Banner (BANR) investor relations material

Executive summary

• Q3 net income was $47.7M, or $1.36 per diluted share, versus $48.9M/$1.43 in Q2 and $53.5M/$1.54 YoY; results included $5.2M of merger-related costs.

• Pacific Financial and organic loan growth lifted net interest income; higher non-interest expense and a $2.1M securities-sale loss partly offset the benefit.

• Core revenue rose 6% YoY to $179M, and core pre-tax, pre-provision earnings were $68.6M.

Financial highlights

• Revenue was $177.3M, up 3% QoQ and 4% YoY; net interest income was $161.9M versus $153.7M in Q2 and $150.0M YoY.

• Nine-month net income was $151.3M, or $4.39 per diluted share, versus $144.1M and $4.15 in 9M 2025; 2026 included $5.4M in merger costs and a $3.3M securities-sale loss.

• Non-interest income was $15.4M, down from $18.2M QoQ, including a $2.1M loss on sale of the acquired investment portfolio; non-interest expense was $115.7M versus $108.0M QoQ.

• Q3 provision for credit losses was $2.8M: $1.8M for loans and $1.0M for unfunded commitments.

Outlook and guidance

• Q4 NIM expected to expand, supported by repricing of ~25% of loans and acquired assets; deposit-cost pressure is expected to carry over.

• Loan growth expected at a mid-single-digit pace through year-end 2026 and into 2027; commercial and CRE pipelines remained healthy, though higher rates may weigh on demand.

• 2027 NIM outlook depends on Fed policy: modest expansion under stable or higher rates, versus flat to moderate compression if rates decline.

• Pacific Financial cost synergies target 40%: 10% achieved, a further 20% expected from Jan. 1, 2027, and the final 10% by mid-2027.

• Systems integration and core conversion were planned for November 2026; operating-efficiency investments are expected to support positive operating leverage in 2027.