What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-05 compared with 2025-11-04 · 232 added, 294 removed, 387 unchanged (58% of the section changed)

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Banner is a bank holding company incorporated in the State of Washington, which wholly owns its subsidiary bank, Banner Bank.

The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington, and as of September 30, 2025, it had 135 branch offices and 14 loan production offices located in Washington, Oregon, California, Idaho, Utah and Nevada.

The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington, and as of March 31, 2026, it had 135 branch offices and 15 loan production offices located in Washington, Oregon, California, Idaho, Utah and Nevada.

Banner is subject to regulation by the Federal Reserve.

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).

As of September 30, 2025, we had total consolidated assets of $16.56 billion, total loans of $11.70 billion, total deposits of $14.02 billion and total shareholders’ equity of $1.91 billion.

As of March 31, 2026, we had total consolidated assets of $16.34 billion, total loans of $11.71 billion, total deposits of $13.84 billion and total shareholders’ equity of $1.97 billion.

The Bank is a regional bank that offers a wide variety of commercial banking services and financial products to individuals, businesses and public sector entities in its primary market areas.

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

Third Quarter 2025 Financial Highlights

First Quarter 2026 Financial Highlights

• Net interest margin, on a tax equivalent basis, was 4.11% for current quarter, compared to 4.03% in the preceding quarter.

• Revenue was $170.7 million for the third quarter of 2025, compared to $162.2 million in the preceding quarter.

• Net interest income was $150.0 million in the third quarter of 2025, compared to $144.4 million in the preceding quarter.

• Mortgage banking operations revenue was $3.3 million for the third quarter of 2025, compared to $3.2 million in the preceding quarter.

• Revenue was $169.3 million for the first quarter of 2026, compared to $167.7 million in the preceding quarter.

• Net interest income was $150.2 million in the first quarter of 2026, compared to $152.4 million in the preceding quarter.

• Mortgage banking operations revenue was $3.2 million for the first quarter of 2026, compared to $3.6 million in the preceding quarter.

• Return on average assets was 1.37%, compared to 1.24% in the preceding quarter.

• Net loans receivable were $11.54 billion at September 30, 2025, compared to $11.53 billion at June 30, 2025.

• Total deposits increased to $14.02 billion at September 30, 2025, compared to $13.53 billion at June 30, 2025.

• Core deposits represented 89% of total deposits at September 30, 2025.

• Non-performing assets were $45.3 million, or 0.27% of total assets, at September 30, 2025, compared to $49.8 million, or 0.30% of total assets at June 30, 2025.

• The allowance for credit losses - loans was $159.7 million, or 1.36% of total loans receivable, as of September 30, 2025, compared to $160.5 million, or 1.37% of total loans receivable, at June 30, 2025.

• Dividends paid to shareholders were $0.48 per share in the quarter ended September 30, 2025.

• Common shareholders’ equity per share increased 3% to $55.71 at September 30, 2025, compared to $53.95 at June 30, 2025.

• Tangible common shareholders’ equity per share* increased 4% to $44.79 at September 30, 2025, compared to $43.09 at June 30, 2025.

• Repurchased 250,000 shares of Banner common stock during the third quarter of 2025 at an average price of $63.11 per share.

• Net loans receivable were $11.55 billion at March 31, 2026, compared to $11.56 billion at December 31, 2025.

• Total deposits increased to $13.84 billion at March 31, 2026, compared to $13.74 billion at December 31, 2025.

• Core deposits represented 89% of total deposits at March 31, 2026.

• Non-performing assets were $51.7 million, or 0.32% of total assets, at March 31, 2026, compared to $51.2 million, or 0.31% of total assets at December 31, 2025.

• The allowance for credit losses - loans was $160.4 million, or 1.37% of total loans receivable, as of March 31, 2026, compared to $160.3 million, or 1.37% of total loans receivable, at December 31, 2025.

• Dividends paid to shareholders were $0.50 per share in the quarter ended March 31, 2026.

• Common shareholders’ equity per share increased 2% to $58.06 at March 31, 2026, compared to $57.08 at December 31, 2025.

• Tangible common shareholders’ equity per share* increased 2% to $47.00 at March 31, 2026, compared to $46.09 at December 31, 2025.

• Repurchased 250,000 shares of Banner common stock during the first quarter of 2026 at an average price of $64.56 per share.

*Non-GAAP Financial Measures:

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

Adjusted revenue, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity and adjusted efficiency ratio are non-GAAP financial measures.

Adjusted revenue, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, return on average tangible common equity, and adjusted efficiency ratio are non-GAAP financial measures.

To calculate these non-GAAP measures, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations.

Management believes that these non-GAAP financial measures provide information to investors that is useful in evaluating the operating performance and trends of financial services companies, including the Company (dollars in thousands except per share data).

Quarters Ended Nine Months Ended September 30,

Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 2025 2024

Quarters Ended

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

ADJUSTED REVENUE

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Total revenue (GAAP) 169,330 167,673 160,191

Net (gain) loss on sale of securities (377) 3 — (374) 5,465

Net loss on sale of securities 1,242 — —

Net change in valuation of financial instruments carried at fair value (1,662) 2,010 (315)

(Gains) losses on building and lease exits (1,373) 919 — (454) —

Losses on building and lease exits — 169 —

Adjusted revenue (non-GAAP) $ 168,910 $ 169,852 $ 159,876

Quarters Ended Nine Months Ended September 30,

Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 2025 2024

Quarters Ended

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

ADJUSTED EARNINGS

Net income (GAAP) $ 54,716 $ 51,249 $ 45,135

Net (gain) loss on sale of securities (377) 3 — (374) 5,465

Net loss on sale of securities 1,242 — —

Net change in valuation of financial instruments carried at fair value (1,662) 2,010 (315)

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11.23 % 10.97 % 10.12 %

Quarters Ended Nine Months Ended September 30,

Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 2025 2024

AVERAGE TANGIBLE COMMON EQUITY Quarters Ended

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

Net Income (GAAP) $ 54,716 $ 51,249 $ 45,135

Amortization of intangibles, net of tax 202 249 360

Tangible net income available to common shareholders (non-GAAP) $ 54,918 $ 51,498 $ 45,495

Average common shareholder’s equity $ 1,965,463 $ 1,925,529 $ 1,799,078

Average goodwill and other intangible assets, net 374,477 374,764 375,943

Average tangible common equity $ 1,590,986 $ 1,550,765 $ 1,423,135

Return on average equity 11.29 % 10.56 % 10.17 %

Return on average tangible common equity (3)

14.00 % 13.17 % 12.96 %

Quarters Ended

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

ADJUSTED EFFICIENCY RATIO

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Total revenue (GAAP) 169,330 167,673 160,191

Net (gain) loss on sale of securities (377) 3 — (374) 5,465

Net loss on sale of securities 1,242 — —

Net change in valuation of financial instruments carried at fair value (1,662) 2,010 (315)

(Gains) losses on building and lease exits (1,373) 919 — (454) —

Losses on building and lease exits — 169 —

Adjusted revenue (non-GAAP) $ 168,910 $ 169,852 $ 159,876

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

(3) Tangible net income (non-GAAP) divided by average tangible common equity (non-GAAP).

(4) Adjusted non-interest expense (non-GAAP) divided by adjusted revenue (non-GAAP).

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TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS

September 30, 2025 June 30, 2025 December 31, 2024 September 30, 2024

March 31, 2026 December 31, 2025 March 31, 2025

Shareholders’ equity (GAAP) $ 1,966,634 $ 1,946,297 $ 1,833,453

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TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE

September 30, 2025 June 30, 2025 December 31, 2024 September 30, 2024

March 31, 2026 December 31, 2025 March 31, 2025

Shareholders’ equity (GAAP) $ 1,966,634 $ 1,946,297 $ 1,833,453

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There have been no significant changes in our application of critical accounting estimates since December 31, 2025.

Comparison of Financial Condition at September 30, 2025 and December 31, 2024

Total assets increased $363.0 million to $16.56 billion at September 30, 2025, from $16.20 billion at December 31, 2024.

The increase compared to year end was primarily due to loan growth and an increase in cash, specifically our interest-bearing deposits in other banks, partially offset by a decrease in securities.

Comparison of Financial Condition at March 31, 2026 and December 31, 2025

Total assets decreased $10.2 million to $16.34 billion at March 31, 2026, from $16.35 billion at December 31, 2025, primarily due to decreases in both loans held for sale and loans receivable and a reduction in FHLB stock resulting from the repayment of FHLB advances, partially offset by growth in interest-bearing deposits held at other banks.

Loans and lending:

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We attempt to maintain a total loans to total deposits ratio at a level designed to enhance our revenues, while adhering to sound underwriting practices and appropriate diversification guidelines in order to maintain a moderate risk profile.

Our loan to deposit ratio at September 30, 2025 was 84%.

Our loan to deposit ratio at March 31, 2026 was 85%.

We offer a wide range of loan products to meet the demands of our clients.

Our lending activities are primarily directed toward the origination of real estate and commercial loans.

Total loans receivable (gross loans less deferred fees and discounts and excluding loans held for sale) increased $347.9 million at September 30, 2025, compared to December 31, 2024, reflecting increases across all loan categories except small balance CRE, multifamily real estate loans, commercial business loans, one- to four-family residential loans and other consumer loans.

Total loans receivable (gross loans less deferred fees and discounts and excluding loans held for sale) decreased $14.1 million at March 31, 2026, compared to December 31, 2025.

The net decrease was driven primarily by payoffs and paydowns in multifamily real estate, land and land development, and agricultural business loans, partially offset by new production in commercial real estate and commercial business loans.

The following table sets forth the composition of the Company’s loans receivable by type of loan as of the dates indicated (dollars in thousands):

Percentage Change

Sep 30, 2025 Dec 31, 2024 Sep 30, 2024 Year End Prior Year Qtr.

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Year End Prior Year Qtr.

Commercial real estate:

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Total loans receivable $ 11,707,626 $ 11,721,687 $ 11,438,796 — % 2 %

Commercial real estate loans totaled $4.00 billion, or 34% of our loan portfolio, and multifamily real estate loans totaled $860.7 million, or 7% of our loan portfolio, at September 30, 2025.

Commercial real estate loans increased by $132.2 million during the first nine months of 2025, primarily due to new production and transfers to the permanent loan portfolio upon completion of the construction phase, partially offset by payoffs and paydowns, while multifamily real estate loans decreased by $33.8 million, primarily due to payoffs and paydowns exceeding new production.

Our construction, land and land development loans totaled $1.74 billion, or 15% of our loan portfolio, at September 30, 2025, compared to $1.52 billion at December 31, 2024.

Multifamily construction loans increased $72.4 million, or 14%, to $586.1 million at September 30, 2025, compared to December 31, 2024.

Multifamily construction represented 5% of our total loan portfolio at September 30, 2025.

Commercial real estate loans totaled $4.11 billion, or 35% of our loan portfolio, and multifamily real estate loans totaled $798.2 million, or 7% of our loan portfolio, at March 31, 2026.

Commercial real estate loans increased by $61.6 million during the first three months of 2026, primarily due to new production and transfers to the permanent loan portfolio upon completion of the construction phase, while multifamily real estate loans decreased by $52.6 million, primarily due to payoffs and paydowns.

Our construction, land and land development loans totaled $1.70 billion, or 14% of our loan portfolio, at March 31, 2026, compared to $1.71 billion at December 31, 2025.

Multifamily construction loans decreased $12.2 million, or 2%, to $502.2 million at March 31, 2026, compared to December 31, 2025.

Multifamily construction represented 4% of our total loan portfolio at March 31, 2026.

Multifamily construction loans were comprised primarily of affordable housing projects and, to a lesser extent, market rate multifamily projects across our footprint.

Commercial construction loans increased $21.8 million, or 18%, to $144.1 million at September 30, 2025, compared to $122.4 million at December 31, 2024, due to advances and new loan production, partially offset by transfers to the permanent loan portfolio upon completion of the construction phase.

Land and land development loans increased $57.7 million, or 16%, to $427.3 million at September 30, 2025, compared to December 31, 2024, primarily due to new loan production, partially offset by payoffs and paydowns.

Commercial construction loans increased $18.7 million, or 12%, to $174.8 million at March 31, 2026, compared to $156.0 million at December 31, 2025, primarily due to advances, partially offset by transfers to the permanent loan portfolio upon completion of the construction phase.

Land and land development loans decreased $32.7 million, or 8%, to $401.0 million at March 31, 2026, compared to December 31, 2025, primarily due to payoffs and paydowns, partially offset by new loan production.

Construction loans across our footprint are concentrated primarily in Washington, California and Oregon, with the majority of multifamily construction projects expected to convert to permanent loans within the next 12 to 24 months as construction phases are completed.

Our commercial business lending is directed toward meeting the credit and related deposit needs of various small- to medium-sized business and agribusiness borrowers operating in our primary market areas.

Our commercial business loans were $2.43 billion at September 30, 2025 and $2.42 billion at December 31, 2024.

Commercial business loans represented 21% of our loan portfolio at September 30, 2025.

Our agricultural business loans were $354.9 million at September 30, 2025 and $340.3 million at December 31, 2024.

Agricultural business loans represented 3% of our loan portfolio at September 30, 2025.

Our commercial business lending also includes participation in certain syndicated loans, including shared national credits, which totaled $215.1 million, or 2% of our loan portfolio, at September 30, 2025, compared to $227.4 million, or 2% of our loan portfolio, at December 31, 2024.

Our commercial business loans were $2.43 billion at March 31, 2026 and $2.41 billion at December 31, 2025.

Commercial business loans represented 21% of our loan portfolio at March 31, 2026.

Our agricultural business loans were $332.4 million at March 31, 2026 and $353.2 million at December 31, 2025.

Agricultural business loans represented 3% of our loan portfolio at March 31, 2026.

Our commercial business lending also includes participation in certain syndicated loans, including shared national credits, which totaled $168.1 million, or 1% of our loan portfolio, at March 31, 2026, compared to $195.6 million, or 2% of our loan portfolio, at December 31, 2025.

We are active originators of one- to four-family residential loans in most communities where we have established offices in Washington, Oregon, California, Idaho and Utah.

Most of the one- to four-family residential loans we originate in normal market conditions are sold in secondary markets with net gains on sales and loan servicing fees reflected in our revenues from mortgage banking operations.

At September 30, 2025, one- to four-family residential loans retained in our portfolio decreased $8.7 million, to $1.58 billion, compared to $1.59 billion at December 31, 2024.

At March 31, 2026, one- to four-family residential loans retained in our portfolio decreased $10.1 million, to $1.56 billion, compared to $1.57 billion at December 31, 2025.

The decrease was primarily the result of one- to four-family residential loan payoffs exceeding one- to four-family construction loans converting to permanent one- to four-family residential loans upon completion of construction and new loan originations.

One- to four-family residential loans represented 14% of our loan portfolio at September 30, 2025.

One- to four-family residential loans represented 13% of our loan portfolio at March 31, 2026.

Our consumer loan activity is primarily directed at meeting demand from our existing deposit clients.

At September 30, 2025, consumer loans, including home equity revolving lines of credit, increased $18.9 million to $740.3 million, compared to $721.4 million at December 31, 2024.

At March 31, 2026, consumer loans, including home equity revolving lines of credit, increased $5.5 million to $774.0 million, compared to $768.5 million at December 31, 2025.

The following table shows the commitment amount for loan origination activity (excluding loans held for sale) for the periods indicated (in thousands):

Three Months Ended Nine Months Ended

Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 Sep 30, 2025 Sep 30, 2024

Three Months Ended

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

Commercial real estate $ 220,193 $ 136,604 $ 37,041

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Total commitment amount for loan originations (excluding loans held for sale) $ 863,218 $ 867,307 $ 535,834

Loans held for sale decreased to $20.3 million at September 30, 2025, compared to $32.0 million at December 31, 2024.

Loans held for sale decreased to $33.8 million at March 31, 2026, compared to $42.9 million at December 31, 2025.

The decrease was primarily the result of increased sales of one- to four- family residential mortgage loans held for sale, with loan sales outpacing originations during the period.

Originations of loans held for sale increased to $265.0 million for the nine months ended September 30, 2025, compared to $197.7 million for the same period last year.

The volume of one- to four-family residential mortgage loans sold was $349.6 million during the nine months ended September 30, 2025, compared to $255.7 million in the same period a year ago.

Originations of loans held for sale increased to $91.7 million for the three months ended March 31, 2026, compared to $75.2 million for the same period last year.

The volume of one- to four-family residential mortgage loans sold was $132.6 million during the three months ended March 31, 2026, compared to $108.1 million in the same period a year ago.

The following table presents loans by geographic concentration at the dates indicated (dollars in thousands):

Sep 30, 2025 Dec 31, 2024 Sep 30, 2024 Percentage Change

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Percentage Change

Amount Percentage Amount Amount Year End Prior Year Qtr.

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Investment Securities:

Total securities decreased $115.9 million to $2.99 billion at September 30, 2025, from $3.11 billion at December 31, 2024, primarily due to securities paydowns and maturities exceeding purchases during the nine months ended September 30, 2025.

Purchases during the nine months ended September 30, 2025, consisted primarily of state and local government obligations.

The average effective duration of the Company’s securities portfolio was 6.4 years at both September 30, 2025 and December 31, 2024.

The fair value of securities designated as available-for-sale increased $80.2 million for the nine months ended September 30, 2025.

This increase, net of $19.3 million in associated tax expense, was recorded in other comprehensive income and reflected the impact of changes in market interest rates during the nine months ended September 30, 2025.

Total securities were $2.98 billion at March 31, 2026, essentially unchanged from December 31, 2025.

Available-for-sale securities increased $18.8 million to $2.04 billion at March 31, 2026, compared to $2.02 billion at December 31, 2025, while held-to-maturity securities decreased $17.5 million to $943.7 million, compared to $961.2 million at December 31, 2025, reflecting maturities and paydowns during the period.

Purchases during the three months ended March 31, 2026, consisted of agency commercial mortgage‑backed securities, corporate securities and collateralized loan obligations.

The average effective duration of the Company’s securities portfolio was 6.1 years at March 31, 2026, compared to 6.6 years at December 31, 2025.

The fair value of securities designated as available-for-sale decreased $5.2 million for the three months ended March 31, 2026.

This decrease, net of $1.3 million in associated tax benefit, was recorded in other comprehensive income and reflected the impact of changes in market interest rates during the three months ended March 31, 2026.

Deposits, client retail repurchase agreements and loan repayments are the major sources of our funds for lending and other investment purposes.

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Percentage Change

Sep 30, 2025 Dec 31, 2024 Sep 30, 2024 Year End Prior Year Qtr.

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Year End Prior Year Qtr.

Non-interest-bearing $ 4,532,639 $ 4,489,839 $ 4,571,598 1 % (1) %

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Total deposits $ 13,840,364 $ 13,743,146 $ 13,593,265 1 % 2 %

Total deposits increased $501.5 million at September 30, 2025, compared to December 31, 2024, with core deposits increasing $460.8 million and certificates of deposit increasing $40.7 million.

The increase in core deposits primarily reflects increases in interest-bearing transaction and savings accounts, primarily from normal seasonal increases from agricultural clients.

We had $50.0 million of brokered deposits at September 30, 2025, compared to $50.3 million at December 31, 2024.

Core deposits represented 89% of total deposits at both September 30, 2025 and December 31, 2024.

Total deposits increased $97.2 million at March 31, 2026, compared to December 31, 2025, with core deposits increasing $164.7 million, partially offset by certificates of deposit decreasing $67.5 million.

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

We had no brokered deposits at March 31, 2026, compared to $50.0 million at December 31, 2025.

Core deposits represented 89% of total deposits at both March 31, 2026 and December 31, 2025.

Competition for deposits in our market areas remains strong.

The following table sets forth the number and average account balance of the Company’s deposit accounts as of the dates indicated (dollars in thousands):

Sep 30, 2025 Dec 31, 2024 Sep 30, 2024

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

Number of deposit accounts 444,250 445,989 453,808

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The following table presents deposits by geographic concentration at the dates indicated (dollars in thousands):

Sep 30, 2025 Dec 31, 2024 Sep 30, 2024 Percentage Change

Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Percentage Change

Amount Percentage Amount Amount Year End Prior Year Qtr.

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Total deposits $ 13,840,364 100 % $ 13,743,146 $ 13,593,265 1 % 2 %

We had $100.0 million of FHLB advances at September 30, 2025, compared to $290.0 million at December 31, 2024 as deposits were used as the primary source of funding during the current period.

Other borrowings, consisting of retail repurchase agreements primarily related to client cash management accounts, decreased $4.7 million to $120.5 million at September 30, 2025, compared to $125.3 million at December 31, 2024.

At September 30, 2025, the Company’s off-balance sheet liquidity included additional borrowing capacity of $3.25 billion at the FHLB, $1.63 billion at the Federal Reserve, and $125.0 million in federal funds lines of credit with other financial institutions.

Junior subordinated debentures totaled $76.3 million at September 30, 2025, compared to $67.5 million at December 31, 2024.

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

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

We had no FHLB advances at March 31, 2026, compared to $150.0 million at December 31, 2025, as the increase in core deposits was used to pay off FHLB advances during the current quarter.

Other borrowings, consisting of retail repurchase agreements primarily related to client cash management accounts, increased $8.0 million to $115.7 million at March 31, 2026, compared to $107.7 million at December 31, 2025.

At March 31, 2026, the Company’s off-balance sheet liquidity included additional borrowing capacity of $3.76 billion at the FHLB, $1.74 billion at the Federal Reserve, and $125.0 million in federal funds lines of credit with other financial institutions.

Junior subordinated debentures totaled $79.5 million at March 31, 2026, compared to $79.2 million at December 31, 2025.

Shareholders’ Equity:

Total shareholders’ equity increased $138.6 million to $1.91 billion, or 11.55% of total assets, at September 30, 2025, compared to $1.77 billion, or 10.95% of total assets, at December 31, 2024.

Total shareholders’ equity increased $20.3 million to $1.97 billion, or 12.03% of total assets, at March 31, 2026, compared to $1.95 billion, or 11.90% of total assets, at December 31, 2025.

The increase was primarily due to a $37.4 million increase in retained earnings resulting from $54.7 million in net income, partially offset by the accrual of $17.3 million in cash dividends and the repurchase of 250,000 shares of Banner common stock in the third quarter of 2025 at an average price of $64.56 per share.

In addition, accumulated other comprehensive loss decreased by $56.5 million, primarily due to a decrease in unrealized losses on the available for sale securities portfolio.

Tangible common shareholders’ equity, which excludes goodwill and other intangible assets and is a non-GAAP financial measure, increased $139.8 million to $1.54 billion, or 9.50% of tangible assets, at September 30, 2025, compared to $1.40 billion, or 8.84% of tangible assets at December 31, 2024.

A reconciliation of this non-GAAP financial measure to its comparable GAAP financial measure is presented above following “Third Quarter 2025 Financial Highlights.”

Comparison of Results of Operations for the Three Months Ended September 30, 2025 and June 30, 2025, and the Nine Months Ended September 30, 2025 and 2024

For the quarter ended September 30, 2025, net income was $53.5 million, or $1.54 per diluted share, compared to $45.5 million, or $1.31 per diluted share, for the preceding quarter.

For the nine months ended September 30, 2025, our net income was $144.1 million, or $4.15 per diluted share, compared to $122.5 million, or $3.54 per diluted share, for the same period a year earlier.

The increase in net income for the comparable periods was primarily due to increases in net interest income and non-interest income.

Net interest income was $150.0 million in the third quarter of 2025, compared to $144.4 million in the preceding quarter, and $435.5 million for the nine months ended September 30, 2025, compared to $401.2 million for the comparable period a year ago.

The increases in net interest income for both periods reflect higher yields and an increase in the average balance of interest-earning assets.

The increase in net interest income for the nine months ended September 30, 2025 compared to the same period a year ago also reflects a decrease in funding costs.

We recorded a $2.7 million provision for credit losses for the quarter ended September 30, 2025, compared to a $4.8 million provision for credit losses in the preceding quarter.

The provision for credit losses in the current quarter was driven by changes in both portfolio mix and individually evaluated loans.

We recorded a $10.6 million provision for credit losses for the nine months ended September 30, 2025, compared to a $4.6 million provision for credit losses for the same period a year ago.

Total non-interest income increased for the quarter ended September 30, 2025, compared to the preceding quarter, and increased during the nine months ended September 30, 2025, compared to the same period a year ago.

The increase from the preceding quarter was primarily due to an increase in miscellaneous income, reflecting gains on the sale of assets during the current quarter, compared to losses on the disposal of assets related to building and lease exits during the prior quarter associated with Banner’s reduction of excess office space.

The increase in non-interest income during the nine months ended September 30, 2025, compared to the same period last year, was primarily due to a decrease in the net loss recognized on the sale of securities and positive fair value adjustments on financial instruments carried at fair value during the current period.

Total non-interest expense increased slightly for the quarter ended September 30, 2025, compared to the preceding quarter and increased for the nine months ended September 30, 2025, compared to the same period a year ago.

Non-interest expense for the current quarter reflects increases in miscellaneous expenses and advertising and marketing expenses, partially offset by a decrease in salary and employee benefits.

The increase in non-interest expense during the nine months ended September 30, 2025, compared to the same period last year primarily reflects increases in salary and employee benefits, information and computer data services expenses and professional and legal expenses.

In addition, accumulated other comprehensive loss increased by $2.9 million, primarily due to an increase in unrealized losses on the available for sale securities portfolio.

Tangible common shareholders’ equity, which excludes goodwill and other intangible assets and is a non-GAAP financial measure, increased $20.6 million to $1.59 billion, or 9.97% of tangible assets, at March 31, 2026, compared to $1.57 billion, or 9.84% of tangible assets at December 31, 2025.

A reconciliation of this non-GAAP financial measure to its comparable GAAP financial measure is presented above following “First Quarter 2026 Financial Highlights.”

Comparison of Results of Operations for the Three Months Ended March 31, 2026 and December 31, 2025, and the Three Months Ended March 31, 2026 and 2025

For the quarter ended March 31, 2026, net income was $54.7 million, or $1.60 per diluted share, compared to $51.2 million, or $1.49 per diluted share, for the preceding quarter and $45.1 million, or $1.30 per diluted share, for the three months ended March 31, 2025.

The increase in net income compared to the preceding quarter was primarily due to an increase in non-interest income, a decrease in non-interest expense and a recapture of provision for credit losses, partially offset by a decrease in net interest income.

When compared to the same period a year ago, the increase in net income was primarily attributable to higher net interest income and the recapture of provision for credit losses, partially offset by increased non-interest expense.

Net interest income was $150.2 million in the first quarter of 2026, compared to $152.4 million in the preceding quarter, and $141.1 million for the comparable period a year ago.

The decrease in net interest income compared to the prior quarter primarily reflects two fewer calendar days in the current quarter as well as a decrease in the average balance of interest-earning assets.

This was partially offset by a reduction in overall funding costs and an improvement in net interest margin.

The increase in net interest income for the three months ended March 31, 2026 compared to the same period a year ago primarily reflects a decrease in overall funding costs and an increase in the average balance of interest-earning assets.

We recorded a $796,000 recapture of provision for credit losses for the quarter ended March 31, 2026, compared to a $2.4 million provision for credit losses in the preceding quarter and a $3.1 million provision for credit losses for the same period a year ago.

The recapture of provision for credit losses in the current quarter was primarily driven by a reduction in unused commitments, mainly within the construction portfolio, reducing the reserve for unfunded commitments.

This was partially offset by a provision for credit losses – loans to capture the impact of risk rating migration, changes in portfolio mix and adjustments to qualitative factor assessments to reflect modestly elevated economic uncertainty.

Total non-interest income increased for the quarter ended March 31, 2026, compared to the preceding quarter, and increased slightly compared to the same period a year ago.

The increase from the preceding quarter was primarily due to an increase in miscellaneous income, primarily due to losses incurred on the disposition of assets recognized during the prior quarter.

In addition, fair value adjustments on financial instruments carried at fair value improved during the quarter, partially offset by a net loss recognized on the sale of securities during the current quarter.

The increase in non-interest income during the three months ended March 31, 2026, compared to the same period last year, was primarily attributable to the increase in fair value adjustments on financial instruments carried at fair value, partially offset by the net loss recognized on the sale of securities during the current quarter.

Total non-interest expense decreased for the quarter ended March 31, 2026, compared to the preceding quarter, and increased compared to the same period a year ago.

The decrease from the previous quarter reflected a decrease in occupancy and equipment costs, primarily due to lower rent expense as well as lower building repair and maintenance expenses, a decrease in professional and legal expenses, primarily due to expenses recognized on a pending legal settlement during the prior quarter, and a decrease in advertising and marketing expense, primarily due to decreases in direct mail marketing and community development expenses.

This was partially offset by an increase in salary and employee benefits, resulting from increased medical premiums and payroll tax expenses.

The increase in non-interest expense during the three months ended March 31, 2026, compared to the same period last year primarily reflects increases in salary and employee benefits, partially offset by a decrease in occupancy and equipment costs.

OPERATING DATA:

Quarters Ended Nine Months Ended

(In thousands) September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Quarters Ended

(In thousands) March 31, 2026 December 31, 2025 March 31, 2025

Interest income $ 197,818 $ 204,980 $ 193,868

1 unchanged sentence

Net interest income 150,169 152,448 141,083

Provision for credit losses 2,670 4,795 1,692 10,604 4,581

Net interest income after provision for credit losses 147,319 139,604 133,983 424,867 396,599

(Recapture) provision for credit losses (796) 2,441 3,139

Net interest income after (recapture) provision for credit losses 150,965 150,007 137,944

Deposit fees and other service charges 11,391 10,681 10,769

Mortgage banking operations 3,212 3,617 3,103

Net gain (loss) on sale of securities 377 (3) — 374 (5,465)

Net loss on sale of securities (1,242) — —

Net change in valuation of financial instruments carried at fair value

12 unchanged sentences

PER COMMON SHARE DATA:

Quarters Ended Nine Months Ended

September 30, 2025 June 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Quarters Ended

March 31, 2026 December 31, 2025 March 31, 2025

Basic $ 1.61 $ 1.50 $ 1.31

1 unchanged sentence

Net Interest Income.

Net interest income increased for the quarter ended September 30, 2025, compared to the preceding quarter.

The $5.6 million increase was due to an increase in interest income, primarily attributable to a five basis point increase in the average loan yield to 6.17% and an increase in average loan balances, while interest expense was essentially flat for the quarter.

Net interest margin on a tax equivalent basis was 3.98% for the third quarter of 2025, compared to 3.92% for the preceding quarter.

Net interest margin for the current quarter, compared to the preceding quarter, benefited from higher yields on interest-earning assets, primarily due to an increase in the average loan yield.

Net interest income increased by $34.3 million, or 9%, to $435.5 million for the nine months ended September 30, 2025, compared to $401.2 million for the same period one year earlier.

The increase was primarily the result of a $30.3 million increase in interest income, reflecting both adjustable-rate loans repricing higher and new loans being originated at rates higher than the overall loan portfolio, and a $532.7 million increase in the average balance of loans.

In addition, funding costs decreased by seven basis points for the nine months ended September 30, 2025 as compared to the same period in the prior year.

The net interest margin on a tax equivalent basis increased to 3.94% for the nine months ended September 30, 2025, compared to 3.72% for the same period in the prior year.

Net interest income decreased $2.3 million during the quarter ended March 31, 2026, compared to the preceding quarter, due to a decrease in interest income, primarily attributable to two fewer calendar days in the current quarter, and a slight decrease in average earning assets.

This was partially offset by an improvement in net interest margin.

Net interest margin on a tax equivalent basis was 4.11% for the first quarter of 2026, compared to 4.03% for the preceding quarter and 3.92% for the same period in the prior year.

The net interest margin for the current quarter benefited from lower funding costs when compared to both the preceding quarter and the same period in the prior year.

Net interest income increased by $9.1 million, or 6% for the three months ended March 31, 2026, compared to the same period one year earlier.

The increase was primarily the result of a $4.0 million increase in interest income, primarily reflecting an increase in the average balance of loans, as well as a $5.1 million decrease in interest expense reflecting a 17 basis-point reduction in the average cost of funding liabilities to 1.38% from 1.55%.

Interest Income.

Interest income for the quarter ended September 30, 2025 was $205.8 million, compared to $200.3 million for the preceding quarter.

The increase was primarily due to higher average loan yields and balances, as well as increases in both the average balance and yield on interest-bearing deposits held at other banks.

The total average loan yield increased five basis points to 6.17%, while the total average loan balance increased $32.9 million.

Loan yields increased five basis points to 6.17% for the quarter ended September 30, 2025, from 6.12% in the preceding quarter, due to new loans being originated at higher interest rates and adjustable rate loans repricing higher.

The increase in average loan balances primarily reflected growth in real estate secured loans, particularly commercial real estate and construction loans, which together contributed the largest share of the quarterly increase in interest income.

The total investment securities average balance increased to $3.61 billion for the quarter ended September 30, 2025 (excluding the effect of fair value adjustments), compared to $3.49 billion for the preceding quarter.

The average yield on the combined portfolio increased to 3.06% for the quarter ended September 30, 2025, from 2.98% for the preceding quarter.

Interest income on interest-bearing deposits with banks also increased, reflecting both a higher average balance and an increase in yield to 4.16%, compared to 3.06% in the prior quarter.

Interest income for the nine months ended September 30, 2025 was $600.0 million, compared to $569.7 million for the same period in the prior year, an increase of $30.3 million.

This increase primarily reflected a 16 basis point increase in the average yield on interest-earning assets, to 5.40%, along with higher average balances.

Loan growth was the primary contributor, with the average loan balances increasing $532.7 million compared to the prior year, supported by growth in the commercial real estate and residential mortgage portfolios.

Interest income for the quarter ended March 31, 2026 was $197.8 million, compared to $205.0 million for the preceding quarter and $193.9 million for the same period in the prior year.

The decrease for the current quarter, compared to the preceding quarter, was primarily attributable to two fewer calendar days in the current quarter and a decrease in average loan yields and balances.

The total average loan yield decreased three basis points to 6.07% for the quarter ended March 31, 2026, from 6.10% in the preceding quarter and was consistent compared to 6.07% in the same period in the prior year.

The decrease in average loan balances for the current quarter, compared to the preceding quarter, primarily reflected a decrease in commercial and agricultural business loans.

The total investment securities average balance decreased for the quarter ended March 31, 2026 (excluding the effect of fair value adjustments), compared to the preceding quarter and the same period in the prior year, reflecting paydowns and maturities that were not fully replaced by new purchases during the period.

The average yield on the combined portfolio decreased to 3.01% for the quarter ended March 31, 2026, from 3.03% for the preceding quarter and 3.02% for the same period in the prior year.

Interest income on interest-bearing deposits with banks decreased for the current quarter, compared to the preceding quarter, reflecting decreases in both the average balance and yield of interest-bearing deposits, and increased compared to the same period a year ago, reflecting increases in both the average balance and yield of interest-bearing deposits.

The average yield on interest-bearing deposits with banks decreased to 3.34%, compared to 3.77% in the prior quarter, and increased compared to 2.99% in the same period in the prior year.

Interest Expense.

Interest expense was relatively flat for the quarter ended September 30, 2025 as compared to the preceding quarter.

Average funding liabilities increased by $124.8 million, primarily due to a $370.2 million increase in average deposit balances, partially offset by a $163.3 million decrease in average balance of FHLB advances.

The average cost of funding liabilities decreased three basis points, to 1.57% for the quarter ended September 30, 2025.

Interest expense for the nine months ended September 30, 2025 was $164.5 million, compared to $168.5 million for the same period in the prior year.

The decrease resulted from a seven basis-point decrease in the average cost of funds to 1.57% from 1.64%, partially offset by a $268.0 million, or 2%, increase in average funding liabilities.

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

Deposit interest expense for the quarter ended September 30, 2025 increased 6% to $52.3 million, compared to $49.3 million for the preceding quarter.

The increase was primarily due to increases in both the average balance and the average rate paid on interest-bearing deposits.

The average rate paid on total deposits, including non-interest-bearing deposits, was 1.50% for the quarter ended September 30, 2025 and 1.47% for the preceding quarter.

The average rate paid on interest-bearing deposits increased to 2.25% for the quarter ended September 30, 2025, compared to 2.21% in the preceding quarter.

The increase in the rate paid on interest-bearing deposits reflects higher average rates paid across all interest-bearing deposit categories, except certificates of deposit, as well as shifts in the deposit mix.

Total average deposit balances, including non-interest-bearing deposits, increased to $13.79 billion for the quarter ended September 30, 2025, from $13.42 billion for the preceding quarter.

Deposit interest expense for the nine months ended September 30, 2025 increased $3.1 million to $150.3 million, compared to $147.2 million for the same period in the prior year.

Average deposit balances increased to $13.55 billion for the nine months ended September 30, 2025, from $13.16 billion for the same period a year earlier, while the average rate paid on interest-bearing deposits decreased by eight basis points to 2.23% for the nine months ended September 30, 2025, compared to 2.31% in the same period a year earlier.

The decrease in the average rate paid on interest-bearing deposits was primarily the result of a 33 basis-point decrease in the cost of certificates of deposit.

Interest expense on total borrowings for the quarter ended September 30, 2025, decreased 45% to $3.6 million, compared to $6.5 million for the prior quarter, primarily due to decreases in both the average balance and the rate paid on total borrowings.

The average balance of total borrowings decreased to $342.3 million for the quarter ended September 30, 2025, compared to $587.7 million for the preceding quarter, primarily due to a $163.3 million decrease in the average balance of FHLB advances.

The average rate paid on total borrowings for the quarter ended September 30, 2025, decreased to 4.18% from 4.47% for the preceding quarter.

Interest expense on total borrowings for the nine months ended September 30, 2025 decreased to $14.2 million from $21.2 million for the same period a year earlier, due to decreases in both the average balance and rate paid on total borrowings.

Average total borrowings were $436.4 million for the nine months ended September 30, 2025, compared to $562.9 million for the same period a year earlier.

The decrease was primarily due to a $42.5 million decrease in the average balance of FHLB advances, a $46.3 million decrease in the average balance of other borrowings and a $37.7 million decrease in the average balance of junior subordinated debentures and subordinated notes.

The average rate paid on total borrowings for the nine months ended September 30, 2025 decreased to 4.35% from 5.04% for the same period a year earlier.

Interest expense decreased for the quarter ended March 31, 2026 as compared to the preceding quarter.

Average funding liabilities decreased by $202.5 million, primarily due to a $201.8 million decrease in average deposit balances.

The average cost of funding liabilities decreased nine basis points, to 1.38% for the quarter ended March 31, 2026.

Interest expense for the three months ended March 31, 2026 was $47.6 million, compared to $52.8 million for the same period in the prior year.

The decrease resulted from a 17 basis-point decrease in the average cost of funds to 1.38% from 1.55%.

Deposit interest expense for the quarter ended March 31, 2026 decreased 10% to $45.7 million, compared to $50.5 million for the preceding quarter and $48.7 million for the same period in the prior year.

The decrease compared to the prior quarter was primarily due to decreases in both the average balance and the average rate paid on interest-bearing deposits.

The decrease compared to the prior year period was primarily due to a decrease in the average rate paid on interest-bearing deposits, partially offset by an increase in the average balance of interest-bearing deposits.

The average rate paid on total deposits, including non-interest-bearing deposits, was 1.35% for the quarter ended March 31, 2026, compared to 1.43% for the preceding quarter and 1.47% for the same period a year earlier.

The average rate paid on interest-bearing deposits decreased to 1.99% for the quarter ended March 31, 2026, compared to 2.14% in the preceding quarter and 2.22% in the same period a year earlier.

The decrease in the average rate paid on interest-bearing deposits, compared to both the preceding quarter and the same period a year ago, is attributable to lower rates paid across all categories of interest-bearing deposits.

The decrease in the average rate paid on interest-bearing deposits compared to the preceding quarter was also impacted by shifts in the deposit mix, primarily reflecting continued migration from higher-rate certificates of deposit into savings and checking accounts.

Total average deposit balances, including non-interest-bearing deposits, decreased to $13.76 billion for the quarter ended March 31, 2026, compared to $13.97 billion for the preceding quarter and increased compared to $13.45 billion for the same period a year earlier.

Interest expense on total borrowings was $2.0 million for both the quarter ended March 31, 2026 and the preceding quarter and was $4.0 million for the same period a year earlier, due to decreases in both the average balance and rate paid on total borrowings, primarily reflecting the repayment of $150.0 million in FHLB advances and the maturity of higher-rate subordinated debt during 2025.

The average rate paid on total borrowings for the quarter ended March 31, 2026, decreased to 3.90%, from 3.93% for the preceding quarter, and decreased from 4.32% for the same period a year earlier.

Analysis of Net Interest Spread .

2 unchanged sentences

ANALYSIS OF NET INTEREST SPREAD Quarters Ended

(rates / ratios annualized) Sep 30, 2025 Jun 30, 2025

(rates / ratios annualized) Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

(dollars in thousands) Average Balance Interest and Dividends Yield / Cost (3)

Average Balance Interest and Dividends Yield / Cost (3)

Interest-earning assets:

43 unchanged sentences

11.23 % 10.97 % 10.12 %

Average equity/average assets 11.49 % 11.41 %

Average interest-earning assets/average interest-bearing liabilities 159.82 % 158.78 %

Average interest-earning assets/average funding liabilities 108.11 % 108.00 %

Non-interest income/average assets 0.50 % 0.44 %

Non-interest expense/average assets 2.48 % 2.52 %

Efficiency ratio 59.76 % 62.50 %

Adjusted efficiency ratio (4)

58.54 % 60.28 %

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

Amortization of net deferred loan fees/costs is included with interest on loans.

(2) Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.

(3) Tax-exempt income is calculated on a tax equivalent basis.

The tax equivalent yield adjustment to interest earned on loans was $2.4 million and $2.3 million for the quarters ended September 30, 2025 and June 30, 2025, respectively.

The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for both the quarters ended September 30, 2025 and June 30, 2025.

(4) Represents non-GAAP financial measures.

See non-GAAP financial measure reconciliations presented above following Third Quarter 2025 Highlights.

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Average Balance Interest and Dividends Yield / Cost (3)

Interest-earning assets:

Held for sale loans $ 28,203 $ 1,391 6.59 % $ 16,225 $ 826 6.80 %

Real estate secured loans 9,528,868 429,315 6.02 % 9,036,256 390,011 5.77 %

Commercial/agricultural loans 1,900,225 93,072 6.55 % 1,861,182 95,155 6.83 %

Consumer and other loans 120,735 6,293 6.97 % 131,676 6,506 6.60 %

Total loans (1)

11,578,031 530,071 6.12 % 11,045,339 492,498 5.96 %

Mortgage-backed securities 2,494,794 46,740 2.50 % 2,674,555 50,424 2.52 %

Other securities 883,330 28,313 4.29 % 962,183 33,802 4.69 %

Interest-bearing deposits with banks 144,974 4,114 3.79 % 51,630 1,530 3.96 %

FHLB stock 17,214 834 6.48 % 18,931 986 6.96 %

Total investment securities 3,540,312 80,001 3.02 % 3,707,299 86,742 3.13 %

Total interest-earning assets 15,118,343 610,072 5.40 % 14,752,638 579,240 5.24 %

Non-interest-earning assets 1,007,862 950,588

Total assets $ 16,126,205 $ 15,703,226

Interest-bearing checking accounts $ 2,489,219 28,833 1.55 % $ 2,185,796 23,834 1.46 %

Savings accounts 3,521,141 57,110 2.17 % 3,161,266 51,778 2.19 %

Money market accounts 1,506,171 23,388 2.08 % 1,648,208 26,696 2.16 %

Certificates of deposit 1,510,594 40,973 3.63 % 1,514,982 44,940 3.96 %

Total interest-bearing deposits 9,027,125 150,304 2.23 % 8,510,252 147,248 2.31 %

Non-interest-bearing deposits 4,526,898 — — % 4,649,297 — — %

Total deposits 13,554,023 150,304 1.48 % 13,159,549 147,248 1.49 %

Other interest-bearing liabilities:

FHLB advances 168,663 5,757 4.56 % 211,135 8,856 5.60 %

Other borrowings 125,517 2,063 2.20 % 171,838 3,482 2.71 %

Junior subordinated debentures and subordinated notes 142,255 6,380 6.00 % 179,941 8,901 6.61 %

Total borrowings 436,435 14,200 4.35 % 562,914 21,239 5.04 %

Total funding liabilities 13,990,458 164,504 1.57 % 13,722,463 168,487 1.64 %

Other non-interest-bearing liabilities (2)

298,056 303,367

Total liabilities 14,288,514 14,025,830

Shareholders’ equity 1,837,691 1,677,396

Total liabilities and shareholders’ equity $ 16,126,205 $ 15,703,226

Net interest income/rate spread (tax equivalent) $ 445,568 3.83 % $ 410,753 3.60 %

Net interest margin (tax equivalent) 3.94 % 3.72 %

Reconciliation to reported net interest income:

Adjustments for taxable equivalent basis (10,097) (9,573)

Net interest income and margin $ 435,471 3.85 % $ 401,180 3.63 %

Additional Key Financial Ratios:

Return on average assets 1.19 % 1.04 %

Adjusted return on average assets (4)

1.20 % 1.08 %

Return on average equity 10.49 % 9.76 %

Adjusted return on average equity (4)

Return on average tangible common equity (4)

14.00 % 13.17 % 12.96 %

10 unchanged sentences

(2) Average other non-interest-bearing liabilities include fair value adjustments related to junior subordinated debentures.

(3) Tax-exempt income is calculated on a tax equivalent basis.

The tax equivalent yield adjustment to interest earned on loans was $7.0 million and $6.5 million for the nine months ended September 30, 2025 and 2024, respectively.

The tax equivalent yield adjustment to interest earned on tax exempt securities was $3.1 million for both the nine months ended September 30, 2025 and 2024.

(3) Tax-exempt income is calculated on a tax equivalent basis, which Banner believes provides comparability of net interest income and net interest margin arising from both taxable and tax-exempt sources and is consistent with industry practice.

The tax equivalent yield adjustment to interest earned on loans was $2.2 million and $2.4 million and $2.2 million for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025, respectively.

The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for both the quarters ended March 31, 2026 and December 31, 2025 and $1.0 million for the quarter ended March 31, 2025.

(4) Represents non-GAAP financial measures.

See non-GAAP financial measure reconciliations presented above following Third Quarter 2025 Highlights.

See non-GAAP financial measure reconciliations presented above following First Quarter 2026 Highlights.

Provision and Allowance for Credit Losses .

4 unchanged sentences

Quarters Ended

Nine Months Ended

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 Sep 30, 2025 Sep 30, 2024

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

Balance, beginning of period $ 160,276 $ 159,707 $ 155,521

9 unchanged sentences

Loans charged off:

Commercial real estate — — — — (347)

Construction and land (218) — (145) (218) (145)

One- to four-family residential — — (13)

Commercial business (863) (837) (3,301)

Agricultural business, including secured by farmland (2,054) (362) — (2,416) —

Consumer (606) (407) (364)

5 unchanged sentences

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

During the quarter ended September 30, 2025, we recorded a provision for credit losses - loans of $1.4 million, compared to a provision for credit losses - loans of $4.2 million during the preceding quarter.

The provision for credit losses in the quarter was driven by changes in both portfolio mix and individually evaluated loans.

The provision for credit losses for the preceding quarter primarily reflected loan growth, as well as risk rating migration.

During the quarter ended March 31, 2026, we recorded a provision for credit losses - loans of $1.3 million, compared to a provision for credit losses - loans of $1.5 million during the preceding quarter.

The provision for credit losses in the quarter was driven by risk rating migration, changes in portfolio mix and adjustments to qualitative factor assessments to reflect modestly elevated economic uncertainty.

The provision for credit losses for the preceding quarter primarily reflected risk rating migration which impacted the overall estimated reserve requirements.

Future provisions for credit losses will continue to be influenced by changes in the amount and composition of the loan portfolio, updates to the reasonable and supportable forecast of future economic conditions, revisions to qualitative factor assessments, and any necessary changes to the reversion period applied in estimating expected credit losses.

2 unchanged sentences

Quarters Ended

Nine Months Ended

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS Sep 30, 2025 Jun 30, 2025 Sep 30, 2024 Sep 30, 2025 Sep 30, 2024

CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS Mar 31, 2026 Dec 31, 2025 Mar 31, 2025

Balance, beginning of period $ 14,985 $ 14,040 $ 13,562

Provision (recapture) for credit losses - unfunded loan commitments 1,290 588 (262) 478 (719)

(Recapture) provision for credit losses - unfunded loan commitments (2,082) 945 (1,400)

Balance, end of period $ 12,903 $ 14,985 $ 12,162

The increase in the allowance for credit losses - unfunded loan commitments for the current quarter reflects an increase in unfunded loan commitments, primarily in the construction portfolio.

The decrease in the allowance for credit losses - unfunded loan commitments for the current quarter was primarily driven by a reduction in unused commitments, mainly within the construction portfolio.

Non-interest Income.

The following table presents the key components of non-interest income for the periods indicated (dollars in thousands):

Quarters Ended Nine Months Ended

Sep 30, 2025 Jun 30, 2025 Change Amount Change Percent Sep 30, 2025 Sep 30, 2024 Change Amount Change Percent

Quarters Ended Quarter Ended

Mar 31, 2026 Dec 31, 2025 Change Amount Change Percent Mar 31, 2025 Change Amount Change Percent

Deposit fees and other service charges $ 11,391 $ 10,681 $ 710 7 % $ 10,769 $ 622 6 %

3 unchanged sentences

18,741 17,235 1,506 9 18,793 (52) —

Net gain (loss) on sale of securities 377 (3) 380 nm 374 (5,465) 5,839 (107)

Net loss on sale of securities (1,242) — (1,242) nm — (1,242) nm

Net change in valuation of financial instruments carried at fair value 1,662 (2,010) 3,672 (183) 315 1,347 428

1 unchanged sentence

nm = not meaningful

The increase in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $2.0 million increase in miscellaneous income, which included gains recognized on asset disposals as part of the building and lease exits during the current quarter of $1.4 million, compared to $919,000 of losses incurred on asset disposals related to building and lease exits during the second quarter of 2025.

The increase in non-interest income for the nine months ended September 30, 2025, compared to the same period a year earlier, was primarily due to a $5.8 million reduction in net losses on the sale of securities.

A net gain of $374,000 was recognized in the current period, compared to $5.5 million in strategic losses recorded during the nine months ended September 30, 2024, which were taken to mitigate rising interest rate risk in the securities portfolio.

In addition, the $626,000 improvement in the fair value of financial instruments during the first nine months of 2025, compared to a $1.1 million negative valuation change in the same period of 2024, contributed to the increase.

These instruments primarily include limited partnership investments, which were positively impacted by current market valuations.

Revenue from mortgage banking operations increased $1.1 million for the nine months ended September 30, 2025, compared to the same period a year earlier.

This increase was the result of higher volumes of one- to four-family loans sold, with gains on these loan sales totaling $6.5 million, compared to $5.4 million in the prior-year period.

Miscellaneous income increased $1.2 million for the nine months ended September 30, 2025, compared to the same period a year earlier, primarily due to an increase in the gain on sale of SBA loans and higher income from back-to-back swaps.

Non-interest income increased $3.9 million to $19.2 million for the three months ended March 31, 2026, compared to $15.2 million for the three months ended December 31, 2025.

The increase primarily reflected a $3.7 million improvement in the fair value of financial instruments carried at fair value, which shifted from a net loss of $2.0 million in the three months ended December 31, 2025 to a net gain of $1.7 million in the three months ended March 31, 2026.

Miscellaneous income also increased $1.4 million, primarily reflecting asset disposition losses recorded in the three months ended December 31, 2025 that did not recur.

Deposit fees and other service charges increased $710,000, or 7%, reflecting seasonal patterns and increased account activity.

These increases were partially offset by a net loss of $1.2 million on the sale of securities in the three months ended March 31, 2026, compared to no securities sold in the prior quarter.

Non-interest income increased slightly for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase was primarily attributable to an increase in the fair value of financial instruments carried at fair value and an increase in deposit fees and other service charges.

These increases were partially offset by a net loss on the sale of securities in the three months ended March 31, 2026.

Non-interest Expense.

The following table represents key elements of non-interest expense for the periods indicated (dollars in thousands):

Quarters Ended Nine Months Ended

Sep 30, 2025 Jun 30, 2025 Change Amount Change Percent.

Sep 30, 2025 Sep 30, 2024 Change Amount Change Percent

Quarters Ended Quarter Ended

Mar 31, 2026 Dec 31, 2025 Change Amount Change Percent.

Mar 31, 2025 Change Amount Change Percent

Salary and employee benefits $ 67,732 $ 65,428 $ 2,304 4 % $ 64,857 $ 2,875 4 %

7 unchanged sentences

State and municipal business and use taxes 1,820 1,751 69 4 1,454 366 25

Real estate operations, net 203 392 (189) (48) 534 180 354 197

Real estate operations, net 109 (43) 152 nm (61) 170 nm

Amortization of core deposit intangibles 256 315 (59) (19) 456 (200) (44)

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nm = not meaningful

The increase in non-interest expense for the current quarter reflects increases in miscellaneous expenses and advertising and marketing expenses, partially offset by a decrease in salary and employee benefits.

In addition, the current quarter included $1.0 million of building and lease exit costs, compared to $834,000 of such costs in the previous quarter.

The increase in non-interest expense for the nine months ended September 30, 2025, compared to the same period a year earlier primarily reflects increases in salary and employee benefits, information and computer data services, and professional and legal expenses, partially offset by a decrease in the amortization of core deposit intangibles.

Salary and employee benefits decreased for the current quarter, compared to the quarter ended June 30, 2025, as a result of decreased medical premiums expense and payroll taxes, and increased for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily from increased loan production-related commission expense and normal salary and wage increases.

Information and computer data services for the nine months ended September 30, 2025 increased from the comparable period primarily due to increases in computer software expenses as the Company invested in technology enhancements.

Professional and legal expense increased for the nine months ended September 30, 2025, compared to the same period a year earlier, primarily due to one-time reductions in litigation settlement costs that occurred during the nine months ended September 30, 2024.

Advertising and marketing expenses increased in the current quarter compared to the prior quarter due to increases in direct mail marketing and community development expenses.

However, these expenses decreased $366,000, or 11%, for the nine-month period due to lower spending compared to the prior year.

Miscellaneous expenses increased in the current quarter compared to the prior quarter due to an increase in talent acquisition and other employee-related expenses.

Our efficiency ratio was 59.76% for the current quarter, compared to 62.50% in the preceding quarter.

Our adjusted efficiency ratio, a non-GAAP financial measure, was 58.54% for the current quarter, compared to 60.28% in the preceding quarter.

The improvement in the efficiency ratio and adjusted efficiency ratio for the current quarter reflects an increase in total revenues and adjusted revenues, respectively.

See non-GAAP financial measure reconciliations presented above under “Third Quarter 2025 Financial Highlights.”

The decrease in non-interest expense for the current quarter reflects decreases in occupancy and equipment expenses, professional and legal expenses, information and computer data services expenses and advertising and marketing expenses, partially offset by an increase in salary and employee benefits.

In addition, the current quarter included no building and lease exit costs, compared to $434,000 of such costs in the quarter ended December 31, 2025, which are included in occupancy and equipment expenses above.

The increase in non-interest expense for the three months ended March 31, 2026, compared to the same period a year earlier, primarily reflects increases in salary and employee benefits and information and computer data services expenses, partially offset by a decrease in occupancy and equipment expenses.

Salary and employee benefits increased for the current quarter, compared to the quarter ended December 31, 2025, as a result of increased medical premiums and payroll tax expenses, and increased compared to the quarter ended March 31, 2025, primarily from increased medical premiums, increased loan production-related commission expense, and normal salary and wage increases.

Occupancy and equipment expenses decreased in the current quarter, compared to both the preceding quarter and the same period a year ago, primarily due to lower rent expense as well as reduced building repair and maintenance costs.

The decrease from the same period a year ago also reflected lower software amortization.

Information and computer data services decreased for the quarter ended March 31, 2026 compared to the quarter ended December 31, 2025, primarily due to decreases in computer software expenses, and increased compared to the quarter ended March 31, 2025, primarily due to an increase in software expenses related to additional software service contracts and the implementation of a new loan and deposit origination system during 2025.

Professional and legal expense decreased in the current quarter, compared to both the preceding quarter and the same period a year ago.

The decrease compared to the preceding quarter was primarily due to expenses recognized on a pending legal settlement during the prior quarter and lower audit and regulatory exam expenses.

The decrease compared to the same period a year ago was primarily due to decreases in consultant and other professional services expenses.

Advertising and marketing expenses decreased in the current quarter compared to the quarter ended December 31, 2025, due to decreases in direct mail marketing and community development expenses.

Our efficiency ratio was 60.60% for the current quarter, compared to 62.11% in the quarter ended December 31, 2025.

Our adjusted efficiency ratio, a non-GAAP financial measure, was 59.45% for the current quarter, compared to 59.87% in the quarter ended December 31, 2025.

The improvement in the efficiency ratio reflects an increase in total revenues and a decrease in non-interest expense.

The improvement in the adjusted efficiency ratio reflects similar trends on an adjusted basis, with further detail provided in the non-GAAP reconciliation.

See non-GAAP financial measure reconciliations presented above under “First Quarter 2026 Financial Highlights.”

Income Taxes.

For the quarter ended September 30, 2025, we recognized $12.5 million in income tax expense for an effective tax rate of 19.0%, which reflects our blended statutory tax rate reduced by the effect of tax-exempt income, certain tax credits, and tax benefits related to restricted stock vesting.

For the quarter ended March 31, 2026, we recognized $12.8 million in income tax expense for an effective tax rate of 19.0%, which reflects our blended statutory tax rate reduced by the effect of tax-exempt income, certain tax credits, and tax benefits related to restricted stock vesting.

Our statutory income tax rate is 24.0%, representing a statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.

For the quarter ended June 30, 2025, we recognized $10.5 million in income tax expense for an effective tax rate of 18.8%.

For the nine months ended September 30, 2025, we recognized $33.7 million in income tax expense for an effective tax rate of 18.9%, compared to $28.9 million in income tax expense for an effective tax rate of 19.1% for the same period in the prior year.

For the quarter ended December 31, 2025, we recognized $9.8 million in income tax expense for an effective tax rate of 16.1%.

For the three months ended March 31, 2025, we recognized $10.7 million in income tax expense for an effective tax rate of 19.1%.

Asset Quality

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Non-Performing Assets:

Non-performing assets totaled $45.3 million, or 0.27% of total assets, at September 30, 2025, compared to $39.6 million, or 0.24% of total assets, at December 31, 2024.

Our allowance for credit losses - loans was $159.7 million, or 399% of non-performing loans, at September 30, 2025, compared to $155.5 million, or 421% of non-performing loans, at December 31, 2024.

The increase in non-performing assets was primarily due to a $6.6 million increase in nonaccrual one- to four-family residential loans.

Non-performing assets totaled $51.7 million, or 0.32% of total assets, at March 31, 2026, compared to $51.2 million, or 0.31% of total assets, at December 31, 2025.

Our allowance for credit losses - loans was $160.4 million, or 353% of non-performing loans, at March 31, 2026, compared to $160.3 million, or 351% of non-performing loans, at December 31, 2025.

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

September 30, 2025 December 31, 2024 September 30, 2024

March 31, 2026 December 31, 2025 March 31, 2025

Nonaccrual Loans:

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Secured by real estate:

Commercial 274 — 2,258

Construction and land — 1,268 —

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Loans 30-89 days past due and on accrual $ 30,177 $ 26,767 $ 37,339

For the nine months ended September 30, 2025, interest income was reduced by $1.9 million as a result of nonaccrual loan activity, which included the reversal of $563,000 of accrued interest as of the date the loan was placed on nonaccrual.

There was no interest income recognized on nonaccrual loans for the nine months ended September 30, 2025.

For the three months ended March 31, 2026, interest income was reduced by $725,000 as a result of nonaccrual loan activity, which included the reversal of $210,000 of accrued interest as of the date the loan was placed on nonaccrual.

There was no interest income recognized on nonaccrual loans for the three months ended March 31, 2026.

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

September 30, 2025 December 31, 2024 September 30, 2024

March 31, 2026 December 31, 2025 March 31, 2025

Pass $ 11,416,687 $ 11,446,550 $ 11,207,852

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Total $ 11,707,626 $ 11,721,687 $ 11,438,796

As of September 30, 2025, total substandard loans primarily consisted of loans within the commercial business, commercial real estate and agricultural business loan segments.

The decrease in special mention loans during the three months ended March 31, 2026, was due to loan risk rating downgrades from special mention to substandard.

The increase in substandard loans during the three months ended March 31, 2026, was primarily due to loan risk rating downgrades, primarily in the commercial business loan segment.

As of March 31, 2026, total substandard loans primarily consisted of loans within the commercial business, commercial real estate and agricultural business loan segments.

Liquidity and Capital Resources

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Our primary investing activity is the origination of loans and, in certain periods, the purchase of securities or loans.

During the nine months ended September 30, 2025 and 2024, our loan originations, including originations of loans held for sale, exceeded our loan repayments by $703.9 million and $744.9 million, respectively.

There were $10.8 million of loan purchases during the nine months ended September 30, 2025, and $4.7 million of loan purchases during the nine months ended September 30, 2024.

During the nine months ended September 30, 2025 and 2024, we received proceeds of $381.5 million and $276.8 million, respectively, from the sale of loans.

Securities purchased during the nine months ended September 30, 2025 and 2024 totaled $101.7 million and $53.2 million, respectively, and securities repayments, maturities and sales in those periods were $296.3 million and $284.4 million, respectively.

During the three months ended March 31, 2026 and 2025, our loan originations, including originations of loans held for sale, exceeded our loan repayments by $112.0 million and $186.2 million, respectively.

There were no loan purchases during the three months ended March 31, 2026, and $10.8 million of loan purchases during the three months ended March 31, 2025.

During the three months ended March 31, 2026 and 2025, we received proceeds of $137.4 million and $120.7 million, respectively, from the sale of loans.

Securities purchased during the three months ended March 31, 2026 and 2025 totaled $104.4 million and $9.8 million, respectively, and securities repayments, maturities and sales in those periods were $97.4 million and $52.9 million, respectively.

Our primary financing activity is gathering deposits.

Total deposits increased by $501.5 million during the nine months ended September 30, 2025, primarily due to an increase in core deposits.

Core deposits were $12.48 billion at September 30, 2025, compared to $12.01 billion at December 31, 2024.

Total deposits increased by $97.2 million during the three months ended March 31, 2026, primarily due to an increase in core deposits.

Core deposits were $12.38 billion at March 31, 2026, compared to $12.21 billion at December 31, 2025.

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

At September 30, 2025, certificates of deposit totaled $1.54 billion, or 11% of our total deposits, including $1.48 billion which were scheduled to mature within one year.

At March 31, 2026, certificates of deposit totaled $1.46 billion, or 11% of our total deposits, including $1.42 billion which were scheduled to mature within one year.

While no assurance can be given as to future periods, historically, we have been able to retain a significant amount of our certificates of deposit as they mature.

We had $100.0 million of FHLB advances at September 30, 2025, compared to $290.0 million at December 31, 2024 as deposits were used as the primary source of funds during the period.

Other borrowings decreased to $120.5 million at September 30, 2025 from $125.3 million at December 31, 2024.

The balance of our outstanding subordinated notes was paid off during the second quarter of 2025.

We had no FHLB advances at March 31, 2026, compared to $150.0 million at December 31, 2025, as the increase in core deposits was used to pay off FHLB advances during the period.

Other borrowings increased to $115.7 million at March 31, 2026, from $107.7 million at December 31, 2025.

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

During the nine months ended September 30, 2025, we used our sources of funds primarily to fund loan growth.

At September 30, 2025, we had outstanding loan commitments totaling $3.91 billion, relating to undisbursed loans in process and unused credit lines.

During the three months ended March 31, 2026, we used our sources of funds to pay off higher costing FHLB advances.

At March 31, 2026, we had outstanding loan commitments totaling $4.10 billion, relating to undisbursed loans in process and unused credit lines.

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

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

however, our primary liquidity management practice to supplement deposits is to increase or decrease short-term borrowings, including FHLB advances and Federal Reserve Bank of San Francisco (FRBSF) borrowings.

We maintain credit facilities with the FHLB, which provide for advances that in the aggregate would equal the lesser of 45% of the Bank’s assets or adjusted qualifying collateral (subject to a sufficient level of ownership of FHLB stock).

At September 30, 2025, under these credit facilities based on pledged collateral, the Bank had $3.25 billion of available credit capacity.

Advances under these credit facilities totaled $100.0 million at September 30, 2025.

In addition, the Bank has been approved for participation in the FRBSF’s Borrower-In-Custody program.

Under this program, based on pledged collateral, the Bank had available lines of credit of approximately $1.63 billion as of September 30, 2025, subject to certain collateral requirements, namely the collateral type and risk rating of eligible pledged loans.

We had no funds borrowed from the FRBSF at September 30, 2025 or December 31, 2024.

At September 30, 2025, the Bank also had uncommitted federal funds line of credit agreements with other financial institutions totaling $125.0 million.

No balances were outstanding under these agreements as of September 30, 2025 or December 31, 2024.

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.

Management believes it has adequate resources and funding potential to meet our foreseeable liquidity requirements.

however, our primary liquidity management practice is to supplement deposits through short-term borrowings, including FHLB advances and Federal Reserve Bank of San Francisco (FRBSF) borrowings.

We maintain credit facilities with the FHLB, which provide for advances secured by eligible collateral and subject to applicable borrowing capacity limitations, including required ownership of FHLB stock.

At March 31, 2026, based on pledged collateral, the Bank had approximately $3.76 billion of available borrowing capacity under these facilities, and no outstanding advances.

The Bank is also approved for participation in the FRBSF Borrower-in-Custody program.

As of March 31, 2026, the Bank had approximately $1.74 billion of available borrowing capacity under this program, subject to eligible collateral requirements, including the type and risk rating of pledged loans.

No borrowings were outstanding under this facility at March 31, 2026 or December 31, 2025.

In addition, the Bank maintains uncommitted federal funds lines of credit with other financial institutions totaling $125.0 million, subject to availability of federal funds balances and continued counterparty eligibility.

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

No amounts were outstanding under these arrangements at March 31, 2026 or December 31, 2025.

Management believes the Bank maintains adequate liquidity resources and borrowing capacity to meet its current and foreseeable funding requirements.

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

At September 30, 2025, Banner (on an unconsolidated basis) had liquid assets of $60.2 million.

At March 31, 2026, Banner (on an unconsolidated basis) had liquid assets of $88.6 million.

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

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

Our current quarterly common stock dividend rate increased to $0.50 per share, up from $0.48 per share, for the dividend paid to shareholders in November 2025, as approved by our Board of Directors, which we believe is a dividend rate per share which enables us to balance our multiple objectives of managing and investing in the Bank, and returning a substantial portion of our cash to our shareholders.

Assuming continued dividend payments going forward at this new rate of $0.50 per share, our average total dividend paid each quarter would be approximately $17.2 million based on the number of outstanding shares at September 30, 2025.

Our current quarterly common stock dividend rate increased to $0.52 per share, up from $0.50 per share, for the dividend paid to shareholders in May 2026, as approved by our Board of Directors.

Our quarterly common stock dividend enables us to balance our multiple objectives of managing and investing in the Bank and returning a substantial portion of our cash to our shareholders.

Assuming continued dividend payments going forward at this new rate of $0.52 per share, our average total dividend paid each quarter would be approximately $17.6 million based on the number of outstanding shares at March 31, 2026.

As noted below, Banner Corporation and its subsidiary bank continued to maintain capital levels in excess of the requirements to be categorized as “Well-Capitalized” under applicable regulatory standards.

During the nine months ended September 30, 2025, total shareholders’ equity increased $138.6 million, to $1.91 billion or 11.55% of total assets.

At September 30, 2025, tangible common shareholders’ equity, which excludes goodwill and other intangible assets, was $1.54 billion, or 9.50% of tangible assets.

During the three months ended March 31, 2026, total shareholders’ equity increased $20.3 million, to $1.97 billion or 12.03% of total assets.

At March 31, 2026, tangible common shareholders’ equity, which excludes goodwill and other intangible assets, was $1.59 billion, or 9.97% of tangible assets.

Tangible common shareholders’ equity represents a non-GAAP financial measure.

See, non-GAAP financial measure reconciliations presented above under “Third Quarter 2025 Financial Highlights.”

See, non-GAAP financial measure reconciliations presented above under “First Quarter 2026 Financial Highlights.”

Capital Requirements

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In addition to the minimum capital ratios, the Bank must maintain a capital conservation buffer consisting of additional common equity tier 1 capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses.

At September 30, 2025, Banner and the Bank each exceeded all regulatory capital requirements to be “well capitalized.”

The actual regulatory capital ratios calculated for Banner Corporation and Banner Bank as of September 30, 2025, along with the minimum capital amounts and ratios, were as follows (dollars in thousands):

At March 31, 2026, Banner and the Bank each exceeded all regulatory capital requirements to be “well capitalized.”

The actual regulatory capital ratios calculated for Banner Corporation and Banner Bank as of March 31, 2026, along with the minimum capital amounts and ratios, were as follows (dollars in thousands):

Actual Minimum to be Categorized as “Adequately Capitalized” Minimum to be Categorized as “Well-Capitalized”

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis