Banner Corporation

include forward-looking statements. These statements include descriptions of management's plans, objectives, or goals for future operations, products, or services, forecasts of financial or other performance measures, and statements about Banner's general outlook for economic and other conditions. We also make other forward-looking statements in the question and answer period following management's discussion. Robert Marlayson, is forward looking statements are subject to a number of risks and uncertainties and actual results may differ materially from those discussed today. Robert Marlayson, Information on risk factors that could cause actual results differ are available from the earnings press release that was released yesterday and a recently filed form 10 Q for the quarter ended march 31 2025. Forward-looking statements are effective only as of the date they are made, and Banner assumes no obligation to update information concerning its expectations. Mark?

Thank you, Rich. As is customary, today we will cover four primary items with you. First, I will provide you high-level comments on Banner's second quarter performance. Second, the actions Banner continues to take to support all of our stakeholders including our banner team, our clients, our communities, and our shareholders. Third, Joe Rice will provide comments on the current status of our loan portfolio. And finally, Rob Butterfield will provide more detail on our operating performance for the quarter, as well as comments on our balance sheet. Before I get started, I want to thank all of my 2,000 colleagues in our company who are working extremely hard to assist our clients and communities. Banner has lived our core values summed up as doing the right thing for the past 135 years. Our overarching goal continues to be to do the right thing for our clients, our communities, our colleagues, our company, and our shareholders, and to provide a consistent and reliable source of commerce and capital through all economic cycles and change events. I am pleased to report again to you that is exactly what we continue to do. I am very proud of the entire Banner team that are living our core values. Now, let me turn to an overview of our performance. As announced, Banner Corporation reported a net profit available to common shareholders of $45.5 million or $1.31 per diluted share for the quarter ended June 30th, 2025. This compares to a net profit to common shareholders of $1.15 per share for the second quarter of 2024 and $1.30 per share for the first quarter of 2025. Our strategy to maintain a moderate risk profile and the investments we have made and continue to make in order to improve operating performance have positioned the company well for the future. The strength of our balance sheet coupled with the strong reputation we maintain in our markets, will allow us to manage through the current market uncertainty. Rob will discuss a number of these items in more detail shortly. To illustrate the core earnings power of Banner, I would direct your attention to pre-tax, pre-provision earnings, excluding gains and losses on the sale of securities, building and lease exit costs, and changes in fair value of financial instruments. Our second quarter 2025 core earnings were $62 million compared to $52 million for the second quarter of 2024. Banner's second quarter 2025 revenue from core operations was $163 million compared to $150 million for the second quarter of 2024. We continue to benefit from a strong core deposit base that has proved to be resilient and loyal to Banner, a very good net interest margin, and core expense control. Overall, this resulted in a return on average assets of 1.13% for the second quarter of 2025. Once again, our core performance reflects continued execution on our super community bank strategy. That is, growing new client relationships, maintaining our core funding position, promoting client loyalty and advocacy through our responsive service model, and demonstrating our safety and soundness through all economic cycles and change events. To that point, our core deposits continue to represent 89% of total deposits. Further, we continued our solid organic growth with loans increasing 5% and core deposits increasing 4% over the same period last year. Reflective of this performance, coupled with our strong regulatory capital ratios and the fact that we increased our tangible common equity per share by 13% from the same period last year, we announced a core dividend of 48 cents per common share. Finally, I'm pleased to say that we continue to receive marketplace recognition and validation of our business model and our value proposition. Banner was again named one of America's 100 best banks and one of the best banks in the world by Forbes. Newsweek named Banner one of the most trustworthy companies in America and the world again this year, and just recently named Banner one of the best regional banks in the country. J.D. Power & Associates named Banner Bank the best bank in the Northwest for retail client satisfaction. Our company was recently certified by Great Places to Work, and S&P Global Market Intelligence ranked Banner's financial performance among the top 50 public banks with more than $10 billion in assets. Additionally, the Kroll Bond Rating Agency affirmed all of Banner's investment-grade debt and deposit ratings, and as we have noted previously, Banner Bank received an outstanding CRA rating. Let me now turn the call over to Jill to discuss trends in our loan portfolio and her comments on Banner's credit quality. Jill?

Thank you, Mark, and good morning, everyone. As reflected in our earnings release, loan originations were strong, we reported solid loan growth across multiple product lines, and Banner's credit metrics remained stable. Loan originations increased 80% when compared to the linked quarter, with commercial real estate up 484%, CNI originations up 96% and construction and land development increasing 43% respectively, all while commercial and commercial real estate pipelines continue to build. This level of activity reflects a certain amount of business confidence in spite of the continuing higher rate environment and yet to be finalized trade negotiations. Loan outstandings grew by $252 million in the quarter, or 9% on an annualized basis, and are up 5% year over year, in line with our year-to-date expectations. The primary drivers of the growth were owner-occupied commercial real estate up $104 million, C&I loans up $65 million, and the construction and development book, with one to four family construction up $48 million, land development up $21 million, commercial construction up $13 million, partially offset by expected payoffs in the multifamily construction portfolio. The growth in owner-occupied commercial real estate is a mix of new middle market clients, expansion of existing relationships, and continued solid performance in new small business generation. The CNI story is similar, with growth coming from the expansion of existing relationships, increased line utilization, and meaningful small business originations. The residential construction portfolio at 5% of total loans continues to be diversified across markets and product mix and the level of complete and unsold inventory remains below historical norms as builders have become more cautious with replacement starts in this extended high rate environment. The increase in land and land development reflects the builder's need to replenish finished lot inventory with land development financing reserved for the strongest vertically integrated clients within the portfolio. Aggregating all business lines in the construction portfolio, the total remains balanced at 15% of total loans. Agricultural loans increased 3% in the quarter as both the size of operating lines and line utilization increased to cover higher operating costs and normal seasonal activity. And the growth in consumer one to four family secured loans reflects the strong home equity promotion that occurred in the second quarter. Circling back to Banner's credit metrics, delinquent loans declined to 0.41% of total loans as compared to 0.63% last quarter and 0.29% as of June 30th, 2024. Adversely classified loans also declined in the quarter over quarter, down 8.3 million and represent 1.62% of total loans, an 11 basis point decrease when compared to March 31st. In spite of the $7 million increase in the quarter, non-performing assets remain modest at 0.30% of total assets. Non-performing loans total $43 million, the majority of which are consumer related, primarily residential mortgage loans, which involve prolonged resolution timelines given consumer protection regulations. REO balances total $6.8 million, up $3.3 million in the quarter as we completed the foreclosure on an industrial property and two small single-family properties during the quarter. Loan losses in the quarter totaled $1.7 million and were offset in part by recoveries totaling $600,000. The net provision for credit losses for the quarter was $4.8 million, including a $4.2 million provision for loan losses and a $588,000 provision related to unfunded loan commitments. The provision was largely driven by the strong loan growth, with the reserve for credit losses providing coverage of 1.37% of total loans, which compares to 1.38% as of the length quarter and 1.37% as of June 30th, 2024. Last quarter, I noted that the level of economic uncertainty, coupled with the myriad of policy changes that were being implemented, created a potential headwind that could negatively impact our clients and communities. to date that has largely not materialized, evidenced by the strong loan originations and growth in the quarter as the implementation of international tariffs were paused. With those policy changes again being suggested as imminent, I am compelled to reiterate that if adopted, they will almost certainly have a negative impact on the West Coast economies, with the majority of the burden borne by the small business sector and further stressing the consumer. Still, in these uncertain times, and a super community delivery model coupled with a consistent approach to underwriting credit has enabled us to expand existing and grow new relationships while maintaining our moderate risk profile. Our strong balance sheet, robust capital base, and solid reserve for loan losses continue to serve us well. With that, I will hand the microphone over to Rob for his comments.