About Banner

Banner Corporation (Banner) operates as the bank holding company for Banner Bank that offers a wide variety of commercial banking services and financial products to individuals, businesses, and public sector entities in its primary market areas. The bank's primary business is that of traditional banking institutions, accepting deposits and originating loans in locations surrounding the company's offices in Washington, Oregon, California and Idaho. In addition, the bank originates loans in the area surrounding its loan production office located in Utah. The bank is also an active participant in secondary loan markets, engaging in mortgage banking operations largely through the origination and sale of one- to four-family residential loans. Lending activities include commercial business and commercial real estate loans, agriculture business loans, construction and land development loans, one- to four-family and multifamily residential loans, the U.S. Small Business Administration (SBA) loans and consumer loans. The bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington and its branch offices and loan production offices located in Washington, Oregon, California, Idaho and Utah. Banner is subject to regulation by the Federal Reserve. The bank is subject to regulation by the Washington DFI and the FDIC. The company also focuses on expanding its product offerings and investing heavily in marketing campaigns designed to significantly increase the brand awareness for the bank. These marketing investments are a significant element in the company's strategy to grow client relationships and increase the company's market presence, while allowing the company to better serve existing and future clients. The company's overall strategy is focused on delivering clients-including middle market and small businesses, business owners, their families and employees. Lending Activities All of the company's lending activities are conducted through the bank and its subsidiary, Community Financial Corporation, a residential construction lender located in Portland, Oregon. The company offers a wide range of loan products to meet the demands of the company's clients and the company's loan portfolio is very diversified by product type, borrower and geographic location within the company's market area. The company originates loans for its portfolio and for sale in the secondary market. The company offers a variety of floating or adjustable interest rate products that correlate more closely with the company's cost of interest-bearing funds, particularly loans for commercial business and real estate, agricultural business, and construction and development purposes. In response to client demand, the company also originates fixed-rate loans, including fixed interest rate mortgage loans with terms of up to 30 years. The relative amount of fixed-rate loans and adjustable-rate loans that can be originated at any time is largely determined by the demand for each in a competitive environment. The company's lending activities are primarily directed toward the origination of commercial real estate and business loans. Commercial real estate loans include owner-occupied, investment properties and multifamily residential real estate. The company also originates residential one- to four-family loans and construction, and land and land development loans, of which a significant component are residential one- to four-family construction loans. The company's commercial business lending is directed toward meeting the credit and related deposit and treasury management needs of various small- to medium-sized business and agribusiness borrowers operating in the company's primary market areas. To a lesser extent, the company's commercial business lending has also included participation in certain national syndicated loans. Typically, most of the one- to four-family loans that the company originates are sold in the secondary markets with net gains on sales and loan servicing fees reflected in the company's revenues from mortgage banking. The company's consumer loan activity is primarily directed at meeting demand from its existing deposit clients. One- to Four-Family Residential Real Estate Lending The company originates loans secured by first mortgages on one- to four-family residences in the markets the company serve. Through the company's mortgage banking activities, the company sell residential loans on either a servicing-retained or servicing-released basis. The company have generally sold a significant portion of the company's conventional residential mortgage originations and nearly all of the company's government insured loans in the secondary market. As of December 31, 2023 14% of the loan portfolio, $1.52 billion, consisted of permanent one- to four-family residences. The company offers fixed- and adjustable-rate mortgages (ARMs) at rates and terms competitive with market conditions, primarily with the intent of selling these loans into the secondary market. The company's residential loans are generally underwritten and documented in accordance with the guidelines established by the Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC) and the Federal National Mortgage Association (Fannie Mae or FNMA). Government insured loans are underwritten and documented in accordance with the guidelines established by the Department of Housing and Urban Development and the Department of Veterans Affairs. Construction and Land Lending Historically, the company has invested a significant portion of the company's loan portfolio in residential construction and land loans to professional home builders and developers. The company's land loans are typically on improved or entitled land, versus raw land. On a more limited basis, the company also makes land and land development loans to developers, builders and individuals to finance the acquisition and/or development of improved lots or unimproved land. The company also makes construction loans to qualified owner occupants, which upon the completion of the construction phase convert to long-term amortizing one- to four-family residential loans that are eligible for sale in the secondary market. The company also originates construction loans for commercial and multifamily real estate. Commercial and Multifamily Real Estate Lending The company originates loans secured by multifamily and commercial real estate, including loans for construction of multifamily and commercial real estate projects. Commercial real estate loans are made for both owner-occupied and investor-owned properties. Multifamily and commercial real estate loans originated by the company is both fixed- and adjustable-rate loans with intermediate terms of generally five to 10 years. A significant portion of the company's multifamily and commercial real estate loans are linked to various FHLB advance rates, certain prime rates, the U.S. Treasury rates, or other market rate indices. The company's commercial real estate portfolio consists of loans on a variety of property types with no large concentrations by property type, location or borrower. Commercial Business Lending The company is active in small- to medium-sized business lending. The company's commercial bankers are focused on local markets and devote a great deal of effort to developing client relationships and providing these types of borrowers with a full array of products and services delivered in a thorough and responsive manner. The company also originates smaller balance business loans principally through its retail branch network, using the company's QuickStep business loan program, which is closely aligned with the company's consumer lending operations and relies on centralized underwriting procedures. The company's commercial business loans may be structured as term loans or as lines of credit. Commercial business term loans are generally made to finance the purchase of fixed assets and have maturities of five years or less. Agricultural Lending Agriculture is a major industry in several of the company's markets. The company makes agricultural loans to borrowers with a strong capital base, sufficient management depth, proven ability to operate through agricultural cycles, reliable cash flows and adequate financial reporting. The company also originates loans to finance the purchase of farm equipment. Loans to purchase farm equipment are made for terms of up to seven years. On occasion, the company also originates agricultural real estate loans secured primarily by first liens on farmland and improvements thereon located in the company's market areas, although generally only to service the needs of the company's existing clients. Consumer and Other Lending The company originates a variety of consumer loans, including home equity lines of credit; automobile, boat and recreational vehicle loans; and loans secured by deposit accounts. Loan Solicitation and Processing The company originates real estate loans in its market areas by direct solicitation of builders, developers, depositors, walk-in clients, real estate brokers and visitors to the company's website. One- to four-family residential loan applications are taken by the company's mortgage loan officers or through the company's website and are processed in branch or regional locations. In addition, the company has specialized loan origination units focused on construction and land development, commercial real estate and multifamily loans. Most underwriting and loan administration functions for the company's real estate loans are performed by loan personnel at central locations. In addition to commercial real estate loans, the company's commercial bankers solicit commercial and agricultural business loans through call programs focused on local businesses and farmers. The company originates consumer loans and small business (including QuickStep) commercial business loans through various marketing efforts directed primarily toward the company's existing deposit and loan clients. Loan Servicing Mortgage and SBA Servicing Rights: The company records mortgage servicing rights (MSRs) with respect to loans the company originates and sells in the secondary market on a servicing-retained basis and SBA servicing rights with respect to the guaranteed portion of SBA loans the company sells. Investment Securities As of December 31, 2023, the company's investment securities consisted of U.S. government and agency obligations; municipal bonds, corporate bonds, mortgage-backed or related securities, and asset-backed securities. Deposit Activities and Other Sources of Funds Deposits, FHLB advances (or other borrowings) and loan repayments are the company's major sources of funds for lending and other investment purposes. The company's efforts, including acquisitions, branch relocations, renovations, and marketing campaigns, are primarily focused on expanding deposit client relationships and balances. In addition, the company's electronic and digital banking activities, encompassing debit card and ATM programs, internet banking services, and remote deposit and mobile banking capabilities, aim to offer products and services that not only enhance client relationships but also contribute to the growth of deposit balances and generate fee income. Core deposits, consisting of non-interest-bearing checking accounts and interest-bearing transaction and savings accounts, constitute a fundamental element of the company's business strategy. Deposit Accounts: The company generally attracts deposits from within its primary market areas by offering a broad selection of deposit instruments, including non-interest-bearing checking accounts, interest-bearing checking accounts, money market deposit accounts, regular savings accounts, certificates of deposit, treasury management services, and retirement savings plans. Regulation The company is subject to regulation by the Federal Reserve. The company is also required to file certain reports with, and otherwise comply with the rules and regulations of the SEC. Under the Bank Holding Company Act of 1956, as amended, the company is supervised by the Federal Reserve. The company's common stock is registered with the SEC under Section 12(b) of the Securities Exchange Act of 1934, as amended. The company is subject to information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934 (the Exchange Act). The Dodd-Frank Act imposes various restrictions and an expanded framework of regulatory oversight for financial institutions, including depository institutions, and implements certain capital regulations applicable to the company and the bank. The bank is subject to regulation by the Washington DFI and the FDIC. The Deposit Insurance Fund of the FDIC insures deposit accounts of the bank up to $250,000 per separately insured deposit relationship category. The FDIC conducts examinations of and requires reporting by state non-member banks, such as the bank. The bank is subject to the provisions of the Community Reinvestment Act of 1977 (CRA). The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLBA) modernized the financial services industry by establishing a comprehensive framework to permit affiliations among commercial banks, insurance companies, securities firms and other financial service providers. Federal banking agencies, including the FDIC, have adopted guidelines for establishing information security standards and cybersecurity programs for implementing safeguards under the supervision of the board of directors. These guidelines, along with related regulatory materials, increasingly focus on risk management and processes related to information technology and the use of third parties in the provision of financial services. These regulations require the bank to disclose its privacy policy, including informing consumers of its information sharing practices and informing consumers of their rights to opt out of certain practices. The bank's policies and procedures are designed to comply with the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA Patriot Act). The bank and its affiliates and subsidiaries are subject to CFPB supervisory and enforcement authority. The bank is subject to a broad array of federal and state consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers. While the list set forth below is not exhaustive, these include the Truth-in-Lending Act, the Truth in Savings Act, the Electronic Fund Transfers Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Home Mortgage Disclosure Act, the Fair Credit Reporting Act, the Right to Financial Privacy Act, the Home Ownership and Equity Protection Act, the Fair Credit Billing Act, the Homeowners Protection Act, the Check Clearing for the 21st Century Act, laws governing flood insurance, laws governing consumer protections in connection with the sale of insurance, federal and state laws prohibiting unfair and deceptive business practices, and various regulations that implement some or all of the foregoing. History Banner Corporation was founded in 1890. The company was incorporated in 1998.