Banner (BANR) investor relations material

Executive summary

• Net income for Q2 2026 was $48.9 million ($1.43 per diluted share), down from $54.7 million in Q1 2026 but up from $45.5 million in Q2 2025.

• Revenue from core operations rose to $172 million, a 6% increase from $163 million in Q2 2025.

• Core earnings (pre-tax, pre-provision, excluding non-core items) were $64.4 million, up from $62.5 million year-over-year.

• Board declared a $0.52 per share quarterly dividend, payable August 14, 2026.

• Announced agreement to acquire Pacific Financial Corporation (Bank of the Pacific), expected to close in Q3 2026, adding $1.3B in assets.

Financial highlights

• Net interest margin (tax equivalent) rose to 4.13% from 4.11% in Q1 2026 and 3.92% in Q2 2025.

• Return on average assets was 1.20%, down from 1.37% in Q1 2026 but up from 1.13% a year ago.

• Adjusted return on average tangible common equity was 12.27%.

• Efficiency ratio was 62.80%, with adjusted efficiency ratio at 61.30%.

• Allowance for credit losses on loans was 1.35% of total loans.

Outlook and guidance

• Expect mid-single-digit loan growth for the full year, with pipelines remaining strong despite some anticipated slowdown in Q3 originations.

• Deposit growth is expected to keep pace with loan growth, supported by seasonality and the upcoming Bank of the Pacific acquisition.

• Net interest margin may expand by 1-2 basis points in Q3, with funding costs expected to remain flat.

• Alternative capital actions (e.g., share buybacks) are on hold until the Bank of the Pacific deal closes, expected in Q3.

• Management expects strategic investments in technology to enhance efficiency and support long-term growth.