BANNER CORP

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. We actively engage with our borrowers to resolve adversely classified loans and other problem assets.

Non-Performing Assets: Non-performing assets totaled $42.7 million, or 0.26% of total assets, at March 31, 2025, compared to $39.6 million, or 0.24% of total assets, at December 31, 2024. Our allowance for credit losses - loans was $157.3 million, or 404% of non-performing loans, at March 31, 2025, compared to $155.5 million, or 421% of non-performing loans, at December 31, 2024.

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

For the three months ended March 31, 2025, interest income was reduced by $870,000 as a result of nonaccrual loan activity, which included the reversal of $263,000 of accrued interest as of the date the loan was placed on nonaccrual. There was no interest income recognized on nonaccrual loans for the three months ended March 31, 2025.

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

As of March 31, 2025, total substandard loans primarily consisted of loans within the commercial business, commercial real estate and agricultural loan segments.