Banner Corporation (NASDAQ:BANR) ("Banner"), the parent company of Banner Bank, today reported net income of $46.4 million, or $1.34 per diluted share, for the fourth quarter of 2024, compared to $45.2 million, or $1.30 per diluted share, for the preceding quarter and $42.6 million, or $1.24 per diluted share, for the fourth quarter of 2023. Net interest income was $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago. The increase in net interest income compared to the preceding quarter reflects a decrease in funding costs and an increase in interest-earning assets, partially offset by a decrease in yields on interest earning assets. The increase in net interest income compared to the prior year quarter reflects an increase in both the yield and average balance of interest earning assets, partially offset by an increase in funding costs. Fourth quarter 2024 results included a $3.0 million provision for credit losses, up from $1.7 million in the preceding quarter and $2.5 million in the fourth quarter of 2023.

Net income was $168.9 million, or $4.88 per diluted share, for the year ended December 31, 2024, compared to $183.6 million, or $5.33 per diluted share, for the year ended December 31, 2023. Net interest income for the year ended December 31, 2024 decreased to $541.7 million from $576.0 million for the year ended December 31, 2023, primarily due to the rise of deposit costs of $99.3 million, partially offset by a $77.7 million increase in interest income on loans. Results for the year ended December 31, 2024 included a $7.6 million provision for credit losses, a $5.2 million net loss on the sale of securities and a $1.0 million net decrease in the valuation of financial instruments carried at fair value, compared to 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 valuation of financial instruments carried at fair value during the same period in 2023.

Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.48 per share payable February 14, 2025, to common shareholders of record on February 4, 2025.

"Banner's fourth quarter financial performance reflects the continued successful execution of our super community bank strategy, which emphasizes growing new client relationships, maintaining our core funding position, promoting client loyalty and advocacy through our responsive service model, and sustaining a moderate risk profile," said Mark Grescovich, President and CEO. "Our earnings for the fourth quarter of 2024 benefited from our solid year over year loan growth as well as margin expansion during the fourth quarter as a result of lower funding costs. This benefit was partially offset by the declining interest rate environment and its effect on loan yields. Additionally, Banner's credit metrics continue to be strong, our reserve for loan losses remained solid, and our capital base continues to be robust. We continue to benefit from a strong core deposit base that has been resilient in a highly competitive environment, with core deposits representing 89% of total deposits at quarter end. Banner has upheld its core values for the past 134 years, which are to do the right thing for our clients, communities, colleagues, company and shareholders; and to provide consistent and reliable strength through all economic cycles and change events."

At December 31, 2024, Banner, on a consolidated basis, had $16.20 billion in assets, $11.20 billion in net loans and $13.51 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.

Fourth Quarter 2024 Highlights

Revenue was $160.6 million for the fourth quarter of 2024, compared to $153.7 million in the preceding quarter and $152.5 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 $160.1 million in the fourth quarter of 2024, compared to $153.7 million in the preceding quarter and $157.1 million in the fourth quarter a year ago.
Net interest income was $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago.
Net interest margin, on a tax equivalent basis, was 3.82%, compared to 3.72% in the preceding quarter and 3.83% in the fourth quarter a year ago.
Mortgage banking operations revenue was $3.7 million for the fourth quarter of 2024, compared to $3.2 million in the preceding quarter and $5.4 million in the fourth quarter a year ago.
Return on average assets was 1.15%, compared to 1.13% in the preceding quarter and 1.09% in the fourth quarter a year ago.
Net loans receivable increased 1% to $11.20 billion at December 31, 2024, compared to $11.07 billion at September 30, 2024, and increased 5% compared to $10.66 billion at December 31, 2023.
Non-performing assets were $39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $45.2 million, or 0.28% of total assets, at September 30, 2024 and $30.1 million, or 0.19% of total assets, at December 31, 2023.
The allowance for credit losses - loans was $155.5 million, or 1.37% of total loans receivable, as of December 31, 2024, compared to $154.6 million, or 1.38% of total loans receivable, as of September 30, 2024 and $149.6 million, or 1.38% of total loans receivable, as of December 31, 2023.
Total deposits were $13.51 billion at December 31, 2024, compared to $13.54 billion at September 30, 2024, and $13.03 billion at December 31, 2023.
Core deposits represented 89% of total deposits at December 31, 2024.
Dividends paid to shareholders were $0.48 per share in the quarter ended December 31, 2024.
Common shareholders' equity per share decreased 1% to $51.49 at December 31, 2024, compared to $52.06 at the preceding quarter end, and increased 7% from $48.12 at December 31, 2023.
Tangible common shareholders' equity per share* decreased 1% to $40.57 at December 31, 2024, compared to $41.12 at the preceding quarter end, and increased 9% from $37.09 at December 31, 2023.

*Non-GAAP (Generally Accepted Accounting Principles) financial 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 $140.5 million in the fourth quarter of 2024, compared to $135.7 million in the preceding quarter and $138.4 million in the fourth quarter a year ago. Net interest margin on a tax equivalent basis increased ten basis points to 3.82% for the fourth quarter of 2024, compared to 3.72% in the preceding quarter, and decreased compared to 3.83% in the fourth quarter a year ago. Net interest margin for the current quarter, compared to the preceding quarter, benefited from decreased funding costs, partially offset by lower yields on interest earning assets, primarily due to decreases in the targeted federal funds rate in the third and fourth quarters of 2024.

Average yields on interest-earning assets decreased two basis points to 5.31% for the fourth quarter of 2024, compared to 5.33% for the preceding quarter, and increased compared to 5.06% in the fourth quarter a year ago. On September 18, 2024, the Federal Open Market Committee ("FOMC") of the Federal Reserve System lowered the target range for the federal funds rate 50 basis points, followed by a 25 basis-point decrease on November 7, 2024 and another 25 basis-point decrease on December 18, 2024, resulting in a target range of 4.25% to 4.50% at December 31, 2024. Average loan yields decreased two basis points to 6.02%, compared to 6.04% in the preceding quarter, and increased compared to 5.77% in the fourth quarter a year ago. The decrease in average loan yields during the current quarter primarily reflects the decrease in interest rates, partially offset by the benefits of a balance sheet hedge that matured during the quarter.

Total deposit costs decreased eight basis points to 1.53% in the fourth quarter of 2024, compared to 1.61% in the preceding quarter, and increased compared to 1.18% in the fourth quarter a year ago. The decrease in deposit costs in the current quarter was primarily due to a decrease in interest rates, partially offset by an increase in the average balance of interest-bearing deposits. The average rate paid on borrowings decreased 51 basis points to 4.57% in the fourth quarter of 2024, compared to 5.08% in the preceding quarter, and decreased compared to 4.77% in the fourth quarter a year ago due to lower wholesale borrowings in the current quarter. The total cost of funding liabilities decreased 13 basis points to 1.60% in the fourth quarter of 2024, compared to 1.73% in the preceding quarter, and increased compared to 1.31% in the fourth quarter a year ago.

A $3.0 million provision for credit losses was recorded in the current quarter (comprised of a $3.2 million provision for credit losses - loans, a $203,000 recapture of provision for credit losses - unfunded loan commitments and a $16,000 recapture of provision for credit losses - held-to-maturity debt securities). This compares to a $1.7 million provision for credit losses in the prior quarter (comprised of a $2.0 million provision for credit losses - loans, a $262,000 recapture of provision for credit losses - unfunded loan commitments and a $13,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $2.5 million provision for credit losses in the fourth quarter a year ago (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). The provision for credit losses for the current quarter primarily reflected risk rating downgrades as well as growth in loan balances.

Total non-interest income was $20.0 million in the fourth quarter of 2024, compared to $18.1 million in the preceding quarter and $14.1 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 $506,000 increase in mortgage banking operations revenue and a $1.1 million increase in miscellaneous income, primarily due to a gain recognized on the sale of a non-performing loan during the fourth quarter of 2024. The increase in non-interest income during the current quarter compared to the prior year quarter was primarily due to a $5.1 million decrease in the net loss recognized on the sale of securities. Total non-interest income was $66.9 million for the year ended December 31, 2024, compared to $44.4 million a year earlier related mostly to the losses on the sale of investment securities in 2023.

Mortgage banking operations revenue was $3.7 million in the fourth quarter of 2024, compared to $3.2 million in the preceding quarter and $5.4 million in the fourth quarter a year ago. While the volume of one- to four-family loans sold during the current quarter increased compared to both the preceding and prior year quarters, volumes remained low due to reduced refinancing and purchase activity in the current rate environment. The increase from the preceding quarter reflects a $508,000 gain related to the pooled loan sale of $34.8 million of one- to four-family loans during the fourth quarter of 2024. The decrease from the prior year quarter primarily reflects a $3.5 million reversal of the lower of cost or market adjustment on multifamily loans held for sale, recognized during the fourth quarter of 2023, partially offset by higher pricing and volumes of one- to four-family loans sold during the current quarter compared to the fourth quarter of 2023. The reversal was due to the transfer of all remaining multifamily loans held for sale to the held for investment loan portfolio during the same period. Home purchase activity accounted for 79% of one- to four-family mortgage loan originations in the fourth quarter of 2024, 88% in the preceding quarter and 92% in the fourth quarter of 2023.

Total non-interest expense was $99.5 million in the fourth quarter of 2024, compared to $96.3 million in the preceding quarter and $96.6 million in the fourth quarter of 2023. The increase in non-interest expense for the current quarter compared to the prior quarter reflects a $691,000 increase in salary and employee benefits, primarily resulting from increased incentive accruals, partially offset by decreased medical premiums expense, a $923,000 increase in professional and legal expenses, primarily due to increased consultant expenses, and a $550,000 increase in advertising and marketing expenses, primarily due to increases in printed media marketing and community development expenses. The increase in non-interest expense for the current quarter compared to the same quarter a year ago primarily reflects increases in salary and employee benefits and professional and legal expenses. For the year ended December 31, 2024, total non-interest expense was $391.5 million, compared to $382.5 million for the year ended December 31, 2023. Banner's efficiency ratio was 61.95% for the fourth quarter of 2024, compared to 62.63% in the preceding quarter and 63.37% in the same quarter a year ago. Banner's adjusted efficiency ratio, a non-GAAP financial measure, was 60.74% for the fourth quarter of 2024, compared to 61.27% in the preceding quarter and 60.04% in the year ago quarter. 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.

Balance Sheet Review

Total assets increased to $16.20 billion at December 31, 2024, compared to $16.19 billion at September 30, 2024, and $15.67 billion at December 31, 2023. Securities and interest-bearing deposits held at other banks totaled $3.40 billion at December 31, 2024, compared to $3.50 billion at September 30, 2024 and $3.48 billion at December 31, 2023. The decrease compared to the prior quarter was primarily due to a decrease in securities - available for sale. The average effective duration of the securities portfolio was approximately 6.6 years at December 31, 2024, compared to 6.5 years at December 31, 2023.

Total loans receivable increased to $11.35 billion at December 31, 2024, compared to $11.22 billion at September 30, 2024, and $10.81 billion at December 31, 2023. Commercial real estate loans increased 2% to $3.86 billion at December 31, 2024, compared to $3.79 billion at September 30, 2024, and increased 6% compared to $3.64 billion at December 31, 2023. The increase in commercial real estate loans from September 30, 2024 and December 31, 2023 was primarily the result of new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase. Commercial business loans increased 2% to $2.42 billion at December 31, 2024, compared to $2.37 billion at September 30, 2024 and increased 6% compared to $2.28 billion at December 31, 2023, primarily due to new loan production. One- to four-family residential loans increased 1% to $1.59 billion at December 31, 2024, compared to $1.58 billion at September 30, 2024, and increased 5% compared to $1.52 billion at December 31, 2023. The increase in one- to four-family residential loans was primarily 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 loan production. Multifamily real estate loans increased 1% to $894.4 million at December 31, 2024, compared to $889.9 million at September 30, 2024, and increased 10% compared to $811.2 million at December 31, 2023. The increase in multifamily real estate loans from September 30, 2024 and December 31, 2023 was primarily the result of the conversion of multifamily construction loans to the multifamily portfolio upon the completion of the construction phase.

Loans held for sale were $32.0 million at December 31, 2024, compared to $78.8 million at September 30, 2024 and $11.2 million at December 31, 2023. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $153.2 million, compared to $95.0 million in the preceding quarter and $65.6 million in the fourth quarter a year ago. The decrease in loans held for sale compared to the prior quarter was primarily the result of the pooled loan sale of $34.8 million of one- to four-family residential loans during the current quarter.

Total deposits were $13.51 billion at December 31, 2024, compared to $13.54 billion at September 30, 2024 and $13.03 billion a year ago. Core deposits decreased slightly to $12.01 billion at December 31, 2024, compared to $12.02 billion at September 30, 2024, and increased 4% compared to $11.55 billion at December 31, 2023. The increase in core deposits compared to the prior year quarter primarily reflects increases in interest-bearing transaction and savings accounts. Core deposits were 89% of total deposits at December 31, 2024, September 30, 2024 and December 31, 2023. Certificates of deposit decreased 1% to $1.50 billion at December 31, 2024, compared to $1.52 billion at September 30, 2024, and increased 2% compared to $1.48 billion a year earlier. The decrease in certificates of deposit during the current quarter compared to the preceding quarter was primarily the result of clients moving funds from certificates of deposits to interest-bearing transaction and savings accounts. The increase in certificates of deposit during the current quarter compared to the 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, partially offset by a $57.7 million decrease in brokered deposits.

FHLB advances were $290.0 million at December 31, 2024, compared to $230.0 million at September 30, 2024 and $323.0 million a year ago. At December 31, 2024, off-balance sheet liquidity included additional borrowing capacity of $2.95 billion at the FHLB and $1.52 billion at the Federal Reserve as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

At December 31, 2024, total common shareholders' equity was $1.77 billion or 10.95% of total assets, compared to $1.79 billion or 11.08% of total assets at September 30, 2024, and $1.65 billion or 10.55% of total assets at December 31, 2023. The decrease in total common shareholders' equity at December 31, 2024 compared to September 30, 2024 was due to an increase in accumulated other comprehensive loss of $51.7 million as the result of a decrease in the fair value of the security portfolio, partially offset by a $29.6 million increase in retained earnings as a result of $46.4 million in net income, partially offset by the accrual of $16.8 million of cash dividends during the fourth quarter of 2024. At December 31, 2024, tangible common shareholders' equity, a non-GAAP financial measure, was $1.40 billion, or 8.84% of tangible assets, compared to $1.42 billion, or 8.96% of tangible assets, at September 30, 2024, and $1.27 billion, or 8.33% of tangible assets, a year ago. 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.

Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as "well-capitalized." At December 31, 2024, Banner's estimated common equity Tier 1 capital ratio was 12.44%, its estimated Tier 1 leverage capital to average assets ratio was 11.05%, and its estimated total capital to risk-weighted assets ratio was 15.04%. These regulatory capital ratios are estimates, pending completion and filing of Banner's regulatory reports.

Credit Quality

The allowance for credit losses - loans was $155.5 million, or 1.37% of total loans receivable and 421% of non-performing loans, at December 31, 2024, compared to $154.6 million, or 1.38% of total loans receivable and 359% of non-performing loans, at September 30, 2024, and $149.6 million, or 1.38% of total loans receivable and 506% of non-performing loans, at December 31, 2023. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $13.6 million at December 31, 2024, compared to $13.8 million at September 30, 2024, and $14.5 million at December 31, 2023. Net loan charge-offs totaled $2.3 million in the fourth quarter of 2024, compared to $230,000 in the preceding quarter and $1.1 million in the fourth quarter a year ago. Non-performing loans were $37.0 million at December 31, 2024, compared to $43.0 million at September 30, 2024, and $29.6 million a year ago.

An increase in adversely classified loans, offset in part by payoffs and paydowns, resulted in total substandard loans of $192.5 million as of December 31, 2024. This compares to $150.1 million as of September 30, 2024 and $125.4 million a year ago.

Total non-performing assets were $39.6 million, or 0.24% of total assets, at December 31, 2024, compared to $45.2 million, or 0.28% of total assets, at September 30, 2024, and $30.1 million, or 0.19% of total assets, a year ago.

Conference Call

Banner will host a conference call on Thursday, January 23, 2025, at 8:00 a.m. PST, 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 347551 to participate in the call. A replay of the call will be available at www.bannerbank.com.

About the Company

Banner Corporation is a $16.20 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.

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) 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 recession or slowed economic growth, or increased political instability due to acts of war; (2) changes in the interest rate environment, including increases or decreases in the Board of Governors of the Federal Reserve System (the "Federal Reserve") benchmark rate and duration at which such interest rate levels are maintained, which could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital and liquidity; (3) the impact of 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) expectations regarding key growth initiatives and strategic priorities; (7) 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; (8) 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; (9) competitive pressures among depository institutions, including repricing and competitors' pricing initiatives, and their impact on Banner's market position, loan, and deposit products; (10) the effect of inflation on interest rate movements and their impact on client behavior and net interest margin; (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) the potential imposition of new tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors including, but not limited to, our agriculture based lending; (20) changes in accounting principles, policies or guidelines; (21) future acquisitions by Banner of other depository institutions or lines of business, and associated risks of goodwill impairment due to changes in Banner's business or 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) environmental, social and governance goals and targets; (24) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (25) 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.

RESULTS OF OPERATIONS	Quarters Ended									Year Ended
(in thousands except shares and per share data)	Dec 31, 2024			Sep 30, 2024			Dec 31, 2023			Dec 31, 2024			Dec 31, 2023
INTEREST INCOME:
Loans receivable	$	169,586		$	168,338		$	154,532		$	655,590		$	577,891
Mortgage-backed securities		16,086			16,357			17,398			66,085			72,352
Securities and cash equivalents		10,764			11,146			11,808			44,428			51,329
Total interest income		196,436			195,841			183,738			766,103			701,572
INTEREST EXPENSE:
Deposits		52,217			53,785			39,342			199,465			100,126
Federal Home Loan Bank (FHLB) advances		85			2,263			1,870			8,941			10,524
Other borrowings		817			1,147			1,125			4,299			3,376
Subordinated debt		2,781			2,971			2,992			11,682			11,541
Total interest expense		55,900			60,166			45,329			224,387			125,567
Net interest income		140,536			135,675			138,409			541,716			576,005
PROVISION FOR CREDIT LOSSES		3,000			1,692			2,522			7,581			10,789
Net interest income after provision for credit losses		137,536			133,983			135,887			534,135			565,216
NON-INTEREST INCOME:
Deposit fees and other service charges		11,018			10,741			9,560			43,371			41,638
Mortgage banking operations		3,686			3,180			5,391			12,207			11,817
Bank-owned life insurance		2,144			2,445			2,609			9,193			9,245
Miscellaneous		2,751			1,658			1,159			8,289			5,169
		19,599			18,024			18,719			73,060			67,869
Net gain (loss) on sale of securities		275			—			(4,806	)		(5,190	)		(19,242	)
Net change in valuation of financial instruments carried at fair value		161			39			139			(982	)		(4,218	)
Total non-interest income		20,035			18,063			14,052			66,888			44,409
NON-INTEREST EXPENSE:
Salary and employee benefits		62,523			61,832			60,111			250,555			244,563
Less capitalized loan origination costs		(4,188	)		(4,354	)		(3,871	)		(16,857	)		(16,257	)
Occupancy and equipment		12,141			12,040			12,200			48,771			47,886
Information and computer data services		7,471			7,134			7,098			29,165			28,445
Payment and card processing services		5,771			5,346			6,088			22,518			20,547
Professional and legal expenses		3,025			2,102			2,267			7,858			9,830
Advertising and marketing		1,711			1,161			1,686			5,149			4,794
Deposit insurance		2,857			2,874			2,926			11,398			10,529
State and municipal business and use taxes		1,518			1,432			1,372			5,648			5,260
Real estate operations, net		113			103			47			293			(538	)
Amortization of core deposit intangibles		589			590			858			2,626			3,756
Miscellaneous		5,947			6,031			5,839			24,414			23,723
Total non-interest expense		99,478			96,291			96,621			391,538			382,538
Income before provision for income taxes		58,093			55,755			53,318			209,485			227,087
PROVISION FOR INCOME TAXES		11,702			10,602			10,694			40,587			43,463
NET INCOME	$	46,391		$	45,153		$	42,624		$	168,898		$	183,624
Earnings per common share:
Basic	$	1.34		$	1.31		$	1.24		$	4.90		$	5.35
Diluted	$	1.34		$	1.30		$	1.24		$	4.88		$	5.33
Cumulative dividends declared per common share	$	0.48		$	0.48		$	0.48		$	1.92		$	1.92
Weighted average number of common shares outstanding:
Basic		34,501,016			34,498,830			34,381,780			34,470,057			34,344,142
Diluted		34,743,024			34,650,322			34,472,155			34,628,710			34,450,412
Increase in common shares outstanding		3,144			936			2,420			111,463			154,351

FINANCIAL CONDITION										Percentage Change
(in thousands except shares and per share data)	Dec 31, 2024			Sep 30, 2024			Dec 31, 2023			Prior Qtr		Prior Yr Qtr
ASSETS
Cash and due from banks	$	203,402		$	226,568		$	209,634		(10	)%	(3	)%
Interest-bearing deposits		298,456			252,227			44,830		18	%	566	%
Total cash and cash equivalents		501,858			478,795			254,464		5	%	97	%
Securities - available for sale, amortized cost $2,460,262, $2,523,968, and $2,729,980, respectively		2,104,511			2,237,939			2,373,783		(6	)%	(11	)%
Securities - held to maturity, fair value $825,528, $879,278, and $907,514, respectively		1,001,564			1,013,903			1,059,055		(1	)%	(5	)%
Total securities		3,106,075			3,251,842			3,432,838		(4	)%	(10	)%
FHLB stock		22,451			19,751			24,028		14	%	(7	)%
Loans held for sale		32,021			78,841			11,170		(59	)%	187	%
Loans receivable		11,354,656			11,224,606			10,810,455		1	%	5	%
Allowance for credit losses – loans		(155,521	)		(154,585	)		(149,643	)	1	%	4	%
Net loans receivable		11,199,135			11,070,021			10,660,812		1	%	5	%
Accrued interest receivable		60,885			66,981			63,100		(9	)%	(4	)%
Property and equipment, net		124,589			125,256			132,231		(1	)%	(6	)%
Goodwill		373,121			373,121			373,121		—	%	—	%
Other intangibles, net		3,058			3,647			5,684		(16	)%	(46	)%
Bank-owned life insurance		312,549			310,400			304,366		1	%	3	%
Operating lease right-of-use assets		39,998			38,192			43,731		5	%	(9	)%
Other assets		424,297			371,829			364,846		14	%	16	%
Total assets	$	16,200,037		$	16,188,676		$	15,670,391		—	%	3	%
LIABILITIES
Deposits:
Non-interest-bearing	$	4,591,543		$	4,688,244		$	4,792,369		(2	)%	(4	)%
Interest-bearing transaction and savings accounts		7,423,183			7,328,051			6,759,661		1	%	10	%
Interest-bearing certificates		1,499,672			1,521,853			1,477,467		(1	)%	2	%
Total deposits		13,514,398			13,538,148			13,029,497		—	%	4	%
Advances from FHLB		290,000			230,000			323,000		26	%	(10	)%
Other borrowings		125,257			154,533			182,877		(19	)%	(32	)%
Subordinated notes, net		80,278			80,170			92,851		—	%	(14	)%
Junior subordinated debentures at fair value		67,477			66,257			66,413		2	%	2	%
Operating lease liabilities		43,472			42,318			48,659		3	%	(11	)%
Accrued expenses and other liabilities		258,070			237,128			228,428		9	%	13	%
Deferred compensation		46,759			46,401			45,975		1	%	2	%
Total liabilities		14,425,711			14,394,955			14,017,700		—	%	3	%
SHAREHOLDERS' EQUITY
Common stock		1,307,509			1,304,792			1,299,651		—	%	1	%
Retained earnings		744,091			714,472			642,175		4	%	16	%
Accumulated other comprehensive loss		(277,274	)		(225,543	)		(289,135	)	23	%	(4	)%
Total shareholders' equity		1,774,326			1,793,721			1,652,691		(1	)%	7	%
Total liabilities and shareholders' equity	$	16,200,037		$	16,188,676		$	15,670,391		—	%	3	%
Common Shares Issued:
Shares outstanding at end of period		34,459,832			34,456,688			34,348,369
Common shareholders' equity per share ⁽¹⁾	$	51.49		$	52.06		$	48.12
Common shareholders' tangible equity per share ^{(1) (2)}	$	40.57		$	41.12		$	37.09
Common shareholders' equity to total assets		10.95	%		11.08	%		10.55	%
Common shareholders' tangible equity to tangible assets ⁽²⁾		8.84	%		8.96	%		8.33	%
Consolidated Tier 1 leverage capital ratio		11.05	%		10.91	%		10.56	%

(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.

ADDITIONAL FINANCIAL INFORMATION

(dollars in thousands)

LOANS

Banner Corporation Reports Net Income of $46.4 Million, or $1.34 Per Diluted Share, for Fourth Quarter 2024; Declares Quarterly Cash Dividend of $0.48 Per Share