BANNER CORP (BANR)

ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Banner is a bank holding company incorporated in the State of Washington, which wholly owns its subsidiary bank, Banner Bank. The Bank is a Washington-chartered commercial bank that conducts business from its main office in Walla Walla, Washington, and as of March 31, 2026, it had 135 branch offices and 15 loan production offices located in Washington, Oregon, California, Idaho, Utah and Nevada.  Banner is subject to regulation by the Federal Reserve.  The Bank is subject to regulation by the Washington State Department of Financial Institutions – Division of Banks (the DFI) and the Federal Deposit Insurance Corporation (the FDIC).  As of March 31, 2026, we had total consolidated assets of $16.34 billion, total loans of $11.71 billion, total deposits of $13.84 billion and total shareholders’ equity of $1.97 billion.

The Bank is a regional 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 our offices.  The Bank is also an active participant in secondary loan markets, engaging in mortgage banking operations 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, SBA loans and consumer loans.

The Company’s successful execution of its super community bank model and strategic initiatives has delivered solid core operating results and profitability over the last several years. The Company’s longer term strategic initiatives continue to focus on originating high quality assets and client acquisition, which we believe will continue to generate strong revenue while maintaining the Company’s moderate risk profile.

First Quarter 2026 Financial Highlights

•Net interest margin, on a tax equivalent basis, was 4.11% for current quarter, compared to 4.03% in the preceding quarter.

•Revenue was $169.3 million for the first quarter of 2026, compared to $167.7 million in the preceding quarter.

•Net interest income was $150.2 million in the first quarter of 2026, compared to $152.4 million in the preceding quarter.

•Mortgage banking operations revenue was $3.2 million for the first quarter of 2026, compared to $3.6 million in the preceding quarter.

•Return on average assets was 1.37%, compared to 1.24% in the preceding quarter.

•Net loans receivable were $11.55 billion at March 31, 2026, compared to $11.56 billion at December 31, 2025.

•Total deposits increased to $13.84 billion at March 31, 2026, compared to $13.74 billion at December 31, 2025.

•Core deposits represented 89% of total deposits at March 31, 2026.

•Non-performing assets were $51.7 million, or 0.32% of total assets, at March 31, 2026, compared to $51.2 million, or 0.31% of total assets at December 31, 2025.

•The allowance for credit losses - loans was $160.4 million, or 1.37% of total loans receivable, as of March 31, 2026, compared to $160.3 million, or 1.37% of total loans receivable, at December 31, 2025.

•Dividends paid to shareholders were $0.50 per share in the quarter ended March 31, 2026.

•Common shareholders’ equity per share increased 2% to $58.06 at March 31, 2026, compared to $57.08 at December 31, 2025.

•Tangible common shareholders’ equity per share* increased 2% to $47.00 at March 31, 2026, compared to $46.09 at December 31, 2025.

•Repurchased 250,000 shares of Banner common stock during the first quarter of 2026 at an average price of $64.56 per share.

*Non-GAAP Financial Measures: Management has presented non-GAAP financial measures in this discussion and analysis because it believes these measures provide useful and comparative information to assess trends in our core operations and to 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, we have also presented comparable earnings information using GAAP financial measures. For a reconciliation of these non-GAAP financial measures, see the tables below. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies.

Adjusted revenue, adjusted diluted earnings per share, adjusted return on average assets, adjusted return on average equity, return on average tangible common equity, and adjusted efficiency ratio are non-GAAP financial measures. To calculate these non-GAAP measures, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations. Management believes that these non-GAAP financial measures provide information to investors that is useful in evaluating the operating performance and trends of financial services companies, including the Company (dollars in thousands except per share data).

45

Table of Contents

(1)Adjusted earnings (non-GAAP) divided by average assets.

(2)Adjusted earnings (non-GAAP) divided by average equity.

(3)Tangible net income (non-GAAP) divided by average tangible common equity (non-GAAP).

(4)Adjusted non-interest expense (non-GAAP) divided by adjusted revenue (non-GAAP).

46

Table of Contents

The ratio of tangible common shareholders’ equity to tangible assets is also a non-GAAP financial measure. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholders’ equity. We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets. We believe that this is consistent with the treatment by our bank regulatory agencies, which exclude goodwill and other intangible assets from the calculation of risk-based capital ratios. Management believes that this non-GAAP financial measure provides information to investors that is useful in understanding the basis of our capital position (dollars in thousands except share and per share data).

[[GREPCENT_TABLE]]
[["TANGIBLE COMMON SHAREHOLDERS\u2019 EQUITY TO TANGIBLE ASSETS"],["","March 31, 2026","","December 31, 2025","","","","March 31, 2025"],["Shareholders\u2019 equity (GAAP)","$","1,966,634","","","$","1,946,297","","","","","$","1,833,453"],["Exclude goodwill and other intangible assets, net","374,356","","","374,612","","","","","375,723"],["Tangible common shareholders\u2019 equity (non-GAAP)","$","1,592,278","","","$","1,571,685","","","","","$","1,457,730"],["Total assets (GAAP)","$","16,344,272","","","$","16,354,488","","","","","$","16,170,812"],["Exclude goodwill and other intangible assets, net","374,356","","","374,612","","","","","375,723"],["Total tangible assets (non-GAAP)","$","15,969,916","","","$","15,979,876","","","","","$","15,795,089"],["Common shareholders\u2019 equity to total assets (GAAP)","12.03","%","","11.90","%","","","","11.34","%"],["Tangible common shareholders\u2019 equity to tangible assets (non-GAAP)","9.97","%","","9.84","%","","","","9.23","%"],["TANGIBLE COMMON SHAREHOLDERS\u2019 EQUITY PER SHARE"],["","March 31, 2026","","December 31, 2025","","","","March 31, 2025"],["Shareholders\u2019 equity (GAAP)","$","1,966,634","","","$","1,946,297","","","","","$","1,833,453"],["Tangible common shareholders\u2019 equity (non-GAAP)","$","1,592,278","","","$","1,571,685","","","","","$","1,457,730"],["Common shares outstanding at end of period","33,875,098","","","34,097,856","","","","","34,489,972"],["Common shareholders\u2019 equity (book value) per share (GAAP)","$","58.06","","","$","57.08","","","","","$","53.16

[Excerpt truncated for page length; source filing is linked above.]

Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist in understanding our financial condition and results of operations. The information contained in this section should be read in conjunction with the Consolidated Financial Statements and accompanying Notes to the Consolidated Financial Statements contained in this Form 10-K.

Executive Overview

Banner’s successful execution of its super community bank model and strategic initiatives has delivered solid core operating results and profitability over the last several years. The Company’s longer term strategic initiatives continue to focus on originating high-quality assets and client acquisition, which we believe will continue to generate strong revenue while maintaining the Company’s moderate risk profile.

2025 Financial Highlights

•Net interest margin, on a tax equivalent basis, was 3.96% compared to 3.75% in the prior year.

•Revenues were $660.7 million for the year ended December 31, 2025, compared to $608.6 million for the prior year.

•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 gains or losses incurred on building and lease exits) was $661.5 million for the year ended December 31, 2025, compared to $614.8 million for the prior year.

•Net interest income was $587.9 million for the year ended December 31, 2025, compared to $541.7 million for the prior year.

•Mortgage banking revenue was $13.2 million for the year ended December 31, 2025, compared to $12.2 million in the prior year.

•Income from deposit fees and other service charges was $43.2 million for the year ended December 31, 2025, compared to $43.4 million for the prior year.

•Return on average assets was 1.21% for year ended December 31, 2025, compared to 1.07% for the prior year.

•Net loans receivable increased 3% to $11.56 billion at December 31, 2025, compared to $11.20 billion a year ago.

•Total deposits were $13.74 billion at December 31, 2025, compared to $13.51 billion a year ago.

•Core deposits represented 89% of total deposits at December 31, 2025.

•Non-performing assets were $51.2 million, or 0.31% of total assets, at December 31, 2025, compared to $39.6 million, or 0.24% of total assets, a year ago.

•The allowance for credit losses - loans was $160.3 million, or 1.37% of total loans receivable, at December 31, 2025, compared to $155.5 million, or 1.37% of total loans receivable a year ago.

•Cash dividends paid to shareholders were $1.94 per share, up from $1.92 per share paid in the prior year.

•Common shareholders’ equity per share increased to $57.08 at December 31, 2025, compared to $51.49 a year ago.

•Tangible common shareholders’ equity per share* increased 14% to $46.09 at December 31, 2025, compared to $40.57 a year ago.

* Represents a non-GAAP financial measure. For a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure, see “Non-GAAP Financial Measures” below.

33

Table of Contents

Selected Financial Data: The following condensed consolidated statements of financial condition and operations and selected performance ratios as of December 31, 2025, 2024 and 2023, and for the years then ended have been derived from our audited consolidated financial statements.

34

Table of Contents

(1)Includes available-for-sale and held-to-maturity securities.

(2)Calculated using common shares outstanding at the end of the period.

(3)Net income divided by average assets.

(4)Adjusted earnings (non-GAAP) divided by average assets.

(5)Net income divided by average common equity.

(6)Adjusted earnings (non-GAAP) divided by average equity.

(7)Net income divided by average tangible common equity.

(8)Net interest income as a percent of average interest-earning assets on a tax equivalent basis.

(9)Non-interest expenses divided by the total of net interest income and non-interest income.

(10)Non-performing loans consist of nonaccrual loans and loans 90 days or more past due and still accruing interest. Non-performing assets consist of non-performing loans and REO.

(11)Represents a non-GAAP financial measure. For a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure, see, “Non-GAAP Financial Measures” below.

Non-GAAP Financial Measures

Management has presented non-GAAP financial measures in this discussion and analysis because it believes that they provide useful information to assess trends in our core operations and to facilitate the comparison of our performance with our peers. However, these non-GAAP financial measures are supplemental to, and not a substitute for, any analysis based on GAAP. The most directly comparable GAAP financial measures are presented with equal or greater prominence. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, see the tables below. Because not all companies use the same calculations, our presentation may not be comparable to other similarly titled measures as calculated by other companies.

35

Table of Contents

Adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio are non-GAAP financial measures. To calculate adjusted revenue, diluted adjusted earnings per share and adjusted efficiency ratio, we make adjustments to our GAAP revenues and expenses as reported on our Consolidated Statements of Operations. Management believes that these non-GAAP financial measures provide information to investors that is useful in evaluating the operating performance and trends of financial services companies, including the Company, by excluding certain items that Management considers not reflective of core operating performance. The following tables set forth reconciliations of these non-GAAP financial measures (dollars in thousands, except share and per share data):

36

Table of Contents

The ratio of tangible common shareholders’ equity to tangible assets is a non-GAAP financial measure. We calculate tangible common equity by excluding goodwill and other intangible assets from shareholders’ equity. We calculate tangible assets by excluding the balance of goodwill and other intangible assets from total assets. Bank regulatory capital measures also exclude goodwill and certain intangible assets; however, tangible common equity and tangible assets as presented here are non-GAAP financial measures and should not be considered substitutes for regulatory capital ratios. The following table sets forth the reconciliation of tangible equity and tangible assets (dollars in thousands, except share and per share data).

37

Table of Contents

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires Management to make estimates, assumptions and judgments that affect amounts reported in the consolidated financial statements. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. Management believes the following estimates require difficult, subjective or complex judgments and, therefore, Management considers the following to be critical accounting estimates.

Allowance for Credit Losses: The allowance for credit losses reflects Management’s evaluation of our loans and unfunded loan commitments along with their estimated loss potential, as well as the risk inherent in various components of the portfolio. Significant judgments and assumptions are applied in estimating the allowance for credit losses. These judgments, assumptions and estimates are susceptible to significant changes based on the current environment. Among the material estimates required to establish the allowance for credit losses are a reasonable and supportable forecast; a reasonable and supportable forecast period and the reversion period; value of collateral; strength of guarantors; the amount and timing of future cash flows for loans individually evaluated; and determination of the qualitative loss factors.

Management estimates the allowance for credit losses using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is maintained at a level sufficient to provide for expected credit losses over the life of the asset based on evaluating historical credit loss experience and making adjustments to historical loss information for differences in the specific risk characteristics in the current portfolio. These factors include, among others, changes in the size and composition of the portfolio, differences in underwriting standards, delinquency rates, actual loss experience and current economic conditions.

Management considers various economic scenarios and forecasts to arrive at the estimate that most reflects Management’s expectations of future conditions. As of December 31, 2025, Management used a baseline forecast to estimate the allowance for credit losses. The selection of a more optimistic or pessimistic economic forecast would result in a lower or higher allowance for credit losses. While there are multiple economic forecast scenarios available, the use of a protracted slump economic forecast would have increased the allowance for credit losses - loans by approximately 10% as of December 31, 2025, where the use of a stronger near-term growth economic forecast would have resulted in a negligible decrease in the allowance for credit losses - loans as of December 31, 2025.

Management uses a scale to assign qualitative and environmental (QE) factor adjustments based on the level of estimated impact which requires a significant amount of judgment. Some QE factors impact all loan segments equally while others may impact some loan segments more or less than others. If Management’s judgment was different for a QE factor that impacts all loan segments equally, a five basis-point change in this QE factor would increase or decrease the allowance for credit losses by approximately 4% as of December 31, 2025.

Fair Value Accounting and Measurement: We use fair value measurements to record certain financial assets and liabilities at their estimated fair value. A hierarchical disclosure framework associated with the level of pricing observability is utilized in measuring financial instruments at fair value. The degree of judgment utilized in measuring the fair value of financial instruments generally correlates to the level of pricing observability. Financial instruments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial instruments rarely traded or not quoted will generally have little or no pricing observability and a higher degree of judgment utilized in measuring fair value. Determining the fair value of financial instruments with unobservable inputs requires a significant amount of judgment. This includes the discount rate used to fair value our trust preferred securities and junior subordinated debentures. A 25 basis-point increase or decrease in the discount rate used to calculate the fair value of our trust preferred securities would result in a $628,000 decrease or increase in the reported fair value as of December 31, 2025, with an offsetting adjustment to our accumulated other comprehensive income. A 25 basis-point increase or decrease in the discount rate used to calculate the fair value of our junior subordinated debentures would result in a $1.6 million decrease or increase in the reported fair value as of December 31, 2025, with an offsetting adjustment to our accumulated other comprehensive income.

38

Table of Contents

Comparison of Financial Condition at December 31, 2025 and 2024

General. Total assets increased to $16.35 billion at December 31, 2025, compared to $16.20 billion at December 31, 2024, primarily due to loan growth, partially offset by decreases in cash and securities.

Total loans receivable (gross loans less deferred fees and discounts and excluding loans held for sale) increased $367.0 million, or 3%, to $11.72 billion at December 31, 2025, from $11.35 billion at December 31, 2024.  The increase in total loans receivable primarily reflects growth in commercial real estate, construction, land and land development, and consumer loan balances.

The aggregate of securities and interest-bearing cash deposits decreased $187.2 million, or 5%, to $3.22 billion at December 31, 2025, compared to $3.40 billion a year earlier, primarily due to decreases in available-for-sale securities.  Securities decreased to $2.98 billion at December 31, 2025, from $3.11 billion at December 31, 2024, due to normal security portfolio cash flows. Fair value adjustments for securities designated as available-for-sale reflected an increase of $99.3 million for the year ended December 31, 2025, which was included, net of the associated tax expense, as a component of other comprehensive income. The average effective duration of our securities portfolio was approximately 6.2 years at December 31, 2025, compared to 6.6 years at December 31, 2024.

Deposits increased $228.7 million, or 2%, to $13.74 billion at December 31, 2025, from $13.51 billion at December 31, 2024, with core deposits (which consist of non-interest-bearing checking accounts and interest-bearing transaction and savings accounts) increasing $196.1 million and certificates of deposit increasing $32.6 million. The increase in core deposits reflects increases in interest-bearing transaction and savings accounts, partially offset by a decrease in non-interest bearing deposits.  Core deposits were 89% of total deposits at both December 31, 2025 and 2024. Non-interest-bearing deposits decreased by $101.7 million, or 2%, to $4.49 billion from $4.59 billion at December 31, 2024, while interest-bearing transaction and savings accounts increased by $297.8 million, or 4%, to $7.72 billion at December 31, 2025, from $7.42 billion at December 31, 2024. Certificates of deposit increased $32.6 million, or 2%, to $1.53 billion at December 31, 2025, from $1.50 billion at December 31, 2024, primarily due to clients moving funds to higher yielding certificates of deposit. Brokered deposits totaled $50.0 million at December 31, 2025, compared to $50.3 million at December 31, 2024.

We had $150.0 million and $290.0 million of FHLB advances at December 31, 2025 and 2024, respectively. Other borrowings, consisting of retail repurchase agreements primarily related to client cash management accounts, decreased $17.5 million to $107.7 million at December 31, 2025, compared to $125.3 million at December 31, 2024. Junior subordinated debentures increased to $79.2 million at December 31, 2025, compared to $67.5 million at December 31, 2024, primarily as a result of fair value adjustments. The outstanding balance of the Company’s subordinated notes was fully repaid during the second quarter of 2025. Subordinated notes, net of issuance costs, totaled $80.3 million at December 31, 2024.

Total shareholders’ equity increased $172.0 million, to $1.95 billion at December 31, 2025, compared to $1.77 billion at December 31, 2024. The increase in shareholders’ equity primarily reflects $195.4 million of net income and a $69.3 million increase in AOCI, related primarily to unrealized gains on available-for-sale securities. This increase was partially offset by $67.7 million of cash dividends paid or accrued to common shareholders. In addition, there were 499,975 shares of common stock repurchased during the year ended December 31, 2025, at an average price of $63.14 per share. Common shareholder’s equity to total assets was 11.90% and 10.95% at December 31, 2025 and 2024, respectively. Tangible common shareholders’ equity (a non-GAAP financial measure), which excludes goodwill and other intangible assets was $1.57 billion, or 9.84% of tangible assets at December 31, 2025, compared to $1.40 billion, or 8.84% at December 31, 2024. The increase in tangible common shareholders’ equity as a percentage of tangible assets was primarily due to the previously mentioned increase in AOCI and an increase in retained earnings. The Company’s book value per share was $57.08 at December 31, 2025, compared to $51.49 per share a year ago, and its tangible book value per share (a non-GAAP financial measure) was $46.09 at December 31, 2025, compared to $40.57 per share a year ago. See, “Executive Overview - Non-GAAP Financial Measures” above for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Investments.  At December 31, 2025, our securities portfolio totaled $2.98 billion, consisting principally of mortgage-backed and mortgage-related securities.  Our investment levels may be increased or decreased depending upon Management’s projections as to the demand for funds to be used in our loan origination, deposit and other activities, and upon yields available on investment alternatives.  During the year ended December 31, 2025, our aggregate investment in securities decreased $128.6 million, primarily due to normal security portfolio cash flows. Mortgage-backed securities decreased $113.1 million and U.S. Government and agency obligations decreased $1.8 million, while municipal bonds increased $11.7 million, corporate debt obligations decreased $7.5 million and asset-backed securities decreased $18.2 million.

U.S. Government and Agency Obligations:  Our portfolio of U.S. Government and agency obligations had a carrying value of $6.4 million (with an amortized cost of $6.7 million) at December 31, 2025, a weighted average contractual maturity of 13.7 years and a weighted average coupon rate of 3.83%.  Many of these U.S. Government and agency obligations include call features which allow the issuing agency to call the securities at various dates prior to the final maturity.

Mortgage-Backed Obligations:  At December 31, 2025, our mortgage-backed and mortgage-related securities had a carrying value of $2.12 billion ($2.36 billion at amortized cost, with a net unrealized loss adjustment of $230.9 million).  The weighted average coupon rate of these securities was 2.60% and the weighted average contractual maturity was approximately 27 years, although we receive principal payments on these securities each month resulting in a much shorter expected average life.  As of December 31, 2025, 97% of the mortgage-backed and mortgage-related securities pay interest at a fixed rate.

39

Table of Contents

Municipal Bonds:  The carrying value of our tax-exempt bonds at December 31, 2025, was $506.2 million ($522.9 million at amortized cost), comprised of general obligation bonds (i.e., backed by the general credit of the issuer) and, to a lesser extent, revenue bonds (i.e., backed by revenues from the specific project being financed) issued by cities and counties and various housing authorities, and hospital, school, water and sanitation districts.  We also had taxable bonds in our municipal bond portfolio, which at December 31, 2025, had a carrying value of $67.7 million ($77.1 million at amortized cost).  Many of our qualifying municipal bonds are not rated by a nationally recognized credit rating agency due to the smaller size of the total issuance and a portion of these bonds have been acquired through direct private placement by the issuers. We have not experienced any defaults or payment deferrals on our current portfolio of municipal bonds.  Our combined municipal bond portfolio is geographically diverse, with the majority within the states of Washington, Oregon, Texas and California. At December 31, 2025, our municipal bond portfolio, including taxable and tax-exempt, had a weighted average maturity of approximately 22 years and a weighted average coupon rate of 3.15%.

Corporate Bonds:  Our corporate bond portfolio had a carrying value of $120.2 million ($118.5 million at amortized cost) at December 31, 2025.  At December 31, 2025, the portfolio had a weighted average maturity of 13 years and a weighted average coupon rate of 5.14%.

Asset-Backed Securities:  At December 31, 2025, our asset-backed securities portfolio had a carrying value of $152.5 million (with an amortized cost of $152.4 million), and was comprised of collateralized loan obligations.  The weighted average coupon rate of these securities was 5.81% and the weighted average contractual maturity was 16 years. At December 31, 2025, 100% of these securities had adjustable interest rates tied to three-month SOFR.

The following table sets forth certain information regarding carrying values and percentage of total carrying values of our portfolio of available-for-sale securities, carried at estimated fair market value, and held-to-maturity securities, carried at amortized cost, net of the allowance for credit losses - securities, as of December 31, 2025, 2024 and 2023 (dollars in thousands):

Table 1: Securities

40

Table of Contents

The following table shows the maturity or period to repricing of our available-for-sale and held-to-maturity securities as of December 31, 2025 (dollars in thousands):

Table 2: Securities Available-for-Sale and Held-to-Maturity—Maturity/Repricing and Rates

(1)Tax-exempt weighted average yield is calculated on a tax equivalent basis using a federal tax rate of 21% and a tax disallowance of 10%.

41

Table of Contents

Loans and Lending.  Loans are our most significant and generally highest yielding earning assets. We attempt to maintain a portfolio of loans to total deposits ratio at a level designed to enhance our revenues, while adhering to sound underwriting practices and appropriate diversification guidelines in order to maintain a moderate risk profile. Our loan-to-deposit ratio at December 31, 2025, was 86%. We offer a wide range of loan products to meet the demands of our clients. Our lending activities are primarily directed toward the origination of commercial real estate and business loans. While we originate a variety of loans, our ability to originate each type of loan depends upon the relative client demand and competition in each market we serve.  We continue to implement strategies designed to capture more market share and achieve increases in targeted loans. New loan originations and portfolio balances will continue to be significantly affected by economic activity and changes in interest rates.

The following table shows loan origination activity (excluding loans held for sale) for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Table 3: Loan Originations

One- to Four-Family Residential Lending:  At December 31, 2025, $1.57 billion, or 13% of our loan portfolio, consisted of permanent loans on one- to four-family residences.  We are active originators of one- to four-family residential loans in the communities we serve. The balance of loans for one- to four-family residences decreased by $18.1 million in 2025, compared to the prior year. This decrease reflects that payoffs of existing permanent loans exceeded the combination of new originations and conversions of one- to four-family construction loans to permanent loans.

Construction, Land and Land Development Lending:  Our construction loan originations have been relatively strong in recent years, as builders have expanded production and experienced strong home sales in many markets where we operate.  At December 31, 2025, construction, land and land development loans totaled $1.71 billion, or 15% of total loans. The largest shifts in this portfolio occurred in one- to four-family construction, land and land development loans. One- to four-family construction loans increased $93.2 million, or 18%, to $607.4 million at December 31, 2025, primarily due to new loan production and advances exceeding payoffs and the conversion of one- to four-family construction loans to permanent one- to four-family residential loans upon completion of construction. One- to four-family construction loans represented approximately 5% of our total loan portfolio at December 31, 2025, and included speculative construction loans, as well as “all-in-one” construction loans made to owner occupants that convert to permanent loans upon completion of the homes that, depending on market conditions, may be subsequently sold into the secondary market. Commercial construction loans increased $33.7 million, or 28%, to $156.0 million at December 31, 2025, primarily due to new loan production and advances exceeding the conversion of commercial construction loans to the commercial real estate portfolio upon the completion of the construction phase. Commercial construction loans represented approximately 1% of our total loan portfolio at December 31, 2025, comprised primarily of retail and industrial property construction projects. Land and land development loans increased $64.0 million, or 17%, to $433.7 million at December 31, 2025. Land and land development loans represented approximately 4% of our total loan portfolio at December 31, 2025, and were comprised of residential properties for personal use and development. Multifamily construction loans represented approximately 5% of our total loan portfolio at December 31, 2025, and were comprised of affordable housing projects and, to a lesser extent, market rate multifamily projects across our footprint.

Commercial and Multifamily Real Estate Lending:  We originate loans secured by commercial and multifamily real estate.  These loans include both fixed- and adjustable-rate loans with intermediate terms of generally five to 10 years.  At December 31, 2025, our loan portfolio included $4.05 billion of commercial real estate loans, or 35% of the total loan portfolio, and $850.8 million of multifamily real estate loans, or 7% of the total loan portfolio. The increase in commercial real estate loans primarily reflected a combination of new loan production and the conversion of commercial construction loans to the commercial real estate portfolio upon completion of the construction phase. Our commercial real estate portfolio consists of loans on a variety of property types with no significant concentrations by property type, borrowers or locations.  Approximately 13% of our commercial real estate portfolio was secured by retail property at December 31, 2025. Within this portfolio, we have limited exposure to the office sector, with only 5% of total loans secured by office properties, nearly 45% of which are owner-occupied. The decrease in multifamily real estate loans was primarily due to payoffs and paydowns exceeding new production, partially offset by the conversion of multifamily construction loans to the multifamily real estate portfolio upon completion of the construction phase.

42

Table of Contents

Commercial Business Lending:  Our commercial business lending is directed toward meeting the credit and related deposit needs of various small-to-medium-sized business and agribusiness borrowers operating in our primary market areas.  In addition to providing earning assets, this type of lending has helped increase our deposit base. At December 31, 2025, commercial business loans, including small business scored, totaled $2.41 billion, or 21% of total loans. Our commercial business lending, to a lesser extent, includes participation in certain syndicated loans, including shared national credits, which totaled $195.6 million, or 2% of our loan portfolio, at December 31, 2025.

Agricultural Lending:  Agriculture is a major industry in our footprint.  While agricultural loans are not a large part of our portfolio, we routinely make 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.  Payments on agricultural loans depend, to a large degree, on the results of operations of the related farm entity.  The repayment is also subject to other economic and weather conditions as well as market prices for agricultural products, which can be highly volatile at times.  At December 31, 2025, agricultural loans totaled $353.2 million, or 3% of the loan portfolio.

Consumer and Other Lending:  Consumer lending has traditionally been a modest part of our business with loans made primarily to accommodate our existing client base. At December 31, 2025, our consumer loans increased $47.1 million to $768.5 million, or 6% of our loan portfolio, compared to December 31, 2024.  As of December 31, 2025, 88% of our consumer loans were secured by one- to four-family residences through home equity lines of credit.

Loan Servicing Portfolio:  At December 31, 2025, we were servicing $3.14 billion of loans for others and held $14.3 million in escrow for our portfolio of loans serviced for others.  The loan servicing portfolio at December 31, 2025, was comprised of $1.39 billion of Freddie Mac residential mortgage loans, $958.9 million of Fannie Mae residential mortgage loans, $403.5 million of Oregon Housing residential mortgage loans, $78.6 million of SBA loans, and $309.2 million of other loans serviced for a variety of investors.  The portfolio included loans secured by property located primarily in the states of Washington, Oregon, Idaho, and California.  For the years ended December 31, 2025 and 2024, we recognized $8.1 million and $8.2 million of loan servicing income in our results of operations, respectively.

43

Table of Contents

The following table sets forth the composition of the Company’s loan portfolio, net of discounts and deferred fees and costs, by type of loan as of the dates indicated (dollars in thousands):

Table 4: Loan Portfolio Analysis

44

Table of Contents

The following table sets forth the Company’s loans by geographic concentration at December 31, 2025, 2024 and 2023 (dollars in thousands):

Table 5: Loans by Geographic Concentration

The geographic concentration of our commercial real estate portfolio, as of December 31, 2025, was 48% in Washington and 26% in California.

The following table sets forth at December 31, 2025, the dollar amount of loans maturing in our portfolio based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments.  Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less. Loan balances are net of unamortized premiums and discounts and exclude loans held for sale (in thousands):

Table 6: Loans by Maturity

Contractual maturities of loans do not necessarily reflect the actual life of such assets.  The average life of loans typically is substantially less than their contractual maturities because of principal repayments and prepayments.  In addition, due-on-sale clauses on certain mortgage loans generally give us the right to declare loans immediately due and payable in the event that the borrower sells the real property subject to the mortgage and the loan is not repaid.  The average life of mortgage loans tends to increase, however, when current mortgage loan market rates are substantially higher than rates on existing mortgage loans and, conversely, decreases when rates on existing mortgage loans are substantially higher than current mortgage loan market rates.

45

Table of Contents

The following table sets forth the dollar amount of all loans maturing after December 31, 2026, which have fixed interest rates and floating or adjustable interest rates (in thousands):

Table 7: Loans Maturing after One Year

Deposits. We compete with other financial institutions and financial intermediaries in attracting deposits and we generally attract deposits within our primary market areas. Much of the focus of our expansion and current marketing efforts have been directed toward attracting additional deposit client relationships and balances.

One of our key strategies is to strengthen our franchise by emphasizing core deposit activity in non-interest-bearing and other transaction and savings accounts with less reliance on higher cost certificates of deposit. This strategy is intended to help control our cost of funds and increase the opportunity for deposit fee revenues, while stabilizing our funding base.  Total deposits increased $228.7 million, or 2%, to $13.74 billion at December 31, 2025, from $13.51 billion at December 31, 2024. The increase in deposits during the year ended December 31, 2025, was due to an increase in core deposits, primarily interest-bearing transaction and savings accounts. Core deposits were 89% of total deposits at both December 31, 2025 and 2024.

46

Table of Contents

The following table sets forth the balances of deposits in the various types of accounts offered by the Bank at the dates indicated (dollars in thousands):

Table 8: Deposits

47

Table of Contents

The following table indicates the certificates of deposit in excess of the FDIC insurance limit by time remaining until maturity as of December 31, 2025 (in thousands):

Table 9: Maturity Period—Certificates of Deposit in Excess of the FDIC Insurance Limit

The following table provides additional detail on geographic concentrations of our deposits at December 31, 2025, 2024 and 2023 (in thousands):

Table 10: Geographic Concentration of Deposits

Borrowings.  We had $150.0 million in FHLB advances at December 31, 2025. At that date, based on pledged collateral, the Bank had $3.65 billion of available credit capacity with the FHLB. At December 31, 2025, based upon our available unencumbered collateral, the Bank was eligible to borrow $1.55 billion from the Federal Reserve Bank; however, at that date we had no funds borrowed under this arrangement.

Other borrowings, consisting of retail repurchase agreements, which are primarily associated with client sweep account arrangements, decreased $17.5 million to $107.7 million at December 31, 2025, from $125.3 million at December 31, 2024. At December 31, 2025, retail repurchase agreements had a weighted average rate of 2.48% and were secured by pledges of certain mortgage-backed securities and agency securities.  We had no borrowings under wholesale repurchase agreements at December 31, 2025.

At December 31, 2025, we had an aggregate of $86.5 million of junior subordinated debentures.  This includes $75.0 million issued by us and $11.5 million acquired in our bank acquisitions. The junior subordinated debentures are carried at their estimated fair value of $79.2 million at December 31, 2025. At December 31, 2025, the junior subordinated debentures had a weighted average rate of 5.67%.  The outstanding balance of the Company’s subordinated notes was fully repaid during the second quarter of 2025. Subordinated notes, net of issuance costs, were $80.3 million at December 31, 2024.

Asset Quality.  Maintaining a moderate risk profile by employing appropriate underwriting standards, avoiding excessive asset concentrations and aggressively managing troubled assets has been and will continue to be a primary focus for us.

Non-performing assets increased to $51.2 million, or 0.31% of total assets, at December 31, 2025, from $39.6 million, or 0.24% of total assets, at December 31, 2024.  At December 31, 2025, our allowance for credit losses - loans was $160.3 million, or 351% of non-performing loans, compared to $155.5 million, or 421% of non-performing loans, at December 31, 2024.

48

Table of Contents

The following table sets forth information with respect to our non-performing assets at the dates indicated (dollars in thousands):

Table 11: Non-Performing Assets

The increase in total non-performing loans was primarily due to an increase in nonaccrual loans in the one- to four-family category and an increase in loans 90 days or more past due and still accruing in both the one- to four-family category and the construction and land category, primarily reflecting one- to four-family custom construction loans. The increases consisted of various borrowers with no meaningful concentrations and reflect loans transferred to nonaccrual, partially offset by payoffs of nonaccrual loans during 2025 and loans past due and still accruing at December 31, 2025, that were not previously reported as past due.

Interest income was reduced by $2.3 million, $2.0 million, and $1.6 million in 2025, 2024 and 2023, respectively, due to nonaccrual loan activity, including reversals of $748,000, $826,000 and $569,000 of accrued interest upon placement of loans on nonaccrual. No interest income was recognized on nonaccrual loans during these years.

The following table presents the Company’s portfolio of risk-rated loans and non-risk-rated loans by grade at the dates indicated (in thousands):

Table 12: Loans by Grade

The increase in special mention loans during the year ended December 31, 2025, was primarily due to loan risk rating downgrades, primarily in the commercial business loan segment. As of December 31, 2025, total substandard loans primarily consisted of loans within the commercial business, owner-occupied commercial real estate and agricultural loan segments.

49

Table of Contents

Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024

General. For the year ended December 31, 2025, net income was $195.4 million, or $5.64 per diluted share, compared to net income of $168.9 million, or $4.88 per diluted share for the year ended December 31, 2024. Current year results included increases in net interest income and non-interest income, partially offset by increases in non-interest expense and the provision for credit losses.

Our operating results depend largely on net interest income, which increased $46.2 million to $587.9 million for the year ended December 31, 2025, compared to the prior year, primarily reflecting increased yields on loans due to adjustable rate loans repricing higher, as well as higher average loan balances and decreased funding costs. Revenues (net interest income and non-interest income) increased $52.1 million, or 9%, to $660.7 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to increased interest income on loans, decreased funding costs and a net gain on the sale of securities during the year ended December 31, 2025, compared to a net loss on the sale of securities during the prior year.

We recorded a $13.0 million provision for credit losses for the year ended December 31, 2025, compared to a $7.6 million provision for credit losses for the year ended December 31, 2024. The provision for credit losses for the year ended December 31, 2025, reflects risk rating downgrades, as well as growth in loan balances.

Total non-interest income for the year ended December 31, 2025, increased to $72.8 million compared to $66.9 million for the year ended December 31, 2024, primarily due to the recognition of a net gain on the sale of securities during the year ended December 31, 2025, compared to a net loss on the sale of securities during the prior year.

Total non-interest expense increased to $408.8 million for the year ended December 31, 2025, compared to $391.5 million for the year ended December 31, 2024, largely as a result of increases in salary and employee benefits, information and computer data services expense, payment and card processing services expense, and professional and legal expenses.

Net Interest Income.  Net interest income increased for the year ended December 31, 2025, compared to $541.7 million for the year ended December 31, 2024, primarily reflecting increased yields on loans due to adjustable rate loans repricing higher, as well as higher average loan balances and lower funding costs. The higher average yield on interest-earning assets, compared to the same period in the prior year, reflects loans being a higher percentage of interest-earnings assets.

The net interest margin on a tax equivalent basis of 3.96% for the year ended December 31, 2025, was 21 basis points higher than the prior year. The increase in net interest margin reflects a 13 basis-point increase in yields on average interest-earning assets and an eight basis-point decrease in the cost of funding liabilities. The increase in average yields on interest-earning assets during the current year reflects the benefit of variable rate interest-earning assets repricing higher. The decrease in the overall cost of funding liabilities was primarily due to the decrease in the overall rate paid on deposits and the decrease in the average balance of borrowings.

Interest Income.  Interest income for the year ended December 31, 2025, was $805.0 million, compared to $766.1 million for the prior year, an increase of $38.9 million.  This increase was a result of yields on interest-earning assets increasing 13 basis points to 5.39%, as well as the average balance of interest-earning assets increasing $367.6 million to $15.17 billion. The increased yield on interest-earning assets primarily reflects increases in the average yields on loans, with the increase concentrated in real estate loans, partially offset by a slight decline in commercial and agricultural loan yields.

Interest income on loans increased $46.4 million from the prior year to $702.0 million for the year ended December 31, 2025. The increase was primarily due to the average loan yields increasing 15 basis points to 6.12%, reflecting the impact of market interest rates being higher than average portfolio interest rates. Average loans receivable increased $508.2 million to $11.63 billion, primarily reflecting increases in the average balances of real estate secured loans.

Interest and dividend income on investment securities decreased $7.4 million for the year ended December 31, 2025, due to a decline in the average balance and average yield of the investment securities portfolio. The combined average balance of total investment securities decreased $140.6 million to $3.54 billion (excluding the effect of fair value adjustments).  The average yield on the combined portfolio decreased to 3.02%, reflecting a 37 basis-point decrease in the yield on other securities.

Interest Expense.  Interest expense for the year ended December 31, 2025, was $217.0 million, compared to $224.4 million for the prior year, a decrease of $7.4 million, or 3%.  The decrease occurred as a result of an eight basis-point decrease in the average cost of all funding liabilities to 1.55%, partially offset by the average balance of funding liabilities increasing $274.7 million to $14.04 billion. The decrease in the average cost of our funding liabilities was primarily due to lower average interest rates paid on deposits and borrowings, reflecting both the lower rates and the impact of changes in funding composition. The increase in the average balance of funding liabilities reflects increases in interest-bearing transaction and savings accounts, partially offset by decreases in money market accounts and total borrowings.

50

Table of Contents

Deposit interest expense increased $1.3 million to $200.8 million for the year ended December 31, 2025, compared to the prior year, as a result of the average balance of interest-bearing deposits increasing by $504.1 million, partially offset by the average cost of total deposits decreasing three basis points to 1.47%. The increase in the average balance of total interest-bearing deposits was primarily due to increases in the average balances of interest-bearing transaction and savings accounts, partially offset by a decrease in the average balances of money market accounts. The decrease in the average cost of deposits between the periods was primarily due to the average cost of interest-bearing deposits decreasing 12 basis points to 2.20% for the year ended December 31, 2025, compared to 2.32% in the prior year. The decrease in the average cost of interest-bearing deposits was primarily the result of a five basis-point decrease in the cost of savings accounts, a 12 basis-point decrease in the cost of money market accounts and a 38 basis-point decrease in the cost of certificates of deposit, partially offset by a seven basis-point increase in the cost of interest-bearing checking accounts.

The average rate paid on total borrowings decreased 68 basis points to 4.29% for the year ended December 31, 2025, reflecting a 103 basis-point decrease in the average cost of FHLB advances, 37 basis-point decrease in the average cost of other borrowings, and 61 basis-point decrease in the average cost of our subordinated debt. The decrease in the average balance of total borrowings was due to a $33.4 million decrease in the average balance of FHLB advances, a $41.8 million decrease in the average balance of other borrowings and a $48.5 million decrease in the average balance of our subordinated debt.

Table 13, Analysis of Net Interest Spread, presents, for the periods indicated, our condensed average balance sheet information, together with interest income and yields earned on average interest-earning assets and interest expense and rates paid on average interest-bearing liabilities.  Average balances are computed using daily average balances.

51

Table of Contents

The following table provides an analysis of our net interest spread for the last three years (dollars in thousands):

Table 13: Analysis of Net Interest Spread