Banner Corporation Reports Net Income of $45.5 Million, or $1.31 Per Diluted Share, for Second Quarter 2025;
Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.48 per share payable August 15, 2025, to common shareholders of record on August 5, 2025.
'Banner's second quarter performance highlights the strength of our super community bank strategy, which focuses on building client relationships, preserving a strong funding base, and delivering exceptional service while sustaining a moderate risk profile,' said Mark Grescovich, President and CEO. 'Our earnings for the second quarter of 2025 benefited from solid year over year loan growth as well as higher yields on interest-earning assets. This benefit was partially offset by higher funding costs. The strategic investments we have made continue to enhance our operation and position Banner well for long-term success. Banner's credit metrics continue to be strong, our reserve for loan losses remains solid, and our capital base continues to be robust. We also continue to benefit from a strong core deposit base, with core deposits representing 89% of total deposits at quarter-end. For 134 years, Banner has upheld its core values and remained committed to doing the right thing for our clients, communities, colleagues, company and shareholders, while delivering strength and consistency through all economic cycles and change events.'
At June 30, 2025, Banner, on a consolidated basis, had $16.44 billion in assets, $11.53 billion in net loans and $13.53 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.
Second Quarter 2025 Highlights
Net interest margin, on a tax equivalent basis, was 3.92% for both the current and preceding quarters, compared to 3.70% in the second quarter a year ago.
Revenue was $162.2 million for the second quarter of 2025, compared to $160.2 million in the preceding quarter and increased 8% from $149.7 million in the second 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, the net change in valuation of financial instruments, and losses incurred on building and lease exits) was $163.0 million in the second quarter of 2025, compared to $159.9 million in the preceding quarter and increased 8% from $150.5 million in the second quarter a year ago.
Net interest income was $144.4 million in the second quarter of 2025, compared to $141.1 million in the preceding quarter and increased 9% from $132.5 million in the second quarter a year ago.
Mortgage banking operations revenue was $3.2 million for the second quarter of 2025, compared to $3.1 million in the preceding quarter and $3.0 million in the second quarter a year ago.
Return on average assets was 1.13%, compared to 1.15% in the preceding quarter and 1.02% in the second quarter a year ago.
Net loans receivable increased 2% to $11.53 billion at June 30, 2025, compared to $11.28 billion at March 31, 2025, and increased 5% compared to $10.99 billion at June 30, 2024.
Non-performing assets were $49.8 million, or 0.30% of total assets, at June 30, 2025, compared to $42.7 million, or 0.26% of total assets, at March 31, 2025 and $33.3 million, or 0.21% of total assets, at June 30, 2024.
The allowance for credit losses - loans was $160.5 million, or 1.37% of total loans receivable, as of June 30, 2025, compared to $157.3 million, or 1.38% of total loans receivable, as of March 31, 2025 and $152.8 million, or 1.37% of total loans receivable, as of June 30, 2024.
Total deposits decreased to $13.53 billion at June 30, 2025, compared to $13.59 billion at March 31, 2025, and increased 3% compared to $13.08 billion at June 30, 2024.
Core deposits represented 89% of total deposits at June 30, 2025.
Dividends paid to shareholders were $0.48 per share in the quarter ended June 30, 2025.
Common shareholders' equity per share increased 1% to $53.95 at June 30, 2025, compared to $53.16 at the preceding quarter end, and increased 10% from $49.07 at June 30, 2024.
Tangible common shareholders' equity per share* increased 2% to $43.09 at June 30, 2025, compared to $42.27 at the preceding quarter end, and increased 13% from $38.12 at June 30, 2024.
*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 $144.4 million in the second quarter of 2025, compared to $141.1 million in the preceding quarter and $132.5 million in the second quarter a year ago. Net interest margin, on a tax equivalent basis, was 3.92% for both the second quarter of 2025 and the preceding quarter, and increased 22 basis points compared to 3.70% in the second quarter a year ago. Net interest margin for the current quarter benefited from higher yields on interest earning assets.
Interest income was $200.3 million in the second quarter of 2025, compared to $193.9 million in the preceding quarter and $189.1 million in the second quarter a year ago. Average yields on interest-earning assets increased five basis points to 5.40% for the second quarter of 2025, compared to 5.35% for the preceding quarter, and increased 15 basis points compared to 5.25% in the second quarter a year ago, primarily due to increases in average loan yields. Average loan yields increased five basis points to 6.12%, compared to 6.07% in the preceding quarter, and increased 16 basis points compared to 5.96% in the second quarter a year ago. The increase in average loan yields during the current quarter primarily reflects new loans being originated at higher interest rates and adjustable rate loans repricing higher.
Interest expense was $55.9 million in the second quarter of 2025, compared to $52.8 million in the preceding quarter and $56.6 million in the second quarter a year ago. Total deposit costs were 1.47% in both the second quarter of 2025 and the preceding quarter and decreased three basis points compared to 1.50% in the second quarter a year ago. The decrease in deposit costs in the current quarter compared to the same quarter a year ago was primarily due to the interest rate declines in the second half of 2024. The average rate paid on borrowings increased 15 basis points to 4.47% in the second quarter of 2025, compared to 4.32% in the preceding quarter, and decreased compared to 5.07% in the second quarter a year ago, primarily due to the decreases in market interest rates. The total cost of funding liabilities increased five basis points to 1.60% in the second quarter of 2025, compared to 1.55% in the preceding quarter, primarily due to an increase in the average balance of FHLB advances to temporarily fund loan growth, and decreased compared to 1.66% in the second quarter a year ago, primarily due to deposit interest rate declines.
A $4.8 million provision for credit losses was recorded in the current quarter (comprised of a $4.2 million provision for credit losses - loans, a $588,000 provision for credit losses - unfunded loan commitments and a $6,000 provision for credit losses - held-to-maturity debt securities). This compares to a $3.1 million provision for credit losses in the prior quarter (comprised of a $4.5 million provision for credit losses - loans, a $1.4 million recapture of provision for credit losses - unfunded loan commitments and a $10,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $2.4 million provision for credit losses in the second quarter a year ago (comprised of a $2.0 million provision for credit losses - loans, a $430,000 provision for credit losses - unfunded loan commitments and a $14,000 recapture of provision for credit losses - held-to-maturity debt securities). The provision for credit losses recorded in the current quarter primarily reflected loan growth, as well as risk rating migration which impacted the overall estimated reserve requirements.
Total non-interest income was $17.8 million in the second quarter of 2025, compared to $19.1 million in the preceding quarter and $17.2 million in the second quarter a year ago. The decrease in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $1.1 million decrease in miscellaneous income, primarily due to losses incurred on building and lease exits during the current quarter. The increase in non-interest income during the current quarter compared to the prior year quarter was primarily due to a $559,000 decrease in the net loss recognized on the sale of securities and a $278,000 increase in the fair value adjustments on financial instruments carried at fair value during the current quarter, partially offset by the decrease in miscellaneous income. Total non-interest income was $36.9 million for the six months ended June 30, 2025, compared to $28.8 million for the same period a year earlier.
Mortgage banking operations revenue was $3.2 million in the second quarter of 2025, compared to $3.1 million in the preceding quarter and $3.0 million in the second quarter a year ago. The volume of one- to four-family loans sold during the current quarter decreased compared to the preceding quarter and increased compared to the prior year quarter. Home purchase activity accounted for 85% of one- to four-family mortgage loan originations in the second quarter of 2025, 84% in the preceding quarter and 89% in the second quarter of 2024.
Total non-interest expense was $101.3 million in both the second quarter of 2025 and the preceding quarter and was $98.1 million in the second quarter of 2024. Non-interest expense for the current quarter compared to the previous quarter reflects a $629,000 increase in salary and employee benefits, primarily resulting from increased loan commissions and normal salary and wage increases, a $571,000 increase in information and computer data services, primarily due to increases in computer software expenses, and a $497,000 increase in advertising and marketing expenses, primarily due to increases in printed media marketing and community development expenses, offset by a $1.6 million increase in capitalized loan origination costs. In addition, the current quarter included $834,000 of building and lease exit costs. 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, information and computer data services and professional and legal expenses. For the six months ended June 30, 2025, total non-interest expense was $202.6 million, compared to $195.8 million for the six months ended June 30, 2024. Banner's efficiency ratio was 62.50% for the second quarter of 2025, compared to 63.21% in the preceding quarter and 65.53% in the same quarter a year ago. Banner's adjusted efficiency ratio, a non-GAAP financial measure, was 60.28% for the second quarter of 2025, compared to 62.18% in the preceding quarter and 63.60% 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 were $16.44 billion at June 30, 2025, up from $16.17 billion at March 31, 2025 and $15.82 billion at June 30, 2024. The increase compared to the prior quarter was primarily due to increases in total loans receivable, partially offset by decreases in securities. Securities and interest-bearing deposits held at other banks totaled $3.29 billion at June 30, 2025, compared to $3.33 billion at March 31, 2025 and $3.27 billion at June 30, 2024. The average effective duration of the securities portfolio was approximately 6.6 years at June 30, 2025, compared to 6.5 years at June 30, 2024.
Total loans receivable were $11.69 billion at June 30, 2025, up from $11.44 billion at March 31, 2025 and $11.14 billion at June 30, 2024. Commercial real estate loans increased 4% to $3.97 billion at June 30, 2025, compared to $3.84 billion at March 31, 2025, and increased 7% compared to $3.72 billion at June 30, 2024. The increase in commercial real estate loans from March 31, 2025 was primarily the result of new loan production and the year over year increase was a combination of both new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase. Multifamily real estate loans decreased 2% to $860.7 million at June 30, 2025, compared to $877.7 million at March 31, 2025, and increased 20% compared to $717.1 million at June 30, 2024. The increase from June 30, 2024 was primarily the result of the conversion of multifamily construction loans to the multifamily portfolio upon the completion of the construction phase. Commercial business loans increased 3% to $2.47 billion at June 30, 2025, compared to $2.41 billion at March 31, 2025 and increased 4% compared to $2.37 billion at June 30, 2024, primarily due to new loan production.
Loans held for sale were $37.7 million at June 30, 2025, compared to $24.5 million at March 31, 2025 and $13.4 million at June 30, 2024. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $104.6 million, compared to $108.1 million in the preceding quarter and $94.9 million in the second quarter a year ago. The increase in loans held for sale compared to the preceding and prior year quarters was primarily the result of increased originations of one- to four- family residential mortgage loans held for sale, with originations outpacing loan sales during the quarter.
Total deposits were $13.53 billion at June 30, 2025, compared to $13.59 billion at March 31, 2025 and $13.08 billion a year ago. Core deposits decreased to $12.05 billion at June 30, 2025, compared to $12.09 billion at March 31, 2025, and increased 4% compared to $11.55 billion at June 30, 2024. The increase compared to the prior year quarter primarily reflects increases in interest-bearing transaction and savings accounts. Core deposits were 89% of total deposits at both June 30, 2025 and March 31, 2025, compared to 88% at June 30, 2024. Certificates of deposit decreased to $1.48 billion at June 30, 2025, compared to $1.50 billion at March 31, 2025, and decreased 3% from $1.53 billion a year earlier. The decreases were principally due to decreases in brokered deposits.
FHLB advances were $565.0 million at June 30, 2025, compared to $168.0 million at March 31, 2025 and $398.0 million a year ago. The increase in FHLB advances were primarily used to fund loan growth. At June 30, 2025, off-balance sheet liquidity included additional borrowing capacity of $2.74 billion at the FHLB and $1.62 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.
The balance of our outstanding subordinated debt was paid off during the second quarter of 2025. Subordinated notes, net of issuance costs, were $80.4 million at March 31, 2025, and $89.6 million at June 30, 2024.
At June 30, 2025, total common shareholders' equity was $1.87 billion or 11.35% of total assets, compared to $1.83 billion or 11.34% of total assets at March 31, 2025, and $1.69 billion or 10.69% of total assets at June 30, 2024. The increase at June 30, 2025 compared to March 31, 2025 was due to a $28.7 million increase in retained earnings resulting from $45.5 million in net income, partially offset by the accrual of $16.8 million of cash dividends during the second quarter of 2025. At June 30, 2025, tangible common shareholders' equity, a non-GAAP financial measure, was $1.49 billion, or 9.28% of tangible assets, compared to $1.46 billion, or 9.23% of tangible assets, at March 31, 2025, and $1.31 billion, or 8.51% 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 June 30, 2025, Banner's estimated common equity Tier 1 capital ratio was 12.63%, its estimated Tier 1 leverage capital to average assets ratio was 11.29%, and its estimated total capital to risk-weighted assets ratio was 14.51%. These regulatory capital ratios are estimates, pending completion and filing of Banner's regulatory reports.
Credit Quality
The allowance for credit losses - loans was $160.5 million, or 1.37% of total loans receivable and 373% of non-performing loans, at June 30, 2025, compared to $157.3 million, or 1.38% of total loans receivable and 404% of non-performing loans, at March 31, 2025, and $152.8 million, or 1.37% of total loans receivable and 498% of non-performing loans, at June 30, 2024. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $12.8 million at June 30, 2025, compared to $12.2 million at March 31, 2025, and $14.0 million at June 30, 2024. Net loan charge-offs totaled $1.0 million in the second quarter of 2025, compared to net loan charge-offs of $2.7 million and $245,000 in the in the preceding quarter and second quarter a year ago, respectively. Non-performing loans were $43.0 million at June 30, 2025, compared to $39.0 million at March 31, 2025, and $30.7 million a year ago. Substandard loans were $189.5 million as of June 30, 2025, compared to $197.8 million as of March 31, 2025 and $122.0 million a year ago. Total non-performing assets were $49.8 million, or 0.30% of total assets, at June 30, 2025, compared to $42.7 million, or 0.26% of total assets, at March 31, 2025, and $33.3 million, or 0.21% of total assets, a year ago.
Conference Call
Banner will host a conference call on Thursday, July 17, 2025, at 8:00 a.m. PDT, to discuss its second 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 859937 to participate in the call. A replay of the call will be available at www.bannerbank.com.
About the Company
Banner Corporation is a $16.44 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.
Forward-looking statements may relate to, among other things, future financial performance, strategic plans or objectives, revenues or earnings projections, and other financial or operational information. These statements are inherently subject to numerous risks and uncertainties, including ongoing market volatility and evolving global conditions, which may cause actual results to differ materially from those expressed or implied. These factors include, but are not limited to: (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 labor shortages, elevated inflation, recessionary pressures, or slowing economic growth; (2) changes in interest rate levels and the duration of such changes, including actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, access to capital and liquidity; (3) the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; (4) geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, energy prices, or economic activity in specific industry sectors, including, but not limited to, agriculture-based lending; (5) the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; (6) 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; (7) expectations regarding key growth initiatives and strategic priorities; (8) credit risks from 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; (9) results of examinations by regulatory authorities, which could result in the imposition of penalties, required changes to our business practices, or additional reserves; (10) competitive pressures among depository and non-depository institutions affecting pricing, market share or product offerings; (11) fluctuations in real estate values; (12) the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity; (13) vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; (14) market volatility or deterioration in capital markets affecting liquidity, valuations, or investor confidence; (15) the costs, effects and outcomes of litigation or other legal proceedings involving the Company; (16) legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; (17) climate-related risks and natural disasters, which may affect loan collateral, operations, or compliance obligations; (18) changes in accounting principles, policies or guidelines; (19) the impact of future acquisitions or business combinations, including related goodwill impairment risks and integration challenges; (20) 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; (21) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (22) 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.
FINANCIAL CONDITION
Percentage Change
(in thousands except shares and per share data)
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Prior Qtr
Prior Yr Qtr
ASSETS
Cash and due from banks
$
239,339
$
213,574
$
203,402
$
195,163
12
%
23
%
Interest-bearing deposits
244,009
228,371
298,456
52,295
7
%
367
%
Total cash and cash equivalents
483,348
441,945
501,858
247,458
9
%
95
%
Securities - available for sale, amortized cost $2,372,331, $2,426,395, $2,460,262 and $2,572,544, respectively
2,064,581
2,108,945
2,104,511
2,197,693
(2
)%
(6
)%
Securities - held to maturity, fair value $801,838, $819,261, $825,528 and $852,709, respectively
981,312
991,796
1,001,564
1,023,028
(1
)%
(4
)%
Total securities
3,045,893
3,100,741
3,106,075
3,220,721
(2
)%
(5
)%
FHLB stock
35,151
17,286
22,451
27,311
103
%
29
%
Loans held for sale
37,651
24,536
32,021
13,421
53
%
181
%
Loans receivable
11,690,373
11,438,796
11,354,656
11,143,848
2
%
5
%
Allowance for credit losses – loans
(160,501
)
(157,323
)
(155,521
)
(152,848
)
2
%
5
%
Net loans receivable
11,529,872
11,281,473
11,199,135
10,991,000
2
%
5
%
Accrued interest receivable
64,729
63,987
60,885
67,520
1
%
(4
)%
Property and equipment, net
117,175
119,649
124,589
126,465
(2
)%
(7
)%
Goodwill
373,121
373,121
373,121
373,121
—
%
—
%
Other intangibles, net
2,147
2,602
3,058
4,237
(17
)%
(49
)%
Bank-owned life insurance
316,365
313,942
312,549
307,948
1
%
3
%
Operating lease right-of-use assets
38,754
37,134
39,998
39,628
4
%
(2
)%
Other assets
392,963
394,396
424,297
397,364
—
%
(1
)%
Total assets
$
16,437,169
$
16,170,812
$
16,200,037
$
15,816,194
2
%
4
%
LIABILITIES
Deposits:
Non-interest-bearing
$
4,504,491
$
4,571,598
$
4,591,543
$
4,537,803
(1
)%
(1
)%
Interest-bearing transaction and savings accounts
7,545,028
7,517,617
7,423,183
7,016,327
—
%
8
%
Interest-bearing certificates
1,477,772
1,504,050
1,499,672
1,525,133
(2
)%
(3
)%
Total deposits
13,527,291
13,593,265
13,514,398
13,079,263
—
%
3
%
Advances from FHLB
565,000
168,000
290,000
398,000
236
%
42
%
Other borrowings
117,112
130,588
125,257
165,956
(10
)%
(29
)%
Subordinated notes, net
—
80,389
80,278
89,561
(100
)%
(100
)%
Junior subordinated debentures at fair value
73,366
67,711
67,477
66,831
8
%
10
%
Operating lease liabilities
41,696
40,466
43,472
44,056
3
%
(5
)%
Accrued expenses and other liabilities
200,194
210,771
258,070
235,515
(5
)%
(15
)%
Deferred compensation
46,846
46,169
46,759
46,246
1
%
1
%
Total liabilities
14,571,505
14,337,359
14,425,711
14,125,428
2
%
3
%
SHAREHOLDERS' EQUITY
Common stock
1,309,004
1,308,967
1,307,509
1,302,236
—
%
1
%
Retained earnings
801,082
772,412
744,091
686,079
4
%
17
%
Accumulated other comprehensive loss
(244,422
)
(247,926
)
(277,274
)
(297,549
)
(1
)%
(18
)%
Total shareholders' equity
1,865,664
1,833,453
1,774,326
1,690,766
2
%
10
%
Total liabilities and shareholders' equity
$
16,437,169
$
16,170,812
$
16,200,037
$
15,816,194
2
%
4
%
Common Shares Issued:
Shares outstanding at end of period
34,583,994
34,489,972
34,459,832
34,455,752
Common shareholders' equity per share (1)
$
53.95
$
53.16
$
51.49
$
49.07
Common shareholders' tangible equity per share (1) (2)
$
43.09
$
42.27
$
40.57
$
38.12
Common shareholders' equity to total assets
11.35
%
11.34
%
10.95
%
10.69
%
Common shareholders' tangible equity to tangible assets (2)
9.28
%
9.23
%
8.84
%
8.51
%
Consolidated Tier 1 leverage capital ratio
11.29
%
11.22
%
11.05
%
10.80
%
Expand
(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.
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
Commercial real estate (CRE):
Owner-occupied
$
1,125,249
$
1,020,829
$
1,027,426
$
950,922
10
%
18
%
Investment properties
1,625,001
1,598,387
1,623,672
1,536,142
2
%
6
%
Small balance CRE
1,223,477
1,217,458
1,213,792
1,234,302
—
%
(1
)%
Multifamily real estate
860,700
877,716
894,425
717,089
(2
)%
20
%
Construction, land and land development:
Commercial construction
159,222
146,467
122,362
173,296
9
%
(8
)%
Multifamily construction
568,058
618,942
513,706
663,989
(8
)%
(14
)%
One- to four-family construction
551,806
504,265
514,220
490,237
9
%
13
%
Land and land development
417,474
396,009
369,663
352,184
5
%
19
%
Commercial business:
Commercial business
1,318,483
1,283,754
1,318,333
1,298,134
3
%
2
%
Small business scored
1,152,531
1,122,550
1,104,117
1,074,465
3
%
7
%
Agricultural business, including secured by farmland:
Agricultural business, including secured by farmland
345,742
334,899
340,280
334,583
3
%
3
%
One- to four-family residential
1,610,133
1,600,283
1,591,260
1,603,266
1
%
—
%
Consumer:
Consumer—home equity revolving lines of credit
639,757
620,483
625,680
611,739
3
%
5
%
Consumer—other
92,740
96,754
95,720
103,500
(4
)%
(10
)%
Total loans receivable
$
11,690,373
$
11,438,796
$
11,354,656
$
11,143,848
2
%
5
%
Loans 30 - 89 days past due and on accrual
$
10,786
$
37,339
$
26,824
$
11,850
Total delinquent loans (including loans on non-accrual), net
$
47,764
$
71,927
$
55,432
$
32,081
Total delinquent loans / Total loans receivable
0.41
%
0.63
%
0.49
%
0.29
%
Expand
LOANS BY GEOGRAPHIC LOCATION
Percentage Change
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Prior Qtr
Prior Yr Qtr
Amount
Percentage
Amount
Amount
Amount
Washington
$
5,438,285
47
%
$
5,260,906
$
5,245,886
$
5,182,378
3
%
5
%
California
3,010,678
26
%
2,927,835
2,861,435
2,787,190
3
%
8
%
Oregon
2,141,185
17
%
2,122,953
2,113,229
2,072,153
1
%
3
%
Idaho
671,217
6
%
665,625
665,158
641,209
1
%
5
%
Utah
70,474
1
%
88,858
82,459
80,295
(21
)%
(12
)%
Other
358,534
3
%
372,619
386,489
380,623
(4
)%
(6
)%
Total loans receivable
$
11,690,373
100
%
$
11,438,796
$
11,354,656
$
11,143,848
2
%
5
%
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
LOAN ORIGINATIONS
Quarters Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Commercial real estate
$
216,189
$
37,041
$
102,258
Multifamily real estate
13,065
9,555
2,774
Construction and land
411,210
287,565
546,675
Commercial business
203,656
103,739
167,168
Agricultural business
14,414
12,765
22,255
One-to four-family residential
5,491
5,139
34,498
Consumer
102,600
80,030
120,470
Total loan originations (excluding loans held for sale)
$
966,625
$
535,834
$
996,098
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES – LOANS
Quarters Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Balance, beginning of period
$
157,323
$
155,521
$
151,140
Provision for credit losses – loans
4,201
4,549
1,953
Recoveries of loans previously charged off:
Commercial real estate
53
57
98
One- to four-family real estate
58
188
17
Commercial business
361
557
324
Agricultural business, including secured by farmland
1
10
195
Consumer
168
119
112
641
931
746
Loans charged off:
Commercial real estate
—
—
(347
)
Construction and land
—
—
—
One- to four-family real estate
—
(13
)
—
Commercial business
(892
)
(3,301
)
(137
)
Agricultural business, including secured by farmland
(362
)
—
—
Consumer
(410
)
(364
)
(507
)
(1,664
)
(3,678
)
(991
)
Net charge-offs
(1,023
)
(2,747
)
(245
)
Balance, end of period
$
160,501
$
157,323
$
152,848
Net (charge-offs) recoveries / Average loans receivable
(0.009
)%
(0.024
)%
(0.002
)%
Expand
ALLOCATION OF ALLOWANCE FOR CREDIT LOSSES – LOANS
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Commercial real estate
$
41,036
$
40,076
$
40,830
$
39,064
Multifamily real estate
9,918
10,109
10,308
8,253
Construction and land
34,124
32,042
29,038
31,597
One- to four-family real estate
20,917
20,752
20,807
20,906
Commercial business
38,591
38,665
38,611
38,835
Agricultural business, including secured by farmland
6,216
5,641
5,727
4,045
Consumer
9,699
10,038
10,200
10,148
Total allowance for credit losses – loans
$
160,501
$
157,323
$
155,521
$
152,848
Allowance for credit losses - loans / Total loans receivable
1.37
%
1.38
%
1.37
%
1.37
%
Allowance for credit losses - loans / Non-performing loans
373
%
404
%
421
%
498
%
Expand
CHANGE IN THE ALLOWANCE FOR CREDIT LOSSES - UNFUNDED LOAN COMMITMENTS
Quarters Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Balance, beginning of period
$
12,162
$
13,562
$
13,597
Provision (recapture) for credit losses - unfunded loan commitments
588
(1,400
)
430
Balance, end of period
$
12,750
$
12,162
$
14,027
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
NON-PERFORMING ASSETS
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Loans on non-accrual status:
Secured by real estate:
Commercial
$
10
$
2,182
$
2,186
$
2,326
Construction and land
4,369
4,359
3,963
3,999
One- to four-family
15,480
10,448
10,016
8,184
Commercial business
6,647
6,425
7,067
8,694
Agricultural business, including secured by farmland
8,690
10,301
8,485
1,586
Consumer
4,802
4,874
4,835
3,380
39,998
38,589
36,552
28,169
Loans more than 90 days delinquent, still on accrual:
Secured by real estate:
One- to four-family
2,896
9
369
1,861
Commercial business
—
206
—
—
Consumer
80
155
35
692
2,976
370
404
2,553
Total non-performing loans
42,974
38,959
36,956
30,722
REO
6,801
3,468
2,367
2,564
Other repossessed assets
—
300
300
—
Total non-performing assets
$
49,775
$
42,727
$
39,623
$
33,286
Total non-performing assets to total assets
0.30
%
0.26
%
0.24
%
0.21
%
Expand
LOANS BY CREDIT RISK RATING
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Pass
$
11,432,456
$
11,207,852
$
11,118,744
$
10,971,850
Special Mention
68,372
33,133
43,451
50,027
Substandard
189,545
197,811
192,461
121,971
Total
$
11,690,373
$
11,438,796
$
11,354,656
$
11,143,848
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
DEPOSIT COMPOSITION
Percentage Change
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Prior Qtr
Prior Yr Qtr
Non-interest-bearing
$
4,504,491
$
4,571,598
$
4,591,543
$
4,537,803
(1
)%
(1
)%
Interest-bearing checking
2,534,900
2,431,279
2,393,864
2,208,742
4
%
15
%
Regular savings accounts
3,538,372
3,542,005
3,478,423
3,192,036
—
%
11
%
Money market accounts
1,471,756
1,544,333
1,550,896
1,615,549
(5
)%
(9
)%
Total interest-bearing transaction and savings accounts
7,545,028
7,517,617
7,423,183
7,016,327
—
%
8
%
Total core deposits
12,049,519
12,089,215
12,014,726
11,554,130
—
%
4
%
Interest-bearing certificates
1,477,772
1,504,050
1,499,672
1,525,133
(2
)%
(3
)%
Total deposits
$
13,527,291
$
13,593,265
$
13,514,398
$
13,079,263
—
%
3
%
Expand
GEOGRAPHIC CONCENTRATION OF DEPOSITS
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Percentage Change
Amount
Percentage
Amount
Amount
Amount
Prior Qtr
Prior Yr Qtr
Washington
$
7,334,391
55
%
$
7,394,201
$
7,441,413
$
7,171,699
(1
)%
2
%
Oregon
3,029,712
22
%
3,045,078
2,981,327
2,909,838
(1
)%
4
%
California
2,486,514
18
%
2,463,012
2,392,573
2,331,793
1
%
7
%
Idaho
676,674
5
%
690,974
699,085
665,933
(2
)%
2
%
Total deposits
$
13,527,291
100
%
$
13,593,265
$
13,514,398
$
13,079,263
—
%
3
%
Expand
INCLUDED IN TOTAL DEPOSITS
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Public non-interest-bearing accounts
$
151,484
$
146,390
$
165,667
$
149,012
Public interest-bearing transaction & savings accounts
250,350
239,707
248,746
250,136
Public interest-bearing certificates
21,272
24,226
25,423
29,101
Total public deposits
$
423,106
$
410,323
$
439,836
$
428,249
Collateralized public deposits
$
329,416
$
313,445
$
336,376
$
326,524
Total brokered deposits
$
49,977
$
75,321
$
50,346
$
105,309
AVERAGE ACCOUNT BALANCE PER DEPOSIT ACCOUNT
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Number of deposit accounts
451,185
453,808
460,004
460,107
Average account balance per account
$
30
$
30
$
30
$
29
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
Banner Corporation-consolidated:
Total capital to risk-weighted assets
$
1,984,862
14.51
%
$
1,094,505
8.00
%
$
1,368,131
10.00
%
Tier 1 capital to risk-weighted assets
1,813,814
13.26
%
820,879
6.00
%
820,879
6.00
%
Tier 1 leverage capital to average assets
1,813,814
11.29
%
642,519
4.00
%
n/a
n/a
Common equity tier 1 capital to risk-weighted assets
1,727,314
12.63
%
615,659
4.50
%
n/a
n/a
Banner Bank:
Total capital to risk-weighted assets
1,909,529
13.96
%
1,094,267
8.00
%
1,367,834
10.00
%
Tier 1 capital to risk-weighted assets
1,738,518
12.71
%
820,700
6.00
%
1,094,267
8.00
%
Tier 1 leverage capital to average assets
1,738,518
10.81
%
643,174
4.00
%
803,968
5.00
%
Common equity tier 1 capital to risk-weighted assets
1,738,518
12.71
%
615,525
4.50
%
889,092
6.50
%
Expand
These regulatory capital ratios are estimates, pending completion and filing of Banner's regulatory reports.
(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 $2.3 million for the quarter ended June 30, 2025 and $2.2 million for both the quarters ended March 31, 2025 and June 30, 2024. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.1 million for the quarter ended June 30, 2025 and $1.0 million for both the quarters ended March 31, 2025 and June 30, 2024.
(4)
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.
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
(rates / ratios annualized)
ANALYSIS OF NET INTEREST SPREAD
Six Months Ended
Jun 30, 2025
Jun 30, 2024
Interest-earning assets:
Held for sale loans
$
26,217
$
860
6.61
%
$
10,802
$
373
6.94
%
Mortgage loans
9,466,335
281,633
6.00
%
8,949,709
254,514
5.72
%
Commercial/agricultural loans
1,915,699
61,948
6.52
%
1,852,067
62,608
6.80
%
Consumer and other loans
121,316
4,179
6.95
%
133,258
4,352
6.57
%
Total loans (1)
11,529,567
348,620
6.10
%
10,945,836
321,847
5.91
%
Mortgage-backed securities
2,519,851
31,471
2.52
%
2,700,413
33,926
2.53
%
Other securities
897,870
19,248
4.32
%
971,724
22,682
4.69
%
Interest-bearing deposits with banks
70,675
1,061
3.03
%
51,643
1,037
4.04
%
FHLB stock
17,969
371
4.16
%
20,077
574
5.75
%
Total investment securities
3,506,365
52,151
3.00
%
3,743,857
58,219
3.13
%
Total interest-earning assets
15,035,932
400,771
5.38
%
14,689,693
380,066
5.20
%
Non-interest-earning assets
1,000,216
935,068
Total assets
$
16,036,148
$
15,624,761
Deposits:
Interest-bearing checking accounts
$
2,423,292
17,999
1.50
%
$
2,130,228
14,337
1.35
%
Savings accounts
3,472,556
36,940
2.15
%
3,106,985
32,479
2.10
%
Money market accounts
1,523,571
15,589
2.06
%
1,666,743
17,512
2.11
%
Certificates of deposit
1,510,404
27,525
3.67
%
1,502,013
29,135
3.90
%
Total interest-bearing deposits
8,929,823
98,053
2.21
%
8,405,969
93,463
2.24
%
Non-interest-bearing deposits
4,503,461
—
—
%
4,673,330
—
—
%
Total deposits
13,433,284
98,053
1.47
%
13,079,299
93,463
1.44
%
Other interest-bearing liabilities:
FHLB advances
186,597
4,230
4.57
%
236,269
6,593
5.61
%
Other borrowings
128,459
1,369
2.15
%
178,105
2,335
2.64
%
Junior subordinated debentures and subordinated notes
169,233
4,993
5.95
%
180,379
5,930
6.61
%
Total borrowings
484,289
10,592
4.41
%
594,753
14,858
5.02
%
Total funding liabilities
13,917,573
108,645
1.57
%
13,674,052
108,321
1.59
%
Other non-interest-bearing liabilities (2)
299,082
299,103
Total liabilities
14,216,655
13,973,155
Shareholders' equity
1,819,493
1,651,606
Total liabilities and shareholders' equity
$
16,036,148
$
15,624,761
Net interest income/rate spread (tax equivalent)
$
292,126
3.81
%
$
271,745
3.61
%
Net interest margin (tax equivalent)
3.92
%
3.72
%
Reconciliation to reported net interest income:
Adjustments for taxable equivalent basis
(6,644
)
(6,240
)
Net interest income and margin, as reported
$
285,482
3.83
%
$
265,505
3.63
%
Additional Key Financial Ratios:
Return on average assets
1.14
%
1.00
%
Adjusted return on average assets (4)
1.15
%
1.06
%
Return on average equity
10.04
%
9.42
%
Adjusted return on average equity (4)
10.16
%
10.03
%
Average equity/average assets
11.35
%
10.57
%
Average interest-earning assets/average interest-bearing liabilities
159.72
%
163.21
%
Average interest-earning assets/average funding liabilities
108.04
%
107.43
%
Non-interest income/average assets
0.46
%
0.37
%
Non-interest expense/average assets
2.55
%
2.52
%
Efficiency ratio
62.85
%
66.52
%
Adjusted efficiency ratio (4)
61.22
%
63.65
%
Expand
(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 $4.6 million and $4.2 million for the six months ended June 30, 2025 and 2024, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.1 million for both the six months ended June 30, 2025 and 2024.
(4)
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.
Expand
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 earnings 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, the adjusted return on average assets, the adjusted return on average equity 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
Six Months Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Jun 30, 2025
Jun 30, 2024
Net interest income (GAAP)
$
144,399
$
141,083
$
132,546
$
285,482
$
265,505
Non-interest income (GAAP)
17,751
19,108
17,199
36,859
28,790
Total revenue (GAAP)
162,150
160,191
149,745
322,341
294,295
Exclude: Net loss on sale of securities
3
—
562
3
5,465
Net change in valuation of financial instruments carried at fair value
(88
)
(315
)
190
(403
)
1,182
Losses incurred on building and lease exits
919
—
—
919
—
Adjusted revenue (non-GAAP)
$
162,984
$
159,876
$
150,497
$
322,860
$
300,942
Expand
ADJUSTED EARNINGS
Quarters Ended
Six Months Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Jun 30, 2025
Jun 30, 2024
Net income (GAAP)
$
45,496
$
45,135
$
39,795
$
90,631
$
77,354
Exclude: Net loss on sale of securities
3
—
562
3
5,465
Net change in valuation of financial instruments carried at fair value
(88
)
(315
)
190
(403
)
1,182
Building and lease exit costs
1,753
—
—
1,753
—
Related net tax (benefit) expense
(401
)
76
(180
)
(325
)
(1,595
)
Total adjusted earnings (non-GAAP)
$
46,763
$
44,896
$
40,367
$
91,659
$
82,406
Diluted earnings per share (GAAP)
$
1.31
$
1.30
$
1.15
$
2.61
$
2.24
Diluted adjusted earnings per share (non-GAAP)
$
1.35
$
1.29
$
1.17
$
2.64
$
2.39
Return on average assets
1.13
%
1.15
%
1.02
%
1.14
%
1.00
%
Adjusted return on average assets (1)
1.16
%
1.14
%
1.04
%
1.15
%
1.06
%
Return on average equity
9.92
%
10.17
%
9.69
%
10.04
%
9.42
%
Adjusted return on average equity (2)
10.20
%
10.12
%
9.83
%
10.16
%
10.03
%
Expand
(1)
Adjusted earnings (non-GAAP) divided by average assets.
(2)
Adjusted earnings (non-GAAP) divided by average equity.
Expand
ADDITIONAL FINANCIAL INFORMATION
(dollars in thousands)
ADJUSTED EFFICIENCY RATIO
Quarters Ended
Six Months Ended
Jun 30, 2025
Mar 31, 2025
Jun 30, 2024
Jun 30, 2025
Jun 30, 2024
Non-interest expense (GAAP)
$
101,348
$
101,259
$
98,128
$
202,607
$
195,769
Exclude: CDI amortization
(455
)
(456
)
(724
)
(911
)
(1,447
)
State/municipal tax expense
(1,416
)
(1,454
)
(1,394
)
(2,870
)
(2,698
)
REO operations
(392
)
61
(297
)
(331
)
(77
)
Building and lease exit costs
(834
)
—
—
(834
)
—
Adjusted non-interest expense (non-GAAP)
$
98,251
$
99,410
$
95,713
$
197,661
$
191,547
Net interest income (GAAP)
$
144,399
$
141,083
$
132,546
$
285,482
$
265,505
Non-interest income (GAAP)
17,751
19,108
17,199
36,859
28,790
Total revenue (GAAP)
162,150
160,191
149,745
322,341
294,295
Exclude: Net loss on sale of securities
3
—
562
3
5,465
Net change in valuation of financial instruments carried at fair value
(88
)
(315
)
190
(403
)
1,182
Losses incurred on building and lease exits
919
—
—
919
—
Adjusted revenue (non-GAAP)
$
162,984
$
159,876
$
150,497
$
322,860
$
300,942
Efficiency ratio (GAAP)
62.50
%
63.21
%
65.53
%
62.85
%
66.52
%
Adjusted efficiency ratio (non-GAAP) (1)
60.28
%
62.18
%
63.60
%
61.22
%
63.65
%
Expand
(1)
Adjusted non-interest expense (non-GAAP) divided by adjusted revenue.
Expand
TANGIBLE COMMON SHAREHOLDERS' EQUITY TO TANGIBLE ASSETS
Jun 30, 2025
Mar 31, 2025
Dec 31, 2024
Jun 30, 2024
Shareholders' equity (GAAP)
$
1,865,664
$
1,833,453
$
1,774,326
$
1,690,766
Exclude goodwill and other intangible assets, net
375,268
375,723
376,179
377,358
Tangible common shareholders' equity (non-GAAP)
$
1,490,396
$
1,457,730
$
1,398,147
$
1,313,408
Total assets (GAAP)
$
16,437,169
$
16,170,812
$
16,200,037
$
15,816,194
Exclude goodwill and other intangible assets, net
375,268
375,723
376,179
377,358
Total tangible assets (non-GAAP)
$
16,061,901
$
15,795,089
$
15,823,858
$
15,438,836
Common shareholders' equity to total assets (GAAP)
11.35
%
11.34
%
10.95
%
10.69
%
Tangible common shareholders' equity to tangible assets (non-GAAP)
9.28
%
9.23
%
8.84
%
8.51
%
TANGIBLE COMMON SHAREHOLDERS' EQUITY PER SHARE
Shareholders' equity (GAAP)
$
1,865,664
$
1,833,453
$
1,774,326
$
1,690,766
Tangible common shareholders' equity (non-GAAP)
$
1,490,396
$
1,457,730
$
1,398,147
$
1,313,408
Common shares outstanding at end of period
34,583,994
34,489,972
34,459,832
34,455,752
Common shareholders' equity (book value) per share (GAAP)
$
53.95
$
53.16
$
51.49
$
49.07
Tangible common shareholders' equity (tangible book value) per share (non-GAAP)
$
43.09
$
42.27
$
40.57
$
38.12
Expand
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