BANR Banner Corporation

The accompanying proxy statement/prospectus is dated September 27, 2019 and is first being mailed to AltaPacific shareholders on or about October 1, 2019.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Be Held October 28, 2019

TO THE SHAREHOLDERS OF ALTAPACIFIC BANCORP:

AltaPacific Bancorp will hold a special meeting of shareholders at 5:30 p.m. Pacific Time on October 28, 2019, at AltaPacific’s offices located at 4845 Old Redwood Highway, Santa Rosa, California 95403. At the special meeting, you will be asked to consider and vote on the following matters:

1. a proposal to approve the Agreement and Plan of Merger, dated as of July 24, 2019, by and between Banner and AltaPacific, pursuant to which AltaPacific will be merged with and into Banner, as more fully described in the attached proxy statement/prospectus, and

2. a proposal to grant discretionary authority to adjourn the special meeting on one or more occasions, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting, or any adjournment of that meeting, to approve the principal terms of the merger agreement and the merger.

We have fixed the close of business on September 25, 2019 as the record date for the special meeting. Only AltaPacific shareholders of record on that date are entitled to notice of, and to vote at, the special meeting, or any adjournment or postponement of the special meeting. In order for the merger agreement and merger to be approved, the holders of a majority of the shares of AltaPacific Bancorp common stock outstanding and entitled to vote must vote in favor of approval of the merger agreement and the merger.

Your vote is very important. We cannot complete the merger unless AltaPacific Bancorp’s common shareholders approve the merger agreement. Failure to vote will have the same effect as voting against the merger.

Regardless of whether you plan to attend the special meeting, please vote as soon as possible. If you hold stock in your name as a shareholder of record, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid return envelope, or call the toll-free telephone number or use the Internet as described in the instructions included with your proxy card or voting instruction card. If you hold your stock in “street name” through a bank or broker, please follow the voting instructions furnished by the record holder.

The enclosed proxy statement/prospectus provides a detailed description of the special meeting, the merger agreement and the merger, the documents related to the merger and other related matters. We urge you to read the proxy statement/prospectus and its appendices carefully and in their entirety. If you have any questions concerning the merger or the proxy statement/prospectus, please contact Allen R. Christensen, Executive Vice President and Chief Financial Officer of AltaPacific Bancorp, at (707) 236-1500.

AltaPacific Bancorp’s Board of Directors has unanimously approved the merger agreement and merger and recommends that AltaPacific Bancorp shareholders vote “FOR” the approval of the merger agreement and merger and “FOR” the approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies in favor of such approval.

DATED: September 27, 2019						By Order of the Board of Directors
						Sheila T. Moran
						Secretary

Important Notice Regarding the Availability of Proxy Materials for the

Special Meeting of Shareholders to be held on October 28, 2019

This proxy statement/prospectus is available electronically at http://www.edocumentview.com/ABNK

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETING

The following questions and answers are intended to briefly address some commonly asked questions regarding the merger, the merger agreement and the special meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference in, this document.

Q: Why am I receiving this proxy statement/prospectus and proxy card?

A: AltaPacific has agreed to be acquired by Banner under the terms of the merger agreement that are described in this proxy statement/prospectus. Immediately following the merger, AltaPacific Bank, AltaPacific’s banking subsidiary, will merge with and into Banner’s banking subsidiary, Banner Bank, with Banner Bank being the surviving entity, which transaction is referred to as the “bank merger.” In order for us to complete the transactions contemplated by the merger agreement, we need, among other things, certain approvals and/or waivers from the Board of Governors of the Federal Reserve System (which we refer to as the “Federal Reserve Board”), the Federal Deposit Insurance Corporation (which we refer to as the “FDIC”) and the Washington State Department of Financial Institutions, Division of Banks (which we refer to as the “DFI”), as described in the section entitled “The Merger—Regulatory Approvals” beginning on page 62 of this proxy statement/prospectus, and the approval of the merger agreement by AltaPacific shareholders.

This proxy statement/prospectus includes important information about the merger, the merger agreement, a copy of which is attached as Annex A to this proxy statement/prospectus, and the special meeting. AltaPacific shareholders should read this information carefully and in its entirety. The enclosed voting materials allow shareholders to vote their shares without attending the special meeting in person.

Q: What am I being asked to vote on at the special meeting?

A: AltaPacific is holding the special meeting to ask its shareholders to consider and vote upon a proposal to approve the merger agreement. AltaPacific shareholders are also being asked to consider and vote upon a proposal to approve adjournment of the special meeting on one or more occasions, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Q: Does my vote matter?

A: Yes. The merger cannot be completed unless the merger agreement is approved by the AltaPacific shareholders. The AltaPacific board of directors, which we refer to as the “AltaPacific board,” unanimously recommends that shareholders vote “FOR” the proposal to approve the merger agreement.

Q: What is the vote required to approve each proposal at the special meeting?

A: The approval of the merger agreement requires the affirmative vote of holders of a majority of the outstanding shares of AltaPacific common stock entitled to vote at the special meeting. If you fail to submit a proxy or vote in person at the special meeting, or vote to abstain, or you do not provide your bank, brokerage firm or other nominee with voting instructions, as applicable, this will have the same effect as a vote “AGAINST” the approval of the merger agreement.

The approval of adjournment of the special meeting, on one or more occasions, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement requires the affirmative vote of the majority of the shares represented at the meeting and entitled to vote. If your shares of AltaPacific common stock are present at the special meeting but are not voted on the proposal, or if you vote to abstain on the proposal, your vote will be considered “AGAINST” the proposal to approve adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the

1

time of the special meeting to approve the merger agreement. If you fail to submit a proxy or vote in person at the special meeting or if your shares of AltaPacific common stock are held through a bank, brokerage firm or other nominee and you do not instruct your bank, brokerage firm or other nominee to vote your shares of AltaPacific common stock, your shares of AltaPacific common stock will not be voted, and this will not have an effect on the vote to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

See the section entitled “Information About the Special Meeting—Record Date for the Special Meeting; Stock Entitled to Vote” beginning on page 35 of this proxy statement/prospectus.

Q: How does the AltaPacific board recommend that I vote at the special meeting?

A: The AltaPacific board unanimously recommends that AltaPacific shareholders vote “FOR” the proposal to approve the merger agreement and “FOR” the proposal to approve adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. See the section entitled “The Merger—AltaPacific’s Reasons for the Merger; Recommendation of the AltaPacific Board of Directors” beginning on page 48 of this proxy statement/prospectus.

Q: Am I entitled to dissenters’ or appraisal rights?

A: Under California law, holders of record of AltaPacific common stock at the record date who do not vote in favor of the approval of the merger agreement have the right to dissent from the merger and obtain payment for the fair value of their shares if the merger is completed, but only if they follow the procedures and satisfy the conditions prescribed by Chapter 13 of the California Corporations Code, which we refer to as the “California Code.” A copy of the applicable statutes regarding dissenters’ rights is attached as Annex D to this proxy statement/prospectus. For an explanation of your dissenters’ rights and how to exercise them, please see the discussion under the heading “The Merger—Dissenters’ Rights.”

Q: What will I receive if the merger is completed?

A: If the merger is completed, each share of AltaPacific common stock outstanding immediately prior to the effective time of the merger, except for certain shares held by Banner or AltaPacific (in each case other than shares held in trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary or agency capacity or as a result of debts previously contracted) or by an AltaPacific shareholder who properly exercises dissenters’ right when and in the manner required under Chapter 13 of the California Code, will be converted into the right to receive 0.2712 shares of Banner common stock, subject to adjustment as provided in the merger agreement, which we refer to as the “merger consideration.”

The merger consideration may be adjusted, via an adjustment to the exchange ratio, as follows:

2

Throughout this proxy statement/prospectus, unless specifically stated otherwise, references to the “merger consideration” and the “exchange ratio,” and all calculations related thereto, assume an exchange ratio of 0.2712, without any adjustment.

Banner will not issue any fractional shares of Banner common stock in the merger. In lieu of the issuance of any such fractional share, Banner will pay to each AltaPacific shareholder who otherwise would be entitled to receive such fractional share an amount in cash (rounded to the nearest cent) determined by multiplying (i) the average closing price of Banner common stock on the NASDAQ for the consecutive period of the five (5) full trading days immediately preceding (but not including) the date that is the second (2nd) business day prior to the closing date, which we refer to as the “Banner average closing price,” by (ii) the fraction of a share (after taking into account all shares of AltaPacific common stock held by such holder immediately prior to the effective time of the merger and rounded to the nearest one-thousandth when expressed in decimal form) of Banner common stock to which such holder would otherwise be entitled to receive pursuant to the merger agreement.

See the sections entitled “The Merger Agreement—Merger Consideration” and “The Merger Agreement—Termination of the Merger Agreement” beginning on pages 66 and 83, respectively, of this proxy statement/prospectus.

Q: What is the exchange ratio?

A: The exchange ratio is used to determine the number of shares of Banner common stock that AltaPacific shareholders will be entitled to receive for each share of AltaPacific common stock they hold. The exchange ratio is 0.2712, as set forth in the merger agreement, subject to adjustment as provided in the merger agreement as described above.

Q: What is the value of the per share merger consideration?

A: The value of the merger consideration will fluctuate as the market price of Banner common stock fluctuates before the completion of the merger. This price will not be known at the time of the special meeting and may be more or less than the current price of Banner common stock or the price of Banner common stock at the time of the special meeting. Based on the closing price of $54.19 per share of Banner common stock on July 23, 2019, the last trading day before the announcement of the merger agreement, the value of the merger consideration was approximately $14.70 per share of AltaPacific common stock. Based on Banner’s closing price of $57.21 per share on September 25, 2019, the last practicable trading day before the date of the enclosed proxy statement/prospectus, the value of the merger consideration was approximately $15.52 per share of AltaPacific common stock. We urge you to obtain current market quotations for shares of Banner common stock. See the section entitled “The Merger Agreement—Merger Consideration” beginning on page 66.

Q: What will happen to AltaPacific as a result of the merger?

A: If the merger is completed, AltaPacific will be merged with and into Banner, with Banner surviving the merger as the surviving corporation.

3

Q: What equity stake will AltaPacific shareholders hold in Banner immediately following the merger?

A: Based on the number of issued and outstanding shares of Banner common stock and AltaPacific common stock as of September 25, 2019, we expect that AltaPacific shareholders as of immediately prior to the closing of the merger will hold, in the aggregate, approximately 4.3% of the issued and outstanding shares of Banner common stock immediately following the closing of the merger (without giving effect to any shares of Banner common stock held by AltaPacific shareholders prior to the merger or any potential adjustment to the exchange ratio).

Q: When do you expect the merger to be completed?

A: Subject to the satisfaction or waiver of the closing conditions described under the section entitled, “The Merger Agreement—Conditions to Completion of the Merger” beginning on page 81 of this proxy statement/prospectus, including the approval of the merger agreement by AltaPacific shareholders at the special meeting, Banner and AltaPacific expect that the merger will be completed in the fourth quarter of 2019. However, it is possible that factors outside the control of both companies, including whether or when the required regulatory approvals will be received, could result in the merger being completed at a different time or not at all.

Q: What are the material U.S. federal income tax consequences of the merger to AltaPacific shareholders?

A: The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the “Code”), and it is a condition to the respective obligations of AltaPacific and Banner to complete the merger that each of AltaPacific and Banner receives an opinion of counsel to that effect. Accordingly, holders of AltaPacific common stock are not expected to recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of AltaPacific common stock for shares of Banner common stock in the merger, except with respect to any cash received in lieu of fractional shares of Banner common stock.

For further information, please refer to “Material U.S. Federal Income Tax Consequences” beginning on page 88. The U.S. federal income tax consequences described above may not apply to all holders of AltaPacific common stock. The particular tax consequences to a holder of AltaPacific common stock will depend on his or her individual situation. Accordingly, holders of AltaPacific common stock should consult their tax advisors for a full understanding of the particular U.S. federal, state, local, foreign or other tax consequences of the merger to them.

Q: Are there any risks that I should consider in deciding whether to vote for the approval of the merger agreement?

A: Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 30 of this proxy statement/prospectus. You also should read and carefully consider the risk factors of Banner contained in the documents that are incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information” beginning on page 108 of this proxy statement/prospectus.

Q: Who can vote at the special meeting?

A: All holders of record of AltaPacific common stock as of the close of business on September 25, 2019, the record date for the special meeting, which we refer to as the “record date,” are entitled to receive notice of, and to vote at, the special meeting, or any postponement or adjournment of the special meeting scheduled in accordance with California law.

Q: When and where is the special meeting?

A: The special meeting will be held on October 28, 2019, at 5:30 p.m., Pacific Time, at AltaPacific’s offices located at 4845 Old Redwood Highway, Santa Rosa, California 95403. For additional information about the special meeting, see the section entitled “Information About the Special Meeting” beginning on page 35 of this proxy statement/prospectus.

4

Q: How will I receive the merger consideration to which I am entitled?

A: After the effective time of the merger, each record holder, as of immediately prior to the effective time of the merger, of shares of AltaPacific common stock that are converted into the right to receive the merger consideration will receive a letter of transmittal and instructions from the exchange agent describing the procedures for surrendering their certificate or certificates representing shares of AltaPacific common stock (which we refer to as a “AltaPacific certificate,” which is deemed to include reference to book-entry accounts relating to the ownership of shares of AltaPacific common stock).

When you properly surrender your AltaPacific certificates, and return the letter of transmittal duly executed and completed in accordance with its instructions, the exchange agent will promptly cancel the surrendered stock certificates and deliver to you a notice specifying, among other things, the number of shares of Banner common stock, which will be solely in uncertificated book-entry form credited to the account of the holder of record, and cash for fractional shares, if any, to which you are entitled under the merger agreement.

More information on the documentation AltaPacific shareholders are required to deliver to the exchange agent may be found under the captions “The Merger Agreement—Exchange and Payment Procedures” beginning on page 67 of this proxy statement/prospectus.

Q: Will my shares of Banner common stock acquired in the merger be entitled to receive dividends?

A: After the closing of the merger, as a holder of Banner common stock, you will receive the same dividends on shares of Banner common stock that all other holders of shares of Banner common stock will receive with any dividend record date that occurs after the merger is completed.

AltaPacific shareholders will not receive any dividends or other distributions which are declared payable to shareholders of record of Banner common stock after the effective time of the merger until such shareholder properly surrenders such shareholder’s share certificates or book entry shares. Upon proper surrender, such shareholder will be paid, without interest, any dividends or other distributions with respect to the shares of Banner common stock as to which the record date and payment date occurred on or after the effective time of the merger and on or before the date on which the shareholder surrendered such shareholder’s AltaPacific share certificates or book entry shares.

Any future payment of dividends by Banner requires approval by the Banner board of directors and the Banner board of directors may change its dividend policy at any time. See “Comparative Per Share Market Price and Dividend Information” beginning on page 25 for a comparison of the historical dividend practices of the two companies.

Q: Do any of AltaPacific’s directors or executive officers have interests in the merger that may differ from those of AltaPacific shareholders?

A: AltaPacific’s directors and executive officers have interests in the merger that may be different from, or in addition to, those of AltaPacific shareholders generally. The AltaPacific board was aware of and considered these interests, among other matters, in evaluating the merger agreement and the merger, and in recommending that AltaPacific shareholders approve the merger agreement. For a description of these interests, refer to the section entitled “The Merger—Interests of Directors and Executive Officers of AltaPacific in the Merger” beginning on page 58 of this proxy statement/prospectus.

Q: What is the difference between holding shares as a shareholder of record and as a beneficial owner?

A: If your shares of AltaPacific common stock are registered directly in your name with the transfer agent of AltaPacific, you are considered the shareholder of record with respect to those shares. As the shareholder of record, you have the right to vote, or to grant a proxy for your vote directly to AltaPacific or to a third party to vote at the special meeting.

5

If your shares are held by a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares held in “street name,” and your bank, brokerage firm or other nominee is considered the shareholder of record with respect to those shares. Your bank, brokerage firm or other nominee will send you, as the beneficial owner, a package describing the procedure for voting your shares. You should follow the instructions provided by them to vote your shares. You are invited to attend the special meeting; however, you may not vote these shares in person at the special meeting unless you obtain a “legal proxy” from your bank, brokerage firm or other nominee that holds your shares, giving you the right to vote the shares at the special meeting.

Q: If my shares of AltaPacific common stock are held in “street name” by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee automatically vote those shares for me?

A: Your bank, brokerage firm or other nominee will only be permitted to vote your shares of AltaPacific common stock if you instruct your bank, brokerage firm or other nominee how to vote. You should follow the procedures provided by your bank, brokerage firm or other nominee regarding the voting of your shares of AltaPacific common stock. Banks, brokerage firms and other nominees who hold shares of AltaPacific common stock in “street name” for their customers typically have authority to vote on “routine” proposals when they have not received voting instructions from beneficial owners. However, banks, brokerage firms and other nominees are precluded from exercising their voting discretion with respect to non-routine matters, such as the approval of the merger agreement and adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement. As a result, absent specific voting instructions from the beneficial owner of such shares, banks, brokerage firms and other nominees are not empowered to vote such shares. A so-called “broker non-vote” results when banks, brokerage firms and other nominees return a valid proxy but do not vote on a particular proposal because they do not have discretionary authority to vote on the matter and have not received specific voting instructions from the beneficial owner of such shares. The effect of not instructing your broker how you wish your shares to be voted will be the same as a vote “against” the approval of the merger agreement and will have no effect on the vote to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Q: How many votes do I have?

A: Each AltaPacific shareholder is entitled to one vote for each share of AltaPacific common stock held of record as of the record date. As of the close of business on the record date, there were 5,780,333 outstanding shares of AltaPacific common stock entitled to vote at the special meeting.

Q: What constitutes a quorum for the special meeting?

A: The presence, in person or represented by proxy, of shareholders who hold a majority of the shares entitled to vote at the special meeting constitutes a quorum for the purposes of the special meeting. Abstentions and broker non-votes, if any, are counted as present for purposes of establishing a quorum.

If a quorum is not present, a majority of the shares represented at the special meeting may adjourn the special meeting.

Q: What do I need to do now?

A: Even if you plan to attend the special meeting in person, after carefully reading and considering the information contained in this proxy statement/prospectus, please vote promptly to ensure that your shares are represented at the special meeting.

6

Q: How do I vote?

A: Shareholder of Record. If you are a shareholder of record, you may have your shares of AltaPacific common stock voted on the matters to be presented at the special meeting in the following ways:

Beneficial Owner. If you are a beneficial owner, please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner and wish to vote in person at the special meeting, you must obtain a legal proxy from your bank, brokerage firm or other nominee.

Q: Can I attend the special meeting and vote in person?

A: Yes. All AltaPacific shareholders are invited to attend the special meeting. Shareholders of record of AltaPacific common stock as of the record date for the special meeting can vote in person at the special meeting.

If you plan to attend the special meeting, you must hold your shares in your own name and bring evidence of your stock ownership, such as your most recent account statement, or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of government-issued personal photo identification with you in order to be admitted to the meeting.

If your shares of AltaPacific are held in “street name,” then you are not the shareholder of record. In order for you to vote the shares that you beneficially own and that are held in “street name” in person at the special meeting, you must bring a legal proxy, executed in your favor, from the bank, brokerage firm or other nominee that was the record holder of your shares held in “street name” as of the record date (i) confirming that you were the beneficial owner of those shares as of the record date, (ii) stating the number of shares of which you were the beneficial owner that were held for your benefit at that time by that bank, brokerage firm or other nominee, and (iii) appointing you as the record holder’s proxy to vote the shares covered by that proxy at the special meeting.

Whether or not you intend to be present at the special meeting, you are urged to sign, date, and return your proxy card promptly. If you are then present and wish to vote your shares in person, your original proxy may be revoked by requesting a revocation of your submitted proxy and voting by ballot at the special meeting.

Q: How can I change or revoke my vote?

A: You have the right to revoke a proxy or change your vote at any time before your proxy card is voted at the special meeting, and your last vote is the vote that will be counted. If you are an AltaPacific shareholder of record, you can write to Allen Christensen, Executive Vice President and Chief Financial Officer of AltaPacific Bancorp, at 4845 Old Redwood Highway, Santa Rosa, California 95403, stating that you wish to revoke your proxy and requesting another proxy card. You may change your vote by (i) signing and delivering to the Corporate Secretary of AltaPacific or to AltaPacific’s transfer agent a new proxy card relating to your shares and bearing a later date, (ii) recording a different vote by Internet or telephone if you have previously voted your shares by Internet or telephone, or (iii) attending the special meeting and voting your shares in person. If you hold your shares through a broker, bank or other nominee, you can revoke your proxy by contacting the broker, bank or other nominee and asking for a new proxy card. If you attend the meeting, you must request a revocation of your submitted proxy and vote by ballot to revoke your proxy. Your attendance alone at the special meeting will not of itself constitute a revocation of your proxy.

Q: If a shareholder gives a proxy, how are the shares of AltaPacific common stock voted?

A: Regardless of the method you choose to vote, the individuals named on the enclosed proxy card will vote your shares of AltaPacific common stock in the way that you indicate. When completing the proxy card, you may specify whether your shares of AltaPacific common stock should be voted “for” or “against,” or whether your shares should “abstain” from voting on, all, some or none of the specific items of business to come before the special meeting.

7

If you properly sign your proxy card but do not mark the boxes showing how your shares should be voted on a matter, the shares represented by your properly signed proxy will be voted “FOR” the proposal to approve the merger agreement and “FOR” the proposal to approve adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Q: What should I do if I receive more than one set of voting materials?

A: If you hold shares of AltaPacific common stock in “street name” and also directly as a record holder or otherwise or if you hold shares of AltaPacific common stock in more than one brokerage account, you may receive more than one set of voting materials relating to the special meeting. Please complete, sign, date and return each proxy card or otherwise follow the voting instructions provided in this proxy statement/prospectus in order to ensure that all of your shares of AltaPacific common stock are voted. If you hold your shares in “street name” through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee to vote your shares.

Q: What happens if I sell my shares of AltaPacific common stock before the special meeting?

A: The record date is earlier than both the date of the special meeting and the effective time of the merger. If you transfer your shares of AltaPacific common stock after the record date but before the special meeting, you will, unless the transferee requests a proxy from you, retain your right to vote at the special meeting but will transfer the right to receive the merger consideration to the person to whom you transfer your shares. In order to receive the merger consideration, you must hold your shares at the effective time of the merger.

Q: Who will solicit and pay the cost of soliciting proxies?

A: AltaPacific’s directors, officers and employees may solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies. AltaPacific will also request that brokerage houses and other custodians, nominees and fiduciaries forward these proxy materials to beneficial owners of AltaPacific common stock. AltaPacific will, upon request, reimburse such brokerage houses and custodians for their reasonable expenses in assisting with the solicitation of proxies.

Q: Should I send in my stock certificates now?

A: No, please do NOT return your stock certificate(s) with your proxy now. After the effective time of the merger, each record holder, as of immediately prior to the effective time of the merger, of shares of AltaPacific common stock that are converted into the right to receive the merger consideration will receive a letter of transmittal and instructions from the exchange agent describing the procedures for surrendering their certificate or certificates representing shares of AltaPacific common stock.

Q: Are there any voting agreements in place with AltaPacific shareholders?

A: Each of the directors and certain of the executive officers of AltaPacific has entered into a voting and support agreement with Banner, in which each such person agreed, among other things, to vote the shares of AltaPacific common stock he or she beneficially owns in favor of the merger proposal and the proposal to adjourn or postpone the special meeting of the AltaPacific shareholders to a later date if there are not sufficient votes to approve the merger agreement, as well as certain other customary restrictions with respect to the voting and transfer of such person’s shares of AltaPacific common stock.

8

Q: What happens if the merger is not completed?

A: If the merger is not completed, AltaPacific shareholders will not receive any consideration for their shares of AltaPacific common stock in connection with the merger. Instead, AltaPacific will remain an independent company. Under specified circumstances, AltaPacific may be required to pay Banner a fee with respect to the termination of the merger agreement, as described under the section entitled “The Merger Agreement—Termination Fee” beginning on page 85 of this proxy statement/prospectus.

Q: Who can help answer any other questions I have?

A: If you have additional questions about the merger, need assistance in submitting your proxy or voting your shares of AltaPacific common stock, or need additional copies of this proxy statement/prospectus or the enclosed proxy card, please contact Allen Christensen, Executive Vice President and Chief Financial Officer of AltaPacific at 4845 Old Redwood Highway, Santa Rosa, California 95403, or by telephone (707) 236-1500.

9

THE MERGER

The following discussion contains certain information about the merger. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement/prospectus. This summary does not purport to be complete and may not contain all of the information about the merger that is important to you. You are encouraged to read the merger agreement carefully and in its entirety. This section is not intended to provide you with any factual information about AltaPacific or Banner. Such information can be found elsewhere in this proxy statement/prospectus and in the public filings Banner makes with the SEC that are incorporated by reference into this document, as described in the section entitled “Where You Can Find More Information” beginning on page 108 of this proxy statement/prospectus.

Terms of the Merger

The merger agreement provides that, subject to the terms and conditions therein, AltaPacific will merge with and into Banner with Banner surviving the merger as the surviving corporation. Immediately following the merger, AltaPacific Bank, AltaPacific’s wholly owned bank subsidiary, will merge with and into Banner’s wholly owned bank subsidiary, Banner Bank, with Banner Bank continuing as the surviving entity.

In the merger, each outstanding share of AltaPacific common stock, other than certain shares held by Banner or AltaPacific (in each case other than shares held in trust accounts, managed accounts, mutual funds and the like, or otherwise held in a fiduciary, custodial, escrow or agency or similar capacity or as a result of debts previously contracted) or held by an AltaPacific shareholder who properly exercises dissenters’ right when and in the manner required under Chapter 13 of the California Code, will be converted into the right to receive 0.2712 shares of Banner common stock. The exchange ratio may be subject to change in the event that the percentage increase or percentage decrease in Banner’s stock price exceeds certain thresholds, as described in the section entitled “The Merger Agreement—Termination of the Merger Agreement” beginning on page 83 of this proxy statement/prospectus.

Background of the Merger

As part of its continuous effort to enhance long-term value for AltaPacific shareholders, the AltaPacific board periodically evaluates the strategic direction and business objectives of AltaPacific. This process entails consideration of, among other things, the economic, regulatory and competitive conditions in which AltaPacific operates, trends in the financial services industry, as well as AltaPacific’s history, long-term business strategy and objectives.

As part of this evaluation, during the latter half of 2018, the AltaPacific board identified a growing set of challenges facing the community banking industry in general and, in some cases, AltaPacific specifically. In particular, the AltaPacific board recognized the need for increased scale to offset persistently high regulatory compliance costs, the industry-wide proliferation of technology that could not be economically accessed or implemented by AltaPacific at its then-existing scale or with its then-existing resources, and the continued, strong competition for customers from other banks, credit unions and financial technology companies. The AltaPacific board also considered the relative illiquidity of AltaPacific common stock and the importance to AltaPacific’s shareholder base of accessing a source of liquidity to monetize their investment in AltaPacific.

On July 11, 2018, the AltaPacific board held a regularly scheduled meeting, during which the AltaPacific board and the executive management team discussed strategic options for AltaPacific, including remaining independent or pursuing a strategic merger of equals or a sale of AltaPacific. A representative of Panoramic Capital Advisors, which we refer to as “Panoramic,” participated in the meeting. At this meeting, the AltaPacific board, the executive management team, and the representative of Panoramic also discussed the future financial projections and operations of AltaPacific and anticipated industry and market conditions. As a result of the deliberations at this meeting, the AltaPacific board approved a course of action whereby AltaPacific would begin to explore a strategic merger of equals that would enable AltaPacific to better execute its operating strategies, optimize its scale, and

41

leverage its resources to more effectively compete for future acquisitions and other growth opportunities in its marketplace. The AltaPacific board determined that, if a favorable merger of equals were not available, it would assess other strategic measures, including remaining independent or pursuing a sale transaction. The AltaPacific board authorized its merger committee, comprised of directors Frank Basirico, who also serves as AltaPacific’s President and Chief Operating Officer, Gary Deems, Charles O. Hall, who also serves as AltaPacific’s Chief Executive Officer, Tim Jorstad, the chairman of the AltaPacific board, Randall Verrue and Joseph Zils, which we refer to as the “merger committee,” to initiate a process for a potential merger of equals or sale of AltaPacific with the assistance of Panoramic.

On July 12, 2018, the merger committee held a special meeting. A representative of Panoramic participated in the meeting. At the meeting, the representative of Panoramic discussed trends in the community banking industry and AltaPacific’s financial position and trajectory, including recent stock market and M&A valuations in the community banking industry. The representative of Panoramic listed a number of financial institutions, including Banner, that could be potential merger partners based on, among other things, market capitalization, prospects, reputation, and business and cultural alignment. The representative of Panoramic proposed reaching out informally to potential merger partners to gauge interest in a strategic transaction.

On August 1, 2018, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. The representative of Panoramic and the merger committee reported its findings to the AltaPacific board. The AltaPacific board directed the merger committee, with the assistance of Panoramic, to reach out informally to potential merger partners to establish relationships that would allow AltaPacific to gauge each such party’s interest in considering a transaction with AltaPacific and to obtain a sense of each such party’s merger philosophies and estimated valuations for AltaPacific.

From early August 2018 through November 2018, at the merger committee’s direction, a representative of Panoramic contacted fourteen financial institutions identified by Panoramic, senior management of AltaPacific, and the AltaPacific board as potential strategic partners concerning their level of interest, if any, in pursuing a transaction with AltaPacific. The list of potential strategic partners included financial institutions headquartered outside of California, including institutions which had no existing branch operations in California, and financial institutions headquartered in California. Some of the out of state financial institutions stated they were not interested in entering California at the present time, while others stated they were not actively seeking acquisition candidates. During this period, AltaPacific entered into confidentiality agreements with two financial institutions, including a confidentiality agreement with Banner that was entered into on September 28, 2018, and AltaPacific only received a non-binding indication of interest from Banner.

On August 28, 2018, with the approval of the merger committee, a financial institution headquartered in California, which we refer to as “Company A,” entered into a confidentiality agreement with AltaPacific in order to commence due diligence. A virtual data room containing certain non-public information about AltaPacific was opened, and access was granted to Company A.

On September 5, 2018, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. The AltaPacific board and the executive management team discussed the interest received from Banner and Company A. The AltaPacific board and the representative of Panoramic also discussed the informal expression of interest received by Panoramic from a California financial institution, which we refer to as “Company B.” After discussion with the executive management team and a representative from Panoramic, the AltaPacific board concluded that a combination of the two financial institutions would not be in the best interest of AltaPacific’s shareholders due to factors which included, but were not limited to, the illiquid stock of Company B and the business culture and strategies of Company B, which were not aligned with AltaPacific. The AltaPacific board and the representative of Panoramic further discussed the informal expressions of interest received by Panoramic from a Midwest financial institution, which we refer to as “Company C”, and a California financial institution, which we refer to as “Company D.” After discussion with the executive management team and a representative from Panoramic, the AltaPacific board instructed the merger committee and Panoramic to continue discussions with Banner, Company A, Company C and Company D.

42

On September 20, 2018, Messrs. Jorstad and Hall met with representatives of Company C to discuss its preliminary interest in a strategic business combination transaction with AltaPacific. During the meeting, the representatives of Company C stated that while they had some interest in discussing a possible merger transaction, Company C was currently discussing a possible merger transaction with another California financial institution and were not in a position to move forward with any further discussions with AltaPacific until they were able to conclude their discussions with the other institution. In addition, the representatives of Company C stated that their current expansion plans did not include entry into the Southern California market.

On September 26, 2018, Messrs. Jorstad and Hall met with representatives of Banner. At the meeting with Banner, Mr. Hall provided an overview of AltaPacific’s operations, financial condition, and strategy, and the representatives of Banner discussed the cultures of the two companies and the complementary nature of their branch locations and strategies.

On September 28, 2018, after entering into a confidentiality agreement with Banner, AltaPacific granted Banner access to certain non-public information in its virtual data room.

In late September 2018, Company A notified a representative of Panoramic that it would not proceed further with exploring a transaction with AltaPacific.

On October 3, 2018, Messrs. Jorstad and Hall met with representatives of Company D to discuss its preliminary interest in a strategic transaction with AltaPacific. During the discussion, a representative of Company D stated that current market conditions had negatively impacted the stock price of Company D which has impaired their ability to offer a fair price for AltaPacific. As a result, the representative stated that he would not be in a position to continue any meaningful discussions until the stock value of Company D substantially improved, which he anticipated would not occur until 2019.

On October 3, 2018, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. The executive management team of AltaPacific, the representative of Panoramic, and the merger committee updated the AltaPacific board on the progress made with respect to Banner and Companies A, C, and D, including that Companies A and D had decided to withdraw their interest in pursuing a transaction with AltaPacific. The representative of Panoramic reviewed the list of financial institutions that had been contacted to gauge interest in a potential strategic business combination transaction with AltaPacific, and the AltaPacific board identified Banner and Company C as the two primary candidates.

On November 7, 2018, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. The executive management team of AltaPacific, the representative of Panoramic, and the merger committee updated the AltaPacific board on the progress made with respect to Banner and noted that there had been no further discussions with Company C subsequent to the meeting on September 20, 2018. Following discussion by the AltaPacific board, the representative of Panoramic was instructed to solicit a non-binding indication of interest from Banner.

In mid-November 2018, as directed by the AltaPacific board, Panoramic requested that Banner submit a written non-binding indication of interest for a potential strategic business combination transaction with AltaPacific.

On November 30, 2018, Banner submitted an indication of interest, which provided a non-binding proposal for an all-stock transaction based on a fixed exchange ratio of 0.2691 shares of Banner common stock per share of AltaPacific common stock. The indication of interest described certain other terms of a proposed transaction, including a customary termination fee payable by AltaPacific under certain circumstances. The indication of interest was contingent on AltaPacific agreeing to a 120-day exclusivity period during which AltaPacific would not, among other things, solicit proposals from or provide confidential information to other potential strategic business combination transaction partners.

43

On December 5, 2018, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. Mr. Jorstad, the executive management team, and the representative of Panoramic updated the AltaPacific board on the events since the prior AltaPacific board meeting on November 7, 2018, including an overview of the written indication of interest from Banner. Based on Banner’s last closing stock price prior to the meeting, the merger consideration proposed in Banner’s indication of interest was valued at approximately $16.08 per share of AltaPacific common stock, or $92.7 million in the aggregate. With the assistance of the representative from Panoramic, the AltaPacific board considered the Banner indication of interest and, based on publicly available information, analyzed Banner’s stock valuation and prospects, including the risks to Banner’s business. The AltaPacific board discussed the valuation, risks and benefits of the Banner indication of interest, including, among other things, the active trading market and liquidity for Banner common stock and Banner’s history of paying cash dividends. The AltaPacific board also discussed the potential effect of a transaction with Banner on AltaPacific’s employees, customers, communities and other constituencies. The AltaPacific board determined that a merger with Banner had the potential to maximize value for AltaPacific shareholders and to be in the best interest of AltaPacific and its other constituents, and that it was in the best interest of AltaPacific and its shareholders to engage in negotiations with Banner with the goal of obtaining the highest merger consideration possible. At the conclusion of the meeting, the AltaPacific board directed Panoramic to propose an exchange ratio of 0.3125 shares of Banner common stock per share of AltaPacific common stock, which, based on Banner’s last closing stock price prior to the meeting, represented a value of roughly $18.68 per share of AltaPacific common stock, and a 60-day exclusivity period.

On December 7, 2018, Mr. Hall, on behalf of AltaPacific, sent Banner a counter-offer with respect to certain terms and conditions in Banner’s initial non-binding indication of interest, which included a proposal to increase the fixed exchange ratio to 0.3125 shares of Banner common stock per share of AltaPacific common stock and to reduce the exclusivity period to 60 days.

On December 14, 2018, Banner responded to AltaPacific’s counter-offer with a proposal that provided for a fixed exchange ratio of 0.2829 shares of Banner common stock per share of AltaPacific common stock and a 90-day exclusivity period.

On December 16, 2018, the executive management team and members of the merger committee of AltaPacific held a teleconference to discuss the recent offer letter. A representative of Panoramic participated in the teleconference. Noting that the recent offer did not meet the terms of AltaPacific’s December 7, 2018, counter-offer, the merger committee decided to decline Banner’s revised offer and choose to explore other opportunities. The merger committee then directed the representative of Panoramic to seek out other entities which might have an interest in pursuing a transaction with AltaPacific.

On December 17, 2018, Mr. Jorstad communicated with Mark J. Grescovich, President and Chief Executive Officer of Banner, to thank him for Banner’s interest in AltaPacific and indicated that AltaPacific had decided to decline their latest offer. The two individuals agreed to stay in communication with one another and each were open to reengaging in potential merger discussions.

During the rest of December 2018 through February 2019, a representative of Panoramic contacted four California financial institutions, a California business development company and a Western credit union to assess their level of interest, if any, in pursuing a transaction with AltaPacific. All four California financial institutions declined to submit an offer stating various reasons including, but not limited to, the fact that their institution was currently not seeking acquisition candidates, AltaPacific did not fit within their acquisition strategy as they were not interested in entering the Southern California market or the institution was concerned regarding their ability to pay a fair price for AltaPacific given current market conditions had negatively impacted the price of their stock.

In January 2019, a representative of Panoramic advised the merger committee that representatives of a California business development company, which we refer to as “Company E,” wished to meet to discuss the possibility of a strategic business combination with AltaPacific.

44

On January 31, 2019, an investment banker met with a representative of Panoramic stating that he had a client who might have an interest in pursuing a transaction with AltaPacific. The investment banker and the representative of Panoramic met on February 19, 2019, at which time the investment banker identified the name of his client, which is a California financial institution that we refer to as “Company F”. Following the meeting, the representative of Panoramic contacted Mr. Hall and informed him of the meeting. Mr. Hall stated that he would discuss the information with executive management and the merger committee.

On February 5, 2019, Messrs. Jorstad, Hall and Basirico met with representatives of Company E. Messrs. Jorstad and Hall had become acquainted with the chief executive officer of Company E a number of years ago and were familiar with the operations of Company E. At the conclusion of the meeting the representatives of Company E expressed a desire to enter into a confidentiality agreement with AltaPacific and conduct preliminary due diligence.

On February 6, 2019, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. Mr. Jorstad briefed the AltaPacific board on the status of Company E’s interest in pursuing a strategic business combination transaction with AltaPacific. The representative from Panoramic provided information on the executive management team of Company E. After discussion, the AltaPacific board authorized management to enter into a confidentiality agreement with Company E. On February 7, 2019, a confidentiality agreement was issued to Company E. In addition, during the meeting Mr. Hall informed the AltaPacific board of the recent discussion he had with the representative of Panoramic regarding Company F. The AltaPacific board then discussed the business and operating strategies and financial performance of Company F and concluded that pursuing a transaction with Company F would not be in the best interests of the shareholders of AltaPacific due to factors which included, but were not limited to, the illiquid stock of Company F and the business culture and strategies of Company F, which were not aligned with AltaPacific.

On February 20, 2019, a representative of Panoramic informed executive management of AltaPacific that representatives of a Western credit union, which we refer to as “Company G,” requested information on AltaPacific as they were interested in discussing the possibility of a possible merger. Executive management of AltaPacific authorized the release of investor presentation materials to Company G.

On March 2, 2019, a representative of Panoramic informed executive management of AltaPacific that Company G decided to withdraw their expression of interest as they concluded they did not have an interest in pursuing a transaction with a financial institution that had branch operations in Southern California.

On March 6, 2019, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. Mr. Hall briefed the AltaPacific board on potential meetings with chief executive officers and, in certain instances, board members of regional financial institutions at the Western Bankers Association, which we refer to as the “WBA,” conference in Hawaii during March 2019 that he intended to take with Mr. Jorstad, which were intended to informally gauge interest in a merger of equals with AltaPacific. The representative of Panoramic informed the AltaPacific board that Company E had not yet entered into a confidentiality agreement with AltaPacific.

On March 9, 2019, while attending the WBA conference Messrs. Jorstad, Hall and Basirico met with representatives of a California financial institution, which we refer to as “Company H.” The purpose of the meeting was to discuss the possibility of a possible merger of equals. Following the discussion, Messrs. Jorstad, Hall and Basirico concluded that a business combination with Company H would not be in the best interests of AltaPacific’s shareholders due to several reasons, including, but not limited to, differing business and operating strategies of the two institutions, the illiquid stock of Company H, and a merger with Company H would effectively result in a transfer of control of AltaPacific to Company H without payment of an adequate control premium.

On March 11, 2019, while attending the WBA conference, Messrs. Jorstad, Hall and Basirico met with representatives of a California financial institution, which we refer to as “Company I.” The purpose of the meeting was to discuss the possibility of a possible merger of equals. On March 19, 2019, Company I entered into a confidentiality agreement with AltaPacific in order to commence due diligence.

45

On April 3, 2019, the AltaPacific board held a regularly scheduled meeting. A representative of Panoramic participated in the meeting. Mr. Jorstad briefed the AltaPacific board on the meeting he and Messrs. Hall and Basirico had with representatives of Company H and Company I as well as other informal meetings with chief executive officers and, in certain instances, board members of financial institutions at the WBA conference in Hawaii during March 2019. Following Mr. Jorstad’s comments, the AltaPacific board, executive management and a representative of Panoramic discussed possible opportunities and strategies which would support AltaPacific’s long-term business strategy and objectives. During the course of the discussion, the AltaPacific board, the executive management team and the representative of Panoramic determined that, given the economies of scale necessary to effectively compete and create organic growth in AltaPacific’s market or in a combined market with a financial institution of a similar or smaller size, a strategic merger of equals was not in the best interests of the shareholders of AltaPacific. Further, the representative of Panoramic informed the AltaPacific board that Company E and Company I were unable to proceed with negotiations regarding a strategic business combination transaction at this time. After consultation with the executive management team and the representative of Panoramic, the AltaPacific board decided to schedule an in-person meeting with Mr. Grescovich and Peter Conner, Chief Financial Officer of Banner.

On April 16, 2019, Messrs. Jorstad, Hall, and Basirico met with Messrs. Grescovich and Conner to further negotiate Banner’s non-binding indication of interest in AltaPacific.

On May 7, 2019, subsequent to the in-person negotiation, Banner submitted a revised indication of interest, which provided a non-binding proposal for an all-stock transaction with an exchange ratio between 0.2836 and 0.2600 shares of Banner common stock for each share of AltaPacific common stock in the event the trading price of Banner common stock was between $55.00 and $60.00 per share. In the event the trading price of Banner common stock was less than $55.00 at the closing of the transaction, the exchange ratio would be fixed at 0.2836 shares of Banner common stock per share of AltaPacific common stock. In the event the trading price of Banner common stock was above $60.00 per share, the exchange ratio would be fixed at 0.2600 shares of Banner common stock per share of AltaPacific common stock. The revised indication of interest provided for a 60-day exclusivity period.

On May 8, 2019, the AltaPacific merger committee held a special meeting. A representative of Panoramic participated in the meeting. Based on Banner’s closing stock price immediately prior to the meeting, the merger consideration proposed in Banner’s indication of interest was valued at approximately $15.36 per share of AltaPacific common stock, or $88.6 million in the aggregate. After discussions with the representative of Panoramic, the merger committee determined to recommend to the full AltaPacific board that AltaPacific make a counter-offer to Banner to increase the per-share merger consideration to at least $15.80 per share of AltaPacific common stock.

On May 11, 2019, the AltaPacific board held a special meeting. A representative of Panoramic participated in the meeting. After consulting with the representative of Panoramic, the AltaPacific board determined that it would make a counter-offer to Banner that indicated AltaPacific would accept either a fixed dollar price of $16.00 per share of AltaPacific common stock in an all-stock transaction, with a floating exchange rate, or a fixed exchange rate of 0.2762 shares of Banner common stock per share of AltaPacific common stock. The AltaPacific board further determined that, in the event Banner accepted either price proposal made in its counter-offer, it would be in the best interests of AltaPacific and its shareholders to agree to negotiate exclusively with Banner on such revised terms. The AltaPacific board made its determination in consultation with the representative of Panoramic and its executive management team, and it considered, among other factors, the benefits and risks of a transaction with Banner as compared to AltaPacific’s stand-alone prospects as well as the fact that none of the other potential counter-parties contacted by Panoramic had expressed actionable interest in a strategic business combination transaction with AltaPacific. The AltaPacific board authorized Mr. Hall to sign the indication of interest in the event Banner accepted either price proposal.

46

On May 13, 2019, Messrs. Jorstad, Hall and Basirico and a representative of Panoramic contacted Messrs. Grescovich and Conner and a consultant from Stephens Inc., which we refer to as “Stephens,” and verbally informed them of AltaPacific’s counter-offer.

On May 14, 2019, Banner submitted a revised indication of interest, which provided a non-binding proposal for an all-stock transaction based on a fixed exchange ratio of 0.2762 shares of Banner common stock for each share of AltaPacific common stock. Based on Banner’s closing stock price that day, the merger consideration proposed in Banner’s indication of interest was valued at approximately $14.94 per share of AltaPacific common stock, or $86.1 million in the aggregate. Mr. Hall executed the indication of interest on May 15, 2019.

On May 14, 2019, AltaPacific and Panoramic entered into a formal engagement letter to provide for the compensation of Panoramic for its consulting services to AltaPacific.

On May 23, 2019, AltaPacific and Vining Sparks entered into a formal engagement letter pursuant to which Vining Sparks agreed to render a financial fairness opinion regarding the merger consideration to be paid to AltaPacific shareholders.

On June 14, 2019, representatives of Davis Wright Tremaine LLP, which we refer to as “Davis Wright,” corporate counsel to Banner, distributed a draft of the merger agreement to King, Holmes, Paterno & Soriano, LLP, corporate counsel to AltaPacific, which we refer to as “KHPS.” The draft merger agreement provided, among other things, for a restriction on AltaPacific’s ability to pay any dividends between execution of the merger agreement and closing of the merger and a condition to the consummation of the merger that AltaPacific have a least a specified minimum amount of adjusted tangible common equity as of the closing.

In late June, a representative of Panoramic spoke with representatives of Stephens regarding adding a price protection mechanism to the draft merger agreement, specifically a “double-trigger” termination provision in favor of either AltaPacific or Banner, depending on the performance of the trading price of Banner common stock. For more information on the “double-trigger” termination provision, please see “The Merger Agreement—Termination of the Merger Agreement” beginning on page 83 of this proxy statement/prospectus During this period of time, Mr. Conner contacted the representative of Panoramic and expressed Banner’s continued desire to proceed with the transaction, but indicated that through due diligence, Banner had discovered that certain of its value assumptions underlying the exchange ratio in the Banner indication of interest were not supported. In order to compensate for this development, Banner proposed a revised exchange ratio of 0.2712 shares of Banner common stock per share of AltaPacific common stock.

On June 27, 2019, the AltaPacific board held a special meeting. Representatives from Panoramic, Vining Sparks, and KHPS participated in the meeting. At the meeting, the representative of Panoramic and KHPS led a discussion with the AltaPacific board regarding the negotiations with Banner and the current draft of the merger agreement. The AltaPacific board discussed Banner’s due diligence findings and Banner’s proposed revised terms. The AltaPacific board also considered the relative merits of AltaPacific’s stand-alone prospects and the proposed transaction with Banner at the revised exchange ratio. Following the discussion, the AltaPacific board directed Panoramic to proceed with negotiation of the transaction terms with Stephens.

On July 12, 2019, Davis Wright distributed a revised draft of the merger agreement that included a “double-trigger” termination provision, a revised exchange ratio of 0.2712 shares of Banner common stock per share of AltaPacific, and a specified minimum amount of adjusted tangible common equity as of the closing of $50.3 million plus $13,000 for every day past September 30, 2019, that the closing of the merger took place. Based on Banner’s closing stock price that day, the merger consideration proposed in Banner’s indication of interest was valued at approximately $14.80 per share of AltaPacific common stock, or $85.4 million in the aggregate.

Between July 12, 2019, and July 24, 2019, AltaPacific and Banner, along with their financial and legal advisors, finalized the merger agreement and related documents.

47

On July 23, 2019, the AltaPacific board held a special meeting. A representative of Panoramic, Vining Sparks, and KHPS participated in the meeting. Representatives of KHPS discussed with the directors the directors’ fiduciary duties and legal obligations in the context of considering the transaction with Banner, reviewed the merger agreement and related documents, and provided an updated report on legal due diligence findings with respect to Banner. The executive management team of AltaPacific provided an updated report on its business due diligence with respect to Banner. A representative of Vining Sparks reviewed the financial aspects of the proposed merger, including discussing the various financial methodologies used in its analysis, and provided Vining Sparks’ oral opinion to the AltaPacific board, subsequently confirmed in writing, to the effect that, as of July 23, 2019, the exchange ratio provided in the merger agreement was fair to the holders of AltaPacific common stock from a financial point of view. The AltaPacific board asked questions and discussed each of the reports and presentations, considered the relative merits of AltaPacific’s stand-alone prospects and the proposed transaction with Banner on the terms provided in the merger agreement, and considered the effect of the proposed transaction with Banner on AltaPacific’s employees, customers, communities, and other constituencies. Following this discussion and the receipt of Vining Sparks’ oral opinion, the AltaPacific board unanimously (i) determined that the merger, on the terms and conditions set forth in the merger agreement, was in the best interests of AltaPacific and its shareholders, (ii) approved entering into the merger agreement and related agreements, (iii) directed that the merger agreement and the transactions contemplated thereby be submitted to the AltaPacific shareholders for approval at a meeting of the AltaPacific shareholders, and (iv) determined to recommend that the AltaPacific shareholders approve the merger agreement and the transactions contemplated thereby.

On July 24, 2019, the merger agreement and related documents were executed, and Banner and AltaPacific publicly announced the merger in a joint press release.

AltaPacific’s Reasons for the Merger; Recommendation of the AltaPacific Board of Directors

At a meeting held on July 23, 2019, the AltaPacific board unanimously determined that the merger, on the terms and conditions set forth in the merger agreement, was in the best interests of AltaPacific and its shareholders. In the course of reaching this determination and making the related decision to approve the merger agreement and recommend that AltaPacific shareholders vote “FOR” the proposal to approve the merger agreement, the AltaPacific board evaluated the merger and the merger agreement in consultation with the management of AltaPacific and AltaPacific’s financial advisor and legal counsel. In making its determination and reaching its decision to approve the merger agreement and recommend that AltaPacific shareholders vote “FOR” the proposal to approve the merger agreement, the AltaPacific board considered a number of factors, including the following factors that the AltaPacific board viewed as generally supporting its determination and decisions:

48

49

The AltaPacific board also considered a number of uncertainties and risks in its deliberations concerning the transactions contemplated by the merger agreement, including the following:

The foregoing discussion of the reasons that led the AltaPacific board to approve the merger agreement and recommend that AltaPacific’s shareholders vote in favor of the proposal to approve the merger agreement includes the material factors considered by the AltaPacific board in connection with its evaluation of the merger, but is not intended to be exhaustive. In reaching its determination to approve and recommend the transaction, the AltaPacific board based its determination on the totality of the information available to it and did not assign any relative or specific weights to the reasons considered in reaching that determination. Individual directors may have given differing weights to different reasons.

50

After careful consideration, the AltaPacific board unanimously determined that the merger, on the terms and conditions set forth in the merger agreement, was in the best interests of AltaPacific and its shareholders.

The AltaPacific board unanimously recommends that AltaPacific shareholders vote “FOR” the proposal to approve the merger agreement and “FOR” the proposal to approve adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the merger agreement.

Opinion of AltaPacific’s Financial Advisor

AltaPacific’s board of directors retained Vining Sparks to render financial advisory and investment banking services. Vining Sparks is a nationally recognized investment banking firm with substantial expertise in transactions similar to the proposed transaction and is familiar with AltaPacific and its business. As part of its investment banking business, Vining Sparks is regularly engaged in the valuation of financial services companies and their securities in connection with mergers and acquisitions, private placements and valuations for estate, corporate and other purposes.

At the July 23, 2019 meeting of the AltaPacific board, Vining Sparks rendered its opinion to the AltaPacific board that the merger consideration to be received by AltaPacific common shareholders in the proposed transaction is fair, from a financial point of view, to AltaPacific’s common shareholders. The full text of Vining Sparks’ opinion is attached as Annex C to this proxy statement/prospectus and should be read in its entirety.

Vining Sparks’ opinion was directed to AltaPacific’s board of directors and is limited to the fairness, from a financial point of view, of the consideration to be received by AltaPacific common shareholders in the proposed transaction. It did not address AltaPacific’s underlying business decision to proceed with the proposed transaction or constitute a recommendation to the AltaPacific board as to how it should vote on the merger and does not constitute a recommendation to any holder of AltaPacific common stock as to how such shareholder should vote in connection with the merger.

Vining Sparks’ opinion was reviewed and approved by Vining Sparks’ Fairness Opinion Committee in conformity with its policies and procedures established under the requirements of Rule 5150 of the Financial Industry Regulatory Authority.

For purposes of Vining Sparks’ opinion and in connection with its review of the proposed transaction, Vining Sparks has, among other things:

51

In conducting its review and arriving at its opinion, Vining Sparks has assumed and relied, without independent verification, upon the accuracy and completeness of all the financial and other information that has been provided to it by AltaPacific and Banner, and their respective representatives, and of the publicly available information that was reviewed by Vining Sparks. Vining Sparks is not an expert in the evaluation of the adequacy of allowances for loan losses and it did not independently verify the adequacy of such allowances. Vining Sparks assumed that the allowance for loan losses set forth in the financial statements of Banner and AltaPacific were adequate to cover such losses and complied fully with applicable law, regulatory policy and sound banking practice as of the date of such financial statements. Vining Sparks did not conduct a physical inspection of any of the properties or facilities of AltaPacific or Banner, did not make any independent evaluation or appraisal of the assets, liabilities or prospects of AltaPacific or Banner, was not furnished with any such evaluation or appraisal, and did not review any individual credit files. Vining Sparks assumed that any projections provided by or approved by AltaPacific were reasonably prepared and reflect the best currently available estimates and judgments of AltaPacific management.

Vining Sparks’ opinion is necessarily based on economic, market, and other conditions as in effect on, and the information made available to it as of, the date of its opinion. Events occurring after the date thereof, including but not limited to, changes affecting the securities markets, the results of operations or material changes in the assets or liabilities of Banner or AltaPacific could materially affect the assumptions used in preparing the opinion. Vining Sparks assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either AltaPacific or Banner since the date of the last financial statements of each entity that were made available to Vining Sparks. Vining Sparks assumed that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to the merger agreement will perform all of the covenants required to be performed by each party under such agreement and that the conditions precedent in the merger agreement are not waived.

In delivering its opinion to the board of directors of AltaPacific, Vining Sparks prepared and delivered to AltaPacific’s board of directors written materials containing various analyses and other information. The following is a summary of the material financial analyses performed by Vining Sparks in connection with the preparation of its opinion and does not purport to be a complete description of all the analyses performed by Vining Sparks. The summary includes information presented in tabular format, which should be read together with the text that accompanies those tables. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, an opinion is not necessarily susceptible to partial analysis or summary description. Vining Sparks believes that its analyses must be considered as a whole and that selecting portions of such analyses and the factors considered therein, without considering all factors and analyses, could create an incomplete view of the analyses and the processes underlying its opinion. In its analyses, Vining Sparks made numerous assumptions with respect to industry performance, business and economic conditions, and other matters, many of which are beyond the control of AltaPacific, Banner and Vining Sparks. Any estimates contained in Vining Sparks’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than such estimates. Estimates of values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold.

52

Vining Sparks’ opinion was based on information available to Vining Sparks through the date of its opinion and conditions as they existed and could be evaluated on the date thereof. Vining Sparks reviewed the financial terms of the proposed transaction set forth in the merger agreement and for purposes of the financial analyses described below and based on merger consideration of 0.2712 shares of Banner for each outstanding share of AltaPacific. Based on a stock price of $53.50 for Banner common stock (based on the closing price on July 18, 2019), the Merger Consideration would equal $14.51 per share.                

Selected Company Analysis—Banner. Vining Sparks used publicly available information to compare selected financial information and stock pricing for Banner with a selected group of financial institutions.    The Banner peer group consisted of publicly traded western banking organizations with total assets between $5 billion and $25 billion, excluding merger targets. While Vining Sparks believes that the companies listed below are similar to Banner, none of these companies have the same composition, operations, size or financial profile as Banner.

To perform this analysis, Vining Sparks used financial information as of March 31, 2019, a price of $53.50 for Banner (the closing price on July 18, 2019) and pricing data for the peer group as of July 18, 2019 obtained from S&P Global Market Intelligence. The following table sets forth the comparative financial and market data:

53

Selected Company Analysis—AltaPacific. Vining Sparks used publicly available information to compare selected financial information and stock pricing for AltaPacific with those of a group of comparable publicly traded California banking organizations with total assets between $250 million and $800 million, excluding merger targets. While Vining Sparks believes that the companies listed below are similar to AltaPacific, none of these companies have the same composition, operations, size or financial profile as AltaPacific.

54

To perform this analysis, Vining Sparks used financial information as of March 31, 2019, a price of $14.25 for AltaPacific (the closing price on July 18, 2019) and pricing data for the peer group as of July 18, 2019 obtained from S&P Global Market Intelligence. The following table sets forth the comparative financial and market data:

Stock Trading History. Vining Sparks reviewed the closing per share market prices and volumes for Banner common stock on a daily basis from January 2, 2019 to July 18, 2019. Banner is listed for trading on NASDAQ under the symbol “BANR.” For the period between January 2, 2019 to July 18, 2019, the closing price of Banner common stock ranged from a low of $50.21 to a high of $64.20. The closing price on July 18, 2019 was $53.50 per share. For the period between January 2, 2019 and July 18, 2019, the average daily trading volume for Banner was 181,476 shares.

Stock Trading History. Vining Sparks reviewed the closing per share market prices and volumes for AltaPacific common stock on a daily basis from January 2, 2019 to July 18, 2019. AltaPacific is quoted on the OTC Market Group’s Pink under the symbol “ABNK.” For the period between January 2, 2019 to July 18, 2019, the closing price of AltaPacific common stock ranged from a low of $12.55 to a high of $15.95. The closing price on July 18, 2019 was $14.25 per share. For the period between January 2, 2019 and July 18, 2019, the average daily trading volume for AltaPacific was 2,424 shares. The implied transaction value of $14.51 represented a 2% premium over AltaPacific’s closing price on July 18, 2019.

Analysis of Selected Financial Institution Transactions. Vining Sparks reviewed certain publicly available information regarding selected merger and acquisition transactions (which we refer to as the “comparable transactions”) announced from announced from January 1, 2018 to July 18, 2019 involving financial institutions located in the western U.S., with total assets under $800 million and a return on assets over 0.75%. The transactions included in the group are shown below. This data was obtained from S&P Global Market Intelligence.

Vining Sparks reviewed the multiples of transaction value to tangible book, transaction value to earnings, transaction value to assets and tangible book premium to core deposits and calculated high, low, mean and median multiples for the comparable transactions. These ratios were compared with corresponding transaction ratios for the proposed merger based on the merger consideration of $14.51 per share for AltaPacific common stock. The results of the analysis are set forth in the following table.

55

No company or transaction used as a comparison in the above analysis is identical to AltaPacific or the proposed transaction. Accordingly, an analysis of these results is not strictly mathematical. An analysis of the results of the foregoing involves complex considerations and judgments concerning differences in financial and operating characteristics of AltaPacific and the companies included in the comparable transactions.

Present Value Analysis. Vining Sparks calculated the present value of theoretical future earnings of AltaPacific and compared the transaction value to the calculated present value of AltaPacific’s common stock on a stand-alone basis. Based on projected earnings for AltaPacific of $4.8 million in 2019, $5.8 million in 2020, $6.6 million in 2021, $7.2 million in 2022 and $7.7 million in 2023, discount rates ranging from 12% to 18%, and including a residual value, the stand-alone present value of AltaPacific indicated an implied range of values per share of $7.22 to $12.29.

Discounted Cash Flow Analysis. Using a discounted cash flow analysis, Vining Sparks estimated the net present value of the future streams of after-tax cash flow that AltaPacific could produce to benefit a potential acquiror, referred to as dividendable net income, and added a terminal value. Based on projected earnings for AltaPacific for 2019 through 2023, we assumed after-tax distributions to a potential acquiror such that its tier 1 leverage ratio would be maintained at 9.00%. The terminal value for AltaPacific was calculated based on AltaPacific’s projected 2023 equity, the median price to tangible book multiple paid in the comparable transactions and utilized a discount rate of 12%. This discounted cash flow analysis indicated an implied value of $11.69 per share.

Pro Forma Merger Analysis. Vining Sparks performed pro forma merger analyses to calculate the financial implications of the merger to AltaPacific common shareholders. This analysis assumes, among other things, the terms of the transaction as indicated above, the merger closes at December 31, 2019 and cost savings and revenue enhancement opportunities of $4,400,000 in 2020 and $5,200,000 annually in the years 2021 through 2023, which approximates 40% of AltaPacific’s total overhead expense in 2018. This analysis utilized earnings estimates of $4.07 per share in 2019, $4.25 per share in 2020 and $4.45 per share in 2021 for Banner and earnings estimates of $0.83 per share in 2019, $1.00 per share in 2020 and $1.14 per share in 2021 for AltaPacific. This analysis indicated that the merger could be accretive to AltaPacific’s projected earnings per share in 2020 and 2021.

In the two years prior to the issuance of this opinion, Vining Sparks has not provided financial advisory services to AltaPacific. In the two years prior to the issuance of this opinion, Vining Sparks engaged in securities and loan sales and trading activity with Banner and/or its subsidiary banks for which Vining Sparks was paid commissions or other fees, which may include mark-ups on the purchase or sale of loans and securities. Pursuant to the terms of an engagement letter with AltaPacific, Vining Sparks received a fee of $95,000 upon delivery of its opinion. Vining Sparks’ opinion fee is not contingent upon consummation of the proposed transaction. In addition, AltaPacific has agreed to indemnify Vining Sparks against certain liabilities and expenses arising out of or incurred in connection with its engagement, including liabilities and expenses which may arise under the federal securities laws.

Banner’s Reasons for the Merger

After careful consideration, at a meeting held on July 23, 2019, Banner’s board of directors determined that the merger is in the best interests of Banner and its shareholders and unanimously approved the merger agreement.

56