WALLA WALLA, Wash.--(BUSINESS WIRE)--Banner Corporation (NASDAQ:BANR) (“Banner”), the parent company of Banner Bank, today reported net income of $47.7 million, or $1.36 per diluted share, for the third quarter of 2026, compared to $48.9 million, or $1.43 per diluted share, for the preceding quarter, and $53.5 million, or $1.54 per diluted share, for the third quarter of 2025. Net interest income was $161.9 million for the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million for the third quarter a year ago. The increase in net interest income compared to both the prior quarter and the third quarter a year ago was primarily driven by an increase in average interest-earning assets resulting from the acquisition of Pacific Financial Corporation (“Pacific Financial”) on September 1, 2026 and organic loan growth, as well as expansion in Banner’s net interest margin reflecting higher yields on interest-earning assets. Funding costs increased compared to the prior quarter, partially offsetting the increase in interest income, but decreased compared to the third quarter a year ago. Third quarter 2026 results included $5.2 million of merger-and acquisition-related costs, compared to $238,000 in the preceding quarter and none in the third quarter of 2025. Third quarter 2026 results also included a $2.8 million provision for credit losses, compared to $3.8 million in the preceding quarter and $2.7 million in the third quarter of 2025.

Net income was $151.3 million, or $4.39 per diluted share, for the nine months ended September 30, 2026, compared to net income of $144.1 million, or $4.15 per diluted share, for the nine months ended September 30, 2025. Results for the nine months ended September 30, 2026 included a $5.8 million provision for credit losses, a $3.3 million net loss on the sale of securities and a $1.8 million net increase in fair value adjustments on financial instruments carried at fair value, compared to a $10.6 million provision for credit losses, a $374,000 net gain on the sale of securities and a $626,000 net increase in the fair value adjustments on financial instruments carried at fair value during the same period in 2025. The nine months ended September 30, 2026 results included $5.4 million of merger and acquisition related costs, compared to none for the nine months ended September 30, 2025.

Banner announced that its Board of Directors declared a regular quarterly cash dividend of $0.52 per share payable November 13, 2026, to common shareholders of record on November 5, 2026.

“During the third quarter, we completed the merger with Pacific Financial Corporation, the holding company of Bank of the Pacific,” said Mark Grescovich, President and CEO. “Bank of the Pacific was a highly respected, financially strong community bank with exceptional core deposits. This transaction expands our presence and density in attractive Western Washington and Western Oregon markets while offering Bank of the Pacific customers broader product offerings and technology tools, increased commercial lending limits and an expanded branch delivery system.”

“Banner’s results for the third quarter reflect the continued strength of our super community bank model, which prioritizes deepening client relationships, maintaining a strong funding base, and delivering exceptional service while upholding a moderate risk profile,” Grescovich continued. “Our earnings for the third quarter of 2026 benefited from loan growth and the completion of the merger with Pacific Financial. These benefits were partially offset by higher non-interest expense, which primarily reflects merger related expenses. Banner continues to build on a foundation of solid credit quality, backed by a well-funded credit loss reserve and a robust capital position that offers both resilience and flexibility for future growth. At the same time, the strategic investments we have made across the organization are delivering tangible results, further positioning Banner for long-term success. We also continue to capitalize on a strong core deposit base, with core deposits representing 90% of total deposits at quarter-end. For more than 136 years, Banner has upheld its core values by consistently doing the right thing for our clients, communities, colleagues, company and shareholders. Our long-standing commitment has enabled us to earn trust, navigate change with confidence and continue building a strong foundation for the future.”

At September 30, 2026, Banner, on a consolidated basis, had $18.08 billion in assets, $12.82 billion in net loans and $15.39 billion in deposits. Banner operates 153 full-service branch offices, including branches located in eight of the top 20 largest western United States Metropolitan Statistical Areas by population.

Third Quarter 2026 Highlights

• Net interest margin, on a tax equivalent basis, was 4.14% for the current quarter, compared to 4.13% in the preceding quarter and 3.98% in the third quarter a year ago.
• Revenue was $177.3 million for the third quarter of 2026, compared to $172.0 million in the preceding quarter and increased 4% from $170.7 million in the third quarter a year ago.
• Net interest income was $161.9 million in the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million in the third quarter a year ago.
• Return on average assets was 1.11% for the third quarter of 2026, compared to 1.20% in the preceding quarter and 1.30% in the third quarter a year ago.
• Net loans receivable increased 8% to $12.82 billion at September 30, 2026, compared to $11.83 billion at June 30, 2026, and increased 11% from $11.54 billion at September 30, 2025.
• Loan originations increased to $1.28 billion for the third quarter of 2026, compared to $1.26 billion in the preceding quarter and increased 61% from $794.5 million in the third quarter a year ago.
• Total deposits were $15.39 billion at September 30, 2026, compared to $13.79 billion at June 30, 2026, and $14.02 billion at September 30, 2025.
• Core deposits represented 90% of total deposits at September 30, 2026.
• Non-performing assets were $63.0 million, or 0.35% of total assets, at September 30, 2026, compared to $60.5 million, or 0.36% of total assets, at June 30, 2026, and $45.3 million, or 0.27% of total assets, at September 30, 2025.
• The allowance for credit losses - loans was $171.6 million, or 1.32% of total loans receivable, as of September 30, 2026, compared to $161.8 million, or 1.35% of total loans receivable, as of June 30, 2026, and $159.7 million, or 1.36% of total loans receivable, as of September 30, 2025.
• Dividends paid to shareholders were $0.52 per share in the quarter ended September 30, 2026.
• Common shareholders’ equity per share was $58.56 at September 30, 2026, compared to $58.83 at June 30, 2026, and increased 5% from $55.71 at September 30, 2025.
• Tangible common shareholders’ equity per share* decreased 4% to $45.84 at September 30, 2026, compared to $47.82 at June 30, 2026, and increased 2% from $44.79 at September 30, 2025.
• Repurchased 200,000 shares of Banner common stock during the third quarter of 2026 at an average price of $71.03 per share

*Non-GAAP (Generally Accepted Accounting Principles) financial measure; See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

Significant Recent Events

On September 1, 2026, Banner completed the acquisition of Pacific Financial Corporation the holding company for Bank of the Pacific, in an all-stock transaction. At closing, Bank of the Pacific had 18 branch locations, including 15 in Washington and three in Oregon. Shareholders of Pacific Financial received 0.2633 shares of Banner common stock for each share of Pacific Financial common stock they owned, plus cash in lieu of any fractional shares, for total consideration paid of $186.8 million.

The Pacific Financial transaction was accounted for using the acquisition method of accounting. Accordingly, the assets (including identifiable intangible assets) and the liabilities of Pacific Financial were measured at their respective estimated fair values as of the merger date. The excess of the purchase price over the fair value of the net assets acquired was attributed to goodwill. The fair value on the merger date represents management's best estimates based on available information and facts and circumstances in existence on the merger date. The acquisition method of accounting is subject to adjustment within a measurement period of one year from the acquisition date. The acquisition brought $1.29 billion of assets, including $756.9 million of net loans receivable, and $1.14 billion of deposits to Banner.

Income Statement Review

Net interest income was $161.9 million in the third quarter of 2026, compared to $153.7 million in the preceding quarter and $150.0 million in the third quarter a year ago. Net interest margin, on a tax equivalent basis, increased one basis point to 4.14% for the third quarter of 2026, compared to 4.13% in the preceding quarter, and increased 16 basis points from 3.98% in the third quarter a year ago. The net interest margin for the current quarter benefited from a higher average yield on interest-earning assets compared to the preceding quarter, partially offset by higher funding costs. Compared to the third quarter a year ago, the increase in the net interest margin primarily reflected lower funding costs and a higher average yield on interest-earning assets.

Interest income was $214.6 million in the third quarter of 2026, compared to $202.7 million in the preceding quarter and $205.8 million in the third quarter of 2025. Average yields on interest-earning assets increased five basis points to 5.46% for the third quarter of 2026, compared to 5.41% for the preceding quarter, primarily reflecting a higher proportion of loans within the interest-earning asset mix and an increase in loan yields. Compared to the third quarter a year ago, average yields on interest-earning assets increased by three basis points from 5.43%. Average loan yields increased by three basis points to 6.12% in the third quarter of 2026, compared to 6.09% in the preceding quarter, and decreased from 6.17% in the third quarter a year ago.

Interest expense was $52.7 million in the third quarter of 2026, compared to $48.9 million in the preceding quarter and $55.9 million in the third quarter a year ago. Total deposit costs increased by five basis points to 1.38% in the third quarter of 2026, compared to 1.33% in the preceding quarter, and decreased by 12 basis points compared to 1.50% in the third quarter a year ago. The increase in deposit costs compared to the preceding quarter was primarily due to higher average rates paid across all deposit categories and a shift in deposit mix toward interest-bearing deposits, partially offset by growth in non-interest-bearing deposits. The decrease in deposit costs in the current quarter compared to the same quarter a year ago primarily reflected lower average rates paid across all deposit categories.

The average rate paid on borrowings increased 11 basis points to 3.99% in the third quarter of 2026 from 3.88% in the preceding quarter, primarily reflecting higher average rates paid on borrowings and lower FHLB advances in the current quarter. The average rate paid on borrowings decreased by 19 basis points from 4.18% in the third quarter a year ago, primarily due to lower average rates paid on FHLB advances and junior subordinated debentures and subordinated notes, partially offset by a higher average rate paid on other borrowings. The total cost of funding liabilities increased four basis points to 1.43% in the third quarter of 2026, compared to 1.39% in the preceding quarter, and decreased 14 basis points from 1.57% in the third quarter a year ago.

A $2.8 million provision for credit losses was recorded in the current quarter (comprised of a $1.8 million provision for credit losses - loans and a $1.0 million provision for credit losses - unfunded loan commitments). This compares to a $3.8 million provision for credit losses in the prior quarter (comprised of a $1.6 million provision for credit losses - loans and a $2.2 million provision for credit losses - unfunded loan commitments) and a $2.7 million provision for credit losses in the third quarter a year ago (comprised of a $1.4 million provision for credit losses - loans and a $1.3 million provision for credit losses - unfunded loan commitments). The provision for credit losses recorded in the third quarter of 2026 primarily reflected loan growth, partially offset by improvements in credit quality.

Total non-interest income was $15.4 million in the third quarter of 2026, compared to $18.2 million in the preceding quarter and $20.7 million in the third quarter of 2025. The decrease from the preceding quarter was driven primarily by a net loss on the sale of securities of $2.1 million, resulting from the sale of the investment portfolio acquired from Pacific Financial, as well as a $630,000 decrease in miscellaneous income, reflecting lower gains on SBA loan sales and fluctuations in other miscellaneous income items. These decreases were partially offset by a $470,000 favorable change in fair value adjustments on financial instruments. Compared to the prior year quarter, non-interest income decreased primarily due to lower miscellaneous income, as well as lower mortgage banking revenue. These declines were partially offset by higher deposit fees and other service charges. Total non-interest income was $52.8 million for the nine months ended September 30, 2026, compared to $57.6 million for the same period in 2025.

Total non-interest expense was $115.7 million in the third quarter of 2026, compared to $108.0 million in the preceding quarter and $102.0 million in the third quarter of 2025. Merger-related expenses were $5.2 million in the third quarter of 2026, compared to $238,000 in the preceding quarter and none in the third quarter of 2025. Excluding merger-related expenses, the increase from the preceding quarter reflected increases in expenses in several categories related to the acquired Pacific Financial operations, including an increase in salary and employee benefits. In addition, real estate operations expense increased by $1.1 million, reflecting write-downs of foreclosed real estate. The increase compared to the same quarter a year ago primarily reflects increases in salary and employee benefits, information and computer data services expenses, professional and legal expenses, and real estate operations expenses, partially offset by a decrease in occupancy and equipment expense. For the nine months ended September 30, 2026, total non-interest expense was $326.3 million, compared to $304.6 million for the nine months ended September 30, 2025.

Banner’s efficiency ratio was 65.25% for the third quarter of 2026, compared to 62.80% in the preceding quarter and 59.76% in the same quarter a year ago. Banner’s adjusted efficiency ratio, a non-GAAP financial measure, was 59.53% for the third quarter of 2026, compared to 61.30% in the preceding quarter and 58.54% in the year-ago quarter. See, “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a discussion and reconciliation of non-GAAP financial measures.

Balance Sheet Review

Total assets increased 9% to $18.08 billion at September 30, 2026, compared to $16.59 billion at June 30, 2026, and increased 9% compared to $16.56 billion at September 30, 2025. The increase for both periods was primarily due to the $1.29 billion of assets acquired in the Pacific Financial acquisition. In addition, both periods benefited from organic loan growth. Securities and interest-bearing deposits held at other banks totaled $3.43 billion at September 30, 2026, compared to $3.17 billion at June 30, 2026 and $3.47 billion at September 30, 2025. The average effective duration of the securities portfolio was approximately 6.0 years and 6.4 years at September 30, 2026 and September 30, 2025, respectively.

Total loans receivable increased 8% to $13.00 billion at September 30, 2026, compared to $11.99 billion at June 30, 2026, and increased 11% from $11.70 billion at September 30, 2025. The increase in total loans compared to both periods included $765.5 million of portfolio loans acquired from Pacific Financial.

Commercial real estate loans totaled $4.61 billion at September 30, 2026, an increase of 11% from $4.14 billion at June 30, 2026, and 15% from $4.00 billion at September 30, 2025. Commercial business loans totaled $2.73 billion at September 30, 2026, an increase of 6% compared to $2.58 billion at June 30, 2026, and an increase of 12% from $2.43 billion at September 30, 2025. Growth in both categories reflected the Pacific Financial acquisition and new loan production, partially offset by payoffs and paydowns.

Multifamily real estate loans totaled $913.3 million at September 30, 2026, an increase of 7% from $855.9 million at June 30, 2026, and 6% from $860.7 million at September 30, 2025. Construction, land and land development loans totaled $1.80 billion at September 30, 2026, an increase of 6% from $1.69 billion at June 30, 2026, and 4% from $1.74 billion at September 30, 2025. Growth in these categories reflected the acquisition of Pacific Financial, as well as new loan production and advances, partially offset by transfers to the permanent loan portfolios upon completion of the construction phase.

Agricultural business loans totaled $389.2 million at September 30, 2026, an increase of 15% from $337.5 million at June 30, 2026, and 10% from $354.9 million at September 30, 2025, primarily reflecting the acquisition, partially offset by payoffs and paydowns. Consumer loans totaled $929.8 million at September 30, 2026, an increase of 12% from $827.0 million at June 30, 2026, and 26% from $740.3 million at September 30, 2025. The growth primarily reflected the acquisition of Pacific Financial, as well as new loan production and advances, particularly on home equity revolving lines of credit.

Loans held for sale were $32.7 million at September 30, 2026, compared to $27.2 million at June 30, 2026, and $20.3 million at September 30, 2025. One- to four- family residential mortgage held for sale loans sold in the current quarter totaled $103.3 million, compared to $134.6 million in the preceding quarter, and $136.9 million in the third quarter a year ago. The increase in loans held for sale at September 30, 2026, compared to both the preceding quarter and the prior year quarter, was attributable to one- to four-family residential mortgage held for sale loan originations outpacing loan sales during the current quarter.

Total deposits were $15.39 billion at September 30, 2026, compared to $13.79 billion at June 30, 2026, and $14.02 billion at September 30, 2025. Core deposits increased to $13.78 billion at September 30, 2026, compared to $12.32 billion at June 30, 2026, and $12.48 billion at September 30, 2025. The increase in deposits reflected $1.14 billion in deposits from Pacific Financial during the third quarter of 2026. Excluding acquired deposits, the increase from both the prior quarter and prior year quarter reflected increases in both noninterest-bearing and interest-bearing transaction and savings accounts. Core deposits remained stable at 90% of total deposits at September 30, 2026, and at 89% at both June 30, 2026 and September 30, 2025. Certificates of deposit increased 10% to $1.62 billion at September 30, 2026, compared to $1.47 billion at June 30, 2026, and increased 5%, compared to $1.54 billion at September 30, 2025, due to the Pacific Financial acquisition.

There were no outstanding FHLB advances at September 30, 2026, compared to $320.0 million outstanding FHLB advances at June 30, 2026, and $100.0 million at September 30, 2025. The decrease in FHLB advances during the quarter reflected repayment of all outstanding advances, as deposits served as the primary source of funding. At September 30, 2026, off-balance sheet liquidity included additional borrowing capacity of $3.82 billion at the FHLB and $1.56 billion at the Federal Reserve, as well as federal funds line of credit agreements with other financial institutions of $125.0 million.

At September 30, 2026, total common shareholders’ equity was $2.13 billion, or 11.80% of total assets, compared to $2.00 billion, or 12.05% of total assets at June 30, 2026, and $1.91 billion, or 11.55% of total assets, at September 30, 2025. The increase in total common shareholders’ equity from June 30, 2026, was primarily due to a $174.6 million increase in common stock, primarily attributable to the acquisition of Pacific Financial during the third quarter. In addition, retained earnings increased by $29.8 million, resulting from $47.7 million in net income, partially offset by the accrual of $17.9 million in cash dividends and a $69.7 million increase in accumulated other comprehensive loss. The Company repurchased 200,000 shares of its common stock in the third quarter of 2026 at an average price of $71.03 per share. At September 30, 2026, tangible common shareholders’ equity, a non-GAAP financial measure, was $1.67 billion, or 9.48% of tangible assets, compared to $1.63 billion, or 10.02% of tangible assets, at June 30, 2026, and $1.54 billion, or 9.50% of tangible assets, at September 30, 2025. See “Additional Financial Information - Non-GAAP Financial Measures” on the final two pages of this press release for a reconciliation of non-GAAP financial measures.

Banner and Banner Bank continue to maintain capital levels in excess of the requirements to be categorized as “well-capitalized.” At September 30, 2026, Banner’s estimated common equity Tier 1 capital ratio was 12.57%, its estimated Tier 1 leverage capital to average assets ratio was 11.59%, and its estimated total capital to risk-weighted assets ratio was 14.42%. These regulatory capital ratios are estimates, pending completion and filing of Banner’s regulatory reports.

Credit Quality

The allowance for credit losses - loans was $171.6 million, or 1.32% of total loans receivable and 290% of non-performing loans, at September 30, 2026, compared to $161.8 million, or 1.35% of total loans receivable and 295% of non-performing loans, at June 30, 2026, and $159.7 million, or 1.36% of total loans receivable and 399% of non-performing loans, at September 30, 2025. The allowance ratio decreased compared to both prior periods, primarily reflecting the acquisition of Pacific Financial, which had favorable credit quality and a moderately lower risk profile. Coverage of non-performing loans remained strong at 290% at September 30, 2026, compared to 295% at June 30, 2026. The year-over-year decline from 399% at September 30, 2025 reflects a moderate increase in non-performing loans over the past year, while the allowance level has remained stable and commensurate with the portfolio’s risk profile. In addition to the allowance for credit losses - loans, the allowance for credit losses - unfunded loan commitments was $16.2 million at September 30, 2026, compared to $15.1 million at June 30, 2026, and $14.0 million at September 30, 2025. Net loan charge-offs were $704,000 in the third quarter of 2026, compared to net loan charge-offs of $101,000 and $2.2 million in the preceding quarter and third quarter of 2025, respectively. Non-performing loans were $59.1 million at September 30, 2026, compared to $54.8 million at June 30, 2026, and $40.0 million at September 30, 2025. Despite the increase in non-performing loans, substandard loans declined to $209.7 million at September 30, 2026, from $218.4 million at June 30, 2026. Total non-performing assets were $63.0 million, or 0.35% of total assets, at September 30, 2026, compared to $60.5 million, or 0.36% of total assets, at June 30, 2026, and $45.3 million, or 0.27% of total assets, at September 30, 2025.

Conference Call

Banner will host a conference call on Thursday, October 22, 2026, at 8:00 a.m. PDT, to discuss its third quarter results. Interested investors may listen to the call live at www.bannerbank.com. Investment professionals are invited to dial (833) 461-5787 using access code 349483357 to participate in the call. A replay of the call will be available at www.bannerbank.com.

About the Company

Banner Corporation is an $18.08 billion bank holding company operating a commercial bank primarily in Washington, Oregon, California and Idaho through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.

Forward-Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “believe,” “will,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “potential,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made and based only on information then actually known to Banner. Banner does not undertake and specifically disclaims any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Forward-looking statements may relate to, among other things, future financial performance, strategic plans or objectives, revenues or earnings projections, and other financial or operational information. These statements are inherently subject to numerous risks and uncertainties, including ongoing market volatility and evolving global conditions, which may cause actual results to differ materially from those expressed or implied. These factors include, but are not limited to: (1) adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of labor shortages, elevated inflation, recessionary pressures, or slowing economic growth; (2) changes in interest rate levels, volatility, and the timing and pace of such changes, including actions by the Federal Reserve, which could materially affect our net interest margin, funding costs, asset values, access to capital and liquidity; (3) the impact of inflation and monetary and fiscal policy responses thereto, and their impact on consumer and business behavior; (4) geopolitical developments and international conflicts, including but not limited to tensions or instability in Eastern Europe, South America, the Middle East, and Asia, or the imposition of new or increased tariffs and trade restrictions, which may disrupt financial markets, global supply chains, commodity prices, or economic activity in specific industry sectors, including, but not limited to, agriculture-based lending; (5) the effects of a federal government shutdown, debt ceiling standoff, or other fiscal policy uncertainty; (6) the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment; (7) expectations regarding key growth initiatives and strategic priorities; (8) credit risks from lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses, which could necessitate additional provisions for credit losses, resulting both from loans originated and loans acquired from other financial institutions; (9) results of examinations by regulatory authorities, which could result in the imposition of penalties, required changes to our business practices, or additional reserves; (10) competitive pressures among depository and non-depository institutions that adversely affect pricing, market share, deposit flows or product offerings; (11) fluctuations in real estate values; (12) the ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking platforms, and cybersecurity; (13) vulnerabilities in information systems or third-party service providers, including disruptions, breaches, or attacks; (14) market volatility or deterioration in capital markets affecting liquidity, valuations, or investor confidence; (15) the costs, effects and outcomes of litigation or other legal proceedings involving the Company; (16) legislation or regulatory changes, including but not limited to shifts in capital requirements, banking regulation, tax laws, or consumer protection laws; (17) climate-related risks and natural disasters, which may affect loan collateral, operations, or compliance obligations; (18) changes in accounting principles, policies or guidelines; (19) the impact of completed and future acquisitions or business combinations, including related goodwill impairment risks and integration challenges; (20) effects of critical accounting policies and judgments, including the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; (21) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and (22) other risks detailed from time to time in Banner’s other reports filed with and furnished to the Securities and Exchange Commission including Banner’s Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent Quarterly Reports on Form 10-Q.

Further, statements about the effects of Banner’s acquisition of Pacific Financial, completed on September 1, 2026, on Banner’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond Banner’s control, including, but are not limited to the risk that: (1) the business of Pacific Financial may not be integrated with Banner’s business successfully, including the planned systems conversions, or such integration may be more difficult, time-consuming or costly than expected; (2) the anticipated benefits of the merger, including anticipated cost savings and earnings accretion, may not be realized or may not be realized within the expected time period; (3) customer and employee relationships and business operations may be disrupted by the merger, and Banner may be challenged in retaining key customers and employees following its completion; (4) merger-related and integration expenses may be greater than expected; (5) preliminary estimates of the fair value of acquired assets and assumed liabilities may change during the measurement period, and acquired loans may experience higher credit losses than anticipated; (6) management’s attention may be diverted from ongoing business operations and opportunities due to integration activities; and (7) other factors detailed in Banner’s filings with the SEC.