,933

Municipal bonds 153,982 453 ( 30,453 ) 123,982

Corporate bonds 131,379 100 ( 6,489 ) 124,990

Mortgage-backed or related securities 1,995,805 383 ( 319,340 ) 1,676,848

Asset-backed securities 170,604 155 ( 1 ) 170,758

$ 2,460,262 $ 1,091 $ ( 356,842 ) $ 2,104,511

December 31, 2024

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

Held-to-Maturity:

Government and agency obligations $ 302 $ — $ ( 4 ) $ 298 $ —

Municipal bonds 438,196 36 ( 62,809 ) 375,280 ( 143 )

Corporate bonds 2,658 — ( 6 ) 2,498 ( 154 )

Mortgage-backed or related securities 560,705 — ( 113,253 ) 447,452 —

$ 1,001,861 $ 36 $ ( 176,072 ) $ 825,528 $ ( 297 )

December 31, 2023

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

Available-for-Sale:

Government and agency obligations $ 34,929 $ — $ ( 740 ) $ 34,189

Municipal bonds 161,264 832 ( 29,191 ) 132,905

Corporate bonds 131,291 — ( 12,168 ) 119,123

Mortgage-backed or related securities 2,179,947 942 ( 314,175 ) 1,866,714

Asset-backed securities 222,549 300 ( 1,997 ) 220,852

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

T able of C onten ts

December 31, 2023

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

Held-to-Maturity:

Government and agency obligations $ 307 $ — $ ( 5 ) $ 302 $ —

Municipal bonds 466,032 687 ( 53,563 ) 412,999 ( 157 )

Corporate bonds 2,781 — ( 20 ) 2,586 ( 175 )

Mortgage-backed or related securities 590,267 — ( 98,640 ) 491,627 —

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

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

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

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

December 31, 2024

Less Than 12 Months 12 Months or More Total

Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses

Available-for-Sale:

Government and agency obligations $ — $ — $ 7,933 $ ( 559 ) $ 7,933 $ ( 559 )

Municipal bonds 15,497 ( 287 ) 91,156 ( 30,166 ) 106,653 ( 30,453 )

Corporate bonds 2,541 ( 59 ) 96,763 ( 6,430 ) 99,304 ( 6,489 )

Mortgage-backed or related securities 44,749 ( 524 ) 1,552,613 ( 318,816 ) 1,597,362 ( 319,340 )

Asset-backed securities 20,000 ( 1 ) — — 20,000 ( 1 )

$ 82,787 $ ( 871 ) $ 1,748,465 $ ( 355,971 ) $ 1,831,252 $ ( 356,842 )

December 31, 2023

Less Than 12 Months 12 Months or More Total

Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses

Available-for-Sale:

Government and agency obligations $ — $ — $ 34,189 $ ( 740 ) $ 34,189 $ ( 740 )

Municipal bonds 6,049 ( 7 ) 103,511 ( 29,184 ) 109,560 ( 29,191 )

Corporate bonds 15,720 ( 46 ) 106,852 ( 12,122 ) 122,572 ( 12,168 )

Mortgage-backed or related securities 71,150 ( 212 ) 1,712,125 ( 313,963 ) 1,783,275 ( 314,175 )

Asset-backed securities 115,162 ( 1,212 ) 85,840 ( 785 ) 201,002 ( 1,997 )

$ 208,081 $ ( 1,477 ) $ 2,042,517 $ ( 356,794 ) $ 2,250,598 $ ( 358,271 )

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

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

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

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

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

T able of C onten ts

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

For the Year Ended December 31,

2024 2023 2022

Available-for-Sale:

Gross Gains $ 36 $ 383 $ 522

Gross Losses ( 5,529 ) ( 19,625 ) ( 3,770 )

Balance, end of the period $ ( 5,493 ) $ ( 19,242 ) $ ( 3,248 )

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

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

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

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

Expected maturities will differ from contractual maturities because some securities may be called or prepaid with or without call or prepayment penalties.

December 31, 2024

Available-for-Sale Held-to-Maturity

Amortized Cost Fair Value Amortized Cost Fair Value

Maturing within one year $ 23,515 $ 23,286 $ 3,651 $ 3,492

Maturing after one year through five years 135,410 128,115 19,325 18,790

Maturing after five years through 10 years 422,962 388,640 34,010 31,511

Maturing after 10 years 1,878,375 1,564,470 944,875 771,735

$ 2,460,262 $ 2,104,511 $ 1,001,861 $ 825,528

The following table presents, as of December 31, 2024, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law (in thousands):

December 31, 2024

Carrying Value Amortized Cost Fair Value

Purpose or beneficiary:

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

Interest rate swap counterparties 959 959 769

Repurchase transaction accounts 215,610 215,610 170,700

Other 2,289 2,289 2,094

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

T able of C onten ts

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

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

The non-rated corporate bonds primarily consist of Community Reinvestment Act related bonds secured by loan instruments from low to moderate income borrowers.

The remaining non-rated held-to-maturity debt securities balance is comprised of local municipal debt from within the Company’s geographic footprint and is monitored through quarterly or annual financial review.

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

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

December 31, 2024

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

AAA/AA/A $ — $ 430,158 $ 500 $ 16,218 $ 446,876

Not Rated 302 8,038 2,158 544,487 554,985

$ 302 $ 438,196 $ 2,658 $ 560,705 $ 1,001,861

December 31, 2023

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

AAA/AA/A $ — $ 456,999 $ 500 $ 16,459 $ 473,958

Not Rated 307 9,033 2,281 573,808 585,429

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

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

For the Year Ended December 31, 2024

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

Beginning balance $ 157 $ 175 $ 332

Recapture of provision for credit losses ( 14 ) ( 46 ) ( 60 )

Recoveries — 25 25

Ending balance $ 143 $ 154 $ 297

For the Year Ended December 31, 2023

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

Beginning balance $ 183 $ 196 $ 379

Recapture of provision for credit losses ( 26 ) ( 45 ) ( 71 )

Recoveries — 24 24

Ending balance $ 157 $ 175 $ 332

For the Year Ended December 31, 2022

Municipal bonds Corporate bonds Total

Allowance for credit losses – securities

Beginning balance $ 203 $ 230 $ 433

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

Recoveries — 29 29

Ending balance $ 183 $ 196 $ 379

T able of C onten ts

LOANS RECEIVABLE AND THE ALLOWANCE FOR CREDIT LOSSES

The following table presents the loans receivable at December 31, 2024 and 2023, by class (dollars in thousands):

December 31, 2024 December 31, 2023

Amount Percent of Total Amount Percent of Total

Commercial real estate:

Owner-occupied $ 1,027,426 9 % $ 915,897 8 %

Investment properties 1,623,672 14 1,541,344 14

Small balance CRE 1,213,792 11 1,178,500 11

Multifamily real estate 894,425 8 811,232 8

Construction, land and land development:

Commercial construction 122,362 1 170,011 2

Multifamily construction 513,706 5 503,993 5

One- to four-family construction 514,220 5 526,432 5

Land and land development 369,663 3 336,639 3

Commercial business:

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

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

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

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

Consumer—home equity revolving lines of credit

625,680 5 588,703 5

Consumer—other 95,720 1 110,681 1

Total loans 11,354,656 100 % 10,810,455 100 %

Less allowance for credit losses – loans ( 155,521 ) ( 149,643 )

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

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

Net loans include net discounts on acquired loans of $ 3.5 million and $ 4.6 million as of December 31, 2024 and 2023, respectively.

Net loans does not include accrued interest receivable.

Accrued interest receivable on loans was $ 47.7 million as of December 31, 2024 and $ 47.8 million as of December 31, 2023 and was reported in accrued interest receivable on the Consolidated Statements of Financial Condition.

At December 31, 2024 and 2023, the Company had pledged $ 7.9 billion and $ 7.6 billion of loans as collateral for FHLB and other borrowings, respectively.

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

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

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

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

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

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

T able of C onten ts

Troubled Loan Modifications.

Occasionally, the Company offers modifications of loans to borrowers experiencing financial difficulty by providing principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions or any combination of these.

When principal forgiveness is provided, the amount of the forgiveness is charged-off against the allowance for credit losses - loans.

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is charged off.

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

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

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

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

December 31, 2024

Payment Delay Term Extension Total

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

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

December 31, 2023

Payment Delay Term Extension Total

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

Commercial business 121 — 121

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

One- to four-family residential 1,060 — 1,060

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

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

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

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

December 31, 2024

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

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

Total $ — $ — $ — $ 2,889 $ 2,889

December 31, 2023

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

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

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

One- to four-family residential — — — 1,060 1,060

Total $ — $ — $ — $ 2,761 $ 2,761

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

For the Year Ended December 31, 2024

Weighted Average Payment Delay Period

(in months) Weighted Average Term Extension

Commercial business 9 3

T able of C onten ts

For the Year Ended December 31, 2023

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

One- to four-family construction n/a 14

Commercial business 8 n/a

Agricultural business, including secured by farmland 8 n/a

One- to four-family residential 8 n/a

Credit Quality Indicators :

To appropriately and effectively manage the ongoing credit quality of the Company’s loan portfolio, Management has implemented a risk-rating or loan grading system for its loans.

The system is a tool to evaluate portfolio asset quality throughout each applicable loan’s life as an asset of the Company.

Generally, loans are risk rated on an aggregate borrower/relationship basis with individual loans sharing similar ratings.

There are some instances when specific situations relating to individual loans will provide the basis for different risk ratings within the aggregate relationship.

Loans are graded on a scale of 1 to 9.

A description of the general characteristics of these categories is shown below.

Overall Risk Rating Definitions :

Risk ratings contain both qualitative and quantitative measurements and take into account the financial strength of a borrower and the structure of the loan.

Consequently, the definitions are to be applied in the context of each lending transaction and judgment must also be used to determine the appropriate risk rating, as it is not unusual for a loan to exhibit characteristics of more than one risk-rating category.

Consideration for the final rating is centered on the borrower’s ability to repay, in a timely fashion, both principal and interest.

The Company’s risk-rating and loan grading policies are reviewed and approved annually.

There were no material changes in the risk-rating or loan grading system for the periods presented.

Risk Ratings 1-5:

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

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

Risk Rating 6:

Special Mention

A credit with potential weaknesses that deserves Management’s close attention is risk rated a 6.

If left uncorrected, these potential weaknesses will result in deterioration in the capacity to repay debt.

A key distinction between Special Mention and Substandard is that in a Special Mention credit, there are identified weaknesses that pose potential risk(s) to the repayment sources, versus well defined weaknesses that pose risk(s) to the repayment sources.

Assets in this category are expected to be in this category no more than 9-12 months as the potential weaknesses in the credit are resolved.

Risk Rating 7:

A credit with well-defined weaknesses that jeopardize the ability to repay in full is risk rated a 7.

These credits are inadequately protected by either the sound net worth and payment capacity of the borrower or the value of pledged collateral.

These are credits with a distinct possibility of loss.

Loans headed for foreclosure and/or legal action due to deterioration are rated 7 or worse.

Risk Rating 8:

A credit with an extremely high probability of loss is risk rated 8.

These credits have all the same critical weaknesses that are found in a substandard loan;

however, the weaknesses are elevated to the point that, based upon current information, collection or liquidation in full is improbable.

While some loss on doubtful credits is expected, pending events may make the amount and timing of any loss indeterminable.

In these situations, taking the loss is inappropriate until the outcome of the pending event is clear.

Risk Rating 9:

A credit that is considered to be currently uncollectible or of such little value that it is no longer a viable bank asset is risk rated 9.

Losses should be taken in the accounting period in which the credit is determined to be uncollectible.

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

T able of C onten ts

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

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

Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination.

Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

December 31, 2024

Term Loans by Year of Origination Revolving Loans Total Loans

2024 2023 2022 2021 2020 Prior

Commercial real estate - owner occupied

Pass $ 188,895 $ 171,046 $ 120,470 $ 152,940 $ 107,495 $ 174,221 $ 56,699 $ 971,766

Special Mention 2,452 — — — 9,444 — 1,997 13,893

Substandard — 292 22,020 2,182 — 17,273 — 41,767

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial real estate - owner occupied $ 191,347 $ 171,338 $ 142,490 $ 155,122 $ 116,939 $ 191,494 $ 58,696 $ 1,027,426

Current period gross charge-offs $ — $ — $ 351 $ — $ — $ — $ — $ 351

Commercial real estate - investment properties

Pass $ 128,132 $ 144,473 $ 209,107 $ 270,202 $ 142,808 $ 659,253 $ 51,925 $ 1,605,900

Special Mention — — — — — 2,649 2,027 4,676

Substandard — — 5,724 — — 7,372 — 13,096

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial real estate - investment properties $ 128,132 $ 144,473 $ 214,831 $ 270,202 $ 142,808 $ 669,274 $ 53,952 $ 1,623,672

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

Multifamily real estate

Pass $ 124,675 $ 87,955 $ 206,373 $ 205,964 $ 94,637 $ 170,235 $ 2,461 $ 892,300

Special Mention — — — — — — — —

Substandard — — — — — 2,125 — 2,125

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Multifamily real estate $ 124,675 $ 87,955 $ 206,373 $ 205,964 $ 94,637 $ 172,360 $ 2,461 $ 894,425

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

T able of C onten ts

December 31, 2024

Term Loans by Year of Origination Revolving Loans Total Loans

2024 2023 2022 2021 2020 Prior

Commercial construction

Pass $ 75,095 $ 34,032 $ 12,481 $ — $ — $ — $ — $ 121,608

Special Mention — — — — — — — —

Substandard — — — 754 — — — 754

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial construction $ 75,095 $ 34,032 $ 12,481 $ 754 $ — $ — $ — $ 122,362

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

Multifamily construction

Pass $ 151,244 $ 226,411 $ 121,706 $ — $ — $ — $ 14,345 $ 513,706

Special Mention — — — — — — — —

Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Multifamily construction $ 151,244 $ 226,411 $ 121,706 $ — $ — $ — $ 14,345 $ 513,706

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

One- to four- family construction

Pass $ 445,602 $ 50,521 $ 10,744 $ — $ — $ — $ 322 $ 507,189

Special Mention — — — — — — — —

Substandard 6,293 738 — — — — — 7,031

Doubtful — — — — — — — —

Loss — — — — — — — —

Total One- to four- family construction $ 451,895 $ 51,259 $ 10,744 $ — $ — $ — $ 322 $ 514,220

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

T able of C onten ts

December 31, 2024

Term Loans by Year of Origination Revolving Loans Total Loans

2024 2023 2022 2021 2020 Prior

Land and land development

Pass $ 197,490 $ 85,344 $ 33,283 $ 22,897 $ 9,575 $ 13,871 $ 1,106 $ 363,566

Special Mention — — — — — — — —

Substandard 3,764 1,098 396 277 562 — — 6,097

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Land and land development $ 201,254 $ 86,442 $ 33,679 $ 23,174 $ 10,137 $ 13,871 $ 1,106 $ 369,663

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

Commercial business

Pass $ 168,794 $ 129,476 $ 186,001 $ 97,590 $ 108,881 $ 192,416 $ 365,770 $ 1,248,928

Special Mention 241 — 657 818 — 727 12,022 14,465

Substandard 2,889 1,714 547 947 3,214 2,274 43,355 54,940

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial business $ 171,924 $ 131,190 $ 187,205 $ 99,355 $ 112,095 $ 195,417 $ 421,147 $ 1,318,333

Current period gross charge-offs $ 2,301 $ 418 $ — $ 689 $ — $ 54 $ 558 $ 4,020

Agricultural business, including secured by farmland

Pass $ 22,330 $ 40,228 $ 19,475 $ 22,117 $ 12,746 $ 53,884 $ 127,755 $ 298,535

Special Mention — — 670 — — — 6,684 7,354

Substandard 1,962 8,980 9,999 1,183 3,367 8,850 50 34,391

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Agricultural business, including secured by farmland $ 24,292 $ 49,208 $ 30,144 $ 23,300 $ 16,113 $ 62,734 $ 134,489 $ 340,280

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

T able of C onten ts

December 31, 2023

Term Loans by Year of Origination Revolving Loans Total Loans

2023 2022 2021 2020 2019 Prior

Commercial real estate - owner occupied

Pass $ 170,577 $ 149,489 $ 161,647 $ 139,934 $ 65,424 $ 154,036 $ 36,209 $ 877,316

Special Mention — — — — — — 1 1

Substandard — 14,450 217 4,731 18,999 183 — 38,580

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial real estate - owner occupied $ 170,577 $ 163,939 $ 161,864 $ 144,665 $ 84,423 $ 154,219 $ 36,210 $ 915,897

Commercial real estate - investment properties

Pass $ 154,128 $ 168,286 $ 281,324 $ 123,315 $ 156,174 $ 597,977 $ 47,936 $ 1,529,140

Special Mention — — — — — 2,714 1,198 3,912

Substandard — — — — — 8,292 — 8,292

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial real estate - investment properties $ 154,128 $ 168,286 $ 281,324 $ 123,315 $ 156,174 $ 608,983 $ 49,134 $ 1,541,344

Multifamily real estate

Pass $ 96,865 $ 177,907 $ 215,220 $ 101,336 $ 46,886 $ 167,305 $ 3,285 $ 808,804

Special Mention — — — — — — — —

Substandard — — — — — 2,428 — 2,428

Doubtful — — — — — — — —

Loss — — — — — — — —

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

T able of C onten ts

December 31, 2023

Term Loans by Year of Origination Revolving Loans Total Loans

2023 2022 2021 2020 2019 Prior

Commercial construction

Pass $ 86,165 $ 62,302 $ 4,056 $ 12,705 $ — $ 1,015 $ — $ 166,243

Special Mention 3,010 — — — — — — 3,010

Substandard — — 758 — — — — 758

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial construction $ 89,175 $ 62,302 $ 4,814 $ 12,705 $ — $ 1,015 $ — $ 170,011

Multifamily construction

Pass $ 176,729 $ 256,661 $ 70,189 $ 414 $ — $ — $ — $ 503,993

Special Mention — — — — — — — —

Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Multifamily construction $ 176,729 $ 256,661 $ 70,189 $ 414 $ — $ — $ — $ 503,993

One- to four- family construction

Pass $ 447,818 $ 43,563 $ 25,229 $ — $ 329 $ — $ 381 $ 517,320

Special Mention — — — — — — — —

Substandard 6,715 253 2,144 — — — — 9,112

Doubtful — — — — — — — —

Loss — — — — — — — —

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

T able of C onten ts

December 31, 2023

Term Loans by Year of Origination Revolving Loans Total Loans

2023 2022 2021 2020 2019 Prior

Land and land development

Pass $ 188,134 $ 80,472 $ 34,146 $ 12,338 $ 8,409 $ 10,152 $ 2,136 $ 335,787

Special Mention — 852 — — — — — 852

Substandard — — — — — — — —

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Land and land development $ 188,134 $ 81,324 $ 34,146 $ 12,338 $ 8,409 $ 10,152 $ 2,136 $ 336,639

Commercial business

Pass $ 157,830 $ 223,582 $ 121,031 $ 134,066 $ 102,545 $ 126,175 $ 363,652 $ 1,228,881

Special Mention 199 — — — 43 — 2,548 2,790

Substandard 1,919 5,207 3,398 5,207 1,509 2,010 4,813 24,063

Doubtful — — — — — — — —

Loss — — — — — — — —

Total Commercial business $ 159,948 $ 228,789 $ 124,429 $ 139,273 $ 104,097 $ 128,185 $ 371,013 $ 1,255,734

Agricultural business, including secured by farmland

Pass $ 48,620 $ 35,520 $ 24,659 $ 17,658 $ 23,885 $ 38,273 $ 123,158 $ 311,773

Special Mention 550 — 652 — — 301 308 1,811

Substandard 4,057 — 626 — 7,819 2,280 2,723 17,505

Doubtful — — — — — — — —

Loss — — — — — — — —

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

T able of C onten ts

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

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

Revolving loans that are converted to term loans are treated as new originations in the table below and are presented by year of origination.

Term loans that are renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension.

December 31, 2024

Term Loans by Year of Origination Revolving Loans Total Loans

2024 2023 2022 2021 2020 Prior

Small balance CRE

Past Due Category

Current $ 66,708 $ 87,829 $ 198,461 $ 209,983 $ 166,244 $ 484,567 $ — $ 1,213,792

30-59 Days Past Due — — — — — — — —

60-89 Days Past Due — — — — — — — —

90 Days + Past Due — — — — — — — —

Total Small balance CRE $ 66,708 $ 87,829 $ 198,461 $ 209,983 $ 166,244 $ 484,567 $ — $ 1,213,792

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

Small business scored

Past Due Category

Current $ 209,692 $ 172,327 $ 236,769 $ 146,220 $ 69,795 $ 123,250 $ 139,836 $ 1,097,889

30-59 Days Past Due 16 62 1,084 650 104 523 523 2,962

60-89 Days Past Due — 823 75 252 — 88 30 1,268

90 Days + Past Due — 135 1,349 343 5 166 — 1,998

Total Small business scored $ 209,708 $ 173,347 $ 239,277 $ 147,465 $ 69,904 $ 124,027 $ 140,389 $ 1,104,117

Current period gross charge-offs $ 82 $ 122 $ 522 $ 575 $ 47 $ 587 $ — $ 1,935

One- to four- family residential

Past Due Category

Current $ 219,254 $ 306,523 $ 537,271 $ 246,070 $ 51,761 $ 207,017 $ — $ 1,567,896

30-59 Days Past Due 1,743 1,731 2,733 762 469 1,818 — 9,256

60-89 Days Past Due 533 570 1,635 270 442 1,099 — 4,549

90 Days + Past Due — 2,000 2,459 2,983 1,156 961 — 9,559

Total One- to four- family residential $ 221,530 $ 310,824 $ 544,098 $ 250,085 $ 53,828 $ 210,895 $ — $ 1,591,260

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

T able of C onten ts

December 31, 2024

Term Loans by Year of Origination Revolving Loans Total Loans

2024 2023 2022 2021 2020 Prior

Consumer—home equity revolving lines of credit

Past Due Category

Current $ 4,551 $ 975 $ 6,884 $ 1,964 $ 2,243 $ 6,582 $ 595,115 $ 618,314

30-59 Days Past Due — 100 1,571 98 — 335 1,532 3,636

60-89 Days Past Due — — 237 561 — 384 136 1,318

90 Days + Past Due — 766 247 190 190 1,019 — 2,412

Total Consumer—home equity revolving lines of credit $ 4,551 $ 1,841 $ 8,939 $ 2,813 $ 2,433 $ 8,320 $ 596,783 $ 625,680

Current period gross charge-offs $ — $ — $ 58 $ — $ 11 $ 1 $ 110 $ 180

Consumer-other

Past Due Category

Current $ 9,329 $ 6,333 $ 25,334 $ 8,243 $ 5,390 $ 17,374 $ 23,185 $ 95,188

30-59 Days Past Due 5 — 54 — 3 88 166 316

60-89 Days Past Due 2 15 20 39 — 1 94 171

90 Days + Past Due — — 45 — — — — 45

Total Consumer-other $ 9,336 $ 6,348 $ 25,453 $ 8,282 $ 5,393 $ 17,463 $ 23,445 $ 95,720

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

T able of C onten ts

December 31, 2023

Term Loans by Year of Origination Revolving Loans Total Loans

2023 2022 2021 2020 2019 Prior

Small balance CRE

Past Due Category

Current $ 83,077 $ 194,213 $ 215,550 $ 163,689 $ 121,596 $ 399,025 $ 378 $ 1,177,528

30-59 Days Past Due — — — — 159 400 — 559

60-89 Days Past Due — — — — — — — —

90 Days + Past Due — — — 413 — — — 413

Total Small balance CRE $ 83,077 $ 194,213 $ 215,550 $ 164,102 $ 121,755 $ 399,425 $ 378 $ 1,178,500

Small business scored

Past Due Category

Current $ 197,138 $ 276,888 $ 172,286 $ 84,320 $ 61,613 $ 96,269 $ 129,998 $ 1,018,512

30-59 Days Past Due 16 171 1,048 52 169 287 307 2,050

60-89 Days Past Due 18 — — 60 79 393 83 633

90 Days + Past Due 24 69 148 — 460 257 1 959

Total Small business scored $ 197,196 $ 277,128 $ 173,482 $ 84,432 $ 62,321 $ 97,206 $ 130,389 $ 1,022,154

One- to four- family residential

Past Due Category

Current $ 360,797 $ 586,167 $ 262,414 $ 56,436 $ 31,275 $ 206,247 $ 209 $ 1,503,545

30-59 Days Past Due 846 3,087 979 511 — 1,441 — 6,864

60-89 Days Past Due — 540 510 388 151 790 — 2,379

90 Days + Past Due 1,060 700 1,582 192 633 1,091 — 5,258

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

T able of C onten ts

December 31, 2023

Term Loans by Year of Origination Revolving Loans Total Loans

2023 2022 2021 2020 2019 Prior

Consumer—home equity revolving lines of credit

Past Due Category

Current $ 5,003 $ 2,594 $ 1,564 $ 1,200 $ 1,177 $ 4,678 $ 566,249 $ 582,465

30-59 Days Past Due — 51 93 66 175 324 2,063 2,772

60-89 Days Past Due — — 98 — 50 246 445 839

90 Days + Past Due — 365 178 1,043 19 966 56 2,627

Total Consumer—home equity revolving lines of credit $ 5,003 $ 3,010 $ 1,933 $ 2,309 $ 1,421 $ 6,214 $ 568,813 $ 588,703

Consumer-other

Past Due Category

Current $ 10,756 $ 31,836 $ 9,961 $ 6,906 $ 4,441 $ 17,920 $ 28,207 $ 110,027

30-59 Days Past Due 5 — 62 — — 81 269 417

60-89 Days Past Due 12 — 4 2 20 6 97 141

90 Days + Past Due — 58 — 28 10 — — 96

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

T able of C onten ts

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

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

December 31, 2024

Real Estate Accounts Receivable Equipment Inventory Total

Commercial real estate:

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

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

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

Commercial business:

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

Small business scored 623 — — — 623

Agricultural business, including secured by farmland

5,013 — 3,447 — 8,460

One- to four-family residential 5,374 — — — 5,374

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

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

December 31, 2023

Real Estate Accounts Receivable Equipment Inventory Total

Commercial real estate:

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

Small balance CRE $ 755 — $ — — $ 755

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

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

Agricultural business, including secured by farmland

2,576 — — — 2,576

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

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

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

T able of C onten ts

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

December 31, 2024

30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Non-accrual with no Allowance Total Non-accrual (1)

Loans 90 Days or More Past Due and Accruing

Commercial real estate:

Owner-occupied $ — $ — $ 2,182 $ 2,182 $ 1,025,244 $ 1,027,426 $ — $ 2,182 $ —

Investment properties — — — — 1,623,672 1,623,672 — — —

Small balance CRE — — — — 1,213,792 1,213,792 — 4 —

Multifamily real estate — — — — 894,425 894,425 — — —

Construction, land and land development:

Commercial construction 754 — — 754 121,608 122,362 — — —

Multifamily construction — — — — 513,706 513,706 — — —

One- to four-family construction — — 738 738 513,482 514,220 1,834 1,834 —

Land and land development 1,600 796 1,568 3,964 365,699 369,663 1,622 2,129 —

Commercial business:

Commercial business 2,025 — 1,012 3,037 1,315,296 1,318,333 123 4,103 —

Small business scored 2,962 1,268 1,998 6,228 1,097,889 1,104,117 623 2,964 —

Agricultural business, including secured by farmland

190 — 7,077 7,267 333,013 340,280 4,829 8,485 —

One- to four-family residential 9,256 4,549 9,559 23,364 1,567,896 1,591,260 5,374 10,016 369

Consumer—home equity revolving lines of credit 3,636 1,318 2,412 7,366 618,314 625,680 977 4,790 35

Consumer—other 316 171 45 532 95,188 95,720 — 45 —

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

T able of C onten ts

December 31, 2023

30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Non-accrual with no Allowance Total Non-accrual (1)

Loans 90 Days or More Past Due and Accruing

Commercial real estate:

Owner-occupied $ — $ — $ — $ — $ 915,897 $ 915,897 $ 1,391 $ 1,450 $ —

Investment properties — — — — 1,541,344 1,541,344 — — —

Small balance CRE 559 — 413 972 1,177,528 1,178,500 755 1,227 —

Multifamily real estate — — — — 811,232 811,232 — — —

Construction, land and land development:

Commercial construction — — — — 170,011 170,011 — — —

Multifamily construction — — — — 503,993 503,993 — — —

One- to four-family construction 286 — 4,201 4,487 521,945 526,432 2,852 3,105 1,096

Land and land development 1,822 553 42 2,417 334,222 336,639 — — 42

Commercial business:

Commercial business 1,166 5,735 1,181 8,082 1,247,652 1,255,734 789 7,346 —

Small business scored 2,050 633 959 3,642 1,018,512 1,022,154 — 1,656 1

Agricultural business, including secured by farmland

— — 2,171 2,171 328,918 331,089 3,167 3,167 —

One- to four-family residential 6,864 2,379 5,258 14,501 1,503,545 1,518,046 1,939 5,702 1,205

Consumer—home equity revolving lines of credit 2,772 839 2,627 6,238 582,465 588,703 821 3,110 391

Consumer—other 417 141 96 654 110,027 110,681 — 94 10

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

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

T able of C onten ts

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

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

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

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

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

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

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

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

For the Year Ended December 31, 2024

Commercial Real Estate Multifamily Real Estate Construction and Land Commercial Business Agricultural Business One- to Four-Family Residential Consumer Total

Allowance for credit losses:

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

(Recapture)/provision for credit losses ( 5,970 ) 982 1,093 7,139 1,558 1,365 2,396 8,563

Recoveries 2,767 — — 1,963 304 171 476 5,681

Charge-offs ( 351 ) — ( 150 ) ( 5,955 ) — — ( 1,910 ) ( 8,366 )

Ending balance $ 40,830 $ 10,308 $ 29,038 $ 38,611 $ 5,727 $ 20,807 $ 10,200 $ 155,521

Net loan recoveries (charge-offs) as a percent of average outstanding loans during the period 0.02 % — % — % ( 0.04 ) % — % — % ( 0.01 ) % ( 0.02 ) %

For the Year Ended December 31, 2023

Commercial Real Estate Multifamily Real Estate Construction and Land Commercial Business Agricultural Business One- to Four-Family Residential Consumer Total

Allowance for credit losses:

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

(Recapture)/provision for credit losses ( 259 ) 1,592 ( 16 ) 3,532 808 4,354 1,086 11,097

Recoveries 557 — 29 1,283 146 230 543 2,788

Charge-offs — — ( 1,089 ) ( 2,650 ) ( 564 ) ( 42 ) ( 1,362 ) ( 5,707 )

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

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

T able of C onten ts

For the Year Ended December 31, 2022

Commercial Real Estate Multifamily Real Estate Construction and Land Commercial Business Agricultural Business One- to Four-Family Residential Consumer Total

Allowance for credit losses:

Beginning balance $ 52,995 $ 7,043 $ 27,294 $ 26,421 $ 3,190 $ 8,205 $ 6,951 $ 132,099

(Recapture)/provision for loan losses ( 9,299 ) 691 1,523 6,654 ( 148 ) 6,343 2,394 8,158

Recoveries 392 — 384 1,923 475 181 566 3,921

Charge-offs ( 2 ) — ( 30 ) ( 1,699 ) ( 42 ) — ( 940 ) ( 2,713 )

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

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

T able of C onten ts

PROPERTY AND EQUIPMENT, NET

Land, buildings and equipment owned by the Company and its subsidiaries at December 31, 2024 and 2023, are summarized as follows (in thousands):

$ 25,616 $ 26,133

Buildings and leasehold improvements (1)

144,480 145,467

Furniture and equipment 147,595 137,640

317,691 309,240

Less accumulated depreciation ( 193,102 ) ( 177,009 )

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

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

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

Deposits consist of the following at December 31, 2024 and 2023 (in thousands):

Non-interest-bearing checking $ 4,591,543 $ 4,792,369

Interest-bearing checking 2,393,864 2,098,526

Regular savings accounts 3,478,423 2,980,530

Money market accounts 1,550,896 1,680,605

Total interest-bearing transaction and savings accounts 7,423,183 6,759,661

Certificates of deposit:

Certificates of deposit greater than or equal to $250,000 487,515 473,124

Certificates of deposit less than $250,000 1,012,157 1,004,343

Total certificates of deposit 1,499,672 1,477,467

Total deposits $ 13,514,398 $ 13,029,497

Included in total deposits:

Public fund transaction accounts $ 414,413 $ 356,615

Public fund interest-bearing certificates 25,423 52,048

Total public deposits $ 439,836 $ 408,663

Total brokered deposits $ 50,346 $ 108,058

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

T able of C onten ts

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

December 31, 2024

Amount Weighted Average Rate

Maturing in one year or less $ 1,448,449 3.84 %

Maturing after one year through two years 31,053 1.22

Maturing after two years through three years 13,222 1.00

Maturing after three years through four years 3,857 0.71

Maturing after four years through five years 2,492 0.85

Maturing after five years 599 0.58

Total certificates of deposit $ 1,499,672 3.75 %

ADVANCES FROM FEDERAL HOME LOAN BANK

Utilizing a blanket pledge, qualifying loans receivable at December 31, 2024 and 2023, were pledged as security for FHLB borrowings and there were no securities pledged as collateral as of December 31, 2024 or 2023.

At December 31, 2024 and 2023, FHLB advances were scheduled to mature as follows (dollars in thousands):

Amount Weighted Average Rate Amount Weighted Average Rate

Maturing in one year or less $ 290,000 4.62 % $ 323,000 5.64 %

Total FHLB advances $ 290,000 4.62 % $ 323,000 5.64 %

The maximum amount outstanding from the FHLB advances at any month end for the years ended December 31, 2024 and 2023 was $ 398.0 million and $ 645.0 million, respectively.

The average FHLB advances balance outstanding for the years ended December 31, 2024 and 2023 was $ 160.0 million and $ 196.8 million, respectively.

The average contractual interest rate on the FHLB advances for the years ended December 31, 2024 and 2023 was 5.59 % and 5.35 %, respectively.

As of December 31, 2024, the Bank has established a borrowing line with the FHLB to borrow up to 45 % of its total assets, contingent on having sufficient qualifying collateral and ownership of FHLB stock.

At December 31, 2024, under these credit facilities based on pledged collateral, the Bank had $ 2.95 billion of available credit capacity.

OTHER BORROWINGS

Other borrowings consist of retail and wholesale repurchase agreements, other term borrowings and Federal Reserve Bank borrowings.

Repurchase Agreements:

At December 31, 2024, retail repurchase agreements carry interest rates ranging from 0.05 % to 3.94 %.

These repurchase agreements are secured by the pledge of certain mortgage-backed and agency securities with a carrying value of $ 215.6 million.

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

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

Federal Reserve Bank of San Francisco and fed fund lines:

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

These borrowings are secured by a pledge of eligible loans.

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

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

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

No balances were outstanding under these agreements as of December 31, 2024 and 2023.

Availability of lines is subject to federal funds balances available for loan and continued borrower eligibility.

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

T able of C onten ts

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

Amount Weighted Average Rate Amount Weighted Average Rate

Repurchase agreements:

Maturing in one year or less $ 125,257 1.98 % $ 182,877 2.48 %

Total year-end outstanding $ 125,257 1.98 % $ 182,877 2.48 %

Average outstanding $ 164,613 2.61 % $ 199,290 1.69 %

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

T able of C onten ts

SUBORDINATED DEBT AND MANDATORILY REDEEMABLE TRUST PREFERRED SECURITIES

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

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

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

The Debentures are the sole assets of the Trusts.

The Company’s obligations under the debentures and related documents, taken together, constitute a full and unconditional guarantee by the Company of the obligations of the Trusts.

The TPS are mandatorily redeemable upon the maturity of the Debentures, or upon earlier redemption as provided in the indentures.

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

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

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

The following table is a summary of TPS at December 31, 2024 (dollars in thousands):

Name of Trust Aggregate Liquidation Amount of Trust Preferred Securities Aggregate Liquidation Amount of Common Capital Securities Aggregate Principal Amount of Junior Subordinated Debentures Stated Maturity (1)

Current Interest Rate Reset Period Interest Rate Spread (3)

Banner Capital Trust V $ 25,000 $ 774 $ 25,774 2035 6.35 % Quarterly Three-month SOFR + 1.83 %

Banner Capital Trust VI 25,000 774 25,774 2037 6.38 Quarterly Three-month SOFR + 1.88 %

Banner Capital Trust VII 25,000 774 25,774 2037 6.23 Quarterly Three-month SOFR + 1.64 %

Greater Sacramento Bancorp Statutory Trust II 4,000 124 4,124 2035 6.30 Quarterly Three-month SOFR + 1.94 %

Mission Oaks Statutory Trust I 7,500 232 7,732 2036 6.27 Quarterly Three-month SOFR + 1.91 %

Total TPS liability at par $ 86,500 $ 2,678 89,178 6.32 %

Fair value adjustment (2)

Total TPS liability at fair value (2)

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

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

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

On June 30, 2020, Banner issued and sold in an underwritten offering $ 100.0 million aggregate principal amount of 5.00 % Fixed-to-Floating Rate Subordinated Notes due 2030 (Notes) at a public offering price equal to 100% of the aggregate principal amount of the Notes, resulting in net proceeds, after underwriting discounts and estimated offering expenses, of approximately $ 98.1 million.

The interest rate on the Notes remains fixed equal to 5.00 % for the first 5 years, after 5 years the interest rate changes to a floating interest rate tied to a benchmark rate, which is expected to be Three-Month Term SOFR, plus a spread of 489 basis points.

The Notes will mature on June 30, 2030.

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

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

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

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

T able of C onten ts

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

Years Ended December 31

2024 2023 2022

Federal $ 22,648 $ 28,805 $ 26,653

State 7,843 6,296 5,882

Total Current 30,491 35,101 32,535

Federal 10,567 7,698 11,595

State ( 471 ) 664 1,267

Total Deferred 10,096 8,362 12,862

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

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

Year Ended December 31

Amount Percent

Federal income tax statutory rate $ 43,992 21.0 %

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

State audits and amended returns 4 —

Tax credits ( 9,597 ) ( 4.6 )

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

Nontaxable and nondeductible items:

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

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

Other 2,067 1.0

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

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

T able of C onten ts

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

Years Ended December 31

Percent Percent

Federal income tax statutory rate 21.0 % 21.0 %

State Income taxes, net of federal tax offset 2.6 2.3

State audits and amended returns — ( 0.1 )

Tax credits ( 2.7 ) ( 1.9 )

Low income housing partnerships, net of amortization 2.0 1.4

Nontaxable and nondeductible items:

Tax-exempt interest ( 3.6 ) ( 3.6 )

Investment in life insurance ( 0.9 ) ( 0.7 )

Other 0.7 0.5

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

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

Income Taxes Paid

US federal $ 20,000

US state and local

California 2,705

Total $ 24,194

T able of C onten ts

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

Deferred tax assets:

Loan loss and REO $ 41,045 $ 39,495

Deferred compensation 22,983 21,470

Net operating loss carryforward 10,482 12,967

Federal and state tax credits 758 758

State net operating losses 3,757 3,978

Loan discount 379 625

Lease liability 10,416 11,547

Unrealized loss on securities—available-for-sale, net 87,709 91,455

Other 1,191 4,222

Total deferred tax assets 178,720 186,517

Deferred tax liabilities:

Depreciation ( 3,783 ) ( 5,428 )

Deferred loan fees, servicing rights and loan origination costs ( 12,575 ) ( 13,008 )

Intangibles ( 2,922 ) ( 3,313 )

Right of use asset ( 9,583 ) ( 10,378 )

Financial instruments accounted for under fair value accounting ( 815 ) ( 841 )

Total deferred tax liabilities ( 29,678 ) ( 32,968 )

Deferred income tax asset 149,042 153,549

Valuation allowance ( 184 ) ( 184 )

Deferred tax asset, net $ 148,858 $ 153,365

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recognized or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment.

At December 31, 2024, the Company had federal net operating loss carryforwards of approximately $ 49.9 million.

The Company also has $ 53.0 million of state net operating loss carryforwards, against which the Company has established a $ 184,000 valuation reserve.

The federal and state net operating losses will expire, if unused, by the end of 2034.

The Company has federal general business credit carryforwards at December 31, 2024 of $ 219,000 , which will expire, if unused, by the end of 2031.

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

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

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

In addition, the underlying Section 382 limitations at Starbuck Bancshares, Inc.’s level continue to apply to the Company.

Section 382 limits the ability of a corporate taxpayer to use net operating loss carryforwards, general business credits, and recognized built-in-losses, on an annual basis, incurred prior to the change in control against income earned after the change in control.

As a result of the Section 382 limitations, the Company is limited to utilizing $ 21.5 million on an annual basis (after the application of the Section 382 limitations carried over from Starbuck Bancshares, Inc.) of federal net operating loss carryforwards, general business credits, and recognized built-in losses.

The applicable state Section 382 limitations range from $ 575,000 to $ 21.5 million.

In 2017, the Company established a $ 184,000 valuation reserve against the portion of its various state net operating loss carryforwards and tax credits that it believed it is more likely than not that it would not realize the benefit because the application of the Section 382 limitations at the state level is based on future apportionment rates.

As a consequence of Banner’s capital raise in June 2010, the Company experienced a change in control within the meaning of Section 382 of the Code.

As a result of the Section 382 limitations, the Company is limited to utilizing $ 6.9 million of net operating loss carryforwards which existed prior to the acquisition of Starbuck Bancshares, Inc., on an annual basis.

Based on its analysis, the Company believes it is more likely than not that the June 2010 change in control will not impact its ability to utilize all of the related available net operating loss carryforwards, general business credits, and recognized built-in-losses.

As of December 31, 2024, the Company had utilized all federal net operating losses and credits limited due to the June 2010 change in control.

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

T able of C onten ts

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

However, the underlying Section 382 limitations at AltaPacific and AltaPacific Bank continue to apply to the Company.

As a result of the Section 382 limitations, the Company is limited to utilizing $ 110,000 of the federal net operating loss carryovers and general business credits acquired from AltaPacific and AltaPacific Bank based on underlying limits carried over.

Based on its analysis, the Company believes it is more likely than not that the Section 382 limitations will not impact its ability to utilize all of the related available net operating loss carryforwards and general business credits.

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

In the future, if this tax bad debt reserve is used for purposes other than to absorb bad debts or the Company no longer qualifies as a bank or is completely liquidated, the Company will incur a federal tax liability at the then-prevailing corporate tax rate, estimated as $ 1.1 million at December 31, 2024.

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

Years Ended December 31

Balance, beginning of year $ 2,000 $ 1,600

Changes related to prior year tax positions — 149

Changes related to current year tax positions — 251

Balance, end of year $ 2,000 $ 2,000

None of the unrecognized tax benefits, if recognized, would materially affect the effective tax rate.

The Company does not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease in the next twelve months.

The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense.

The amount of interest and penalties accrued for the years ended December 31, 2024, 2023 and 2022 is immaterial.

The Company files consolidated income tax returns in Oregon, California, Utah, Montana and Idaho and for federal purposes.

The Company is no longer subject to tax examination for tax years before 2021.

Tax credit investments:

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

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

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

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

December 31, 2024 December 31, 2023

Tax Credit Investments:

Total commitments $ 153,618 $ 103,453

Unfunded commitments 94,416 62,594

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

For the years ended December 31,

2024 2023 2022

Tax credits and other tax benefits recognized $ 12,072 $ 8,018 $ 5,621

Tax credit amortization expense included in provision for income taxes 9,334 6,449 4,638

EMPLOYEE BENEFIT PLANS

Employee Retirement Plans:

Substantially all Company and Bank employees are eligible to participate in its 401(k)/Profit Sharing Plan, a defined contribution and profit sharing plan sponsored by the Company.

Employees may elect to have a portion of their salary contributed to the plan in conformity with Section 401(k) of the Internal Revenue Code.

At the discretion of the Company’s Board of Directors, the Company may elect to make matching and/or profit-sharing contributions for the employees’ benefit.

For the years ended December 31, 2024, 2023 and 2022, $ 7.1 million, $ 6.7 million and $ 6.9 million, respectively, was expensed for the Company’s 401(k) contributions.

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

T able of C onten ts

Supplemental Retirement and Salary Continuation Plans:

Through the Bank, the Company is obligated under various non-qualified deferred compensation plans to help supplement the retirement income of certain executives, including certain retired executives, selected by resolution of the Bank’s Boards of Directors or in certain cases by the former directors of acquired banks.

These plans are unfunded, include both defined benefit and defined contribution plans, and provide for payments after the executive’s retirement.

In the event of a participant employee’s death prior to or during retirement, the Company is obligated to pay to the designated beneficiary the benefits set forth under the plan.

For the years ended December 31, 2024, 2023 and 2022, expense recorded for supplemental retirement and salary continuation plan benefits totaled $ 2.2 million, $ 2.5 million, and $ 2.0 million, respectively.

At December 31, 2024 and 2023, liabilities recorded for the various supplemental retirement and salary continuation plan benefits totaled $ 34.8 million and $ 36.1 million, respectively, and are recorded in a deferred compensation liability account.

Deferred Compensation Plans and Rabbi Trusts:

The Company and the Bank also offer non-qualified deferred compensation plans to members of their Boards of Directors and certain employees.

The plans permit each participant to defer a portion of director fees, non-qualified retirement contributions, salary or bonuses for future receipt.

Compensation is charged to expense in the period earned.

In connection with its acquisitions, the Company also assumed liability for certain deferred compensation plans for key employees, retired employees and directors.

In order to fund the plans’ future obligations, the Company has purchased life insurance policies or other investments, including Banner common stock, which in certain instances are held in irrevocable trusts commonly referred to as “Rabbi Trusts.” As the Company is the owner of the investments and the beneficiary of the insurance policies, and in order to reflect the Company’s policy to pay benefits equal to the accumulations, the assets and liabilities are reflected in the Consolidated Statements of Financial Condition.

Banner common stock held for such plans is reported as a contra-equity account and was recorded at an original cost of $ 6.2 million at December 31, 2024 and $ 6.6 million at December 31, 2023.

At December 31, 2024 and 2023, liabilities recorded in connection with deferred compensation plan benefits totaled $ 18.8 million ($ 6.2 million in contra-equity) and $ 15.8 million ($ 6.6 million in contra-equity), respectively, and are recorded in deferred compensation or equity as appropriate.

The Bank has purchased, or acquired through mergers, life insurance policies in connection with the implementation of certain executive supplemental retirement, salary continuation and deferred compensation retirement plans, as well as additional policies not related to any specific plan.

These policies provide protection against the adverse financial effects that could result from the death of a key employee and provide tax-exempt income to offset expenses associated with the plans.

It is the Bank’s intent to hold these policies as a long-term investment.

However, there will be an income tax impact if the Bank chooses to surrender certain policies.

Although the lives of individual current or former management-level employees are insured, the Bank is the owner and sole or partial beneficiary.

At December 31, 2024 and 2023, the cash surrender value of these policies was $ 312.5 million and $ 304.4 million, respectively.

The Bank is exposed to credit risk to the extent an insurance company is unable to fulfill its financial obligations under a policy.

In order to mitigate this risk, the Bank uses a variety of insurance companies and regularly monitors their financial condition.

STOCK-BASED COMPENSATION PLANS

The Company operates the following stock-based compensation plans as approved by its shareholders:

• 2014 Omnibus Incentive Plan (the 2014 Plan).

• 2018 Omnibus Incentive Plan (the 2018 Plan).

• 2023 Omnibus Incentive Plan (the 2023 Plan).

The purpose of these plans is to promote the success and enhance the value of the Company by providing a means for attracting and retaining highly skilled employees, officers and directors of Banner and its affiliates and linking their personal interests with those of the Company’s shareholders.

Under these plans, the Company currently has outstanding restricted stock share grants and restricted stock unit grants.

2014 Omnibus Incentive Plan

The 2014 Plan was approved by shareholders on April 22, 2014.

The 2014 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards and other cash awards, and provides for vesting requirements which may include time-based or performance-based conditions.

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

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

2018 Omnibus Incentive Plan

The 2018 Plan was approved by shareholders on April 24, 2018.

The 2018 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards and other cash awards, and provides for vesting requirements which may include time-based or performance-based conditions.

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

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

T able of C onten ts

2023 Omnibus Incentive Plan

The 2023 Plan was approved by shareholders on May 24, 2023.

The 2023 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, other stock-based awards and other cash awards, and provides for vesting requirements which may include time-based or performance-based conditions.

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

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

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

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

A summary of the Company’s Restricted Stock/Unit award activity during the years ended December 31, 2024, 2023 and 2022 follows:

Shares/Units Weighted Average Grant-Date Fair Value

Unvested at January 1, 2021 476,222 $ 43.62

Granted (138,022 non-voting)

139,574 58.87

( 193,082 ) 45.30

( 39,987 ) 47.63

Unvested at December 31, 2022 382,727 49.98

Granted (203,464 non-voting)

208,273 53.64

( 217,262 ) 42.87

( 16,158 ) 55.43

Unvested at December 31, 2023 357,580 55.44

Granted (262,222 non-voting)

276,947 47.18

( 166,144 ) 54.62

( 24,501 ) 53.37

Unvested at December 31, 2024

443,882 $ 50.82

T able of C onten ts

REGULATORY CAPITAL REQUIREMENTS

Banner is a bank holding company registered with the Federal Reserve.

Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve.

Banner Bank, as a state-chartered federally insured commercial bank, is subject to the capital requirements established by the FDIC.

The Federal Reserve requires Banner to maintain capital adequacy that generally parallels the FDIC requirements.

The following table shows the regulatory capital ratios of the Company and the Bank and the minimum regulatory requirements (dollars in thousands):

Actual Minimum for Capital Adequacy Purposes Minimum to be Categorized as “Well Capitalized” Under Prompt Corrective Action Provisions

Amount Ratio Amount Ratio Amount Ratio

December 31, 2024:

Banner Corporation—consolidated:

Total capital to risk-weighted assets $ 2,024,046 15.04 % $ 1,076,652 8.00 % $ 1,345,814 10.00 %

Tier 1 capital to risk-weighted assets 1,760,065 13.08 807,489 6.00 807,489 6.00

Tier 1 capital to average leverage assets 1,760,065 11.05 636,913 4.00 n/a n/a

Tier 1 common equity to risk-weighted assets 1,673,565 12.44 605,616 4.50 n/a n/a

Total capital to risk-weighted assets 1,890,438 14.03 1,077,725 8.00 1,347,157 10.00

Tier 1 capital to risk-weighted assets 1,726,457 12.82 808,294 6.00 1,077,725 8.00

Tier 1 capital to average leverage assets 1,726,457 10.83 637,392 4.00 796,740 5.00

Tier 1 common equity to risk-weighted assets 1,726,457 12.82 606,221 4.50 875,652 6.50

December 31, 2023:

Banner Corporation—consolidated:

Total capital to risk-weighted assets $ 1,904,533 14.58 % $ 1,045,181 8.00 % $ 1,306,476 10.00 %

Tier 1 capital to risk-weighted assets 1,650,872 12.64 783,886 6.00 783,886 6.00

Tier 1 capital to average leverage assets 1,650,872 10.56 625,387 4.00 n/a n/a

Tier 1 common equity to risk-weighted assets 1,564,372 11.97 587,914 4.50 n/a n/a

Total capital to risk-weighted assets 1,789,371 13.69 1,045,273 8.00 1,306,592 10.00

Tier 1 capital to risk-weighted assets 1,635,710 12.52 783,955 6.00 1,045,273 8.00

Tier 1 capital to average leverage assets 1,635,710 10.46 625,298 4.00 781,622 5.00

Tier 1 common equity to risk-weighted assets 1,635,710 12.52 587,966 4.50 849,285 6.50

At December 31, 2024, Banner and the Bank each exceeded the requirements to be “well capitalized” and the fully phased-in capital conservation buffer requirement.

There have been no conditions or events since December 31, 2024 that have materially adversely changed the Tier 1 or Tier 2 capital of the Company or the Bank.

However, events beyond the control of the Bank, such as weak or depressed economic conditions in areas where the Bank has most of its loans, could adversely affect future earnings and, consequently, the ability of the Bank to meet its respective capital requirements.

The Company may not declare or pay cash dividends on, or repurchase, any of its shares of common stock if the effect thereof would cause equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration and payment would otherwise violate regulatory requirements.

GOODWILL, OTHER INTANGIBLE ASSETS AND MORTGAGE SERVICING RIGHTS

Goodwill and Other Intangible Assets:

At December 31, 2024, intangible assets are comprised of goodwill and CDI acquired in business combinations.

Goodwill is not amortized but is reviewed at least annually for impairment.

Banner has identified one reporting unit for purposes of evaluating goodwill for impairment.

At December 31, 2024, the Company completed an assessment of qualitative factors and concluded that no further analysis was required as it is more likely than not that the fair value of the Bank, the reporting unit, exceeds the carrying value.

CDI represents the value of transaction-related deposits and the value of the client relationships associated with the deposits.

The Company amortizes CDI assets over their estimated useful lives and reviews them at least annually for events or circumstances that could impair their value.

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

T able of C onten ts

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

Goodwill CDI Total

Balance, January 1, 2022 $ 373,121 $ 14,855 $ 387,976

Amortization — ( 5,279 ) ( 5,279 )

Other Changes (1)

— ( 136 ) ( 136 )

Balance, December 31, 2022 373,121 9,440 382,561

Amortization — ( 3,756 ) ( 3,756 )

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

Amortization — ( 2,626 ) ( 2,626 )

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

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

Estimated amortization expense with respect to CDI as of December 31, 2024 for the periods indicated (in thousands):

Estimated Amortization

Net carrying amount $ 3,058

Mortgage Servicing Rights:

Mortgage and SBA servicing rights are reported in other assets.

SBA servicing rights are initially recorded and carried at fair value.

Mortgage servicing rights are initially recognized at fair value and are amortized in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Mortgage servicing rights are subsequently evaluated for impairment based upon the fair value of the rights compared to the amortized cost (remaining unamortized initial fair value).

If the fair value is less than the amortized cost, a valuation allowance is created through an impairment charge to servicing fee income.

However, if the fair value is greater than the amortized cost, the amount above the amortized cost is not recognized in the carrying value.

In 2024, 2023 and 2022, the Company did not record any impairment charges or recoveries against mortgage servicing rights.

Unpaid principal balance of loans for which mortgage and SBA servicing rights have been recognized totaled $ 2.84 billion and $ 2.78 billion at December 31, 2024 and 2023, respectively.

Custodial accounts maintained in connection with this servicing totaled $ 12.2 million and $ 11.6 million at December 31, 2024 and 2023, respectively.

An analysis of the mortgage and SBA servicing rights for the years ended December 31, 2024, 2023 and 2022, is presented below (in thousands):

Years Ended December 31

2024 2023 2022

Balance, beginning of the year $ 14,649 $ 16,166 $ 17,206

Additions—amounts capitalized 1,802 1,590 3,200

Additions—through purchase 211 313 285

Amortization (1)

( 3,304 ) ( 3,325 ) ( 4,216 )

Fair value adjustments (2)

129 ( 95 ) ( 309 )

Balance, end of the year (2)

$ 13,487 $ 14,649 $ 16,166

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

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

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

T able of C onten ts

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents estimated fair values of the Company’s financial instruments as of December 31, 2024 and 2023, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (in thousands):

December 31, 2024 December 31, 2023

Level Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

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

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

Securities—available-for-sale 3 25,685 25,685 25,304 25,304

Securities—held-to-maturity 2 995,237 819,230 1,052,028 900,522

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

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

Loans receivable, net 3 11,199,135 10,894,024 10,660,812 10,250,271

Equity securities 1 481 481 449 449

FHLB stock 3 22,451 22,451 24,028 24,028

Bank-owned life insurance 1 312,549 312,549 304,366 304,366

Mortgage servicing rights 3 12,618 37,926 13,909 35,794

SBA servicing rights 3 869 869 740 740

Investments in limited partnerships 3 13,955 13,955 13,475 13,475

Interest rate swaps 2 14,507 14,507 15,129 15,129

Interest rate lock and forward sales commitments 2,3 331 331 275 275

Demand, interest checking and money market accounts 2 8,536,303 8,536,303 8,571,500 8,571,500

Regular savings 2 3,478,423 3,478,423 2,980,530 2,980,530

Certificates of deposit 2 1,499,672 1,492,829 1,477,467 1,465,612

FHLB advances 2 290,000 290,000 323,000 323,000

Other borrowings 2 125,257 125,257 182,877 182,877

Subordinated notes, net 2 80,278 78,832 92,851 85,536

Junior subordinated debentures 3 67,477 67,477 66,413 66,413

Interest rate swaps 2 30,184 30,184 29,809 29,809

Interest rate lock and forward sales commitments 2,3 2 2 185 185

Risk participation agreement 2 6 6 42 42

The Company measures and discloses certain assets and liabilities at fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale).

When measuring fair value, Management will maximize the use of observable inputs and minimize the use of unobservable inputs whenever possible.

Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions.

The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies.

However, considerable judgment is required to interpret data to develop the estimates of fair value.

Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date.

The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for many of the financial instruments.

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

T able of C onten ts

Items Measured at Fair Value on a Recurring Basis:

The following tables present financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets and liabilities as of December 31, 2024 and 2023 (in thousands):

December 31, 2024

Level 1 Level 2 Level 3 Total

Securities—available-for-sale

Government and agency obligations $ — $ 7,933 $ — $ 7,933

Municipal bonds — 123,982 — 123,982

Corporate bonds — 99,305 25,685 124,990

Mortgage-backed or related securities — 1,676,848 — 1,676,848

Asset-backed securities — 170,758 — 170,758

— 2,078,826 25,685 2,104,511

Loans held for sale (1)

— 26,185 — 26,185

Equity securities 481 — — 481

SBA servicing rights — — 869 869

Investment in limited partnerships — — 13,955 13,955

Interest rate swaps — 14,507 — 14,507

Interest rate lock and forward sales commitments — 221 110 331

$ 481 $ 2,119,739 $ 40,619 $ 2,160,839

Junior subordinated debentures $ — $ — $ 67,477 $ 67,477

Interest rate swaps — 30,184 — 30,184

Interest rate lock and forward sales commitments — — 2 2

Risk participation agreement — 6 — 6

$ — $ 30,190 $ 67,479 $ 97,669

T able of C onten ts

December 31, 2023

Level 1 Level 2 Level 3 Total

Securities—available-for-sale

Government and agency obligations — 34,189 — 34,189

Municipal bonds — 132,905 — 132,905

Corporate bonds — 93,819 25,304 119,123

Mortgage-backed or related securities — 1,866,714 — 1,866,714

Asset-backed securities — 220,852 — 220,852

— 2,348,479 25,304 2,373,783

Loans held for sale (1)

— 9,105 — 9,105

Equity securities 449 — — 449

SBA servicing rights — — 740 740

Investment in limited partnerships — — 13,475 13,475

Interest rate swaps — 15,129 — 15,129

Interest rate lock and forward sales commitments — — 275 275

$ 449 $ 2,372,713 $ 39,794 $ 2,412,956

Junior subordinated debentures $ — $ — $ 66,413 $ 66,413

Interest rate swaps — 29,809 — 29,809

Interest rate lock and forward sales commitments — 161 24 185

Risk participation agreement — 42 — 42

$ — $ 30,012 $ 66,437 $ 96,449

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

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

The estimated fair values of investment securities and mortgage-backed securities are priced using current active market quotes, if available, which are considered Level 1 measurements.

For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value.

These measurements are considered Level 2.

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

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

Loans Held for Sale:

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

Equity Securities:

Equity securities are invested in a publicly traded stock.

The fair value of these securities is based on daily quoted market prices.

SBA Servicing Rights:

Fair values are estimated based on an independent dealer analysis by discounting estimated net future cash flows from servicing.

The evaluation utilizes assumptions market participants would use in determining fair value including prepayment speeds, delinquency and foreclosure rates, the discount rate, servicing costs, and the timing of cash flows.

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

T able of C onten ts

Junior Subordinated Debentures:

The fair value of junior subordinated debentures is estimated using an income approach technique.

The significant inputs included in the estimation of fair value are the credit risk adjusted spread and three month SOFR.

The credit risk adjusted spread represents the nonperformance risk of the liability.

The Company utilizes an external valuation firm to validate the reasonableness of the credit risk adjusted spread used to determine the fair value.

The junior subordinated debentures are carried at fair value which represents the estimated amount that would be paid to transfer these liabilities in an orderly transaction amongst market participants.

Due to inactivity in the trust preferred markets that have limited the observability of market spreads, Management has classified this as a Level 3 fair value measurement.

Derivatives include interest rate swap agreements, interest rate lock commitments to originate loans held for sale, forward sales contracts to sell loans and securities related to mortgage banking activities and risk participation agreements.

Fair values for these instruments, which generally change as a result of changes in the level of market interest rates, are estimated based on dealer quotes and secondary market sources.

As the interest rate lock commitments use a pull-through rate that is considered an unobservable input, these derivatives are classified as a level 3 fair value measurement.

Off-Balance Sheet Items:

Off-balance sheet financial instruments include unfunded commitments to extend credit, including standby letters of credit, and commitments to purchase investment securities.

The fair value of these instruments is not considered to be material.

The fair value estimates presented herein are based on pertinent information available to Management as of December 31, 2024 and 2023.

The factors used in the fair value estimates are subject to change subsequent to the dates the fair value estimates are completed;

therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3):

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

Weighted Average Rate or Range

Financial Instruments Valuation Technique Unobservable Inputs 2024 2023

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

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

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

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

SBA servicing rights Discounted cash flows Constant prepayment rate 18.85 % 16.92 %

Management believes that the credit risk-adjusted spread used to develop the discount rate utilized in the fair value measurement of TPS is indicative of the risk premium a willing market participant would require under current market conditions for instruments with similar contractual rates and terms and conditions and issuers with similar credit risk profiles and with similar expected probability of default.

Management attributes the change in fair value of these instruments, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of assets subsequent to their issuance.

Junior subordinated debentures :

Similar to the TPS discussed above, Management believes the credit risk-adjusted spread utilized in the fair value measurement of the junior subordinated debentures is indicative of the risk premium a willing market participant would require under current market conditions for an issuer with Banner’s credit risk profile.

Management attributes the change in fair value of the junior subordinated debentures, compared to their par value, primarily to perceived general market adjustments to the risk premiums for these types of liabilities subsequent to their issuance.

Future contractions in the risk-adjusted spread relative to the spread currently utilized to measure the Company’s junior subordinated debentures at fair value as of December 31, 2024, or the passage of time, will result in negative fair value adjustments.

At December 31, 2024, the discount rate utilized was based on a credit spread of 526 basis points and three month SOFR of 431 basis points.

Interest rate lock commitments:

The fair value of the interest rate lock commitments is based on secondary market sources adjusted for an estimated pull-through rate.

The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments.

An increase or decrease in the pull-through rate would have a corresponding, positive or negative fair value adjustment.

SBA servicing asset:

The constant prepayment rate (CPR) is set based on industry data.

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

T able of C onten ts

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

Level 3 Fair Value Inputs

TPS Securities Borrowings— Junior Subordinated Debentures Interest Rate Lock and Forward Sales Commitments Investments in Limited Partnerships SBA Servicing Asset

Balance, January 1, 2023 $ 28,694 $ 74,857 $ 39 $ 12,427 $ 835

Net change recognized in earnings ( 3,375 ) — 212 ( 719 ) ( 95 )

Net change recognized in AOCI (15) ( 8,444 ) — — —

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

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

Net change recognized in earnings 115 — ( 143 ) ( 1,013 ) 129

Net change recognized in AOCI 266 1,064 — — —

Purchases, issuances and settlements — — — 1,493 —

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

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

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

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

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

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

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

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

Items Measured at Fair Value on a Non-recurring Basis

The following tables present financial assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets at December 31, 2024 and 2023 (in thousands):

December 31, 2024

Level 1 Level 2 Level 3 Total

Loans individually evaluated $ — $ — $ 6,590 $ 6,590

REO — — 2,367 2,367

December 31, 2023

Level 1 Level 2 Level 3 Total

Loans individually evaluated $ — $ — $ 8,308 $ 8,308

REO — — 526 526

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

For the years ended December 31,

2024 2023 2022

Loans individually evaluated $ ( 1,483 ) $ ( 933 ) $ ( 626 )

Loans held for sale (1)

— 2,538 ( 2,538 )

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

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

T able of C onten ts

Loans individually evaluated :

Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or when the Bank determines that foreclosure is probable, the expected credit loss is measured based on the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable.

If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off.

The Company records REO (acquired through a lending relationship) at fair value on a non-recurring basis.

Fair value adjustments on REO are based on updated real estate appraisals which are based on current market conditions.

All REO properties are recorded at the lower of the estimated fair value of the real estate, less expected selling costs, or the carrying amount of the defaulted loans.

From time to time, non-recurring fair value adjustments to REO are recorded to reflect partial write-downs based on an observable market price or current appraised value of property.

Banner considers any valuation inputs related to REO to be Level 3 inputs.

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

BANNER CORPORATION (PARENT COMPANY ONLY)

Summary financial information is as follows (in thousands):

Statements of Financial Condition December 31

Cash $ 75,712 $ 108,513

Investment in trust equities 2,678 2,678

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

Note receivable from subsidiary 50,000 —

Other assets 11,446 10,467

$ 1,952,837 $ 1,830,811

LIABILITIES AND SHAREHOLDERS’ EQUITY

Miscellaneous liabilities $ 6,879 $ 7,838

Deferred tax liability, net 4,377 4,518

Subordinated notes, net 99,778 99,351

Junior subordinated debentures at fair value 67,477 66,413

Shareholders’ equity 1,774,326 1,652,691

Total liabilities and shareholders’ equity $ 1,952,837 $ 1,830,811

Statements of Operations Years Ended December 31

2024 2023 2022

INTEREST INCOME:

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

Note receivable from subsidiary 1,559 — —

OTHER INCOME (EXPENSE):

Dividend income from subsidiaries 87,799 104,004 101,931

Equity in undistributed income of subsidiaries 91,179 92,018 104,391

Other income 186 1 96

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

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

Net income before taxes 166,077 179,808 192,006

BENEFIT FROM INCOME TAXES ( 2,821 ) ( 3,816 ) ( 3,372 )

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

T able of C onten ts

Statements of Cash Flows Years Ended December 31

2024 2023 2022

OPERATING ACTIVITIES:

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

Adjustments to reconcile net income to net cash provided by operating activities:

Equity in undistributed income of subsidiaries ( 91,179 ) ( 92,018 ) ( 104,391 )

Decrease in deferred taxes 114 ( 52 ) ( 43 )

Net change in valuation of financial instruments carried at fair value ( 186 ) 253 ( 56 )

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

Loss on extinguishment of debt — — 765

Net change in other assets ( 793 ) 442 ( 4,169 )

Net change in other liabilities 374 ( 609 ) 3,765

Net cash provided from operating activities 87,259 100,809 100,119

INVESTING ACTIVITIES:

Other investing activities

( 1,155 ) 488 ( 1,549 )

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

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

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

FINANCING ACTIVITIES:

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

Proceeds from redemption of trust securities related to junior subordinated debentures — — 1,518

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

Repurchase of common stock — — ( 10,960 )

Cash dividends paid ( 66,733 ) ( 66,765 ) ( 61,078 )

Net cash used by financing activities ( 68,905 ) ( 70,241 ) ( 124,370 )

NET CHANGE IN CASH ( 32,801 ) 31,056 ( 28,872 )

CASH, BEGINNING OF PERIOD 108,513 77,457 106,329

CASH, END OF PERIOD $ 75,712 $ 108,513 $ 77,457

CALCULATION OF EARNINGS PER COMMON SHARE

The following table reconciles basic to diluted weighted average shares outstanding used to calculate earnings per share data (dollars in thousands, except per share data):

Years Ended December 31

2024 2023 2022

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

Basic weighted average shares outstanding 34,470,057 34,344,142 34,264,322

Dilutive effect of unvested restricted stock 158,653 106,270 195,600

Diluted weighted shares outstanding 34,628,710 34,450,412 34,459,922

Earnings per common share

Basic $ 4.90 $ 5.35 $ 5.70

Diluted $ 4.88 $ 5.33 $ 5.67

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

1,929 21,865 —

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

T able of C onten ts

COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk - The Company has financial instruments with off-balance-sheet risk generated in the normal course of business to meet the financing needs of its clients.

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

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

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

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

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

Contract or Notional Amount

December 31, 2024 December 31, 2023

Commitments to extend credit $ 3,843,421 $ 3,887,423

Standby letters of credit and financial guarantees 28,287 29,312

Commitments to originate loans 14,361 27,487

Risk participation agreements 43,913 46,348

Derivatives also included in Note 19:

Commitments to originate loans held for sale 35,512 19,572

Commitments to sell loans secured by one- to four-family residential properties 17,963 8,437

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

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

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

Unfunded commitment balance for:

December 31, 2024 December 31, 2023

Tax credit investments $ 94,416 $ 62,594

Limited partnerships investments $ 14,706 $ 10,462

Commitments to extend credit are agreements to lend to a client, as long as there is no violation of any condition established in the contract.

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Many of the commitments may expire without being drawn upon;

therefore, the total commitment amounts do not necessarily represent future cash requirements.

Each client’s creditworthiness is evaluated on a case-by-case basis.

The amount of collateral obtained, if deemed necessary upon extension of credit, is based on Management’s credit evaluation of the client.

Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, and income producing commercial properties.

The Company’s allowance for credit losses - unfunded loan commitments was $ 13.6 million and $ 14.5 million at December 31, 2024 and 2023, respectively.

Standby letters of credit are conditional commitments issued to guarantee a client’s performance or payment to a third party.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients.

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

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

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

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

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

Delays in funding the loans may require a lock extension.

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

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

For mandatory delivery commitments the Company enters into forward commitments at specific prices and settlement dates to deliver either:

(1) residential mortgage loans for purchase by secondary market investors (i.e., Freddie Mac or Fannie Mae), or (2) mortgage-backed securities to broker/dealers.

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

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

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

The Company limits its exposure to market risk by monitoring differences between commitments to clients and forward contracts with market investors and securities broker/dealers.

In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the transaction is completed by either paying or receiving a fee to or from the investor or broker/dealer equal to the increase or decrease in the market value of the forward contract.

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

T able of C onten ts

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

These proceedings and the associated legal claims are often contested and the outcome of individual matters is not always predictable.

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

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

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

If the underlying assets do not conform to the specifications, the Bank may have an obligation to repurchase the assets or indemnify the purchaser against any loss.

The Bank believes that the potential for material loss under these arrangements is remote.

Accordingly, the fair value of such obligations is not material.

DERIVATIVES AND HEDGING

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

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

The notional amount serves as the basis for the payment provision of the contract and takes the form of units, such as shares or dollars.

The underlying variable represents a specified interest rate, index, or other component.

The interaction between the notional amount and the underlying variable determines the number of units to be exchanged between the parties and influences the market value of the derivative contract.

The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain term loans and forward sales contracts associated with mortgage banking activities.

Generally, these instruments help the Company manage exposure to market risk and meet client financing needs.

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

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

Asset Derivatives Liability Derivatives

December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Notional/ Contract Amount Fair Value Notional/ Contract Amount Fair Value Notional/ Contract Amount Fair Value Notional/ Contract Amount Fair Value

Hedged interest rate swaps $ — $ — $ — $ — $ — $ — $ 400,000 $ 15,141

Interest rate swaps not designated in hedge relationships $ 386,995 $ 30,134 $ 416,711 $ 29,058 $ 386,995 $ 30,184 $ 416,711 $ 29,126

Master netting agreements ( 15,627 ) ( 13,929 ) — ( 13,929 )

Cash offset/(settlement) — — — ( 529 )

Net interest rate swaps 14,507 15,129 30,184 29,809

Risk participation agreements 817 — 1,050 — 43,097 6 45,298 42

Mortgage loan commitments 30,085 108 19,572 275 5,427 2 — —

Forward sales contracts 49,628 223 5,406 — — — 17,966 185

Total $ 467,525 $ 14,838 $ 442,739 $ 15,404 $ 435,519 $ 30,192 $ 479,975 $ 30,036

The Company’s asset derivatives are included in other assets, while the liability derivatives are included in accrued expenses and other liabilities on the Consolidated Statements of Financial Condition.

Interest Rate Swaps used in Cash Flow Hedges:

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

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

In late 2024, these interest rate swap derivatives matured.

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

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

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

T able of C onten ts

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

For the Year Ended December 31, 2024

Amount of Gain or (Loss) Recognized in AOCI on Derivative Amount of Gain or (Loss) Recognized in AOCI Included Component Amount of Gain or (Loss) Recognized in AOCI Excluded Component Location of Gain or (Loss) Recognized from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component

Interest rate swaps $ ( 2,145 ) $ ( 2,145 ) $ — Interest Income $ ( 16,074 ) $ ( 16,074 ) $ —

For the Year Ended December 31, 2023

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

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

Interest Rate Swaps:

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

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

These swaps do not qualify as designated hedges;

therefore, each swap is accounted for as a freestanding derivative.

Risk Participation Agreements:

In conjunction with the purchase or sale of participating interests in loans, the Company also participates in related swaps through risk participation agreements.

The existing credit derivatives resulting from these participations are not designated as hedges as they are not used to manage interest rate risk in the Company’s assets or liabilities and are not speculative.

Mortgage Loan Commitments:

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

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

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

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

For the Years Ended December 31

2024 2023 2022

Mortgage loan commitments $ (79) $ 263 $ (1,427)

Forward sales contracts 320 313 84

$ 241 $ 576 $ ( 1,343 )

The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements.

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

T able of C onten ts

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

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

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

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

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

Collateral posted against derivative liabilities was $ 19.9 million and $ 15.0 million as of December 31, 2024 and 2023, respectively.

The collateral posted included restricted cash of $18.9 million and $14.0 million as of December 31, 2024 and 2023, respectively.

Derivative assets and liabilities are recorded at fair value on the balance sheet.

Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis and to offset net derivative positions with related collateral where applicable.

In addition, some interest rate swap derivatives between the Company and the dealer counterparties are cleared through central clearing houses.

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

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

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

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

December 31, 2024

Gross Amounts of Financial Instruments Not Offset in the Consolidated Statement of Financial Condition

Gross Amounts Recognized Amounts offset in the Statement of Financial Condition Net Amounts in the Statement of Financial Condition Netting Adjustment Per Applicable Master Netting Agreements Fair Value of Financial Collateral in the Statement of Financial Condition Net Amount

Derivative assets

Interest rate swaps $ 30,134 $ ( 15,627 ) $ 14,507 $ — $ — $ 14,507

$ 30,134 $ ( 15,627 ) $ 14,507 $ — $ — $ 14,507

Derivative liabilities

Interest rate swaps $ 30,184 $ — $ 30,184 $ — $ ( 18,228 ) $ 11,956

$ 30,184 $ — $ 30,184 $ — $ ( 18,228 ) $ 11,956

December 31, 2023

Gross Amounts of Financial Instruments Not Offset in the Consolidated Statement of Financial Condition

Derivative assets

Interest rate swaps $ 29,058 $ ( 13,929 ) $ 15,129 $ — $ — $ 15,129

$ 29,058 $ ( 13,929 ) $ 15,129 $ — $ — $ 15,129

Derivative liabilities

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

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

T able of C onten ts

REVENUE FROM CONTRACTS WITH CLIENTS

Disaggregation of Revenue:

Deposit fees and other service charges for the years ended December 31, 2024, 2023 and 2022, are summarized as follows (in thousands):

Years Ended December 31

2024 2023 2022

Deposit service charges $ 24,708 $ 22,497 $ 23,710

Debit and credit card interchange fees 23,766 24,021 23,766

Debit and credit card expense ( 12,632 ) ( 12,386 ) ( 11,487 )

Merchant services income 13,431 14,466 15,551

Merchant services expense ( 11,246 ) ( 11,687 ) ( 12,754 )

Other service charges 5,344 4,727 5,673

Total deposit fees and other service charges $ 43,371 $ 41,638 $ 44,459

Deposit fees and other service charges

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

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

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

These are contract specific to each individual transaction and do not extend beyond the individual transaction.

The performance obligation is completed, and the fees are recognized, at the time the specific transactional service is provided to the client.

Non-transactional deposit fees are typically monthly account maintenance fees charged on deposit accounts.

These are day-to-day contracts that can be canceled by either party without notice.

The performance obligation is satisfied, and the fees are recognized, on a monthly basis after the service period is completed.

Debit and credit card interchange income and expenses

Debit and credit card interchange income represent fees earned when a credit or debit card issued by the Bank is used to purchase goods or services at a merchant.

The merchant’s bank pays the Bank a default interchange rate set by Mastercard on a transaction-by-transaction basis.

The merchant acquiring bank can stop accepting the Bank’s cards at any time and the Bank can stop further use of cards issued by them at any time.

The performance obligation is satisfied, and the fees are earned, when the cost of the transaction is charged to the Bank’s cardholders’ card.

Direct expenses associated with the credit and debit card are recorded as a net reduction against the interchange income.

Merchant services income

Merchant services income represents fees earned by the Bank for card payment services provided to its merchant clients.

The Bank has a contract with a third party to provide card payment services to the Bank’s merchants that contract for those services.

The third party provider has contracts with the Bank’s merchants to provide the card payment services.

The Bank does not have a direct contractual relationship with its merchants for these services.

The Bank sets the rates for the services provided by the third party.

The third party provider passes the payments made by the Bank’s merchants through to the Bank.

The Bank, in turn, pays the third party provider for the services it provides to the Bank’s merchants.

These payments to the third party provider are recorded as expenses as a net reduction against fee income.

In addition, a portion of the payment received by the Bank represents interchange fees passed through to the card issuing bank.

Income is primarily earned based on the dollar volume and number of transactions processed.

The performance obligation is satisfied and the related fee is earned when each payment is accepted by the processing network.

The Company leases 89 buildings and offices under non-cancelable operating leases.

The leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule.

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

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

December 31, 2024 December 31, 2023

Operating lease ROU assets $ 39,998 $ 43,731

Operating lease liabilities $ 43,472 $ 48,659

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

Weighted average discount rate - operating leases 4.0 % 3.3 %

T able of C onten ts

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

Year Ended December 31,

2024 2023 2022

Operating lease cost $ 13,863 $ 13,848 $ 16,647

Short-term lease cost 9 132 125

Variable lease cost 2,454 2,231 2,189

Less sublease income ( 1,547 ) ( 1,447 ) ( 1,126 )

Total lease cost (1)

$ 14,779 $ 14,764 $ 17,835

(1) Lease expenses and sublease income are classified within occupancy and equipment expense on the Consolidated Statements of Operations.

Operating cash flows paid for operating lease amounts included in the measurement of lease liabilities were $ 14.9 million for the year ended December 31, 2024, and $ 14.8 million for the year ended December 31, 2023.

The Company recorded $ 8.2 million of lease ROU assets in exchange for operating lease liabilities for the year ended December 31, 2024, and $ 6.8 million for the year ended December 31, 2023.

The table below reconciles the undiscounted cash flows for each of the first five years beginning with 2025 and the total of the remaining years to the operating lease liabilities recorded on the Consolidated Statements of Financial Position (in thousands):

Operating Leases

2025 $ 14,117

Thereafter 3,854

Total minimum lease payments

amount of lease payments representing interest ( 3,859 )

Lease obligations

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

T able of C onten ts

SEGMENT DISCLOSURES

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

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

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

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

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

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

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

OPERATING DATA:

For the Year Ended December 31

(In thousands) 2024 2023 2022

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

Interest expense 224,387 125,567 19,390

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

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

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

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

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

FINANCIAL CONDITION DATA:

(In thousands) 2024 2023 2022

Cash and securities (1)

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

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

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

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

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

KEY FINANCIAL RATIOS:

For the Years Ended December 31

2024 2023 2022

Performance Ratios:

Return on average assets (2)

1.07 % 1.18 % 1.18 %

Net interest margin (tax equivalent) (3)

3.75 4.01 3.68

Non-interest expense to average assets 2.48 2.46 2.29

Efficiency ratio (4)

64.33 61.66 60.04

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

(2) Net income divided by average assets.

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

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

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

What changed 10-K

Item 9A. Controls and Procedures