BANNER CORPBANR

BANNER CORP Leases Disclosure

10-KFiled Feb 25, 20262 min read
The Company leases 83 buildings and offices under non-cancelable operating leases. The leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The table below presents the lease ROU assets and lease liabilities recorded on the balance sheet at December 31, 2025 and 2024 (dollars in thousands):
December 31, 2025December 31, 2024
Assets
Operating lease ROU assets$32,736 $39,998 
Liabilities
Operating lease liabilities$35,755 $43,472 
Weighted average remaining lease term - operating leases4.3 years4.4 years
Weighted average discount rate - operating leases4.0 %4.0 %

The table below presents certain information related to the lease costs for operating leases for the years ended December 31, 2025, 2024 and 2023 (in thousands):
Year Ended December 31,
202520242023
Operating lease cost (1)
$15,456 $13,863 $13,848 
Short-term lease cost22 9 132 
Variable lease cost2,431 2,454 2,231 
Less sublease income(1,375)(1,547)(1,447)
Total lease cost (2)
$16,534 $14,779 $14,764 

(1)    Total operating lease cost includes early lease termination fees of $1.6 million for the year ended December 31, 2025. There were no lease termination fees recognized for the years ended December 31, 2024 or 2023.
(2)    Lease expenses and sublease income are classified within occupancy and equipment expense on the Consolidated Statements of Operations.

Operating cash flows paid for operating lease amounts included in the measurement of lease liabilities were $16.0 million for the year ended December 31, 2025, and $14.9 million for the year ended December 31, 2024. The Company recorded $6.7 million of lease ROU assets in exchange for operating lease liabilities for the year ended December 31, 2025, and $8.2 million for the year ended December 31, 2024.

The table below reconciles the undiscounted cash flows for each of the first five years beginning with 2026 and the total of the remaining years to the operating lease liabilities recorded on the Consolidated Statements of Financial Position (in thousands):
Operating Leases
2026$12,620 
202710,288 
20286,179 
20294,177 
20302,212 
Thereafter3,426 
Total minimum lease payments
38,902 
Less: amount of lease payments representing interest(3,147)
Lease obligations
$35,755 

As of December 31, 2025 and 2024, the Company had no undiscounted lease payments under an operating lease that had not yet commenced.

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 26, 2025
2023Feb 23, 2024
2022Feb 21, 2023
2021Feb 24, 2022
2020Feb 23, 2021
2019Feb 21, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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