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Banner Corporation (Nasdaq: BANR), the Walla Walla, Washington-based holding company for Banner Bank, has reached a definitive agreement to acquire Pacific Financial Corporation (OTCQX: PFLC), the parent of Bank of the Pacific, in an all-stock transaction valued at approximately $177 million. The deal, announced jointly by both companies, would push the combined institution to roughly $18 billion in total assets upon closing.

Deal Terms

Pacific Financial shareholders will receive 0.2633 shares of Banner common stock for each share of Pacific Financial they hold. Based on Banner’s April 29 closing price of $66.25, that translates to an implied value of $17.44 per Pacific Financial share. Following the close, Pacific Financial shareholders are expected to own approximately 7% of the combined company, with Banner’s existing shareholders holding the remaining 93%.

Banner has signaled the transaction is expected to be immediately accretive to 2027 earnings per share, excluding one-time transaction costs — a metric that will matter to BANR investors assessing dilution risk from the share issuance.

What Banner Is Getting

Bank of the Pacific brings 55 years of community banking history to the table. As of March 31, 2026, the Aberdeen, Washington-based institution carried $1.29 billion in assets, a $762 million loan portfolio, and — arguably most attractive to Banner — a $1.14 billion low-cost deposit base spread across 18 branches and offices in Western Washington and Northern Oregon.

That deposit quality is the real story here. In a rate environment where core deposit franchises command serious strategic value, Bank of the Pacific’s funding profile is precisely the kind of asset larger regional banks are hunting for. Low-cost deposits improve net interest margins and reduce reliance on more expensive wholesale funding — a meaningful operational benefit for Banner as it scales.

Geographic Logic

Banner Bank already operates across Washington, Oregon, Idaho, and California, giving it strong Pacific Northwest coverage. The Pacific Financial acquisition deepens penetration specifically in Western Washington and Western Oregon — coastal and rural markets where community banking relationships tend to be sticky and competition from money-center banks is less intense.

For Bank of the Pacific customers, the combination brings access to broader product offerings, higher commercial lending limits, and expanded branch infrastructure — the typical value proposition in community bank consolidation that tends to hold up in practice.

Leadership Continuity

One notable element of the deal structure: Denise Portmann, Bank of the Pacific’s President and CEO, is expected to join the Banner Bank executive team following close. Retaining acquired leadership, particularly in relationship-driven community banking, is a meaningful risk mitigant. It signals cultural alignment between the two institutions and helps protect client relationships during the transition period.

Timeline and Advisors

Both boards unanimously approved the transaction. Closing is targeted for the third quarter of 2026, pending Pacific Financial shareholder approval and regulatory clearance. Piper Sandler advised Pacific Financial, with Miller Nash LLP as legal counsel. BofA Securities advised Banner, with Ballard Spahr LLP handling legal.

This transaction is a clean example of the community bank consolidation trend that has been accelerating across the U.S. as smaller institutions face mounting pressure from technology costs, regulatory burden, and margin compression — dynamics that continue to favor scale.