Banner Corporation (NASDAQ:BANR) ("Banner"), the parent company of Banner Bank, today reported net income of $39.8 million, or $1.15 per diluted share, for the second quarter of 2024, compared to $37.6 million, or $1.09 per diluted share, for the preceding quarter and $39.6 million, or $1.15 per diluted share, for the second quarter of 2023. Net interest income was $132.5 million in the second quarter of 2024, compared to $133.0 million in the preceding quarter and $142.5 million in the second 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 second quarter 2024 results included a $562,000 net loss on the sale of securities, compared to a $4.9 million net loss on the sale of securities in the preceding quarter and a $4.5 million net loss on the sale of securities in the second quarter of 2023. Banner's second quarter 2024 results also included a $2.4 million provision for credit losses, compared to a $520,000 provision for credit losses in the preceding quarter and a $6.8 million provision for credit losses in the second quarter of 2023. Net income was $77.4 million, or $2.24 per diluted share, for the six months ended June 30, 2024, compared to net income of $95.1 million, or $2.76 per diluted share, for the six months ended June 30, 2023. Banner's results for the six months ended June 30, 2024 include a $2.9 million provision for credit losses, a $5.5 million net loss on the sale of securities and a $1.2 million net decrease in the fair value adjustments on financial instruments carried at fair value, compared to a $6.2 million provision for credit losses, an $11.8 million net loss on the sale of securities and a $3.7 million net decrease in the fair value adjustments on 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. The dividend will be payable August 16, 2024, to common shareholders of record on August 6, 2024.

"Banner's second quarter operating results reflect the continued successful execution of our super community bank strategy, which emphasizes strong relationship banking and a moderate risk profile," said Mark Grescovich, President and CEO. "Our earnings for the second quarter of 2024 benefited from solid growth in loans and higher yields on interest-earning assets. The continued high interest rate environment and its effect on funding costs, however, resulted in moderate compression in our net interest margin during the quarter. We continue to maintain strong credit quality metrics and a solid reserve for potential credit losses. Additionally, we continue to benefit from a strong core deposit base that has been resilient in a highly competitive environment, with core deposits representing 88% of total deposits at quarter end. Banner has upheld its core values for the past 133 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 June 30, 2024, Banner, on a consolidated basis, had $15.82 billion in assets, $10.99 billion in net loans and $13.08 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 2024 Highlights

Revenue was $149.7 million for the second quarter of 2024, compared to $144.6 million in the preceding quarter and $150.9 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 and the net change in valuation of financial instruments) was $150.5 million in the second quarter of 2024, compared to $150.4 million in the preceding quarter and $158.6 million in the second quarter a year ago.
Net interest income was $132.5 million in the second quarter of 2024, compared to $133.0 million in the preceding quarter and $142.5 million in the second quarter a year ago.
Net interest margin, on a tax equivalent basis, was 3.70%, compared to 3.74% in the preceding quarter and 4.00% in the second quarter a year ago.
Mortgage banking operations revenue was $3.0 million for the second quarter of 2024, compared to $2.3 million in the preceding quarter and $1.7 million in the second quarter a year ago.
Return on average assets was 1.02%, compared to 0.97% in the preceding quarter and 1.02% in the second quarter a year ago.
Net loans receivable increased 3% to $10.99 billion at June 30, 2024, compared to $10.72 billion at March 31, 2024, and increased 6% compared to $10.33 billion at June 30, 2023.
Non-performing assets were $33.3 million, or 0.21% of total assets, at June 30, 2024, compared to $29.9 million, or 0.19% of total assets, at March 31, 2024 and $28.7 million, or 0.18% of total assets, at June 30, 2023.
The allowance for credit losses - loans was $152.8 million, or 1.37% of total loans receivable, as of June 30, 2024, compared to $151.1 million, or 1.39% of total loans receivable, as of March 31, 2024 and $144.7 million, or 1.38% of total loans receivable, as of June 30, 2023.
Total deposits decreased to $13.08 billion at June 30, 2024, compared to $13.16 billion at March 31, 2024 and $13.10 billion at June 30, 2023.
Core deposits represented 88% of total deposits at June 30, 2024.
Available borrowing capacity was $4.73 billion at June 30, 2024, compared to $5.05 billion at March 31, 2024.
On-balance sheet liquidity was $2.83 billion at June 30, 2024, compared to $2.77 billion at March 31, 2024.
Dividends paid to shareholders were $0.48 per share in the quarter ended June 30, 2024.
Common shareholders' equity per share increased 1% to $49.07 at June 30, 2024, compared to $48.39 at the preceding quarter end, and increased 9% from $44.91 at June 30, 2023.
Tangible common shareholders' equity per share* increased 2% to $38.12 at June 30, 2024, compared to $37.40 at the preceding quarter end, and increased 13% from $33.83 at June 30, 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 $132.5 million in the second quarter of 2024, compared to $133.0 million in the preceding quarter and $142.5 million in the second quarter a year ago. Net interest margin on a tax equivalent basis decreased four basis points to 3.70% for the second quarter of 2024, compared to 3.74% in the preceding quarter, and decreased compared to 4.00% in the second quarter a year ago. Net interest margin for the current quarter was impacted by increased funding costs reflecting the persistent high interest rate environment, partially offset by increased yields on loans due to new loans being originated at higher interest rates and adjustable rate loans repricing higher.

Average yields on interest-earning assets increased nine basis points to 5.25% for the second quarter of 2024, compared to 5.16% for the preceding quarter, and increased compared to 4.80% in the second quarter a year ago. Average loan yields increased nine basis points to 5.96%, compared to 5.87% in the preceding quarter, and increased compared to 5.51% in the second quarter a year ago. The increase in average yields, especially loans, during the current quarter reflects the benefit of originating new loans at higher interest rates as well as adjustable rate loans repricing higher. Total deposit costs increased 13 basis points to 1.50% in the second quarter of 2024, compared to 1.37% in the preceding quarter, and compared to 0.64% in the second quarter a year ago. The increase in deposit costs was due to a larger percentage of core deposits being in interest bearing accounts as well as an increase in the mix of higher cost retail CDs. The average rate paid on borrowings increased nine basis points to 5.07% in the second quarter of 2024, compared to 4.98% in the preceding quarter, and compared to 4.60% in the second quarter a year ago. The total cost of funding liabilities increased 13 basis points to 1.66% during the second quarter of 2024, compared to 1.53% in the preceding quarter, and compared to 0.86% in the second quarter a year ago.

A $2.4 million provision for credit losses was recorded in the current quarter (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). This compares to a $520,000 provision for credit losses in the prior quarter (comprised of a $1.4 million provision for credit losses - loans, an $887,000 recapture of provision for credit losses - unfunded loan commitments and a $17,000 recapture of provision for credit losses - held-to-maturity debt securities) and a $6.8 million provision for credit losses in the second quarter a year ago (comprised of a $3.6 million provision for credit losses - loans, a $1.2 million provision for credit losses - unfunded loan commitments, a $2.0 million provision for credit losses - available for sale securities and a $16,000 recapture of provision for credit losses - held-to-maturity debt securities). The provision for credit losses for the current quarter primarily reflected loan growth and an increase in the reserve for collateral dependent loans. The provision for credit losses for the preceding quarter primarily reflected loan growth in the construction and one- to four-family loan portfolios and was partially offset by a reduction in unfunded loan commitments in the construction portfolio.

Total non-interest income was $17.2 million in the second quarter of 2024, compared to $11.6 million in the preceding quarter and $8.4 million in the second quarter a year ago. The increase in non-interest income during the current quarter compared to the preceding quarter was primarily due to a $4.3 million decrease 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 $1.3 million increase in mortgage banking operations revenue, a $4.0 million decrease in the net loss recognized on the sale of securities and a $3.0 million decrease in the net loss recognized for fair value adjustments on financial instruments carried at fair value. Total non-interest income was $28.8 million for the six months ended June 30, 2024, compared to $17.7 million for the same period a year earlier.

Mortgage banking operations revenue was $3.0 million in the second quarter of 2024, compared to $2.3 million in the preceding quarter and $1.7 million in the second quarter a year ago. 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 in the current rate environment. The increase from the preceding quarter included a $284,000 gain related to the sale of $19.8 million of one- to four-family portfolio loans during the second quarter of 2024. The increase from the preceding quarter also reflects an increase in the percentage of loan sold servicing retained. Home purchase activity accounted for 89% of one- to four-family mortgage loan originations in both the second quarter of 2024 and the preceding quarter and 93% in the second quarter of 2023.

During the second quarter of 2024, non-interest income included a $190,000 net loss for fair value adjustments as a result of changes in the valuation of financial instruments carried at fair value, principally comprised of limited partnership investments, and a $562,000 net loss on the sale of securities, related to a security with a premium that was called early. In the preceding quarter, non-interest income included a $992,000 net loss for fair value adjustments and a $4.9 million net loss on the sale of securities. In the second quarter a year ago, non-interest income included a $3.2 million net loss for fair value adjustments and a $4.5 million net loss on the sale of securities.

Total non-interest expense was $98.1 million in the second quarter of 2024, compared to $97.6 million in the preceding quarter and $95.4 million in the second quarter of 2023. The increase in non-interest expense for the current quarter compared to the prior quarter reflects a $1.5 million increase in salary and employee benefits, primarily resulting from normal annual salary and wage increases and an increase in loan production related commission expense, partially offset by a $963,000 increase in capitalized loan origination costs, primarily due to increased loan production. 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 payment and card processing services expense, partially offset by a decrease in professional and legal expenses. For the six months ended June 30, 2024, total non-interest expense was $195.8 million, compared to $190.0 million for the six months ended June 30, 2023. Banner's efficiency ratio was 65.53% for the second quarter of 2024, compared to 67.55% in the preceding quarter and 63.21% in the same quarter a year ago. Banner's adjusted efficiency ratio, a non-GAAP financial measure, was 63.60% for the second quarter of 2024, compared to 63.70% in the preceding quarter and 58.58% 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.

Federal and state income tax expense totaled $9.5 million for the second quarter of 2024 resulting in an effective tax rate of 19.2%, reflecting the benefits from tax exempt income. Banner's statutory income tax rate for the quarter ended June 30, 2024, 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 $15.82 billion at June 30, 2024, compared to $15.52 billion at March 31, 2024, and $15.58 billion at June 30, 2023. Securities and interest-bearing deposits held at other banks totaled $3.27 billion at June 30, 2024, compared to $3.32 billion at March 31, 2024 and $3.64 billion at June 30, 2023. The decrease compared to the prior quarter was primarily due to normal cash flows from the securities portfolio. The average effective duration of the securities portfolio was approximately 6.5 years at June 30, 2024, compared to 6.8 years at June 30, 2023.

Total loans receivable increased to $11.14 billion at June 30, 2024, compared to $10.87 billion at March 31, 2024, and $10.47 billion at June 30, 2023. One- to four-family residential loans increased 2% to $1.60 billion at June 30, 2024, compared to $1.57 billion at March 31, 2024, and increased 20% compared to $1.34 billion at June 30, 2023. 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 loan production, partially offset by the sale of $19.8 million of one- to four-family portfolio loans. Multifamily real estate loans decreased 11% to $717.1 million at June 30, 2024, compared to $809.1 million at March 31, 2024, and increased 2% compared to $699.8 million at June 30, 2023. The decrease in multifamily real estate compared to March 31, 2024 was primarily due to certain affordable housing loans transferring to small balance commercial real estate. The increase in multifamily real estate loans from June 30, 2023 was primarily the result of the conversion of affordable housing multifamily construction loans to the multifamily portfolio upon the completion of the construction phase as well as 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, partially offset by the transfer of certain affordable housing loans to small balance commercial real estate. Construction, land and land development loans increased 7% to $1.68 billion at June 30, 2024, compared to $1.57 billion at March 31, 2024, and increased 11% compared to $1.51 billion at June 30, 2023. The increase in construction, land and land development loans was primarily the result of new loan production and advances on multifamily construction loans, primarily related to affordable housing projects. Agricultural business loans increased 5% to $334.6 million at June 30, 2024, compared to $318.0 million at March 31, 2024 and increased 8% compared to $310.1 million at June 30, 2023, primarily due to new loan production and advances on agricultural lines of credit.

Loans held for sale were $13.4 million at June 30, 2024, compared to $9.4 million at March 31, 2024 and $60.6 million at June 30, 2023. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $75.0 million, compared to $65.9 million in the preceding quarter and $62.6 million in the second quarter a year ago. The decrease in loans held for sale compared to June 30, 2023 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 June 30, 2024 or March 31, 2024.

Total deposits decreased to $13.08 billion at June 30, 2024, compared to $13.16 billion at March 31, 2024 and $13.10 billion a year ago. Core deposits decreased 1% to $11.55 billion at June 30, 2024, compared to $11.67 billion at March 31, 2024, and decreased 2% compared to $11.74 billion at June 30, 2023. The decrease in core deposits primarily reflects clients using deposits for seasonal tax payments. Core deposits were 88% of total deposits at June 30, 2024, compared to 89% of total deposits at March 31, 2024 and 90% of total deposits at June 30, 2023. Certificates of deposit increased 3% to $1.53 billion at June 30, 2024, compared to $1.49 billion at March 31, 2024, and increased 12% compared to $1.36 billion a year earlier. The increase in certificates of deposit during the current quarter compared to the preceding quarter and second 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 second quarter a year ago was partially offset by a $98.3 million decrease in brokered deposits.

Banner Bank's estimated uninsured deposits were $4.09 billion or 31% of total deposits at June 30, 2024, compared to $4.18 billion or 31% of total deposits at March 31, 2024. The uninsured deposit calculation includes $326.5 million and $316.6 million of collateralized public deposits at June 30, 2024 and March 31, 2024, respectively. Uninsured deposits also include cash held by the holding company of $63.9 million and $113.9 million at June 30, 2024 and March 31, 2024, 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 June 30, 2024 and March 31, 2024.

Banner had $398.0 million of FHLB advances at June 30, 2024, compared to $52.0 million at March 31, 2024 and $270.0 million a year ago. At June 30, 2024, Banner's off-balance sheet liquidity included additional borrowing capacity of $3.02 billion at the FHLB and $1.59 billion at the Federal Reserve as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

At June 30, 2024, total common shareholders' equity was $1.69 billion, or 10.69% of total assets, compared to $1.66 billion or 10.73% of total assets at March 31, 2024, and $1.54 billion or 9.90% of total assets at June 30, 2023. The increase in total common shareholders' equity at June 30, 2024 compared to March 31, 2024 was primarily due to a $23.1 million increase in retained earnings as a result of $39.8 million in net income, partially offset by the accrual of $16.7 million of cash dividends during the second quarter of 2024. At June 30, 2024, tangible common shareholders' equity, a non-GAAP financial measure, was $1.31 billion, or 8.51% of tangible assets, compared to $1.29 billion, or 8.50% of tangible assets, at March 31, 2024, and $1.16 billion, or 7.64% 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, 2024, Banner's estimated common equity Tier 1 capital ratio was 12.02%, its estimated Tier 1 leverage capital to average assets ratio was 10.80%, and its estimated total capital to risk-weighted assets ratio was 14.62%. These regulatory capital ratios are estimates, pending completion and filing of Banner's regulatory reports.

Credit Quality

The allowance for credit losses - loans was $152.8 million, or 1.37% of total loans receivable and 498% of non-performing loans, at June 30, 2024, compared to $151.1 million, or 1.39% of total loans receivable and 513% of non-performing loans, at March 31, 2024, and $144.7 million, or 1.38% of total loans receivable and 513% of non-performing loans, at June 30, 2023. In addition to the allowance for credit losses - loans, Banner maintains an allowance for credit losses - unfunded loan commitments, which was $14.0 million at June 30, 2024, compared to $13.6 million at March 31, 2024, and $14.7 million at June 30, 2023. Net loan charge-offs totaled $245,000 in the second quarter of 2024, compared to net loan recoveries of $73,000 in the preceding quarter and net loan charge-offs of $336,000 in the second quarter a year ago. Non-performing loans were $30.7 million at June 30, 2024, compared to $29.5 million at March 31, 2024, and $28.2 million a year ago.

Substandard loans were $122.0 million at June 30, 2024, compared to $116.1 million at March 31, 2024 and $145.0 million a year ago. The increase from the prior quarter reflects downgrades of loans, partially offset by paydowns and payoffs of substandard loans. The decrease from the prior year quarter primarily reflects paydowns and payoffs of substandard loans as well as risk rating upgrades.

Total non-performing assets were $33.3 million, or 0.21% of total assets, at June 30, 2024, compared to $29.9 million, or 0.19% of total assets, at March 31, 2024, and $28.7 million, or 0.18% of total assets, a year ago.

Conference Call

Banner will host a conference call on Thursday July 18, 2024, 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 005428 to participate in the call. A replay of the call will be available at www.bannerbank.com.

About the Company

Banner Corporation is a $15.82 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) 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 past 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 elevated 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; (10) the effect of inflation on interest rate movements and their impact on client behavior and net interest margin; (11) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (12) fluctuations in real estate values; (13) the ability to adapt successfully to technological changes to meet clients' needs and developments in the market place; (14) the ability to access cost-effective funding; (15) 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; (16) changes in financial markets; (17) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (18) the costs, effects and outcomes of litigation; (19) 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; (20) changes in accounting principles, policies or guidelines; (21) future acquisitions by Banner of other depository institutions or lines of business; (22) future goodwill impairment due to changes in Banner's business or changes in market conditions; (23) 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; (24) environmental, social and governance goals and targets; (25) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (26) 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									Six Months Ended
(in thousands except shares and per share data)	Jun 30, 2024			Mar 31, 2024			Jun 30, 2023			Jun 30, 2024			Jun 30, 2023
INTEREST INCOME:
Loans receivable	$	161,191		$	156,475		$	140,848		$	317,666		$	274,105
Mortgage-backed securities		16,708			16,934			18,285			33,642			37,263
Securities and cash equivalents		11,239			11,279			12,676			22,518			27,402
Total interest income		189,138			184,688			171,809			373,826			338,770
INTEREST EXPENSE:
Deposits		48,850			44,613			20,539			93,463			29,783
Federal Home Loan Bank (FHLB) advances		3,621			2,972			5,157			6,593			6,421
Other borrowings		1,160			1,175			771			2,335			1,152
Subordinated debt		2,961			2,969			2,824			5,930			5,584
Total interest expense		56,592			51,729			29,291			108,321			42,940
Net interest income		132,546			132,959			142,518			265,505			295,830
PROVISION FOR CREDIT LOSSES		2,369			520			6,764			2,889			6,240
Net interest income after provision for credit losses		130,177			132,439			135,754			262,616			289,590
NON-INTEREST INCOME:
Deposit fees and other service charges		10,590			11,022			10,600			21,612			21,162
Mortgage banking operations		3,006			2,335			1,686			5,341			4,377
Bank-owned life insurance		2,367			2,237			2,386			4,604			4,574
Miscellaneous		1,988			1,892			1,428			3,880			3,068
		17,951			17,486			16,100			35,437			33,181
Net loss on sale of securities		(562	)		(4,903	)		(4,527	)		(5,465	)		(11,779	)
Net change in valuation of financial instruments carried at fair value		(190	)		(992	)		(3,151	)		(1,182	)		(3,703	)
Total non-interest income		17,199			11,591			8,422			28,790			17,699
NON-INTEREST EXPENSE:
Salary and employee benefits		63,831			62,369			61,972			126,200			123,361
Less capitalized loan origination costs		(4,639	)		(3,676	)		(4,457	)		(8,315	)		(7,888	)
Occupancy and equipment		12,128			12,462			11,994			24,590			23,964
Information and computer data services		7,240			7,320			7,082			14,560			14,229
Payment and card processing services		5,691			5,710			4,669			11,401			9,287
Professional and legal expenses		1,201			1,530			2,400			2,731			4,521
Advertising and marketing		1,198			1,079			940			2,277			1,746
Deposit insurance		2,858			2,809			2,839			5,667			4,729
State and municipal business and use taxes		1,394			1,304			1,229			2,698			2,529
Real estate operations, net		297			(220	)		75			77			(202	)
Amortization of core deposit intangibles		724			723			991			1,447			2,041
Miscellaneous		6,205			6,231			5,671			12,436			11,709
Total non-interest expense		98,128			97,641			95,405			195,769			190,026
Income before provision for income taxes		49,248			46,389			48,771			95,637			117,263
PROVISION FOR INCOME TAXES		9,453			8,830			9,180			18,283			22,117
NET INCOME	$	39,795		$	37,559		$	39,591		$	77,354		$	95,146
Earnings per common share:
Basic	$	1.15		$	1.09		$	1.15		$	2.25		$	2.77
Diluted	$	1.15		$	1.09		$	1.15		$	2.24		$	2.76
Cumulative dividends declared per common share	$	0.48		$	0.48		$	0.48		$	0.96		$	0.96
Weighted average number of common shares outstanding:
Basic		34,488,163			34,391,564			34,373,434			34,439,863			34,306,853
Diluted		34,537,012			34,521,105			34,409,024			34,539,620			34,435,221
Increase in common shares outstanding		60,531			46,852			36,087			107,383			150,609

FINANCIAL CONDITION													Percentage Change
(in thousands except shares and per share data)	Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Jun 30, 2023			Prior Qtr		Prior Yr Qtr
ASSETS
Cash and due from banks	$	195,163		$	168,427		$	209,634		$	229,918		15.9	%	(15.1	)%
Interest-bearing deposits		52,295			40,849			44,830			51,407		28.0	%	1.7	%
Total cash and cash equivalents		247,458			209,276			254,464			281,325		18.2	%	(12.0	)%
Securities - trading		—			—			—			25,659		nm		(100.0	)%
Securities - available for sale, amortized cost $2,572,544, $2,617,986, $2,729,980 and $2,879,179, respectively		2,197,693			2,244,939			2,373,783			2,465,960		(2.1	)%	(10.9	)%
Securities - held to maturity, fair value $852,709, $869,097, $907,514 and $933,116, respectively		1,023,028			1,038,312			1,059,055			1,098,570		(1.5	)%	(6.9	)%
Total securities		3,220,721			3,283,251			3,432,838			3,590,189		(1.9	)%	(10.3	)%
FHLB stock		27,311			11,741			24,028			20,800		132.6	%	31.3	%
Loans held for sale		13,421			9,357			11,170			60,612		43.4	%	(77.9	)%
Loans receivable		11,143,848			10,869,096			10,810,455			10,472,407		2.5	%	6.4	%
Allowance for credit losses – loans		(152,848	)		(151,140	)		(149,643	)		(144,680	)	1.1	%	5.6	%
Net loans receivable		10,991,000			10,717,956			10,660,812			10,327,727		2.5	%	6.4	%
Accrued interest receivable		67,520			66,124			63,100			57,007		2.1	%	18.4	%
Property and equipment, net		126,465			129,889			132,231			135,414		(2.6	)%	(6.6	)%
Goodwill		373,121			373,121			373,121			373,121		—	%	—	%
Other intangibles, net		4,237			4,961			5,684			7,399		(14.6	)%	(42.7	)%
Bank-owned life insurance		307,948			306,600			304,366			301,260		0.4	%	2.2	%
Operating lease right-of-use assets		39,628			40,834			43,731			45,812		(3.0	)%	(13.5	)%
Other assets		397,364			365,169			364,846			384,070		8.8	%	3.5	%
Total assets	$	15,816,194		$	15,518,279		$	15,670,391		$	15,584,736		1.9	%	1.5	%
LIABILITIES
Deposits:
Non-interest-bearing	$	4,537,803		$	4,699,553		$	4,792,369		$	5,369,187		(3.4	)%	(15.5	)%
Interest-bearing transaction and savings accounts		7,016,327			6,973,338			6,759,661			6,373,269		0.6	%	10.1	%
Interest-bearing certificates		1,525,133			1,485,880			1,477,467			1,356,600		2.6	%	12.4	%
Total deposits		13,079,263			13,158,771			13,029,497			13,099,056		(0.6	)%	(0.2	)%
Advances from FHLB		398,000			52,000			323,000			270,000		665.4	%	47.4	%
Other borrowings		165,956			183,341			182,877			193,019		(9.5	)%	(14.0	)%
Subordinated notes, net		89,561			89,456			92,851			92,646		0.1	%	(3.3	)%
Junior subordinated debentures at fair value		66,831			66,586			66,413			67,237		0.4	%	(0.6	)%
Operating lease liabilities		44,056			45,524			48,659			51,234		(3.2	)%	(14.0	)%
Accrued expenses and other liabilities		235,515			211,578			228,428			223,565		11.3	%	5.3	%
Deferred compensation		46,246			46,515			45,975			45,466		(0.6	)%	1.7	%
Total liabilities		14,125,428			13,853,771

Banner Corporation Reports Net Income of $39.8 Million, or $1.15 Per Diluted Share, for Second Quarter 2024; Declares Quarterly Cash Dividend of $0.48 Per Share