Banner Corporation Q4 FY2025 earnings call

• Mark Grescovich noted Banner's net profit performance for the quarter and full year, emphasizing core earnings power and balance sheet strength.
• Jill Rice discussed the loan portfolio, noting loan originations up but growth limited by payoffs and line utilization, and provided updates on credit metrics.
• Rob Butterfield detailed operating performance, including net interest income, margin, deposits, borrowings, share repurchases, and core expense control.

For the quarter ended December 31, 2025, Banner Corporation reported a net profit available to common shareholders of $51.2 million or $1.49 per diluted share. The full year ended December 31, 2025, saw net income available to common shareholders of $195.4 million or $5.64 per diluted share. Fourth quarter 2025 core revenue was $170 million, prior quarter was $169 million, and fourth quarter 2024 was $160 million. Full year 2025 core revenue was $661 million, an 8% increase from 2024's $615 million. Pretax pre-provision earnings for the full year 2025 were $255 million compared to $223.2 million in 2024. Core deposits represent 89% of total deposits.

• Jill Rice expects mid-single digit loan growth in 2026 if the economy holds, citing building pipelines and new bankers hired.
• Rob Butterfield mentioned margin influenced by Federal Reserve actions, repurchase authorization with remaining shares available, and continued M&A discussions with potential partners.

• Forward-looking statements are subject to risks and uncertainties, with actual results possibly differing from discussions.
• Loan portfolio risks include commercial real estate payoffs as a potential headwind, and credit quality changes in sectors like alcoholic beverages and certain commercial/construction segments.

Q: Jeff Rulis asked about loan growth outlook for 2026 and the competitive landscape.

A: Jill Rice responded that commercial real estate payoffs may be a headwind, but pipelines are building and new bankers hired could lead to mid-single digit loan growth, and Banner competes well in product offerings and pricing.

Q: Matthew Clark inquired about deposits at year-end, average margin in December, and expenses.

A: Robert Butterfield said spot deposit cost for December was 1.39%, margin around 4.03%, and expenses had transitory items but expected normal inflationary trends in 2026. Jill Rice discussed Special Mention and substandard loan changes.

Q: Andrew Terrell asked about capital buyback and M&A.

A: Robert Butterfield mentioned remaining share repurchase authorization and continued M&A discussions, while Mark Grescovich stated Banner's posture on M&A is to continue conversations with potential partners.

Q: Kelly Motta asked about tax rate and fees.

A: Robert Butterfield said tax rate expected around 19% in 2026, and fees had nonrecurring items like software write-off. Jill Rice discussed payoffs as a potential headwind in 2026.

Q: Liam Coohill asked about core deposit growth and deposit betas.

A: Robert Butterfield cited relationship banking and small business focus as drivers of core deposit growth, and discussed deposit beta modeling at 28% with trends to narrow in 2026