BANNER CORP 8-K

What Happened
Banner Corporation (BANR) announced on April 30, 2026 that it entered an Agreement and Plan of Merger to combine with Pacific Financial Corporation. Under the agreement Pacific Financial will merge into Banner, and each outstanding share of Pacific Financial common stock (except certain exceptions) will convert into the right to receive 0.2633 shares of Banner common stock. The parties executed a Voting and Support Agreement and the companies expect to complete the merger in the third quarter of 2026, subject to shareholder and regulatory approvals.

Key Details

• Exchange ratio: each Pacific Financial share converts into 0.2633 Banner shares; fractional shares will be paid in cash based on the 15‑day average closing price of Banner stock prior to closing.
• Treatment of equity awards: Pacific Financial stock options vest and are cancelled for a cash payment based on (Exchange Ratio × Banner closing price − option exercise price) × number of option shares; outstanding RSUs fully vest and will be settled and treated as outstanding Pacific shares at closing.
• Approvals & conditions: Pacific Financial shareholder approval (Washington law requires affirmative vote of two‑thirds of outstanding shares), required regulatory approvals (Federal Reserve, FDIC, WA State DFI), effectiveness of a Form S‑4/registration, and no material adverse changes. Banner also requires Pacific Financial’s Adjusted Equity to be ≥ $124,269,000 (as of March 31, 2026) when calculated 10 business days before closing.
• Termination fee & governance: Pacific Financial would owe Banner a $6.3 million termination fee in certain circumstances. Bank subsidiaries (Bank of the Pacific into Banner Bank) will merge after the corporate merger; Denise Portmann (Bank of the Pacific CEO) is expected to become an executive vice president of Banner Bank if she accepts the role.

Why It Matters
This is a strategic bank merger that will increase Banner’s footprint and requires shareholder and multiple regulatory approvals before closing in Q3 2026. For investors, key near‑term impacts include issuance of Banner shares to Pacific shareholders (potential dilution), cash payments to option holders, accelerated vesting of Pacific RSUs, and regulatory review risks that could delay or block the deal. Banner will file a Form S‑4 (proxy/prospectus) with more details for Pacific Financial shareholders prior to any vote.