Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 18, 2024

Banner Corporation

(Exact name of registrant as specified in its charter)

Washington

000-26584

91-1691604

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

10 S. First Avenue, Walla Walla, Washington 99362

(Address of principal executive offices) (Zip Code)

Registrant's telephone number (including area code) (509) 527-3636

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $.01 per share

BANR

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.*

On January 18, 2024, Banner Corporation issued its earnings release for the quarter ended December 31, 2023. A copy of the earnings release is furnished herewith as Exhibit 99.1, and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.*

Banner Corporation intends to review the investor presentation attached as Exhibit 99.2 to this Current Report on Form 8-K in conjunction with its earnings release conference call on January 19, 2024, and from time to time in presentations to investors and other stakeholders.

Item 8.01 Other Events.

On January 18, 2024, Banner Corporation announced its Board of Directors declared a regular quarterly cash dividend on Banner Corporation common stock of $0.48 per share, payable on February 16, 2024 to stockholders of record as of the close of business on February 7, 2024.

Item 9.01 Financial Statements and Exhibits.*

(d) Exhibits

99.1 Press Release of Banner Corporation dated January 18, 2024.

99.2 Banner Corporation Investor Materials

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

* The information furnished under Item 2.02, Item 7.01 and Item 9.01 of this Current Report on Form 8-K, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities under that Section, nor shall it be deemed incorporated by reference in any registration statement or other filings of Banner Corporation under the Securities Act of 1933, as amended, except as shall be set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			BANNER CORPORATION



Date: January 18, 2024			By: /s/ Robert G Butterfield
			Robert G Butterfield
			Executive Vice President, Treasurer and Chief Financial Officer

Exhibit 99.1


						CONTACT:			MARK J. GRESCOVICH,
									PRESIDENT & CEO
									ROBERT G. BUTTERFIELD, CFO
									(509) 527-3636

						NEWS RELEASE

Banner Corporation Reports Net Income of $42.6 Million, or $1.24 Per Diluted Share, for Fourth Quarter 2023;

Earns $183.6 Million in Net Income, or $5.33 Per Diluted Share, for the Full Year of 2023;

Declares Quarterly Cash Dividend of $0.48 Per Share

Walla Walla, WA - January 18, 2024 - Banner Corporation (NASDAQ GSM: BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $42.6 million, or $1.24 per diluted share, for the fourth quarter of 2023, a 7% decrease compared to $45.9 million, or $1.33 per diluted share, for the preceding quarter and a 22% decrease compared to $54.4 million, or $1.58 per diluted share, for the fourth quarter of 2022. Net interest income was $138.4 million in the fourth quarter of 2023, compared to $141.8 million in the preceding quarter and $159.1 million in the fourth quarter a year ago. The decrease in net interest income compared to the preceding quarter and prior year quarter reflects an increase in funding costs, partially offset by an increase in yields on earning assets. Banner’s fourth quarter 2023 results include a $4.8 million net loss on the sale of securities, compared to a $2.7 million net loss on the sale of securities in the preceding quarter and a $3.7 million net loss on the sale of securities in the fourth quarter of 2022. Banner’s fourth quarter 2023 results also include a $2.5 million provision for credit losses, compared to a $2.0 million provision for credit losses in the preceding quarter and a $6.7 million provision for credit losses in the fourth quarter of 2022. Net income was $183.6 million, or $5.33 per diluted share, for the year ended December 31, 2023, compared to net income of $195.4 million, or $5.67 per diluted share, for the year ended December 31, 2022. Banner’s results for the year ended 2023 include a $10.8 million provision for credit losses, a $19.2 million net loss on the sale of securities and a $4.2 million net decrease in the fair value adjustments on financial instruments carried at fair value, compared to a $10.4 million provision for credit losses, a $3.2 million net loss on the sale of securities and an $807,000 net increase in the fair value adjustments on financial instruments carried at fair value during the same period in 2022.

Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.48 per share. The dividend will be payable February 16, 2024, to common shareholders of record on February 7, 2024.

“Our super community bank business strategy of emphasizing a moderate risk profile and strong relationship banking, continues to provide stable operating performance and has positioned the Company well to weather recent market headwinds,” said Mark Grescovich, President and CEO. “Banner’s performance for the fourth quarter of 2023 benefited from strong loan growth and higher yields on interest-earning assets. However, the continued higher interest rate environment and its effect on funding costs resulted in moderate compression in our net interest margin during the quarter. We continue to maintain very strong credit quality metrics and a solid reserve for potential loan losses. Additionally, we continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter end. Banner’s overarching goals continue to be to do the right thing for our clients, communities, colleagues, company and shareholders; and to provide a consistent and reliable source of commerce and capital through all economic cycles and change events.”

At December 31, 2023, Banner, on a consolidated basis, had $15.67 billion in assets, $10.66 billion in net loans and $13.03 billion in deposits. Banner operates 135 full service branch offices, including branches located in eight of the top 20 largest western Metropolitan Statistical Areas by population.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 2

Fourth Quarter 2023 Highlights

•Revenues were $152.5 million for the fourth quarter of 2023, compared to $154.4 million in the preceding quarter, and $172.1 million in the fourth quarter a year ago.

•Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities and the net change in valuation of financial instruments) was $157.1 million in the fourth quarter of 2023, compared to $157.7 million in the preceding quarter and $175.7 million in the fourth quarter a year ago.

•Net interest income was $138.4 million in the fourth quarter of 2023, compared to $141.8 million in the preceding quarter and $159.1 million in the fourth quarter a year ago.

•Net interest margin, on a tax equivalent basis, was 3.83%, compared to 3.93% in the preceding quarter and 4.23% in the fourth quarter a year ago.

•Mortgage banking operations revenue was $5.4 million for the fourth quarter of 2023, compared to $2.0 million in the preceding quarter and $2.3 million in the fourth quarter a year ago.

•Return on average assets was 1.09%, compared to 1.17% in the preceding quarter and 1.34% in the fourth quarter a year ago.

•Net loans receivable increased 2% to $10.66 billion at December 31, 2023, compared to $10.46 billion at September 30, 2023, and increased 7% compared to $10.01 billion at December 31, 2022.

•Non-performing assets were $30.1 million, or 0.19% of total assets, at December 31, 2023, compared to $26.8 million, or 0.17% of total assets at September 30, 2023, and $23.4 million, or 0.15% of total assets, at December 31, 2022.

•The allowance for credit losses - loans was $149.6 million, or 1.38% of total loans receivable, as of December 31, 2023, compared to $147.0 million, or 1.38% of total loans receivable as of September 30, 2023 and $141.5 million, or 1.39% of total loans receivable as of December 31, 2022.

•Total deposits decreased to $13.03 billion at December 31, 2023, compared to $13.17 billion at September 30, 2023 and $13.62 billion at December 31, 2022. Core deposits represented 89% of total deposits at December 31, 2023.

•Banner Bank’s estimated uninsured deposits were approximately 31% of total deposits at both December 31, 2023 and September 30, 2023.

•Banner Bank’s estimated uninsured deposits, excluding collateralized public deposits and affiliate deposits, were approximately 28% of total deposits at both December 31, 2023 and September 30, 2023.

•Available borrowing capacity was $4.65 billion at December 31, 2023, compared to $4.62 billion at September 30, 2023.

•On-balance sheet liquidity was $2.93 billion at December 31, 2023, compared to $2.86 billion at September 30, 2023.

•Dividends paid to shareholders were $0.48 per share in the quarter ended December 31, 2023.

•Common shareholders’ equity per share increased 9% to $48.12 at December 31, 2023, compared to $44.27 at the preceding quarter end, and increased 13% from $42.59 at December 31, 2022.

•Tangible common shareholders’ equity per share* increased 12% to $37.09 at December 31, 2023, compared to $33.22 at the preceding quarter end, and increased 18% from $31.41 at December 31, 2022.

*Non-GAAP (Generally Accepted Accounting Principles) measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

Income Statement Review

Net interest income was $138.4 million in the fourth quarter of 2023, compared to $141.8 million in the preceding quarter and $159.1 million in the fourth quarter a year ago. Net interest margin on a tax equivalent basis was 3.83% for the fourth quarter of 2023, a ten basis-point decrease compared to 3.93% in the preceding quarter and a 40 basis-point decrease compared to 4.23% in the fourth quarter a year ago. Net interest margin for the current quarter was impacted by an increase in funding costs due to an increase in the percentage of deposits being interest bearing and a large mix of higher cost retail CDs, partially offset by a decrease in FHLB advances and increased yields on loans due to the benefit of variable rate interest-earning loans repricing for the first time since the start of the rising rate environment.

Average yields on interest-earning assets increased 12 basis points to 5.06% for the fourth quarter of 2023, compared to 4.94% for the preceding quarter and increased 66 basis points compared to 4.40% in the fourth quarter a year ago. Average loan yields increased 12 basis points to 5.77% compared to 5.65% in the preceding quarter and increased 63 basis points compared to 5.14% in the fourth quarter a year ago. The increase in average yields on interest-earning assets, particularly loans, during the current quarter reflects the benefit of variable rate interest-earning assets repricing higher, as well as new loans being originated at higher interest rates. Total deposit costs were 1.18% in the fourth quarter of 2023, which was a 24 basis-point increase compared to the preceding quarter and a 108 basis-point increase compared to the fourth quarter a year ago. The increase in the costs of deposits was due to an increase in the mix of higher cost retail CDs as well as a larger percentage of core deposits being in interest bearing accounts. The average rate paid on borrowings was 4.77% in the fourth quarter of 2023, a 13 basis-point increase compared to 4.64% in the preceding quarter and a 223 basis-point increase compared to 2.54% in the fourth quarter a year ago. The total cost of funding liabilities was 1.31% during the fourth quarter of 2023, a 23 basis-point increase compared to 1.08% in the preceding quarter and a 113 basis-point increase compared to 0.18% in the fourth quarter a year ago.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 3

A $2.5 million provision for credit losses was recorded in the current quarter (comprised of a $3.8 million provision for credit losses - loans, a $526,000 recapture of provision for credit losses - unfunded loan commitments, a $750,000 recapture of provision for credit losses - available for sale securities and a $23,000 recapture of provision for credit losses - held-to-maturity debt securities). This compares to a $2.0 million provision for credit losses in the prior quarter (comprised of a $2.9 million provision for credit losses - loans, a $346,000 provision for credit losses - unfunded loan commitments, a $1.3 million recapture of provision for credit losses - available for sale securities and a $12,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $6.7 million provision for credit losses in the fourth quarter a year ago (comprised of a $6.0 million provision for credit losses - loans, a $680,000 provision for credit losses - unfunded loan commitments and a $19,000 recapture of provision for credit losses - held-to-maturity debt securities). The provision for credit losses for the current quarter primarily reflects the increasing loan balances and the higher net loan charge-offs, partially offset by an increase in the trading price of bank subordinated debt investments. The provision for credit losses for the preceding quarter primarily reflected increased loan balances and unfunded loan commitments, partially offset by an increase in the trading price on bank subordinated debt investments.

Total non-interest income was $14.1 million in the fourth quarter of 2023, compared to $12.7 million in the preceding quarter and $13.1 million in the fourth quarter a year ago. The increase in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $3.3 million increase in mortgage banking operations revenue and a $793,000 increase in the fair value adjustments on financial instruments carried at fair value during the current quarter, partially offset by a $1.4 million decrease in deposit fees and other service charges and a $2.1 million increase in the net loss recognized on the sale of securities. The increase in non-interest income during the current quarter compared to the prior year quarter was primarily due to a $3.1 million increase in mortgage banking operations revenue, partially offset by a $1.3 million decrease in deposit fees and other service charges and a $1.1 million increase in the net loss recognized on the sale of securities. Total non-interest income was $44.4 million for the year ended December 31, 2023, compared to $75.3 million for the same period a year earlier.

Mortgage banking operations revenue, including gains on one- to four-family and multifamily loan sales and loan servicing fees, was $5.4 million in the fourth quarter of 2023, compared to $2.0 million in the preceding quarter and $2.3 million in the fourth quarter a year ago. The increase from the preceding quarter and the fourth quarter of 2022 primarily reflects the reversal of the lower of cost or market adjustment on multifamily loans held for sale recognized during the current period due to the transfer of $43.5 million of multifamily loans held for sale to the held for investment loan portfolio in the fourth quarter of 2023. In addition, the volume of one- to four-family loans sold during the current quarter increased compared to the prior year quarter, although overall volumes remained low due to reduced refinancing and purchase activity amid rising interest rates. The increase in volume of one- to four-family loans sold during the current quarter compared to the prior year quarter was partially offset by a decrease in the gain on sale margin of one- to four-family loans sold. Home purchase activity accounted for 92% of one- to four-family mortgage loan originations in the fourth quarter of 2023, compared to 90% in both the preceding quarter and in the fourth quarter of 2022. For the fourth quarter of 2023, mortgage banking operations revenue included a $3.5 million lower of cost or market upward adjustment on multifamily loans held for sale, attributed to the transfer of $43.5 million of multifamily loans from held for sale to the held for investment portfolio. For the third quarter of 2023, we recorded a $456,000 lower of cost or market downward adjustment on multifamily loans held for sale, driven by increases in market interest rates. During the fourth quarter of 2022, a $723,000 lower of cost or market upward adjustment was recorded due to the transfer of a pool of multifamily loans held for sale to held for investment portfolio loans, partially offset by a negative fair value adjustment on multifamily loans held for sale.

Fourth quarter 2023 non-interest income included a $139,000 net gain for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of certain investment securities held for trading and limited partnership investments, and a $4.8 million net loss on the sale of securities. In the preceding quarter, non-interest income included a $654,000 net loss for fair value adjustments and a $2.7 million net loss on the sale of securities. In the fourth quarter a year ago, non-interest income included a $157,000 net gain for fair value adjustments and a $3.7 million net loss on the sale of securities.

Total revenue decreased 1% to $152.5 million for the fourth quarter of 2023, compared to $154.4 million in the preceding quarter, and decreased 11% compared to $172.1 million in the fourth quarter of 2022. Adjusted revenue* (the total of net interest income and total non-interest income adjusted for the net gain or loss on the sale of securities and the net change in valuation of financial instruments) was $157.1 million in the fourth quarter of 2023, compared to $157.7 million in the preceding quarter and $175.7 million in the fourth quarter a year ago. Total revenue was $620.4 million for the year ended December 31, 2023, compared to $628.4 million for the year ended December 31, 2022. Adjusted revenue* was $643.9 million for the year ended December 31, 2023, compared to $623.1 million for the year ended December 31, 2022.

Total non-interest expense was $96.6 million in the fourth quarter of 2023, compared to $95.9 million in the preceding quarter and $99.0 million in the fourth quarter of 2022. The increase in non-interest expense for the current quarter compared to the prior quarter primarily reflects a $627,000 decrease in capitalized loan origination costs, a $478,000 increase in occupancy and equipment expense, a $916,000 increase in payment and card processing services expense, and a $430,000 increase in REO operations, partially offset by a $980,000 decrease in salary and employee benefits expense, primarily due to decreases in severance expenses, and a $775,000 decrease in professional and legal expense. The prior quarter included $996,000 of Banner Forward expenses related to the consolidation of two branch locations, as well as expenses related to the discontinuation of the Multifamily Originated for Sale business line due to the continued lack of an active secondary market for originated for sale multifamily loans. The decrease in non-interest expense for the current quarter compared to the same quarter a year ago primarily reflects decreases in occupancy and equipment expense and professional and legal expense, partially offset by a decrease in capitalized loan origination costs and increases in payment and card processing services expense and deposit insurance expense. The prior year quarter included a $3.5 million accrual related to a potential settlement of a pending litigation matter. For the year ended December 31, 2022, total non-interest expense was $382.5 million, compared to $377.3 million for the year ended December 31, 2022. Banner’s efficiency ratio was 63.37% for the fourth quarter of 2023, compared to 62.10% in the preceding quarter and 57.52% in the same quarter a year ago. Banner’s adjusted efficiency ratio* was 60.04% for the fourth quarter of 2023, compared to 59.00% in the preceding quarter and 54.43% in the year ago quarter.

*Non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a discussion and reconciliation of non-GAAP financial measures.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 4

Federal and state income tax expense totaled $10.7 million for the fourth quarter of 2023 resulting in an effective tax rate of 20.1%, reflecting the benefits from tax exempt income. Banner’s statutory income tax rate for the quarter ended December 31, 2023, was 23.7%, representing a blend of the statutory federal income tax rate of 21.0% and apportioned effects of the state income tax rates.

Balance Sheet Review

Total assets increased to $15.67 billion at December 31, 2023, compared to $15.51 billion at September 30, 2023, and decreased from $15.83 billion at December 31, 2022. The total of securities and interest-bearing deposits held at other banks totaled $3.48 billion at December 31, 2023, compared to $3.44 billion at September 30, 2023 and $4.28 billion at December 31, 2022. The decrease compared to the prior year quarter was primarily due to reverse repurchase agreements maturing during the first six months of 2023 and the sale of securities. The average effective duration of the securities portfolio was approximately 6.5 years at both December 31, 2023 and 2022.

Total loans receivable increased to $10.81 billion at December 31, 2023, compared to $10.61 billion at September 30, 2023, and $10.15 billion at December 31, 2022. One- to four-family residential loans increased 6% to $1.52 billion at December 31, 2023, compared to $1.44 billion at September 30, 2023, and increased 29% compared to $1.17 billion at December 31, 2022. The increase in one- to four-family residential loans was the result of one- to four-family construction loans converting to one- to four-family portfolio loans upon the completion of the construction phase and new production. Multifamily real estate loans increased 6% to $811.2 million at December 31, 2023, compared to $766.6 million at September 30, 2023, and increased 26% compared to $645.1 million at December 31, 2022. The increase in multifamily loans was the result of the transfer of $43.5 million of multifamily loans held for sale to the held for investment loan portfolio in the fourth quarter of 2023; when compared to the prior year quarter the primary driver for the increase was the conversion of affordable housing construction loans to the multifamily portfolio upon the completion of the construction phase. Agricultural business loans decreased 1% to $331.1 million at December 31, 2023, compared to $334.6 million at September 30, 2023, primarily due to operating line paydowns and increased 12% compared to $295.1 million at December 31, 2022, primarily due to new loan production and advances on agricultural lines of credit.

Loans held for sale were $11.2 million at December 31, 2023, compared to $54.2 million at September 30, 2023, and $56.9 million at December 31, 2022. One- to four- family residential mortgage loans sold totaled $65.6 million in the current quarter, compared to $87.3 million in the preceding quarter and $39.3 million in the fourth quarter a year ago. The decrease in loans held for sale during the current quarter was due to the previously mentioned transfer of multifamily loans held for sale to the held for investment loan portfolio in the fourth quarter of 2023; there were no multifamily loans held for sale at December 31, 2023.

Total deposits decreased to $13.03 billion at December 31, 2023, compared to $13.17 billion at September 30, 2023 and $13.62 billion a year ago. The decline in deposits from a year ago was primarily due to interest rate sensitive clients shifting a portion of their non-operating deposit balances to higher yielding investments. Non-interest-bearing account balances decreased 8% to $4.79 billion at December 31, 2023, compared to $5.20 billion at September 30, 2023, and decreased 22% compared to $6.18 billion at December 31, 2022. Core deposits were 89% of total deposits at both December 31, 2023 and September 30, 2023 and were 95% of total deposits at December 31, 2022. Certificates of deposit increased 1% to $1.48 billion at December 31, 2023, compared to $1.46 billion at September 30, 2023, and increased 104% compared to $723.5 million a year earlier. The increase in certificates of deposit during the current quarter compared to the preceding quarter and fourth quarter a year ago was principally due to clients seeking higher yields moving funds from core deposit accounts to higher yielding certificates of deposit. The increase in certificates of deposit from the fourth quarter a year ago was also due to a $108.1 million increase in brokered deposits.

Banner Bank’s estimated uninsured deposits were $4.08 billion or 31% of total deposits at December 31, 2023, compared to $4.08 billion or 31% of total deposits at September 30, 2023. The uninsured deposit calculation includes $305.3 million and $300.2 million of collateralized public deposits at December 31, 2023 and September 30, 2023, respectively. Uninsured deposits also include cash held by the holding company of $108.2 million and $97.8 million at December 31, 2023 and September 30, 2023, respectively. Banner Bank’s estimated uninsured deposits, excluding collateralized public deposits and cash held at the holding company, were 28% of total deposits at both December 31, 2023 and September 30, 2023.

Banner had $323.0 million of FHLB borrowings at December 31, 2023, compared to $140.0 million at September 30, 2023 and $50.0 million a year ago. At December 31, 2023, Banner’s off-balance sheet liquidity included additional borrowing capacity of $2.97 billion at the FHLB and $1.56 billion at the Federal Reserve as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

Subordinated notes, net of issuance costs, were $92.9 million at December 31, 2023 compared to $92.7 million at September 30, 2023 and $98.9 million at December 31, 2022. The decrease in subordinated notes from the prior year was due to Banner Bank’s purchase of $6.5 million of Banner’s subordinated debt during the second quarter of 2023.

At December 31, 2023, total common shareholders’ equity was $1.65 billion, or 10.55% of total assets, compared to $1.52 billion or 9.81% of total assets at September 30, 2023, and $1.46 billion or 9.20% of total assets at December 31, 2022. The increase in total common shareholders’ equity at December 31, 2023 compared to September 30, 2023 was primarily due to a $103.8 million decrease in accumulated other comprehensive loss, primarily due to an increase in the fair value of the security portfolio as a result of a decrease in market interest rates during the fourth quarter of 2023 and by a $26.0 million increase in retained earnings as a result of $42.6 million in net income, offset by the accrual of $16.7 million of cash dividends during the fourth quarter of 2023. The increase in total common shareholders’ equity from December 31, 2022 reflects a $116.9 million increase in retained earnings and a $73.6 million decrease in accumulated other comprehensive loss, primarily due to an increase in the fair value of the security portfolio as a result of a decrease in interest rates during the fourth quarter of 2023, and the sale of securities during 2023. At December 31, 2023, tangible common shareholders’ equity*, which excludes goodwill and other intangible assets, net, was $1.27 billion, or 8.33% of tangible assets*, compared to $1.14 billion, or 7.54% of tangible assets, at September 30, 2023, and $1.07 billion, or 6.95% of tangible assets, a year ago.

*Non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 5

Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At December 31, 2023, Banner’s estimated common equity Tier 1 capital ratio was 11.97%, its estimated Tier 1 leverage capital to average assets ratio was 10.56%, and its estimated total capital to risk-weighted assets ratio was 14.58%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.

Credit Quality

The allowance for credit losses - loans was $149.6 million, or 1.38% of total loans receivable and 506% of non-performing loans, at December 31, 2023, compared to $147.0 million, or 1.38% of total loans receivable and 560% of non-performing loans, at September 30, 2023, and $141.5 million, or 1.39% of total loans receivable and 615% of non-performing loans, at December 31, 2022. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $14.5 million at December 31, 2023, compared to $15.0 million at September 30, 2023, and $14.7 million at December 31, 2022. Net loan charge-offs totaled $1.1 million in the fourth quarter of 2023, compared to net loan charge-offs of $663,000 in the preceding quarter and net loan charge-offs of $496,000 in the fourth quarter a year ago. Non-performing loans were $29.6 million at December 31, 2023, compared to $26.3 million at September 30, 2023, and $23.0 million a year ago.

Substandard loans were $125.4 million at December 31, 2023, compared to $124.5 million at September 30, 2023, and $137.2 million a year ago. The decrease from the comparable quarter a year ago primarily reflect risk rating upgrades as well as the payoff of substandard loans.

Total non-performing assets were $30.1 million, or 0.19% of total assets, at December 31, 2023, compared to $26.8 million, or 0.17% of total assets, at September 30, 2023, and $23.4 million, or 0.15% of total assets, a year ago.

Conference Call

Banner will host a conference call on Friday January 19, 2024, at 8:00 a.m. PDT, to discuss its fourth quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (833) 470-1428 using access code 238589 to participate in the call. A replay will be available for one week at (866) 813-9403 using access code 197139 or at www.bannerbank.com.

About the Company

Banner Corporation is a $15.67 billion bank holding company operating a commercial bank in four Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 6

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements and could negatively affect Banner’s operating and stock price performance.

Factors that could cause Banner’s actual results to differ materially from those described in the forward-looking statements, include but are not limited to, the following: (1) potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth, or increased political instability due to acts of war; (2) changes in the interest rate environment, including the recent increases in the Board of Governors of the Federal Reserve System (the “Federal Reserve”) benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; (3) the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; (4) the effects of any federal government shutdown; (5) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (6) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (7) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for credit losses or writing down of assets or impose restrictions or penalties with respect to Banner’s activities; (8) competitive pressures among depository institutions; (9) the effect of inflation on interest rate movements and their impact on client behavior and net interest margin; (10) the impact of repricing and competitors’ pricing initiatives on loan and deposit products; (11) fluctuations in real estate values; (12) the ability to adapt successfully to technological changes to meet clients’ needs and developments in the market place; (13) the ability to access cost-effective funding; (14) disruptions, security breaches or other adverse events, failures or interruptions in, or attacks on, information technology systems or on the third-party vendors who perform critical processing functions; (15) changes in financial markets; (16) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (17) the costs, effects and outcomes of litigation; (18) legislation or regulatory changes, including but not limited to changes in regulatory policies and principles, or the interpretation of regulatory capital or other rules, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (19) changes in accounting principles, policies or guidelines; (20) future acquisitions by Banner of other depository institutions or lines of business; (21) future goodwill impairment due to changes in Banner’s business or changes in market conditions; (22) effects of critical accounting policies and judgments, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; (23) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (24) other risks detailed from time to time in Banner’s other reports filed with and furnished to the Securities and Exchange Commission including Banner’s Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 7


RESULTS OF OPERATIONS	Quarters Ended						Year Ended
(in thousands except shares and per share data)	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Dec 31, 2023		Dec 31, 2022
INTEREST INCOME:
Loans receivable	$	154,532	$	149,254	$	129,450	$	577,891	$	450,916
Mortgage-backed securities	17,398		17,691		19,099		72,352		67,585
Securities and cash equivalents	11,808		12,119		17,009		51,329		54,068
Total interest income	183,738		179,064		165,558		701,572		572,569
INTEREST EXPENSE:
Deposits	39,342		31,001		3,623		100,126		10,124
Federal Home Loan Bank (FHLB) advances	1,870		2,233		198		10,524		489
Other borrowings	1,125		1,099		132		3,376		377
Subordinated debt	2,992		2,965		2,534		11,541		8,400
Total interest expense	45,329		37,298		6,487		125,567		19,390
Net interest income	138,409		141,766		159,071		576,005		553,179
PROVISION FOR CREDIT LOSSES	2,522		2,027		6,704		10,789		10,364
Net interest income after provision for credit losses	135,887		139,739		152,367		565,216		542,815
NON-INTEREST INCOME:
Deposit fees and other service charges	9,560		10,916		10,821		41,638		44,459
Mortgage banking operations	5,391		2,049		2,311		11,817		10,834
Bank-owned life insurance	2,609		2,062		2,120		9,245		7,794
Miscellaneous	1,159		942		1,382		5,169		6,805
	18,719		15,969		16,634		67,869		69,892
Net loss on sale of securities	(4,806)		(2,657)		(3,721)		(19,242)		(3,248)

Net change in valuation of financial instruments carried at fair value	139		(654)		157		(4,218)		807

Gain on sale of branches, including related deposits	—		—		—		—		7,804
Total non-interest income	14,052		12,658		13,070		44,409		75,255
NON-INTEREST EXPENSE:
Salary and employee benefits	60,111		61,091		60,309		244,563		242,266
Less capitalized loan origination costs	(3,871)		(4,498)		(4,877)		(16,257)		(24,313)
Occupancy and equipment	12,200		11,722		13,506		47,886		52,018
Information and computer data services	7,098		7,118		6,535		28,445		25,986
Payment and card processing services	6,088		5,172		5,109		20,547		21,195
Professional and legal expenses	2,267		3,042		6,328		9,830		14,005
Advertising and marketing	1,686		1,362		1,350		4,794		3,959
Deposit insurance	2,926		2,874		1,739		10,529		6,649
State and municipal business and use taxes	1,372		1,359		1,304		5,260		4,693
Real estate operations, net	47		(383)		28		(538)		(104)
Amortization of core deposit intangibles	858		857		1,215		3,756		5,279
Loss on extinguishment of debt	—		—		—		—		793
Miscellaneous	5,839		6,175		6,467		23,723		24,869



Total non-interest expense	96,621		95,891		99,013		382,538		377,295
Income before provision for income taxes	53,318		56,506		66,424		227,087		240,775
PROVISION FOR INCOME TAXES	10,694		10,652		12,044		43,463		45,397
NET INCOME	$	42,624	$	45,854	$	54,380	$	183,624	$	195,378





Earnings per common share:
Basic	$	1.24	$	1.33	$	1.59	$	5.35	$	5.70
Diluted	$	1.24	$	1.33	$	1.58	$	5.33	$	5.67
Cumulative dividends declared per common share	$	0.48	$	0.48	$	0.44	$	1.92	$	1.76
Weighted average number of common shares outstanding:
Basic	34,381,780		34,379,865		34,226,162		34,344,142		34,264,322
Diluted	34,472,155		34,429,726		34,437,151		34,450,412		34,459,922
Increase (decrease) in common shares outstanding	2,420		1,322		2,259		154,351		(58,614)

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 8


FINANCIAL CONDITION										Percentage Change
(in thousands except shares and per share data)	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Prior Qtr		Prior Yr Qtr

ASSETS
Cash and due from banks	$	209,634		$	207,171		$	198,154		1.2	%	5.8	%
Interest-bearing deposits	44,830			44,535			44,908			0.7	%	(0.2)	%
Total cash and cash equivalents	254,464			251,706			243,062			1.1	%	4.7	%
Securities - trading	—			25,268			28,694			(100.0)	%	(100.0)	%
Securities - available for sale, amortized cost $2,729,980, $2,774,972 and $3,218,777, respectively	2,373,783			2,287,993			2,789,031			3.7	%	(14.9)	%
Securities - held to maturity, fair value $907,514, $853,653 and $942,180, respectively	1,059,055			1,082,156			1,117,588			(2.1)	%	(5.2)	%
Total securities	3,432,838			3,395,417			3,935,313			1.1	%	(12.8)	%

FHLB stock	24,028			15,600			12,000			54.0	%	100.2	%
Securities purchased under agreements to resell	—			—			300,000			nm		(100.0)	%
Loans held for sale	11,170			54,158			56,857			(79.4)	%	(80.4)	%
Loans receivable	10,810,455			10,611,417			10,146,724			1.9	%	6.5	%
Allowance for credit losses – loans	(149,643)			(146,960)			(141,465)			1.8	%	5.8	%
Net loans receivable	10,660,812			10,464,457			10,005,259			1.9	%	6.6	%
Accrued interest receivable	63,100			61,040			57,284			3.4	%	10.2	%
Property and equipment, net	132,231			136,504			138,754			(3.1)	%	(4.7)	%
Goodwill	373,121			373,121			373,121			—	%	—	%
Other intangibles, net	5,684			6,542			9,440			(13.1)	%	(39.8)	%
Bank-owned life insurance	304,366			303,347			297,565			0.3	%	2.3	%
Operating lease right-of-use assets	43,731			43,447			49,283			0.7	%	(11.3)	%
Other assets	364,846			402,541			355,493			(9.4)	%	2.6	%
Total assets	$	15,670,391		$	15,507,880		$	15,833,431		1.0	%	(1.0)	%
LIABILITIES
Deposits:
Non-interest-bearing	$	4,792,369		$	5,197,854		$	6,176,998		(7.8)	%	(22.4)	%
Interest-bearing transaction and savings accounts	6,759,661			6,518,385			6,719,531			3.7	%	0.6	%
Interest-bearing certificates	1,477,467			1,458,313			723,530			1.3	%	104.2	%
Total deposits	13,029,497			13,174,552			13,620,059			(1.1)	%	(4.3)	%
Advances from FHLB	323,000			140,000			50,000			130.7	%	546.0	%
Other borrowings	182,877			188,440			232,799			(3.0)	%	(21.4)	%
Subordinated notes, net	92,851			92,748			98,947			0.1	%	(6.2)	%
Junior subordinated debentures at fair value	66,413			66,284			74,857			0.2	%	(11.3)	%
Operating lease liabilities	48,659			48,642			55,205			—	%	(11.9)	%
Accrued expenses and other liabilities	228,428			231,478			200,839			(1.3)	%	13.7	%
Deferred compensation	45,975			45,129			44,293			1.9	%	3.8	%
Total liabilities	14,017,700			13,987,273			14,376,999			0.2	%	(2.5)	%
SHAREHOLDERS’ EQUITY
Common stock	1,299,651			1,297,307			1,293,959			0.2	%	0.4	%
Retained earnings	642,175			616,215			525,242			4.2	%	22.3	%
Accumulated other comprehensive loss	(289,135)			(392,915)			(362,769)			(26.4)	%	(20.3)	%
Total shareholders’ equity	1,652,691			1,520,607			1,456,432			8.7	%	13.5	%
Total liabilities and shareholders’ equity	$	15,670,391		$	15,507,880		$	15,833,431		1.0	%	(1.0)	%
Common Shares Issued:


Shares outstanding at end of period	34,348,369			34,345,949			34,194,018
Common shareholders’ equity per share (1)	$	48.12		$	44.27		$	42.59
Common shareholders’ tangible equity per share (1) (2)	$	37.09		$	33.22		$	31.41
Common shareholders’ tangible equity to tangible assets (2)	8.33		%	7.54		%	6.95		%
Consolidated Tier 1 leverage capital ratio	10.56		%	10.40		%	9.45		%


(1)			Calculation is based on number of common shares outstanding at the end of the period rather than weighted average shares outstanding.
(2)			Common shareholders’ tangible equity and tangible assets exclude goodwill and other intangible assets. These ratios represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 9


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
										Percentage Change
LOANS	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Prior Qtr		Prior Yr Qtr

Commercial real estate (CRE):
Owner-occupied	$	915,897		$	911,540		$	845,320		0.5	%	8.3	%
Investment properties	1,541,344			1,530,087			1,589,975			0.7	%	(3.1)	%
Small balance CRE	1,178,500			1,169,828			1,200,251			0.7	%	(1.8)	%
Multifamily real estate	811,232			766,571			645,071			5.8	%	25.8	%
Construction, land and land development:
Commercial construction	170,011			168,061			184,876			1.2	%	(8.0)	%
Multifamily construction	503,993			453,129			325,816			11.2	%	54.7	%
One- to four-family construction	526,432			536,349			647,329			(1.8)	%	(18.7)	%
Land and land development	336,639			346,362			328,475			(2.8)	%	2.5	%
Commercial business:
Commercial business	1,255,734			1,263,747			1,283,407			(0.6)	%	(2.2)	%
Small business scored	1,022,154			1,000,714			947,092			2.1	%	7.9	%
Agricultural business, including secured by farmland:
Agricultural business, including secured by farmland	331,089			334,626			295,077			(1.1)	%	12.2	%
One- to four-family residential	1,518,046			1,438,694			1,173,112			5.5	%	29.4	%
Consumer:
Consumer—home equity revolving lines of credit	588,703			579,836			566,291			1.5	%	4.0	%
Consumer—other	110,681			111,873			114,632			(1.1)	%	(3.4)	%
Total loans receivable	$	10,810,455		$	10,611,417		$	10,146,724		1.9	%	6.5	%

Loans 30 - 89 days past due and on accrual	$	19,744		$	6,108		$	17,186
Total delinquent loans (including loans on non-accrual), net	$	43,164		$	28,312		$	32,371
Total delinquent loans / Total loans receivable	0.40		%	0.27		%	0.32		%


LOANS BY GEOGRAPHIC LOCATION								Percentage Change
	Dec 31, 2023			Sep 30, 2023		Dec 31, 2022		Prior Qtr		Prior Yr Qtr
	Amount		Percentage	Amount		Amount

Washington	$	5,095,602	47.2%	$	5,046,028	$	4,777,546	1.0	%	6.7	%
California	2,670,923		24.7%	2,570,175		2,484,980		3.9	%	7.5	%
Oregon	1,974,001		18.3%	1,929,531		1,826,743		2.3	%	8.1	%
Idaho	610,064		5.6%	600,648		565,586		1.6	%	7.9	%
Utah	68,931		0.6%	57,711		75,967		19.4	%	(9.3)	%
Other	390,934		3.6%	407,324		415,902		(4.0)	%	(6.0)	%
Total loans receivable	$	10,810,455	100.0%	$	10,611,417	$	10,146,724	1.9	%	6.5	%

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 10

ADDITIONAL FINANCIAL INFORMATION

(dollars in thousands)


LOAN ORIGINATIONS	Quarters Ended						Year Ended
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Dec 31, 2023		Dec 31, 2022
Commercial real estate	$	76,277	$	62,337	$	117,787	$	309,022	$	418,635
Multifamily real estate	5,360		12,725		8,881		57,046		37,612
Construction and land	382,905		421,656		301,804		1,541,383		1,935,476

Commercial business	166,984		157,833		298,396		585,047		1,034,950
Agricultural business	15,058		17,466		24,314		84,072		89,655
One-to four-family residential	37,446		43,622		83,491		167,951		358,976
Consumer	57,427		70,043		102,502		300,913		545,254
Total loan originations (excluding loans held for sale)	$	741,457	$	785,682	$	937,175	$	3,045,434	$	4,420,558

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 11


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
	Quarters Ended									Year Ended
CHANGE IN THE	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022
ALLOWANCE FOR CREDIT LOSSES – LOANS
Balance, beginning of period	$	146,960		$	144,680		$	135,918		$	141,465		$	132,099
Provision for credit losses – loans	3,821			2,943			6,043			11,097			8,158
Recoveries of loans previously charged off:
Commercial real estate	129			170			88			557			392

Construction and land	—			29			—			29			384
One- to four-family real estate	18			59			18			230			181
Commercial business	237			403			616			1,283			1,923
Agricultural business, including secured by farmland	16			19			91			146			475
Consumer	131			126			153			543			566
	531			806			966			2,788			3,921
Loans charged off:
Commercial real estate	—			—			—			—			(2)

Construction and land	(933)			—			—			(1,089)			(30)
One- to four-family real estate	(8)			—			—			(42)			—
Commercial business	(310)			(616)			(1,231)			(2,650)			(1,699)
Agricultural business, including secured by farmland	—			(564)			—			(564)			(42)
Consumer	(418)			(289)			(231)			(1,362)			(940)
	(1,669)			(1,469)			(1,462)			(5,707)			(2,713)
Net (charge-offs) recoveries	(1,138)			(663)			(496)			(2,919)			1,208
Balance, end of period	$	149,643		$	146,960		$	141,465		$	149,643		$	141,465
Net (charge-offs) recoveries / Average loans receivable	(0.011)		%	(0.006)		%	(0.005)		%	(0.028)		%	0.013		%



ALLOCATION OF
ALLOWANCE FOR CREDIT LOSSES – LOANS	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022

Commercial real estate	$	44,384		$	44,016		$	44,086
Multifamily real estate	9,326			8,804			7,734
Construction and land	28,095			29,389			29,171
One- to four-family real estate	19,271			17,925			14,729
Commercial business	35,464			34,065			33,299
Agricultural business, including secured by farmland	3,865			3,718			3,475
Consumer	9,238			9,043			8,971
Total allowance for credit losses – loans	$	149,643		$	146,960		$	141,465
Allowance for credit losses - loans / Total loans receivable	1.38		%	1.38		%	1.39		%
Allowance for credit losses - loans / Non-performing loans	506		%	560		%	615		%


	Quarters Ended						Year Ended
CHANGE IN THE	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Dec 31, 2023		Dec 31, 2022
ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
Balance, beginning of period	$	15,010	$	14,664	$	14,041	$	14,721	$	12,432

(Recapture) provision for credit losses - unfunded loan commitments	(526)		346		680		(237)		2,289

Balance, end of period	$	14,484	$	15,010	$	14,721	$	14,484	$	14,721

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 12


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
NON-PERFORMING ASSETS
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022
Loans on non-accrual status:
Secured by real estate:
Commercial	$	2,677		$	1,365		$	3,683

Construction and land	3,105			5,538			181
One- to four-family	5,702			5,480			5,236
Commercial business	9,002			5,289			9,886
Agricultural business, including secured by farmland	3,167			3,170			594
Consumer	3,204			3,378			2,126
	26,857			24,220			21,706
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:


Construction and land	1,138			—			—
One- to four-family	1,205			1,799			1,023
Commercial business	1			—			—

Consumer	401			245			264
	2,745			2,044			1,287
Total non-performing loans	29,602			26,264			22,993

REO	526			546			340
Other repossessed assets	—			—			17
Total non-performing assets	$	30,128		$	26,810		$	23,350
Total non-performing assets to total assets	0.19		%	0.17		%	0.15		%


LOANS BY CREDIT RISK RATING
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022
Pass	$	10,671,281	$	10,467,498	$	10,000,493
Special Mention	13,732		19,394		9,081
Substandard	125,442		124,525		137,150

Total	$	10,810,455	$	10,611,417	$	10,146,724

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 13


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)

DEPOSIT COMPOSITION							Percentage Change
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Prior Qtr		Prior Yr Qtr
Non-interest-bearing	$	4,792,369	$	5,197,854	$	6,176,998	(7.8)	%	(22.4)	%
Interest-bearing checking	2,098,526		2,006,866		1,811,153		4.6	%	15.9	%
Regular savings accounts	2,980,530		2,751,453		2,710,090		8.3	%	10.0	%
Money market accounts	1,680,605		1,760,066		2,198,288		(4.5)	%	(23.5)	%
Total interest-bearing transaction and savings accounts	6,759,661		6,518,385		6,719,531		3.7	%	0.6	%
Total core deposits	11,552,030		11,716,239		12,896,529		(1.4)	%	(10.4)	%
Interest-bearing certificates	1,477,467		1,458,313		723,530		1.3	%	104.2	%
Total deposits	$	13,029,497	$	13,174,552	$	13,620,059	(1.1)	%	(4.3)	%


GEOGRAPHIC CONCENTRATION OF DEPOSITS
	Dec 31, 2023				Sep 30, 2023		Dec 31, 2022		Percentage Change
	Amount		Percentage		Amount		Amount		Prior Qtr		Prior Yr Qtr
Washington	$	7,247,392	55.6	%	$	7,241,341	$	7,563,056	0.1	%	(4.2)	%
Oregon	2,852,677		21.9	%	2,918,446		2,998,572		(2.3)	%	(4.9)	%
California	2,269,557		17.4	%	2,342,345		2,331,524		(3.1)	%	(2.7)	%
Idaho	659,871		5.1	%	672,420		726,907		(1.9)	%	(9.2)	%

Total deposits	$	13,029,497	100.0	%	$	13,174,552	$	13,620,059	(1.1)	%	(4.3)	%


INCLUDED IN TOTAL DEPOSITS
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022
Public non-interest-bearing accounts	$	146,916	$	169,058	$	212,533
Public interest-bearing transaction & savings accounts	209,699		188,831		180,326
Public interest-bearing certificates	52,048		46,349		26,810
Total public deposits	$	408,663	$	404,238	$	419,669
Collateralized public deposits	$	305,306	$	300,189	$	304,244
Total brokered deposits	$	108,058	$	162,856	$	—

AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022
Number of deposit accounts	463,750		466,159		471,140
Average account balance per account	$	29	$	28	$	29

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 14


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ESTIMATED REGULATORY CAPITAL RATIOS AS OF DECEMBER 31, 2023	Actual				Minimum to be categorized as "Adequately Capitalized"				Minimum to be categorized as "Well Capitalized"
	Amount		Ratio		Amount		Ratio		Amount		Ratio

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 leverage capital to average assets	1,650,872		10.56	%	625,387		4.00	%	n/a		n/a
Common equity tier 1 capital to risk-weighted assets	1,564,372		11.97	%	587,914		4.50	%	n/a		n/a
Banner Bank:
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 leverage capital to average assets	1,635,710		10.46	%	625,298		4.00	%	781,622		5.00	%
Common equity tier 1 capital to risk-weighted assets	1,635,710		12.52	%	587,966		4.50	%	849,285		6.50	%

These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 15


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD	Quarters Ended
	Dec 31, 2023						Sep 30, 2023						Dec 31, 2022
	Average Balance		Interest and Dividends		Yield / Cost(3)		Average Balance		Interest and Dividends		Yield / Cost(3)		Average Balance		Interest and Dividends		Yield / Cost(3)
Interest-earning assets:
Held for sale loans	$	31,148	$	447	5.69	%	$	56,697	$	765	5.35	%	$	45,654	$	527	4.58	%
Mortgage loans	8,770,029		123,382		5.58	%	8,596,705		118,285		5.46	%	8,175,281		103,478		5.02	%
Commercial/agricultural loans	1,818,198		30,420		6.64	%	1,822,609		29,866		6.50	%	1,742,517		24,727		5.63	%
SBA PPP loans	3,871		27		2.77	%	4,298		28		2.58	%	9,347		224		9.51	%
Consumer and other loans	138,049		2,237		6.43	%	138,723		2,226		6.37	%	140,801		2,125		5.99	%
Total loans(1)	10,761,295		156,513		5.77	%	10,619,032		151,170		5.65	%	10,113,600		131,081		5.14	%
Mortgage-backed securities	2,798,647		17,541		2.49	%	2,863,345		17,834		2.47	%	3,187,557		19,244		2.40	%
Other securities	1,035,842		11,993		4.59	%	1,071,389		12,128		4.49	%	1,628,553		15,945		3.88	%

Interest-bearing deposits with banks	45,286		506		4.43	%	43,594		529		4.81	%	245,538		2,126		3.44	%
FHLB stock	15,326		215		5.57	%	16,443		385		9.29	%	10,773		76		2.80	%
Total investment securities	3,895,101		30,255		3.08	%	3,994,771		30,876		3.07	%	5,072,421		37,391		2.92	%
Total interest-earning assets	14,656,396		186,768		5.06	%	14,613,803		182,046		4.94	%	15,186,021		168,472		4.40	%
Non-interest-earning assets	875,719						932,364						927,585
Total assets	$	15,532,115					$	15,546,167					$	16,113,606
Deposits:
Interest-bearing checking accounts	$	2,060,226	5,907		1.14	%	$	1,971,179	4,190		0.84	%	$	1,818,907	566		0.12	%
Savings accounts	2,885,167		12,560		1.73	%	2,659,890		8,400		1.25	%	2,761,323		866		0.12	%
Money market accounts	1,723,426		7,644		1.76	%	1,793,953		6,639		1.47	%	2,256,867		1,337		0.24	%
Certificates of deposit	1,477,474		13,231		3.55	%	1,412,542		11,772		3.31	%	709,974		854		0.48	%
Total interest-bearing deposits	8,146,293		39,342		1.92	%	7,837,564		31,001		1.57	%	7,547,071		3,623		0.19	%
Non-interest-bearing deposits	5,036,523		—		—	%	5,316,023		—		—	%	6,402,297		—		—	%
Total deposits	13,182,816		39,342		1.18	%	13,153,587		31,001		0.94	%	13,949,368		3,623		0.10	%
Other interest-bearing liabilities:
FHLB advances	129,630		1,870		5.72	%	161,087		2,233		5.50	%	19,337		198		4.06	%
Other borrowings	185,518		1,125		2.41	%	194,659		1,099		2.24	%	238,217		132		0.22	%
Junior subordinated debentures and subordinated notes	182,678		2,992		6.50	%	182,678		2,965		6.44	%	189,178		2,534		5.31	%
Total borrowings	497,826		5,987		4.77	%	538,424		6,297		4.64	%	446,732		2,864		2.54	%
Total funding liabilities	13,680,642		45,329		1.31	%	13,692,011		37,298		1.08	%	14,396,100		6,487		0.18	%
Other non-interest-bearing liabilities(2)	311,539						296,578						292,480
Total liabilities	13,992,181						13,988,589						14,688,580
Shareholders’ equity	1,539,934						1,557,578						1,425,026
Total liabilities and shareholders’ equity	$	15,532,115					$	15,546,167					$	16,113,606
Net interest income/rate spread (tax equivalent)			$	141,439	3.75	%			$	144,748	3.86	%			$	161,985	4.22	%
Net interest margin (tax equivalent)					3.83	%					3.93	%					4.23	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis			(3,030)						(2,982)						(2,914)
Net interest income and margin, as reported			$	138,409	3.75	%			$	141,766	3.85	%			$	159,071	4.16	%
Additional Key Financial Ratios:
Return on average assets					1.09	%					1.17	%					1.34	%
Return on average equity					10.98	%					11.68	%					15.14	%
Average equity/average assets					9.91	%					10.02	%					8.84	%
Average interest-earning assets/average interest-bearing liabilities					169.55	%					174.47	%					189.97	%
Average interest-earning assets/average funding liabilities					107.13	%					106.73	%					105.49	%
Non-interest income/average assets					0.36	%					0.32	%					0.32	%
Non-interest expense/average assets					2.47	%					2.45	%					2.44	%
Efficiency ratio(4)					63.37	%					62.10	%					57.52	%
Adjusted efficiency ratio(5)					60.04	%					59.00	%					54.43	%

(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 $2.0 million, $1.9 million and $1.6 million for the quarters ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.0 million, $1.1 million and $1.3 million for the quarters ended December 31, 2023, September 30, 2023 and December 31, 2022, respectively.

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

(5)Adjusted non-interest expense divided by adjusted revenue. Represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 16


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD	Year Ended
	Dec 31, 2023						Dec 31, 2022
	Average Balance		Interest and Dividends		Yield/Cost(3)		Average Balance		Interest and Dividends		Yield/Cost(3)
Interest-earning assets:
Held for sale loans	$	49,106	$	2,621	5.34	%	$	82,030	$	2,973	3.62	%
Mortgage loans	8,513,487		460,664		5.41	%	7,731,195		364,499		4.71	%
Commercial/agricultural loans	1,777,099		113,078		6.36	%	1,617,191		77,309		4.78	%
SBA PPP loans	5,042		172		3.41	%	41,167		4,677		11.36	%
Consumer and other loans	138,196		8,715		6.31	%	123,667		7,332		5.93	%
Total loans(1)	10,482,930		585,250		5.58	%	9,595,250		456,790		4.76	%
Mortgage-backed securities	2,927,650		72,927		2.49	%	3,130,124		68,148		2.18	%
Other securities	1,173,637		52,148		4.44	%	1,625,250		48,278		2.97	%

Interest-bearing deposits with banks	46,815		2,200		4.70	%	969,952		9,633		0.99	%
FHLB stock	17,903		847		4.73	%	10,628		357		3.36	%
Total investment securities	4,166,005		128,122		3.08	%	5,735,954		126,416		2.20	%
Total interest-earning assets	14,648,935		713,372		4.87	%	15,331,204		583,206		3.80	%
Non-interest-earning assets	917,018						1,169,271
Total assets	$	15,565,953					$	16,500,475
Deposits:
Interest-bearing checking accounts	$	1,921,326	13,334		0.69	%	$	1,890,917	1,557		0.08	%
Savings accounts	2,674,936		27,739		1.04	%	2,810,264		2,053		0.07	%
Money market accounts	1,908,983		24,089		1.26	%	2,364,122		3,143		0.13	%
Certificates of deposit	1,209,261		34,964		2.89	%	764,255		3,371		0.44	%
Total interest-bearing deposits	7,714,506		100,126		1.30	%	7,829,558		10,124		0.13	%
Non-interest-bearing deposits	5,436,953		—		—	%	6,434,670		—		—	%
Total deposits	13,151,459		100,126		0.76	%	14,264,228		10,124		0.07	%
Other interest-bearing liabilities:
FHLB advances	196,819		10,524		5.35	%	15,285		489		3.20	%
Other borrowings	199,291		3,376		1.69	%	249,681		377		0.15	%
Junior subordinated debentures and subordinated notes	185,883		11,541		6.21	%	189,870		8,400		4.42	%
Total borrowings	581,993		25,441		4.37	%	454,836		9,266		2.04	%
Total funding liabilities	13,733,452		125,567		0.91	%	14,719,064		19,390		0.13	%
Other non-interest-bearing liabilities(2)	295,098						253,983
Total liabilities	14,028,550						14,973,047
Shareholders’ equity	1,537,403						1,527,428
Total liabilities and shareholders’ equity	$	15,565,953					$	16,500,475
Net interest income/rate spread (tax equivalent)			$	587,805	3.96	%			$	563,816	3.67	%
Net interest margin (tax equivalent)					4.01	%					3.68	%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis			(11,800)						(10,637)
Net interest income and margin, as reported			$	576,005	3.93	%			$	553,179	3.61	%
Additional Key Financial Ratios:
Return on average assets					1.18	%					1.18	%
Return on average equity					11.94	%					12.79	%
Average equity/average assets					9.88	%					9.26	%
Average interest-earning assets/average interest-bearing liabilities					176.57	%					185.06	%
Average interest-earning assets/average funding liabilities					106.67	%					104.16	%
Non-interest income/average assets					0.29	%					0.46	%
Non-interest expense/average assets					2.46	%					2.29	%
Efficiency ratio(4)					61.66	%					60.04	%
Adjusted efficiency ratio(5)					57.89	%					57.99	%

(1)Average balances include loans accounted for on a nonaccrual basis and 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 $7.4 million and $5.9 million for the years ended December 31, 2023 and December 31, 2022, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.4 million and $4.8 million for the years ended December 31, 2023 and December 31, 2022, respectively.

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

(5)Adjusted non-interest expense divided by adjusted revenue. These represent non-GAAP financial measures. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 17


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)

* Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. Tangible common shareholders’ equity per share and the ratio of tangible common equity to tangible assets, and references to adjusted revenue, adjusted earnings and the adjusted efficiency ratio represent non-GAAP financial measures. Management has presented these non-GAAP financial measures in this earnings release because it believes that they provide useful and comparative information to assess trends in Banner’s core operations reflected in the current quarter’s results and facilitate the comparison of our performance with the performance of our peers. However, these non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP. Where applicable, comparable earnings information using GAAP financial measures is also presented. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies. For a reconciliation of these non-GAAP financial measures, see the tables below:

ADJUSTED REVENUE	Quarters Ended						Year Ended
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Dec 31, 2023		Dec 31, 2022
Net interest income (GAAP)	$	138,409	$	141,766	$	159,071	$	576,005	$	553,179
Non-interest income (GAAP)	14,052		12,658		13,070		44,409		75,255
Total revenue (GAAP)	152,461		154,424		172,141		620,414		628,434
Exclude: Net loss on sale of securities	4,806		2,657		3,721		19,242		3,248

Net change in valuation of financial instruments carried at fair value	(139)		654		(157)		4,218		(807)

Gain on sale of branches	—		—		—		—		(7,804)
Adjusted revenue (non-GAAP)	$	157,128	$	157,735	$	175,705	$	643,874	$	623,071


ADJUSTED EARNINGS	Quarters Ended						Year Ended
	Dec 31, 2023		Sep 30, 2023		Dec 31, 2022		Dec 31, 2023		Dec 31, 2022
Net income (GAAP)	$	42,624	$	45,854	$	54,380	$	183,624	$	195,378
Exclude: Net loss on sale of securities	4,806		2,657		3,721		19,242		3,248
Net change in valuation of financial instruments carried at fair value	(139)		654		(157)		4,218		(807)


Gain on sale of branches	—		—		—		—		(7,804)
Banner Forward expenses (1)	—		996		838		1,334		5,293
Loss on extinguishment of debt	—		—		—		—		793
Related net tax benefit	(1,121)		(1,033)		(1,057)		(5,951)		(174)
Total adjusted earnings (non-GAAP)	$	46,170	$	49,128	$	57,725	$	202,467	$	195,927

Diluted earnings per share (GAAP)	$	1.24	$	1.33	$	1.58	$	5.33	$	5.67
Diluted adjusted earnings per share (non-GAAP)	$	1.34	$	1.43	$	1.68	$	5.88	$	5.69

(1)Included in miscellaneous expenses in results of operations.

BANR - Fourth Quarter 2023 Results

January 18, 2024

Page 18


ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ADJUSTED EFFICIENCY RATIO	Quarters Ended									Year Ended
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022			Dec 31, 2023			Dec 31, 2022
Non-interest expense (GAAP)	$	96,621		$	95,891		$	99,013		$	382,538		$	377,295


Exclude: Banner Forward expenses (1)	—			(996)			(838)			(1,334)			(5,293)
CDI amortization	(858)			(857)			(1,215)			(3,756)			(5,279)
State/municipal tax expense	(1,372)			(1,359)			(1,304)			(5,260)			(4,693)
REO operations	(47)			383			(28)			538			104
Loss on extinguishment of debt	—			—			—			—			(793)
Adjusted non-interest expense (non-GAAP)	$	94,344		$	93,062		$	95,628		$	372,726		$	361,341

Net interest income (GAAP)	$	138,409		$	141,766		$	159,071		$	576,005		$	553,179
Non-interest income (GAAP)	14,052			12,658			13,070			44,409			75,255
Total revenue (GAAP)	152,461			154,424			172,141			620,414			628,434
Exclude: Net loss on sale of securities	4,806			2,657			3,721			19,242			3,248
Net change in valuation of financial instruments carried at fair value	(139)			654			(157)			4,218			(807)
Gain on sale of branches	—			—			—			—			(7,804)
Adjusted revenue (non-GAAP)	$	157,128		$	157,735		$	175,705		$	643,874		$	623,071

Efficiency ratio (GAAP)	63.37		%	62.10		%	57.52		%	61.66		%	60.04		%
Adjusted efficiency ratio (non-GAAP)	60.04		%	59.00		%	54.43		%	57.89		%	57.99		%

(1)Included in miscellaneous expenses in results of operations.


TANGIBLE COMMON SHAREHOLDERS’ EQUITY TO TANGIBLE ASSETS
	Dec 31, 2023			Sep 30, 2023			Dec 31, 2022
Shareholders’ equity (GAAP)	$	1,652,691		$	1,520,607		$	1,456,432
Exclude goodwill and other intangible assets, net	378,805			379,663			382,561
Tangible common shareholders’ equity (non-GAAP)	$	1,273,886		$	1,140,944		$	1,073,871

Total assets (GAAP)	$	15,670,391		$	15,507,880		$	15,833,431
Exclude goodwill and other intangible assets, net	378,805			379,663			382,561
Total tangible assets (non-GAAP)	$	15,291,586		$	15,128,217		$	15,450,870
Common shareholders’ equity to total assets (GAAP)	10.55		%	9.81		%	9.20		%
Tangible common shareholders’ equity to tangible assets (non-GAAP)	8.33		%	7.54		%	6.95		%

TANGIBLE COMMON SHAREHOLDERS’ EQUITY PER SHARE
Tangible common shareholders’ equity (non-GAAP)	$	1,273,886		$	1,140,944		$	1,073,871
Common shares outstanding at end of period	34,348,369			34,345,949			34,194,018
Common shareholders’ equity (book value) per share (GAAP)	$	48.12		$	44.27		$	42.59
Tangible common shareholders’ equity (tangible book value) per share (non-GAAP)	$	37.09		$	33.22		$	31.41

Photo by Salvador Saldana Photo by Yvonne McDonald Photo by Maria DeVecchio Photo by Siti Alimah Fourth Quarter 2023

Disclosure Statement 1 This presentation includes forward-looking statements. These statements include descriptions of management’s plans, objectives or goals for future operations, products or services, forecast of financial or other performance measures and statements about Banner’s general outlook for economic and other conditions. Additional forward-looking statements may be made in the question-and-answer period following the presentation. These forward-looking statements are subject to several risks and uncertainties and actual results may differ materially from those discussed today. Information on the risk factors that could cause actual results to differ are available from the earnings press release that was released January 18, 2024 as well as the Form 10-K for the year ended December 31, 2022 and Forms 10-Q filed quarterly thereafter. Forward-looking statements are effective only as of the date they are made, and Banner assumes no obligation to update information concerning its expectations.

Fourth quarter 2023 highlights 2 • Net income of $42.6 million, compared to $45.9 million for the third quarter of 2023 • Loan growth of $156 million (6% annualized) • Total loan originations (excluding HFS) were $741 million • Total deposits declined by $145 million (1.1%); retail deposits declined by $90 million and brokered by $55 million; loan-to-deposit ratio increased from 81% to 83% • Net interest margin (tax equivalent) decreased 10 basis points to 3.83% • Efficiency ratio (adjusted, non-GAAP) increased 104 basis points to 60.04% • $2.5 million provision for credit losses driven by loan growth and unfunded commitments, including $750,000 recapture of provision for credit losses – AFS securities; Allowance for credit losses – loans was 1.38% of total loans • Non-performing assets remained low at 0.19% of total assets, up from 0.17% last quarter • Announced dividend of $0.48 per share to be paid in February 2024

Building value at Banner Building value for stakeholders … by focusing on core banking competency … that is sustainable through change events … and scalable with acquisition growth Banner Corporation Assets $15.7B Deposits $13.0B Loans $10.8B Offices 135 Employees 1,966 3 Acquisition History 2019 Q4 2018 Q4 2015 Q4 2015 Q1 2014 Q2 AltaPacific Bank Skagit Bank AmericanWest Bank Siuslaw Bank SW Oregon Branches Assets $0.4B $0.9B $4.5B $0.4B $0.2B Deposits $0.3B $0.8B $3.6B $0.3B $0.2B Loans $0.3B $0.6B $3.0B $0.2B $0.1B Offices 6 11 98 10 6

Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Growing revenue Take advantage of ideal geography Offer super community bank value proposition Guard and improve reputation Grow market share 4

Growing revenue … in a good place since 1890 5 Source: U.S. Census Bureau Moody’s Analytics Forecasted (June 2023) Population Estimate (millions) 2020 2030 Growth Washington 7.7 8.4 9%* Oregon 4.2 4.5 5% Idaho 1.8 2.2 20%* California 39.5 39.5 0% Region 53.3 54.6 2% United States 331.4 344.6 4% * Among the fastest growing in the country

Growing revenue … in an ideal geography Powerful and diverse economic drivers From Banner’s Pacific Northwest base to … Technology Manufacturing Consumer Logistics Natural Resources Agriculture Traditional, specialty crops, orchards, wineries, … California From Apple to from Silicon Valley to the Central Valley … the world’s 6th largest economy 6

Growing revenue Our super community bank value proposition Broad product offerings serving middle market, small business and consumer client base Decision making as close to client as possible Delivery channels aligned to maximize tactical execution of strategic plan Community investment 7

Growing revenue Guard and improve reputation Outstanding CRA Rating FDIC 2021, most recent 3-year examination cycle Most Trustworthy Companies in America Newsweek 2023 World’s Most Trustworthy Companies Newsweek 2023 America’s Best Regional Banks *NEW* Newsweek 2024 Excellence Award for Bank of the Year Q2 Holdings 2023 5-Star rating™ (highest category) BauerFinancial; 10+years America’s 100 Best Banks Forbes, 7 consecutive years (2017-2023) World’s Best Banks Forbes, 4 consecutive years (2020-2023) Top 50 U.S. Public Banks (assets of $10B+) S&P Global Market Intelligence 2021 & 2022 8

$ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0 5 10 15 20 25 30 0% 4% 8% 12% 16% 20% 24% 28% $ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0 25 50 75 100 125 150 175 200 Growing revenue Deposit Fees as % of Core Revenue 1 Other Fees Mortgage Banking Deposit Fees 9 1. Excludes net gain/loss on sale of securities, change in valuation of financial instruments carried at fair value and branch sale gain. Core revenue1 Quarter Ending Quarter Last 12 Months Amount Amount 12/31/23 $157M $644M 12/31/09 $45M $177M Noninterest income Quarter Ending Quarter Last 12 Months Amount Amount 12/31/23 $18.7M $67.9M 12/31/09 $6.6M $31.1M Other Income Net Interest Income

Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Protecting net interest margin Improve earning asset mix Improve funding mix Reduce deposit costs Maintain loan-to-deposit ratio 10

Protecting net interest margin $ Millions Avg Bal Cost (in bps) Non-Interest 5,037 0 Interest Bearing 6,669 155 CDs 1,477 355 Subtotal Deposits 13,183 118 FHLB & Other 498 477 Total 13,681 131 11 37% 49% 11% 3% 73% 27% 36% 26% 38% Non-Interest Bearing Certificates of Deposit Interest Bearing and Savings Securities & Int-bearing Deposits Loans Fixed: 4.49% Yield Floating: 8.55% Yield Low Cost Funding Mix 12/31/2023 Adjustable: 4.95% Yield Earning Asset Mix 12/31/2023 Loan Repricing Structure 12/31/2023 $ Millions Avg Bal Yield (in bps) Loans 10,761 577 Securities & Int- bearing Deposits 3,895 308 Total 14,656 506 64% of the loan portfolio is floating/adjustable 70% of the floating/adjustable loans have floors 29% of the loans that have floors are at the floor FHLB, Sub Debt & Other

20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 —% 1% 2% 3% 4% 5% 6% 7% $ B ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0 2 4 6 8 10 12 14 16 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Protecting net interest margin Noncore Deposits Core Deposits Manage deposit costs Quarter Ending Quarter Last 12 Months Amount Rate Amount Rate 12/31/23 $39.3M 1.18% $100.1M 0.76% 12/31/09 $17.7M 1.83% $83.2M 2.21% 12 Focus on core deposits Quarter Ending Balance % of Total Deposits 12/31/23 $11,552M 89% 12/31/09 $1,924M 50% Loan Yield Deposit Cost Core Deposits % Loan–Deposit Spread

20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 -20% -10% 0% 10% 20% 30% 40% 50% Protecting net interest margin Peer Median Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation Net Noncore Funding Dependence Peer Top Quartile 13 $ B illio n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 —% 20% 40% 60% 80% 100% 0 2 4 6 8 10 12 14 Banner Loan-to-Deposit Ratio Deposits Loans

20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0% 1% 2% 3% 4% 5% 6% 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Protecting net interest margin Maintain top quartile net interest margin Quarter Ending Quarter Last 12 Months Amount Rate Amount Rate 12/31/23 $138M 3.75% $576M 3.93% 12/31/09 $39M 3.53% $146M 3.36% Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation 14 Peer Top Quartile Peer Median Net Interest Margin Banner Net Interest Margin Earning Asset Yield Funding Cost

Conservative investment portfolio 15 Assumes flat forward balance sheet, parallel rate shift; Base as of 12/31/23 525 546 566 565 554 531 (7.3)% (3.5)% —% (0.1)% (2.2)% (6.2)% -200 bps -100 bps Base +100 bps +200 bps +300 bps 0 200 400 600 800 -20% -15% -10% -5% 0% 5% CMO, $1,163, 33.9% MBS, $882, 25.7% CMBS, $517, 15.1% Municipal, $494, 14.4% ABS, $221, 6.4% Corp, $119, 3.5% Agency, $34, 1.0% Other, $3, 0.1% Y e ar s 3.16 2.29 5.04 9.59 6.51 6.72 6.79 6.67 Total Portfolio Effective Duration Duration on New Purchases Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.00 2.00 4.00 6.00 8.00 10.00 12.00 5.13% 6.93% 5.20% 5.91% 2.99% 3.03% 3.07% 3.10% New Purchases Tax Effected Yield Total Portfolio Tax Effected Yield Q1 2023 Q2 2023 Q3 2023 Q4 2023 0% 2% 4% 6% 8% 12 Month Net Interest Income Shock ($MM), % Change Quarterly New Purchases: Average Duration Investment Portfolio Composition ($3.43 billion) 79% of investments are Agency MBS/CMO or AAA rated 7.4% non-rated investments, principally CRA investments Portfolio is a diversified mix of asset types and blend of fixed and floating rate instruments. It remains moderately asset sensitive. Quarterly New Purchases: Average Yield $ Millions

Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Spending carefully Benefit from scale Control core operating expense 16

$ M ill io n s 20 09- Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0 20 40 60 80 100 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 50% 60% 70% 80% 90% 100% Spending carefully Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation 17 Control core operating expense Quarter Ending Quarter Last 12 Months Amount Amount 12/31/23 $94M $373M 12/31/09 $31M $132M Peer Top Quartile Peer Median Banner Efficiency Ratio Occupancy Compensation Info Services Other Efficiency Ratio

Maintaining a moderate risk profile Embrace effective enterprise risk management Minimize nonperforming assets Maintain appropriate loan loss reserve Maintain appropriate risk capital Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely 18

Commercial RE 34% Multifamily 8% Construction 14% Commercial 21% Agricultural 3% 1-4 Family 14% Consumer 6% Diversified loan portfolio 19 Loan Composition 12/31/2023 CRE Breakout $MM % OO CRE 916 8 % Investment Properties 1,541 14 % Small Balance CRE 1,179 11 % Total Comm CRE 3,636 34 % Construction Breakout $MM % Commercial 170 2 % Multifamily 504 5 % 1-4 Family 526 5 % Land 337 3 % Total Construction 1,537 14 % Loan Originations (commitments, $MM) A ve rag e Y ie ld 6.42% 7.41% 7.69% 8.27% 8.59% Commercial RE Multifamily Construction Commercial Agricultural 1-4 Fam Consumer Avg Yield on New Loan Originations Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4' 23 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

20 Characteristics of highlighted loan segments Office 1 Balances ($MM) $660.8 Percent of Total Loans 6.1% Total Investor Office $303.9 Total Owner Occupied $356.9 Average Loan Size $0.8 Largest Loan Size $19.2 30 + days Past Due $0.5 Adversely Classified $7.2 Retail 2 Balances ($MM) $1,284.1 Percent of Total Loans 11.9% Balance of Retail Loans Secured by CRE * $1,145.0 Average Loan Size $0.6 Average CRE Secured Loan Size $0.7 Largest Loan Size $29.6 30 + days Past Due $1.1 Adversely Classified $7.4 * No mall exposure Healthcare 3 Balances ($MM) $408.5 Percent of Total Loans 3.8% Balance of Healthcare Services secured by Medical Office * $176.3 Medical Office as a % of Total Loans 1.6% Average Loan Size $0.6 Average Medical Office Size $0.8 Largest Loan Size $16.7 30 + days Past Due $0.5 Adversely Classified $0.3 * No hospital exposure 1 By collateral code 2 Retail business loans, both commercial and commercial real estate secured loans 3 All healthcare and social services, including both commercial and commercial real estate secured loans

Allowance for credit losses 21 $ M ill io n s ACL Provision/Release $14.9 $23.5 $28.6 $15.2 $0.6 $4.5 $6.1 $6.7 $6.8 $2.0 $2.5 -$9.3-$10.3-$8.6 -$5.2-$7.0 -$0.5 1/ 1/ 20 20 20 20 -Q 1 20 20 -Q 2 20 20 -Q 3 20 20 -Q 4 20 21 -Q 1 20 21 -Q 2 20 21 -Q 3 20 21 -Q 4 20 22 -Q 1 20 22 -Q 2 20 22 -Q 3 20 22 -Q 4 20 23 -Q 1 20 23 -Q 2 20 23 -Q 3 20 23 -Q 4 $ M ill io n s $108.4 $130.5 $156.4 $168.0 $167.3 $156.1 $148.0 $139.9 $132.1 $125.5 $128.7 $135.9 $141.5 $141.5 $144.7 $147.0 $149.6 1.16% 1.41% 1.71% 1.86% 1.90% 1.81% 1.68% 1.57% 1.48% 1.39% 1.36% 1.38% 1.39% 1.39% 1.38% 1.38% 1.38% ACL - Loans ACL - Loans as % of Loans, excluding PPP 01 /0 1/ 20 20 20 -Q 1 20 20 -Q 2 20 20 -Q 3 20 20 -Q 4 20 21 -Q 1 20 21 -Q 2 20 21 -Q 3 20 21 -Q 4 20 22 -Q 1 20 22 -Q 2 20 22 -Q 3 20 22 -Q 4 20 23 -Q 1 20 23 -Q 2 20 23 -Q 3 20 23 -Q 4 $163.1 $164.5 2023-Q 3 Portfolio Econom y N et C /O Provision 2023-Q 4 Net charge-offs Portfolio Economic factors Provision Change assessment: Changes to allowance: $ Millions ACL - Loans 147.0 2.8 (0.1) (1.1) 3.8 149.6 ACL - Unfunded Commitments 15.0 (0.3) (0.2) — (0.5) 14.5 ACL - HTM Securities 0.3 — — — — 0.3 ACL - AFS Securities 0.8 — (0.8) — (0.8) — Total ACL 163.1 2.4 (1.0) (1.1) 2.5 164.5

$ M ill io n s 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0 50 100 150 200 250 300 350Minimize nonperforming assets Quarter Ending NPAs REO Amount % of TA Amount % of TA 12/31/23 $30M 0.19% $0.5M 0.00% 12/31/09 $292M 6.11% $78M 2.01% Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision and Regulation Maintaining a moderate risk profile ACLL Real Estate Owned Nonperforming Loans 20 09 -Q 4 20 10 -Q 4 20 11 -Q 4 20 12 -Q 4 20 13 -Q 4 20 14 -Q 4 20 15 -Q 4 20 16 -Q 4 20 17 -Q 4 20 18 -Q 4 20 19 -Q 4 20 20 -Q 4 20 21 -Q 4 20 22 -Q 4 20 23 -Q 4 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% Peer Top Quartile Peer Median Banner ACLL to Total Loans 22

Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Employing capital wisely Maintain premium to tangible book value Pay appropriate dividends Prepare for future opportunities 23

Reconciliation of non-GAAP measures 24 $ Thousands Quarters Ended Years Ended PRE-TAX PRE-PROVISION EARNINGS Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Dec 31, 2023 Dec 31, 2022 Income before provision for income taxes (GAAP) $ 53,318 $ 56,506 $ 66,424 $ 227,087 $ 240,775 Provision for credit losses 2,522 2,027 6,704 10,789 10,364 Pretax pre provision earnings (non- GAAP) 55,840 58,533 73,128 237,876 251,139 Exclude net loss/(gain) on sale of securities 4,806 2,657 3,721 19,242 3,248 Exclude net change in valuation of financial instruments carried at fair value (139) 654 (157) 4,218 (807) Exclude gain on sale of branches — — — — (7,804) Exclude Banner Forward expenses — 996 838 1,334 5,293 Exclude loss of extinguishment of debt — — — — 793 Adjusted pretax pre provision earnings (non-GAAP) $ 60,507 $ 62,840 $ 77,530 $ 262,670 $ 251,862

Building value at Banner Building value for … Shareholders by delivering top quartile financial performance Clients by delivering super community bank service and products Employees by offering opportunity and reward Communities by providing capital and staying involved 25

Cover	Jan. 18, 2024
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Jan. 18, 2024
Entity Registrant Name	Banner Corporation
Entity Incorporation, State or Country Code	WA
Entity File Number	000-26584
Entity Tax Identification Number	91-1691604
Entity Address, Address Line One	10 S. First Avenue,
Entity Address, City or Town	Walla Walla
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	99362
City Area Code	509
Local Phone Number	527-3636
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $.01 per share
Trading Symbol	BANR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000946673
Amendment Flag	false

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