Liam Cahill

Liam Cahill asked about the key drivers behind Banner Corporation's year-on-year core deposit growth across all geographies, whether similar growth could be expected in 2026 given new banker hires, and the company's expectations for deposit betas in 2026, considering its low-cost core deposit base.

Answer

Rob Butterfield, Chief Financial Officer, explained that core deposit growth is driven by Banner's relationship banking model, where new clients bring both loan and deposit relationships, and a strong focus on small business relationships, which are typically deposit-rich. He attributed recent success to new bankers gaining traction and small business growth. Regarding deposit betas, Rob Butterfield stated that Banner has been modeling 28% through the cycle and expects to maintain that for the next cut or two, but anticipates it will trend down in 2026 depending on the level of Fed activity.

Liam Cahill asked about the key drivers behind the year-on-year core deposit growth across Banner's geographies and whether similar core deposit growth could be expected in 2026, given new banker hires. He also sought insight into the company's expectations for deposit betas in 2026, considering its already low-cost core deposit base.

Answer

Rob Butterfield, Chief Financial Officer, explained that core deposits exhibit seasonality, but Banner's relationship banking model ensures new clients bring both loan and deposit relationships. He highlighted the focus on building small business relationships, which are typically deposit-rich, as a key driver, along with traction from new bankers. Regarding deposit betas, he stated that Banner has been modeling 28%, consistent with what has been observed through the cycle, including Q4. He noted that this beta has been achieved by applying the full 25 basis points on exception-priced clients, CDs, and high-yield savings accounts. He anticipates the deposit beta will trend down over time, potentially narrowing in 2026 depending on the level of Fed activity.