SecProbe.io

CORRESP
 1
 filename1.htm

 Banner Corporation
 10 South First Avenue
 Walla Walla, WA 99362
 (509) 527-3636

 June 15, 2026

 Via EDGAR

 U.S. Securities and Exchange Commission
 Division of Corporation Finance
 100 F Street, N.E.
 Washington, D.C.  20549
 Attn: Robert Arzonetti

 Re:

 Banner Corporation
 Request for Acceleration of Effectiveness
 Registration Statement on Form S-4
 (SEC File No.: 333-296472) (the “Registration Statement”)

 Ladies and Gentlemen:

 On behalf of Banner Corporation (the “Company”), the undersigned officer hereby respectfully requests acceleration of the effective date of the Registration
 Statement so that the same shall become effective at 4:00 p.m. Eastern Time on Tuesday, June 16, 2026, or as soon as practicable thereafter.

 If you have any questions regarding this request, please contact April Hamlin of Ballard Spahr LLP, counsel to the Company, at (612) 371-3522. In addition,
 once the Registration Statement has been declared effective, please orally confirm that event with Ms. Hamlin.

 Very truly yours,

 BANNER CORPORATION

 /s/ Sherrey Luetjen

 Sherrey Luetjen
 Executive Vice President and General Counsel

<DOCUMENT>
<TYPE>TEXT-EXTRACT
<SEQUENCE>2
<FILENAME>filename2.txt
<TEXT>
 June 11, 2026

Mark J. Grescovich
Chief Executive Officer
Banner Corporation
10 S. First Avenue
Walla Walla, WA 99362

 Re: Banner Corporation
 Registration Statement on Form S-4
 Filed June 3, 2026
 File No. 333-296472
Dear Mark J. Grescovich:
 This is to advise you that we have not reviewed and will not review your
registration
statement.
 Please refer to Rules 460 and 461 regarding requests for acceleration.
We remind you that
the company and its management are responsible for the accuracy and adequacy of
their
disclosures, notwithstanding any review, comments, action or absence of action
by the staff.
 Please contact Robert Arzonetti at 202-551-8819 with any questions.

 Sincerely,

 Division of
Corporation Finance
 Office of Finance
cc: April Hamlin
</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

CORRESP

 BANNER CORPORATION

10 South First Avenue

 Walla Walla,
WA 99362

 (509) 527-3636

September 27, 2019

 VIA EDGAR and e-mail LinD@SEC.GOV

 United States Securities and Exchange Commission

Division of Corporation Finance

 100 F Street, N.E.

Washington, D.C. 20549-7010

 Attention: David Lin

RE: Banner Corporation

Registration Statement on Form S-4

File No. 333-233497

Request for Acceleration

 Dear Mr. Lin:

 Reference is made to the Registration Statement on Form S-4 (File No. 333-233497) filed by Banner Corporation (the “Company”) with the U.S. Securities and Exchange Commission (the “SEC”) on August 28, 2019, as amended on
September 27, 2019 (the “Registration Statement”).

 The Company hereby requests the Registration Statement be made
effective at 4:00 p.m., Eastern Time, on September 30, 2019, or as soon as possible thereafter, in accordance with Rule 461 promulgated under the Securities Act of 1933, as amended.

Furthermore, the Company hereby acknowledges:

•

 should the Securities and Exchange Commission (the “Commission”) or the staff, acting pursuant
to delegated authority, declare the Registration Statement effective, it does not foreclose the Commission from taking any action with respect to the Registration Statement;

•

 the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the Registration
Statement effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the Registration Statement; and

•

 the Company may not assert the staff comments and the declaration of effectiveness as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of the United States.

 Please contact Ryan
J. York of Davis Wright Tremaine LLP at (425) 646-6191 or ryanyork@dwt.com with any questions you may have concerning this letter, or if you require any additional information. Please notify Mr. York
when this request for acceleration of effectiveness of the Registration Statement has been granted.

Very truly yours,

BANNER CORPORATION

By:

/s/ Craig Miller

Name:

Craig Miller

Title:

Executive Vice President and General Counsel

 cc: Davis Wright Tremaine LLP, Ryan J. York

September 5, 2019
Craig Miller
Executive Vice President and General Counsel
Banner Corporation
10 South First Avenue
Walla Walla, WA 99632
Re:Banner Corporation
Registration Statement on Form S-4
Filed August 28, 2019
File No. 333-233497
Dear Mr. Miller:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact David Lin, Staff Attorney, at (202) 551-3552 with any questions.
Sincerely,
Division of Corporation Finance
Office of Financial Services

CORRESP
1
filename1.htm

BANNER CORPORATION

10 South First Avenue

Walla Walla, WA 99362

(509) 527-3636

September 5, 2018

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549-7010

Attention:                                         David Gessert

RE:                           Banner Corporation
 Registration Statement on Form S-4
 File No. 333-226991
 Request for Acceleration

Dear Mr. Gessert:

Reference is made to the Registration Statement on Form S-4 (File No. 333-226991) filed by Banner Corporation (the “Company”) with the U.S. Securities and Exchange Commission (the “SEC”) on August 24, 2018, as amended on September 5, 2018 (the “Registration Statement”).

The Company hereby requests the Registration Statement be made effective at 4:00 p.m., Eastern Time, on September 6, 2018, or as soon as possible thereafter, in accordance with Rule 461 promulgated under the Securities Act of 1933, as amended.

Please contact Jacob A. Kling of Wachtell, Lipton, Rosen & Katz at (212) 403-1003 or JAKling@wlrk.com with any questions you may have concerning this letter, or if you require any additional information.  Please notify Mr. Kling when this request for acceleration of effectiveness of the Registration Statement has been granted.

Very   truly yours,

BANNER   CORPORATION

By:

/s/   Craig Miller

Name:

Craig   Miller

Title:

Executive   Vice President and General Counsel

cc:                                Wachtell, Lipton, Rosen & Katz

Jacob A. Kling

August 29, 2018
Albert H. Marshall
Senior Vice President and Secretary
Banner Corporation
10 South First Avenue
Walla Walla, WA 99362
Re:Banner Corporation
Registration Statement on Form S-4
Filed August 24, 2018
File No. 333-226991
Dear Mr. Marshall:
            This is to advise you that we have not reviewed and will not review your registration
statement.
            Please refer to Rules 460 and 461 regarding requests for acceleration.  We remind you
that the company and its management are responsible for the accuracy and adequacy of their
disclosures, notwithstanding any review, comments, action or absence of action by the staff.
            Please contact David Gessert at 202-551-2326 with any questions.
Sincerely,
Division of Corporation Finance
Office of Financial Services

Mail Stop 4720       May 4, 2017

Via E -mail
Lloyd W. Baker
Chief Financial Officer
Banner Corporation
10 South First Avenue
Walla Walla, Washington 99362

Re: Banner Corporation
Form 10-K for the Fiscal Year Ended December 31, 2016
Filed February 27, 2017
File No. 000-26584

Dear Mr. Baker :

We have completed our review of your filing .  We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosure s, notwithstanding
any review, comments, action or absence  of action  by the staff .

Sincerely,

 /s/ Michelle Miller

Michelle Miller
Staff Accountant
Office of Financial Services

CORRESP
1
filename1.htm

		Document

Via Edgar

May 3, 2017

Michelle Miller

Staff Accountant

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

     Re:     Banner Corporation

Form 10-K for the Fiscal Year Ended December 31, 2016

Filed February 27, 2017

File No. 000-26584

This letter is being filed as a supplemental to our prior letter submitted to the Securities and Exchange Commission (“SEC”) on April 13, 2017, which was submitted in response to comments received from the Staff of the Securities and Exchange Commission (the "Staff") by letter dated April 3, 2017, with respect to the Form 10-K for the year ended December 31, 2016, which was filed February 27, 2017 by Banner Corporation (“Banner”, “we”, or the “Company”).  Banner would like to supplement its previous response to the comment addressed below.  The numbering of the paragraphs below corresponds to the numbering of the Staff’s letter, the text of which we have incorporated in bold print for convenience.

Form 10-K for the Fiscal Year Ended December 31, 2016

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Non-GAAP financial measures, page 40

1.

 We note on page 42 that you add the net loan discount on acquired loans to the allowance for loan losses and to loans receivable. Please address the following:

•

 Tell us why adding the net loan discount on acquired loans to the allowance for loan losses provides useful information to investors in evaluating the risks of credit losses in the loan portfolio;

SUPPLEMENTAL RESPONSE:

Banner will not include the referenced disclosure in future filings beginning with Form 10-Q for the quarter ended March 31, 2017.

We believe that our previous response and this supplemental response have addressed the Staff’s comments. If you have any questions regarding the foregoing, please do not hesitate to contact Lloyd Baker at (509) 526-8896 or Rob Butterfield at (509) 462-5819.

Respectfully,

/s/ Lloyd Baker

Lloyd Baker

Executive Vice President/Chief Financial Officer

Banner Corporation

May 3, 2017

CORRESP
1
filename1.htm

		Document

Via Edgar

April 13, 2017

Michelle Miller

Staff Accountant

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, DC 20549

Re:

 Banner Corporation

Form 10-K for the Fiscal Year Ended December 31, 2016

Filed February 27, 2017

File No. 000-26584

This letter is being filed in response to comments received from the Staff of the Securities and Exchange Commission (the "Staff") by letter dated April 3, 2017, with respect to the Form 10-K for the year ended December 31, 2016, which was filed February 27, 2017 by Banner Corporation (“Banner”, “we”, or the “Company”).  The numbering of the paragraphs below corresponds to the numbering of the Staff’s letter, the text of which we have incorporated in bold print for convenience.

Form 10-K for the Fiscal Year Ended December 31, 2016

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Non-GAAP financial measures, page 40

1.

 We note on page 42 that you add the net loan discount on acquire loans to the allowance for loan losses and to loans receivable. Please address the following:

•

 Tell us why adding the net loan discount on acquired loans to the allowance for loan losses provides useful information to investors in evaluating the risks of credit losses in the loan portfolio;

RESPONSE:

The purpose of providing investors with a credit loss coverage ratio that combines the net loan discount on acquired loans with the allowance for loan losses (“ALLL”) is to give investors a similar view on how Banner evaluates its overall credit loss coverage ratio on the loan portfolio.  The same ratio that is being provided to investors is also used by Banner for its internal review of its overall credit loss coverage.  In addition, this is a Non-GAAP disclosure that banking industry equity analysts are familiar with, and it is regularly disclosed by public company banks that have completed acquisitions that are significant to the institution.  The GAAP allowance coverage ratio disclosed by public banks is the ratio of ALLL to all loans, including acquired loans that are

carried at fair value  For institutions that have completed significant acquisitions, this ratio can be misleading to investors due to the lack of comparability to prior periods and to other public company banks that have not completed significant acquisitions, as acquired loans generally do not have an ALLL unless they have suffered performance deterioration subsequent to the date of acquisition..

The loans acquired from AmericanWest Bank (“AmericanWest”) and Siuslaw Bank (“Siuslaw”) were recorded at their estimated fair value, which resulted in a net discount to the loans’ contractual amounts.  The net loan discount consists of two components:  a credit discount and a market interest rate premium or discount.  Credit discounts are included in the determination of fair value and no ALLL is recorded for acquired loans at the acquisition date.  Should an acquired loan incur a charge-off, the loss to be recorded is reduced by the net loan discount available for that specific loan before charging anything to the ALLL.  Effectively the net loan discount is available to reduce potential losses on a specific loan or pool basis in the acquired loan portfolio and providing additional loss coverage on the acquired loans based on the discount specific to each loan or pool.  As the net loan discount, including the portion related to a credit discount, is not reflected in the ALLL or the GAAP allowance coverage ratio, we believe providing the non-GAAP coverage ratio is useful information to investors and should be considered when comparing the current coverage ratio to similar ratios in periods prior to the acquisitions of AmericanWest and Siuslaw and the coverage ratio of other banks.

Further, in evaluating the need for an ALLL specific to the acquired loan portfolio subsequent to the acquisition date (“Day 2”), the Company incorporates the credit discount and other factors into its consideration by determining an ALLL for the acquired loan portfolio as if it were originated and then comparing the remaining net loan discount to the calculated need for an ALLL on the acquired loan portfolio.  If the net loan discount is less than the calculated ALLL, then the Company would record a provision for loan losses to increase the ALLL related to the acquired loans.  However, if the net loan discount is equal to or greater than the calculated ALLL need, the Company would not record any provision for loan losses as the net loan discount would be sufficient as an available “allowance”.  This component of the ALLL related to the acquired loan portfolio is presented in aggregate with the Company’s overall ALLL.

•

 Tell us how you considered prepayment risk in the loan portfolio with the addition of the net loan discount on acquired loans to the allowance for loan losses;

RESPONSE:

Prepayment risk is a component in the determination of the amount of the acquisition date (“Day 1”) net loan discount.  If an acquired loan with a net loan discount were to prepay, the associated net loan discount would no longer be available to cover future credit losses, but the related loan balance would also no longer represent a future potential credit exposure.  Depending on the net loan discount percentage on the loan that prepaid compared to the overall net loan discount percentage, the overall coverage ratio could increase, decrease or remain the same, but on average would remain the same.

•

 Tell us the nature, amount and how you determined the components of the net loan discount on acquired loans; and

RESPONSE:

Banner engaged a third party valuation firm to assist management in determining the amount of the Day 1 fair value, which resulted in a net loan discount.  Banner utilized the income approach; specifically the discounted cash flow (“DCF”) approach.  In applying the DCF approach, the fair value of the Loan Portfolio was based on the present value of the expected cash flows from the portfolio.  The monthly principal and interest cash flows were projected based on the loan terms including contractual coupon, maturity, spread, index, amortization term, interest only term, day count convention, and age of each loan. The contractual principal and interest cash flows were adjusted for credit loss expectations and prepayments.

Loan-level lifetime expected losses were obtained by applying default rates based on a transition study, market data, as well as valuation of similar loan portfolios with similar loan pools.  Default rates for the purchased credit-impaired (“PCI”) portfolio were obtained from the transition matrix study which was then scaled up by the multiplier of the most similar Federal Deposit Insurance Corporation Statistics on Depository Institutions pool.  Non-PCI portfolios were derived from the most similar 10-year average FDIC charge-off rates for California and Washington divided by the pool level Loss Given Default.

The rate used to discount the cash flows takes into account the servicing costs, capital charges and market benchmark interest rates of similar collateral and loan purposes. Discount rates were based on recent originations of similar loan types; market data from Bloomberg, SNL Financial, Bankrate, and Federal Reserve releases market surveys; consideration of a synthetic discount rate build-up; and consideration of the remaining term of each pool.

The following are the components of the Day 1 net loan discount recorded on the AmericanWest and Siuslaw loan portfolios:

AmericanWest

in thousands

 Credit Discount

 Market Interest Rate Premium (Discount)

 Net Loan Discount

 $

 %

 $

 %

 $

 %

Non PCI Loans

 ($44,064

 )

 -1.49

  %

 $26,404

 0.89

  %

 ($17,660

 )

 -0.60

  %

PCI Loans

 (18,551)

 -21.64

  %

 ($5,655

 )

 -6.60

  %

 (24,206)

 -28.24

  %

Total Loans

 ($62,615

 )

 -2.06

  %

 $20,749

 0.68

  %

 ($41,866

 )

 -1.38

  %

Siuslaw

in thousands

 Credit Discount

 Market Interest Rate Premium (Discount)

 Net Loan Discount

 $

 %

 $

 %

 $

 %

Non PCI Loans

 ($3,121

 )

 -1.29

  %

 $316

 0.13

  %

 ($2,805

 )

 -1.16

  %

PCI Loans*

 NA

 NA

 NA

 NA

 (2,292)

 -28.87

  %

Total Loans

 NA

 NA

 NA

 NA

 ($5,097

 )

 -2.03

  %

* Note: Loan Discount on Siuslaw PCI loans was not split out between credit and market discount.

•

 Tell us how you considered Question 100.04 of the Compliance & Disclosure Interpretations issued on May 17, 2016 since GAAP requires that the net loan discount be accreted to interest income over the remaining life of the loan and therefore adding the net loan discount to the allowance for loan losses would appear to represent a tailored accounting principle.

RESPONSE:

Banner acknowledges the Staff’s question, and believes it is important to note that the disclosure is not presented for any purpose of analyzing operating performance; instead it is provided as a balance sheet credit quality metric.  Banner views the disclosed Non-GAAP adjusted ALLL to loans ratio to be a point in time credit coverage ratio disclosure rather than a performance measure.

Specifically for the PCI loan portfolio, a portion of the discount is considered non-accretable difference and effectively absorbs future credit losses, rather than being accreted to interest income.  The $31.3 million net loan discount as of December 31, 2016 includes $10.0 million of non-accretable difference associate with projected credit losses on the PCI loan pools that is not currently being accreted to interest income.  Even though the accretable portion of the loan discount associated with the PCI loans can be accreted to interest income in future periods, as of the date of the disclosure, the combined accretable yield and non-accretable difference is available to offset PCI loan pool credit losses in the acquired loan portfolio.

While a portion of the net loan discount on Non-PCI loans will be accreted to interest income over the remaining life of the acquired loan portfolio, a portion of the discount will likely never be accreted to interest income. Instead, it will be used to offset future credit losses by reducing the net carrying value of the specific loans to be charged off.  In addition, over the remaining contractual life of the acquired portfolio, there will continue to be a net loan discount available to offset future credit losses, as a net loan discount will continue to exist as long as loans remain in the acquired loan portfolio.

Because the net loan discount on PCI and Non-PCI loans would offset losses on specific acquired loans and loan pools as of the balance sheet date, just as the ALLL provides for incurred losses on acquired and originated loans as of the same dates, Banner does not consider this non-GAAP metric that combines the net loan discount and the ALLL to be a tailored measurement method.

Banner Corporation believes the responses provided above address the staff's comments, and further acknowledges that:

•

 Banner is responsible for the adequacy and accuracy of the disclosure in the Filing;

•

 Staff comments or changes to disclosure in response to comments do not foreclose the Commission from taking any action with respect to the Filing; and

•

 Banner Corporation may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We hope that the foregoing have been responsive to the Staff’s comments. If you have any questions regarding the foregoing, please do not hesitate to contact Lloyd Baker at (509) 526-8896 or Rob Butterfield at (509) 462-5819.

Respectfully,

/s/ Lloyd Baker

Lloyd Baker

Executive Vice President/Chief Financial Officer

Banner Corporation

April 13, 2017

Mail Stop 4720        April 3, 2017

Lloyd W. Baker
Chief Financial Officer
Banner Corporation
10 South First Avenue
Walla Walla, Washington 99362

Re: Banner Corporation
 Form 10-K for the Fiscal Year Ended December 31, 2016
Filed February 27, 2017
File No. 000 -26584

Dear Mr. Baker :

We have limited our review  of your filing  to the financial statements and related
disclosures and have the following comment .  In some of our comments, we may ask you to
provide us with information so we may better understand your disclosure.

Please respond to this comment  within ten busine ss days by providing the requested
information or advis e us as soon as possible when you will respond.  If  you do not believe our
comment applies  to your facts and circumstances, please tell us why in your response.

After reviewing your response to this comment , we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2016

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Executive Overview

Non-GAAP financial measures, page 40

1. We note on page 42 that you add the net loan discount on acquire loans to the allowance
for loan losses and to loans receivable.   Please address the following:

 Tell us why adding the net loan discount on acquired loans to the allowance for loan
losses provides useful information to investors in evaluating the risks of credit losses
in the loan portfolio;

Lloyd W. Baker
Banner Corporation
April 3, 2017
Page 2

  Tell us how you considered prepayment risk in the loan portfolio with the addition of
the net loan discount on acquired loans t o the allowance for loan losses;

 Tell us the nature, amount and how you determined the components of the net loan
discount on acqu ired loans; and

 Tell us how you considered Question 100.04 of the Compliance &  Disclosure
Interpretations issued on May 17, 2016 since GAAP requires that the net loan
discount be accreted to interest income over the remaining life of the loan and
therefore adding the net loan discount to the allowance for loan losses would appear
to represent a tailored accounting principle.

We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.

You may contact Chris Harley  at (202) 551 -3695  or me at (202) 551 -3368  with any
questions.

Sincerely,

 /s/ Michelle Miller

Michelle Miller
Staff Accountant
Office of Financial Services

CORRESP
1
filename1.htm

    secacceleration11314.htm

[BANNER CORPORATION LETTERHEAD]

January 13, 2015

Via EDGAR and Email

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, NE

Washington, D.C.  20549

Re:          Banner Corporation, Walla Walla, Washington

Registration Statement on Form S-4 (Commission File No. 333-199211)

Request for Acceleration of Effectiveness

Ladies and Gentlemen:

Pursuant to Rule 461 of Regulation C of the Securities Act of 1933, as amended, and in connection with the above-referenced Registration Statement, Banner Corporation (the “Company”) hereby respectfully requests that the above-referenced Registration Statement be declared effective at 12:00 p.m. on Thursday, January 15, 2015, or as soon thereafter as practicable.

Furthermore, the Company hereby acknowledges:

·

should the Securities and Exchange Commission (the “Commission”) or the staff, acting pursuant to delegated authority, declare the Registration Statement effective, it does not foreclose the Commission from taking any action with respect to the Registration Statement;

·

the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the Registration Statement effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the Registration Statement; and

·

the Company may not assert the staff comments and the declaration of effectiveness as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We request that we be notified of such effectiveness by a telephone call to Mr. John F. Breyer, Jr. of Breyer & Associates PC at (703) 883-1100.

Sincerely,

/s/Lloyd W. Baker

Lloyd W. Baker

Executive Vice President and

 Chief Financial Officer

cc:           David Lin, Esquire, Division of Corporation Finance, Securities and Exchange Commission

December 29, 2014

Via E -mail
Albert H. Marshall
Senior Vice President and Secretary
Banner Corporation
10 S. First Avenue
Walla Walla, WA 99362

Re: Banner Corporation
  Amendment No. 1 to Registration Statement on Form S -4
Filed December 5 , 2014
  File No. 333-199211

Dear Mr. Marshall :

We have reviewed your amended registration statement  and have the following
comments.  In some of our comments, we may ask you to provide us with information so we
may better understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information .  If you do not believe our comments apply to your facts and
circumstanc es or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.

Amendm ent No. 1 to Registration Statement on Form S -4

General

1. Please tell us  whether the financial information required under Rule 3 -05 of Regulation
S-X has been adequately provided in the registration statement  for the proposed
transactions between Banner  and Siuslaw and AmericanWest Bank and the Bank of
Sacramento.

Selected Consolidated Historical Financial Information of AmericanWest, page 26

2. The tables of selected financial information and other data represent the consolidated
financial information of SKBHC Holdings.  Please tell us why the audited financial
information of AmericanWest Bank are not disclosed since the definitive agreement with

Albert H. Marshall
Banner Corporation
December 29, 2014
Page 2

 Banner is for the acquisition of AmericanWest  Bank .  Please also tell us why the audited
financial statements of AmericanWest Bank are not available.

Comparative Unaudited Pro Forma Per Share Data, page 27

3. Please revise to disclose historical per shar e information for AmericanWest and the pro
forma AmericanWest equivalent per share information.

Unaudited Pro Forma Combined Condensed Consolidated Financial Information, page 68

4. The information presented for AmericanWest has been segregated from the parent
holding company SKBHC for the pro forma periods presented.  The pro forma statements
of financial condition and statements of operations should be based upon the information
included in the filing (i.e the historical financial statements). We note that neither the
separate audited financial statements nor the interim period financial statements of
AmericanWest have been presented.  Please tell us how the pro forma financial
inform ation presented is in accordance with Rule 11 -02 of Regulation S -X.

Pro Forma Statements of Financial Condition, page 72

5. Please revise to disclose the pro forma adjustment to the investment securities which
coincides with the pro forma fair value adju stment reflected in the statement of
operations on page 75.

6. Please tell us whether there was any pro forma adjustment to the fair value of the deposits
to be assumed in the AmericanWest transaction.

7. Please revise to address the nature of the disposi tion of the premises and equipment as
identified in pro forma Note D on page 89 and whether there would be any impact to the
pro forma statement of operations.

Pro Forma C onsolidated Statement of Operations , page 73

8. Please address whether there was any  pro forma impact on interest and fees on loans for
the interim and year end periods for the purchase accounting adjustments reflected in the
statements of financial condition for the Siuslaw transaction.

Pro Forma Consolidated Statement of Operations, page 74

9. Please address whether there was any pro forma impact on operations for the interim and
year-end periods from the OREO, premises and equipment, other assets and other
liabilities purchase accounting adjustments reflected in the statements of fina ncial
condition for the Greater Sacramento Bancorp transaction.

Albert H. Marshall
Banner Corporation
December 29, 2014
Page 3

 Pro Forma Consolidated Statement of Operations, page 75

10. We note that the Banner and Siuslaw pro forma combined amounts for the nine months
ended September 30, 2014 (i.e. on page 73) do no t agree to the amounts disclosed on
page 75. Please revise in your next amendment.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Act of 193 3 and
all applicable Securities  Act rules require.   Since the company and its management are in
possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disc losures they have made.

Notwithstanding our comments, in the event you request acceleration of the effective date
of the pending regist ration statement please provide  a written statement from the company
acknowledging that:

 should the Commission or the  staff, acting pursuant to delegated authority, declare the
filing effective, it does not foreclose the Commission from taking any action with respect
to the filing;
 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and
 the company may not assert staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

Please refer to Rules 460 and 461 regarding requests for  acceleration .  We will consider a
written request for acceleration of the effective date of the registration statement as confirmation
of the fact that those requesting acceleration are aware of their respective responsibilities under
the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in the above registration statement.  Please allow
adequate time  for us to review any amendment prior to the requested effective date of the
registration statement.

You may contact  Marc Thomas at (202) 551 -3452 or me at (202) 551 -3752  if you have
any questions.
Sincerely,

 /s/ Gus Rodriguez

Gus Rodriguez
Accounting Branch Chief

cc: Via E -mail: John F. Breyer, Jr., Esq.

CORRESP
1
filename1.htm

    seccommentresponse162015.htm

[BANNER CORPORATION LETTERHEAD]

January 6, 2015

Via EDGAR and E-Mail

Mr. Gus Rodriguez

Accounting Branch Chief

Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

Re:           Banner Corporation

Amendment No. 2 to Registration Statement on Form S-4

File No. 333-199211

Dear Mr. Rodriguez:

Banner Corporation (“Banner,” “we,” “our” or “us”) has received your letter dated December 29, 2014, with respect to Amendment No. 1 to our Registration Statement on Form S-4 (“Registration Statement”). We have reviewed your comments and, where appropriate, have incorporated our responses into Amendment No. 2 to the Registration Statement, which is being filed today via EDGAR.  All changes have been marked.  In addition, we are providing the following responses to the comments in your letter.  To facilitate your review, we have included your comments in bold with our responses below:

Amendment No. 1 to Registration Statement on Form S-4

General

1.

Please tell us whether the financial information required under Rule 3-05 of Regulation S-X has been adequately provided in the registration statement for the proposed transactions between Banner and Siuslaw and AmericanWest Bank and the Bank of Sacramento.

Response:  We believe the financial information that is required under Rule 3-05 of Regulation S-X, is included in the Registration Statement, including the information that is incorporated by reference to our prior filings. The filings that have been incorporated by reference are specified under the heading “Where You Can Find More Information” on page 106 of the Registration Statement.  These filings contain financial information for Banner in the relevant Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.  In addition, our Current Report on Form 8-K that we filed on December 4, 2014, contains SKBHC LLC’s (“SKBHC”) audited financial statements for the years ended December 31, 2013 and 2012 and its unaudited financial statements for the nine months ended September 30, 2014 and 2013.Therefore, it provides all required financial information for SKBHC, the top tier holding company for Starbuck/AmericanWest.

Mr. Gus Rodriquez

U.S. Securities and Exchange Commission

January 6, 2015

Page 2

We have determined that neither Siuslaw Financial Group, Inc. (“Siuslaw”) nor Greater Sacramento Bancorp (“GSB”) meet any of the conditions necessary to be considered a “Significant Subsidiary” as defined in Rule 1-02(w) of Regulation S-X and as modified by Rule 3-05(b)(2)(i).  As a result of this determination, we have not included financial statements for these entities in the Registration Statement.  However, we have included unaudited condensed statements of financial condition and statements of operations for both entities in the “Unaudited Pro Forma Combined Condensed Consolidated Financial Information” on pages 68-90 of the Registration Statement.  We also have provided historical per share data for Siuslaw in the “Comparative Unaudited Pro Forma Per Share Data” on page 27 of the Registration Statement.

In making these determinations under Rules 1-02 and 3-05 of Regulation S-X as to Siuslaw and GSB we noted the following:

·

As of December 31, 2013, Siuslaw had total assets of $352.4 million, which was equal to 8.0% of Banner’s consolidated assets of $4.4 billion.

·

For the twelve months ended December 31, 2013, Siuslaw had net income from continuing operations of $3.1 million, which was equal to 6.7% of Banner’s net income of $46.6 million.

·

As of December 31, 2013, the estimated purchase price to be paid for Siuslaw was $59.3 million, which was equal to 1.4% of Banner’s consolidated assets of $4.4 billion.

·

As of December 31, 2013, GSB had total assets of $461.1 million, which was equal to 10.5% of Banner’s consolidated assets of $4.4 billion.

·

For the twelve months ended December 31, 2013, GSB had net income from continuing operations of $2.9 million, which was equal to 6.2% of Banner’s net income of $46.6 million.

·

As of December 31, 2013, the estimated purchase price to be paid for GSB was $59.6 million, which was equal to 1.4% of Banner’s consolidated assets of $4.4 billion.

Mr. Gus Rodriquez

U.S. Securities and Exchange Commission

January 6, 2015

Page 3

Selected Consolidated Historical Financial Information of AmericanWest, page 26

2.

The tables of selected financial information and other data represent the consolidated financial information of SKBHC Holdings. Please tell us why the audited financial information of AmericanWest Bank are not disclosed since the definitive agreement with Banner is for the acquisition of AmericanWest Bank. Please also tell us why the audited financial statements of AmericanWest Bank are not available.

Response:  The Agreement and Plan of Merger in connection with Banner’s acquisition of AmericanWest was entered into by and between Banner Corporation, SKBHC and Starbuck Bancshares, Inc. (“Starbuck”).  Under the terms of the Agreement and Plan of Merger, Starbuck will merge into a subsidiary of Banner and, immediately following that merger, Starbuck’s wholly-owned subsidiary bank, AmericanWest Bank will merge into Banner’s wholly-owned subsidiary bank, Banner Bank.

“AmericanWest” is defined on page 12 of the Registration Statement to include Starbuck and AmericanWest Bank.  Starbuck is the parent holding company of AmericanWest Bank.  Starbuck is wholly-owned by SKBHC, a higher tier holding company.  SKBHC is a closely held limited liability company with only 31 members/shareholders and neither SKBHC, nor Starbuck files financial reports with the Securities and Exchange Commission.  Audited financial statements are only available for SKBHC.  Neither SKBHC nor Starbuck has ever engaged independent auditors to conduct financial statement audits for either Starbuck or AmericanWest Bank.

We considered the guidance contained in the Division of Corporation Finance’s Financial Reporting Manual (“FRM”), Section 2065.1, which provides guidance when substantially all of an entity is to be acquired.  While we acknowledge that Starbuck is a separate legal entity, as reflected in the pro forma financial statements on pages 68-90 of the Registration Statement, Starbuck/AmericanWest comprises more than 99.9% of the consolidated assets and equity of SKBHC as of September 30, 2014, and more than 105.0% of SKBHC’s consolidated net income for the nine months ended September 30, 2014 and the twelve months ended December 31, 2013.  In addition, Note 21 of the Notes to Consolidated Financial Statements of the SKBHC Audited Financial Statements and Note 8 of the Notes to the SKBHC Unaudited Interim Consolidated Financial Statements, which were contained in the Form 8-K Banner filed on December 4, 2014, contain Condensed Statements of Financial Condition, Condensed Statements of Income and Condensed Statements of Cash Flows for SKBHC and Starbuck, which allow the reader to identify the differences between these two entities.

Given the insignificant difference between the financial statements of SKBHC and Starbuck/AmericanWest, the detailed analysis of Starbuck/AmericanWest in the pro forma combined financial information and the significant delay and cost that would be required to obtain audited financial statements for Starbuck/AmericanWest, it is our belief that utilizing the SKBHC financial statements provides meaningful disclosure and

Mr. Gus Rodriquez

U.S. Securities and Exchange Commission

January 6, 2015

Page 4

that disclosure would not be materially improved if audited financial statements of Starbuck/AmericanWest were presented. We also believe that our facts and circumstances are reasonably analogous to the guidance provided in FRM Section   2065.1. Therefore, the SKBHC financial statements have been incorporated into our Registration Statement by reference to our earlier Form 8-K filing.

Comparative Unaudited Pro Forma Per Share Data, page 27

3.

Please revise to disclose historical per share information for AmericanWest and the pro forma AmericanWest equivalent per share information.

Response:   As noted above, Starbuck and AmericanWest Bank are wholly-owned first and second tier subsidiaries, respectively of SKBHC and the sale of those companies has already been approved by the parent companies of each of them.  The transaction that is the subject of the Registration Statement is the acquisition of Siuslaw by Banner.  As such, the historical per share information for AmericanWest and the pro forma AmericanWest equivalent per share information are not relevant to the Siuslaw shareholders who are being asked to vote on the transaction and who will receive Banner common stock as part of the consideration for their shares if the Banner/Siuslaw merger is approved.

We have presented historical per share information for Banner and Siuslaw, as well as pro forma combined per share amounts for Banner and Siuslaw equivalent per share amounts assuming the combination of Banner and Siuslaw and the combination of Banner, Siuslaw and AmericanWest (including the acquisition by AmericanWest of GSB).  We believe this presentation provides the Siuslaw shareholders appropriate information about the effects of each transaction on their investment and the information they need to make an informed decision.

For the foregoing reasons, we do not believe that per share information for AmericanWest would be meaningful to Siuslaw shareholders.

Unaudited Pro Forma Combined Condensed Consolidated Financial Information, page 68

4.

The information presented for AmericanWest has been segregated from the parent holding company SKBHC for the pro forma periods presented. The pro forma statements of financial condition and statements of operations should be based upon the information included in the filing (i.e the historical financial statements). We note that neither the separate audited financial statements nor the interim period financial statements of AmericanWest have been presented. Please tell us how the pro forma financial information presented is in accordance with Rule 11-02 of Regulation S-X.

Response:  The purpose of the pro forma financial information is to provide investors with information about the financial impact of a transaction by showing how it might have affected financial statements if the transaction had been consummated at an earlier

Mr. Gus Rodriquez

U.S. Securities and Exchange Commission

January 6, 2015

Page 5

time.  In this Registration Statement the investors of concern are the shareholders of Siuslaw who will receive Banner common stock as part of the consideration for the sale of their company.  However, there are multiple proposed transactions that will impact Banner as the surviving company and these transactions are currently anticipated to occur nearly simultaneously.  As a result, it is appropriate to disclose the impact of all of the transactions to the Siuslaw shareholders.  For purposes of the pro forma financial information all of the transactions are assumed to be consummated on the same dates; however, the pro forma financial statements are presented separately to capture the essence of each transaction.  These assumptions are explained in the introductory paragraphs to the “Unaudited Pro Forma Combined Condensed Consolidated Financial Information” on pages 68 and 69 of the Registration Statement.

The pro forma financial statements on pages 70, 73 and 76 reflect the acquisition of Siuslaw by Banner.  Additional pro forma financial statements on pages 71, 74 and 77 reflect the acquisition of GSB by AmericanWest.  The final pro forma financial statements on pages 72, 75 and 78 reflect the acquisition of AmericanWest (including GSB) by Banner.  For each combination, a pro forma consolidated statement of financial condition as of September 30, 2014 and pro forma consolidated statements of operations for the nine months ended September 30, 2014 and twelve months ended December 31, 2013 are presented.  The pro forma financial statements are presented in columnar form showing condensed historical statements for each entity, pro forma adjustments and the pro forma results.  The pro forma adjustments are specifically identified and described in the accompanying explanatory notes.

As noted in our response to Comments 1 and 2 above, audited financial statements for Starbuck/AmericanWest are not available; however, both audited and unaudited financial statements for the top tier parent company, SKBHC, which we filed  on a Current Report on Form 8-K, have been incorporated by reference into the Registration Statement.  Starbuck/AmericanWest comprises nearly all of the assets and contributes an amount that is greater than the net income of SKBHC.  The Pro Forma Consolidated Statements of Financial Condition on page 71 and the Pro Forma Consolidated Statement of Operations on pages 74 and 77 begin with the SKBHC financial data and then eliminate all amounts that are solely attributable to SKBHC to appropriately present Starbuck/AmericanWest’s stand-alone historical financial information.  Those pro forma financial statements were then further adjusted to reflect the combination of AmericanWest with GSB.  Separate pro forma financial statements on pages 72, 75 and 78 reflect the merger of this combined AmericanWest/GSB entity with the pro forma combined Banner/Siuslaw entity.

Mr. Gus Rodriquez

U.S. Securities and Exchange Commission

January 6, 2015

Page 6

Pro Forma Statements of Financial Condition, page 72

5.

Please revise to disclose the pro forma adjustment to the investment securities which coincides with the pro forma fair value adjustment reflected in the statement of operations on page 75.

Response:  Investment securities being acquired from AmericanWest consist primarily of securities designated as available-for-sale (“AFS”).  AFS securities are carried on AmericanWest’s balance sheet at fair value, so no acquisition accounting adjustment to mark them to fair value is necessary.  Changes in the fair value of AFS securities when recorded for financial reporting purposes are offset by entries to deferred tax assets or liabilities and accumulated other comprehensive income (“AOCI”), a component of equity.  In the acquisition accounting, the former mark-to-market entries in the securities section of the balance sheet are reclassified to premiums or discounts of the respective securities and are subsequently amortized against or accreted to interest income.  The “Pro Forma Consolidated Statements of Operations” for the acquisition of AmericanWest on pages 75 and 78 include adjustments (identified in Note K and described on page 90) to reflect the accretion of the reclassified net discounts related to the AFS securities acquired; however as noted above, no adjustment is required to the “Pro Forma Consolidated Statements of Financial Condition” on page 72.

The description of these adjustments presented in Note K of the “Notes to Pro Forma Adjustments for AmericanWest Merging Into Banner” on page 90 has been revised to explain more clearly the adjustments.  A similar change has been made to Note K of the “Notes to Pro Forma Adjustments for Siuslaw Merging Into Banner” on page 85.

In addition, the adjustments on pages 75 and 78 and in the “Notes to Pro Forma Adjustments for AmericanWest Merging Into Banner” on page 90 have been corrected to properly reflect those adjustments as credits to interest income.  Amendment No. 1 to Form S-4 incorrectly reflected these adjustments as charges to interest income.  We have corrected the “Pro Forma Consolidated Statements of Operations” to reflect these adjustments. These changes resulted in modest changes to the pro forma earnings per share information in the table on page 27 in the final two columns identified as the “Pro Forma Combined Amounts for Banner, Siuslaw

June 6, 2014

Via E -mail
Mr. Lloyd W. Baker
Chief Financial Officer
Banner Corporation
10 South First Avenue
Walla Walla, Washington 99362

Re: Banner Corporation
Form 10-K for the Fiscal Year Ended December 31, 2013
Filed March 4, 2014
Amendment No. 1 to Form 10 -K for the Fiscal Year Ended
December 31, 2013
Filed March 26, 2014
Amendment No. 2 to Form  10-K for the Fiscal Year Ended
December 31, 2013
Filed May 21, 2014
File No. 000-26584

Dear Mr. Baker :

We have completed our review of your filing s.  We remind you that our  comments or
changes to disclosure in response to our comments do not foreclose the Commission from taking
any action with respect to the company or the filing s and the company may not assert staff
comments as a defense in any proceeding initiated by the C ommission or any person under the
federal securities laws of the United States.  We urge all persons who are responsible for the
accuracy and adequacy of the disclosure in the filing s to be certain that the filing s include the
information the Securities Ex change Act of 1934 and all applicable rules require.

Sincerely,

 /s/ David S. Irving

David S. Irving
Reviewing Accountant

CORRESP
1
filename1.htm

		SEC Comment Letter 05-20-2014 RESPONSE

 May 21, 2014

Mr. David S. Irving

Reviewing Accountant

U.S. Securities and Exchange Commission

Washington, D.C.  20549

Re:    Banner Corporation

Form 10-K for the Fiscal Year Ended December 31, 2013

Filed March 4, 2014

Amendment No. 1 to Form 10-K for the Fiscal Year Ended

December 31, 2013

Filed March 26, 2014

File No. 000-26584

Dear Mr. Irving:

We are in receipt of your letter dated May 20, 2014 regarding our Form 10-K filed on March 4, 2014 and the subsequent amendment filed on Form 10-K/A on March 25, 2014.  You note correctly that the Exhibit 32 certification inadvertently omitted the conformed signatures of the principal executive and financial officers of Banner Corporation.  When this came to our attention we filed an amendment to Form 10-K.  That amendment on Form 10-K/A included an explanatory note and updated and signed Exhibits 31.1, 31.2 and 32, but did not include the entire periodic report as we were interpreting Rule 12b-15 that that information was not required.  Per your instruction, we will file a full and complete amendment immediately and will ensure that Exhibits 31 and 32 are updated, signed and refer to the Form 10-K/A.

Further, we acknowledge that:

•

 Banner Corporation is responsible for the adequacy and accuracy of the disclosure in the filing;

•

 staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

•

 the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

You may contact me at (509) 526-8896 or by email at lbaker@bannerbank.com if you have further questions regarding our filings.

Sincerely,

/s/William Jenkins, SVP Controller, for

Lloyd W. Baker

Executive Vice President

Chief Financial Officer

10 South First Avenue ● P.O. Box 907 ● Walla Walla, WA 99362-0265

509-527-3636 ● Fax:  509-526-8891 ● www.bannerbank.com ● Member FDIC

May 20, 2014

Via E -mail
Mr. Lloyd W. Baker
Chief Financial Officer
Banner Corporation
10 South First Avenue
Walla Walla, Washington 99362

Re: Banner Corporation
 Form 10 -K for the Fiscal Year Ended December 31, 2013
 Filed March 4, 2014
 Amendment No. 1 to Form 10 -K for the Fiscal Year Ended
December 31, 2013
Filed March 26, 2014
File No. 000 -26584

Dear Mr. Baker :

We have reviewed your filing an d have the following comment .  In some of our
comments, we may ask you to provide us with information so  we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our c omment applies  to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to this comment , we may have  additional comments.

Form 10 -K for the Fiscal Year Ended December 31, 2013

Part IV

Item 15. Exhibits and Financial Statement Schedules

Exhibit 32 – Certificate of Chief Executive Officer and Chief Financial Officer pursuant to
Section 90 6 of the Sarbanes Oxley Act of 2002

1. We note that your Exhibit 32 certification presented in your December 31, 2013 Form
10-K filed March 4, 2014 inadvertently omitted the signatures of each of your principal

Mr. Lloyd W. Baker
Banner Corporation
May 20, 2014
Page 2

 executive and principal financial officers.  We  also note that you filed an abbreviated
amendment to Form 10 -K on March 26, 2014 to correct such omissions.  Since you did
not file a full and complete  amendment to the December 31, 2013 Form 10 -K, please do
so.  Please also ensure that the signatures, Ex hibit 31  and 32 certifications  are also
updated and refer to the Form 10 -K/A.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exch ange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of t he United States.

You may contact Chris Harley  at (202) 551 -3695  or me at (202) 551 -3321  if you have
questions regarding comments on the financial statements and related matters.

Sincerely,

 /s/ Davi d S. Irving

David S. Irving
Reviewing Accountant

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

DIVISION OF
  CORPORATION FINANCE

        October  10, 2012

Via E -mail
Mr. Mark J. Grescovich
President  and Chief Executive Officer
Banner Corporation
10 South First Avenue
Walla Walla, Washington 99362

Re:   Banner Corporation
Form 10 -K for the Fiscal Year Ended December 31, 2011
Filed March 13 , 2012
File No. 00 0-26584

Dear Mr. Grescovich :

We completed our review of your filing on July 2 , 2012.  We remind you that our
comments or changes to disclosure in response to our comments do not foreclose the
Commission from ta king any action with respect to the company or the filing and the
company may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States.  We
urge all persons wh o are responsible for the accuracy and adequacy of the disclosure in
the filing to be certain that the filing include s the information the Securities Exchange
Act of 1934 and all applicable rules require.

        Sincerely,

  `      /s/ Todd K. Schiffman

Todd K. Schiffman
Assistant Director

CORRESP
1
filename1.htm

    banr-secresp6812.htm

June 8, 2012

Via EDGAR

Securities and Exchange Commission

100 F Street, NE.

Washington, D.C.  20549

Attn:

Kathryn Sears McHale, Esquire

Division of Corporation Finance

Re:

Banner Corporation

Form 10-K for the Fiscal Year Ended December 31, 2011

Filed March 13, 2012

Proxy Statement on Schedule 14A

Filed March 21, 2012

File No. 000-26584

Dear Ms. McHale:

This letter sets forth the responses of Banner Corporation (the “Company”) to the comments received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated June 5, 2012 in connection with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Commission on March 13, 2012 and Proxy Statement on Schedule 14A filed with the Commission on March 21, 2012.

The relevant text of the Staff’s comments has been included in this letter.  The numbering of the Company’s responses corresponds to the numbering in the Staff’s letter.

Form 10-K for the Fiscal Year Ended December 31, 2011

Performance Graph, page 32

Comment 1. In future filings, please disclose the identities of the issuers in each peer group as required by Instruction 5 to Item 201(e).

Response:  The Company’s performance graph is prepared using “The cumulative total return, assuming reinvestment of dividends, of a published industry or line-of-business index” as provided by Section (3)(1)(A) of Regulation S-K.  Section 201(e)(3) defines the term “published industry or line-of business index”, as “any index that is prepared by a party other than the registrant or an affiliate and is accessible to the registrant’s security holders…”.   The Company’s securities are listed on the NASDAQ Global Select Market and it uses the NASDAQ Composite Index as well as the SNL Bank $1 billion to $5 billion Index and the SNL Bank NASDAQ Index to prepare its performance graph.  The SNL Bank $1 billion to $5 billion Index and the SNL Bank NASDAQ Index are recognized published industry indices, with the SNL Bank NASDAQ Index comprised of 281 financial institutions.  The instructions for Item 201(e), paragraph 5, state that “If the registrant uses a peer issuer(s) comparison or comparison with issuer(s) with similar market capitalizations, the identity of those issuers must be disclosed and the returns of each component issuer of the group must be weighted according to the respective issuer's stock market capitalization at the beginning of each period for which a return is indicated.”  The Company does not utilize an index based on its peer issuers.  As a result, there is no requirement to identify each of the

Securities and Exchange Commission

June 8, 2012

Page 2

issuers, which in this case would include the 281 financial institutions that comprise the SNL Bank NASDAQ Index.  The Company has elected, instead and as provided by Section 201(e)(1)(ii)(A) of Regulation S-K, to prepare its performance graph based on “a published industry or line-of-index” method.

Notes to Consolidated Financial Statements

Note 6: Loans Receivable and the Allowance for Loan Losses, page 106

Comment 2. We note the disclosure on page 108 following the impaired loan table, that the Company had “additional commitments to advance funds up to amount of $155 million related to troubled debt restructurings” at December 31, 2011. The disclosure on page 21 following the impaired loan table in the March 31, 2012 Form 10-Q, addresses “additional commitments to advance funds up to an amount of $363,000 related to impaired loans.” So that we may have a better understanding of these different disclosures, please provide us with sufficient clarifying information addressing both the disclosure differences as well the levels of additional commitments at each reporting period in light of the levels of both troubled debt restructurings and impaired loans at these dates.

Response.  The Company notes that the impaired loan table on page 108 is in thousands, in contrast to the number given in the sentence immediately following the impaired loan table which is the actual number ($155,000), that is not $155 million.  Similarly, this also occurred in the Company’s March 31, 2012 Form 10-Q, where the table on page 21 is in thousands and the number given in the sentence following the table is the actual number ($363,000).

*      *      *

Additionally, in response to the Staff=s request, the Company acknowledges that (i) it is responsible for the adequacy of the disclosure in its filings; (ii) Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Company=s filings; and (iii) the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Should you have any questions concerning the foregoing, please do not hesitate to contact the undersigned at (509) 526-8896 or lbaker@bannerbank.com.

Sincerely,

/s/ Lloyd W. Baker

Lloyd W. Baker

Executive Vice President,

Chief Financial Officer

cc:           Jonathan E. Gottlieb, Esquire, Division of Corporation Finance, Securities and

   Exchange Commission

Mark J. Grescovich, President and Chief Executive Officer, Banner Corporation

Albert H. Marshall, Vice President and Secretary, Banner Corporation

John F. Breyer, Jr., Breyer & Associates PC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

DIVISION OF
  CORPORATION FINANCE

         June 5, 2012
   Via E-mail

Mr. Mark J. Grescovich President and Chief Executive Officer Banner Corporation 10 South First Avenue  Walla Walla, Washington 99362

Re:   Banner Corporation
Form 10-K for the Fiscal Year Ended December 31, 2011 Filed March 13, 2012  Proxy Statement on Schedule 14A  Filed March 21, 2012 File No. 000-26584

Dear Mr. Grescovich:

We have reviewed your filings and have the following comments.  In some of our
comments, we may ask you to provide us w ith information so we may better understand
your disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested response.  If you do not believe  our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
  Form 10-K for the Fiscal Year Ended December 31, 2011

Performance Graph, page 32
 1. In future filings, please disclose the ident ities of the issuers in each peer group as
required by Instruction 5 to Item 201(e).

Mr. Mark J. Grescovich
Banner Corporation June 5, 2012 Page 2
 Notes to Consolidated Financial Statements

Note 6: Loans Receivable and the Allowance for Loan Losses, page 106

2. We note the disclosure on page 108 followi ng the impaired loan table, that the
Company had “additional commitments to advance funds up to amount of $155 million  related to troubled debt restruct urings” at December 31, 2011. The disclosure
on page 21 following the impaired loan table in the March 31, 2012 Form 10-Q,
addresses “additional commitments to a dvance funds up to an amount of $363,000
related to impaired loans.” So that we  may have a better understanding of these
different disclosures, plea se provide us with suffici ent clarifying information
addressing both the disclosure differen ces as well the levels of additional
commitments at each reporting period in light of the levels of both troubled debt
restructurings and impaired loans at these dates.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes the information the Securities
Exchange Act of 1934 and all applicable Exch ange Act rules require.  Since the company
and its management are in possession of all f acts relating to a company’s disclosure, they
are responsible for the accuracy and adequacy  of the disclosures they have made.

In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
 staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
 the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

You may contact or William J. Schroeder at (202) 551-3294 or Marc D. Thomas at
(202) 551-3452 if you have questions regard ing comments on the financial statements
and related matters.  Please contact Jonathan E. Gottlieb at (202) 551-3416 or me at (202)
551-3464 with any other questions.          S i n c e r e l y ,           / s /  K a t h r y n  S .  M c H a l e
Kathryn Sears Mchale
        S t a f f  A t t o r n e y

CORRESP
1
filename1.htm

    s3acceleration5812.htm

[Letterhead of Banner Corporation]

May 8, 2012

Via EDGAR and Email

Securities and Exchange Commission

100 F Street, NE.

Washington, D.C.  20549

Re:         Banner Corporation

Registration Statement on Form S-3 (File No. 333-180925)

Acceleration Request for Acceleration of Effectiveness

Ladies and Gentlemen:

Banner Corporation (“Company”) hereby respectfully requests that the Securities and Exchange Commission (“Commission”) accelerate the effective date of the above-referenced Registration Statement on Form S-3 to 4:00 p.m., Eastern time, on May 10, 2012, or as soon thereafter as practicable.

In connection with this request, the Company hereby acknowledges the following:

·

Should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing;

·

The action of the Commission or the staff, acting pursuant to delegated authority, in declaring the filing effective, does not relieve the Company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and

·

The Company may not assert this action as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Sincerely,

/s/Lloyd W. Baker

Lloyd W. Baker

Executive Vice President and

Chief Financial Officer

cc:           Michael F. Johnson, Esquire, Division of Corporation Finance, Securities and

     Exchange Commission

May 4, 2012
 Via E-mail

Mr. Albert H. Marshall Senior Vice President Banner Corporation 10 S. First Avenue Walla Walla, WA 99362
Re: Banner Corporation
  Registration Statement on Form S-3
Filed April 25, 2012
  File No. 333-180925

Dear Mr. Marshall:
 We have limited our review of your filing to  those issues we have addressed in our
comments.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
 Please respond to this letter by amending your registration statement and providing the
requested information.  Where you do not beli eve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information you
provide in response to these comments, we may have additional comments.

Part II. Information Not Required in Prospectus

 Item 16. Exhibits

 Exhibit 5.1, page II-2

 1. We note that counsel has assumed “due au thorization, execution and delivery of all
documents where due authorization, executi on and delivery are pr erequisites to the
effectiveness thereof.”  The staff considers it inappropriate for counsel to include in its
opinion assumptions that “assume away” any of  the material facts underlying the opinion
or any readily ascertainable fact s.  In this regard, counsel’s diligence in the preparation of
its opinion should include ascertaining wh ether documents executed by Banner were
appropriately authorized, execute d and delivered.  Please refer to Section II.B.3.a of Staff
Legal Bulletin No. 19, and revise accordingly.

Mr. Albert H. Marshall
Banner Corporation May 4, 2012 Page 2

We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing incl udes the information the Securities Act of 1933 and
all applicable Securities Act rules require.  Since the company and its management are in
possession of all facts relating to a company’s disc losure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
Notwithstanding our comments, in the event you request acceleration of  the effective date
of the pending registration statement please pr ovide a written statement from the company
acknowledging that:

 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose the Co mmission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

Please refer to Rule 461 regarding requests fo r acceleration.  We will consider a written
request for acceleration of the e ffective date of the registration statement as confirmation of the
fact that those requesting acceler ation are aware of their respec tive responsibilities under the
Securities Act of 1933 and the Secu rities Exchange Act of 1934 as they relate to the proposed
public offering of the securities specified in th e above registration stat ement.  Please allow
adequate time for us to review any amendment prior to the requested effective date of the
registration statement.
 If you have questions or comme nts please contact Michael F.  Johnson, Staff Attorney, at
(202) 551-3477.  If you require further assistan ce, you may contact me at (202) 551-3698.

Sincerely,
         / s / M a r k  W e b b           M a r k  W e b b          L e g a l  B r a n c h  C h i e f

Mail Stop 4561

      June 9, 2009

Via US Mail and Facsimile to (509) 526-8873

Lloyd W. Baker Executive Vice President and Chief Financial Officer Banner Corporation 10 South First Avenue Walla Walla, WA 99362

Re: Banner Corporation
 Form 10-K for the year ended December 31, 2008
Filed March 16, 2009
 File No.  0-26584

Dear Mr. Baker:
  We have completed our review of your Form 10-K and related filings and have no further comments at this time.           S i n c e r e l y ,            Kevin W. Vaughn         B r a n c h  C h i e f

CORRESP
1
filename1.htm

    Unassociated Document

    May 15,
2009

      Via Edgar
and Overnight Mail

      Mr. Kevin
Vaughan

      Branch
Chief

      Securities
and Exchange Commission

      Division
of Corporation Finance

      Mail Stop
4561

      100 F
Street, N.E.

      Washington,
DC 20549-4561

      RE:      Banner
Corporation

                                  File
No. 0-26584

                  Form 10-K for the
Period Ended December 31, 2008

      Dear Mr.
Vaughan:

      This
letter sets forth the responses of Banner Corporation (the “Company”) to the
comments received from the staff (the “Staff”) of the Securities and Exchange
Commission (the “Commission”) by letter dated April 22, 2009 in connection with
the Staff’s review of the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2008.  We assume that, since the comments
included in that letter relate only to that most recent Form 10-K, that our
responses to previous Staff comment letters with respect to the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2007, Form 10-Qs for
the fiscal quarters ended March 31, June 30 and September 30, 2008 and Form 8-K
filed January 28, 2009, were sufficient to address the questions raised in those
previous letters.

      The
relevant text of the Staff’s comments has been included in this
letter.  The numbering of the Company’s responses corresponds to the
numbering in the Staff’s letter.

      Form
10-K

      Management’s Discussion and
Analysis of Financial Condition and Results of Operations, page
34

      Asset Quality, page
51

                1.

                Please
      refer to your response and revisions made in response to comment 4 of our
      February 23, 2009 letter.  We note the numerous changes to your
      disclosures, both qualitative and quantitative, of the significant
      increase in the provision for loan losses in 2008, of the effect of the
      provision on operations and of the allowance for loan losses to total
      loans.  We also note the disaggregated information you have
      disclosed for your non-performing loans.  However, these
      disclosures do not seem to address how you determined the appropriateness
      of the allowance for loan losses at each balance sheet date in light of
      the significant deterioration of your asset quality
      ratios.  Please tell us and revise future filings to discuss the
      reasons surrounding the decrease in the allowance as a percentage of
      non-performing loans to 40%
at

            Mr. Kevin
Vaughan

            Branch
Chief

            Securities
and Exchange Commission

            May 15, 2009

            Page 2 of 7

                  December
      31, 2008 from 1.08% at December 31, 2007, as disclosed on
      page  56, which represents an approximately 63% decrease in that
      measure between periods.  Clarify why it appears you do not
      expect similar loss trends on non-performing loans in 2009 as you
      experienced in 2008.  Also, please clarify how you considered
      the following trends:

                ·

                Non-performing
      loans increased approximately 342% at December 31, 2008 from December 31,
      2007.

                ·

                Non-performing
      loans to net loans before allowance for loan losses increased
      approximately 326% at December 31, 2008 from December 31,
      2007.

                ·

                Charge-offs
      in 2008 represented approximately 83% of non-performing loans at December
      31, 2007.

                ·

                Charge-offs
      increased approximately 737% at December 31, 2008 from December 31,
      2007.

                ·

                Charge-offs
      in 2008 approximated 80% of the allowance for loan losses at December 31,
      2007.

      As we
have reported in our Form 10-Q and Form 10-K filings for 2008, the significant
increase in our non-performing loans has been primarily centered in our
residential construction and land development loans.  Delinquencies
for these types of loans increased sharply in the second half of 2008 as housing
sales, which had previously been slow but still sufficient to provide adequate
cash flow for builders and developers to maintain their loans in a current
status, came to a near complete halt in the Northwest markets that we
serve.  This was particularly true in the last four months of 2008 and
continued for the first two months of 2009.  Fortunately, in March and
April 2009 new home sales began to occur at an improved pace and we are becoming
more optimistic with respect to future sales.  This increase in
delinquencies mirrored the rapid decline in the U.S. economy and loss of
consumer confidence brought on in large part by the financial crisis which also
heightened late in the third quarter of 2008.  As this increase in
delinquencies unfolded, the amount of loans that we individually evaluated for
specific impairment analysis increased, as did the level of loan charge-offs
that we recorded.  However, it is important to note that not all of
those charge-offs related to loans that were considered non-performing at
December 31, 2007; rather, the majority of the charge-offs related to loans that
became non-performing during 2008 as the economic deterioration became more
pronounced.  It is also important to note that in most instances those
charge-offs do not represent the entire amount of individual loan balances, but
instead reflect charges designed to reduce the carrying value of those impaired
loans down to the expected recovery value (net of  holding and selling
costs) of the underlying collateral.  As noted in SFAS No. 114, Accounting by Creditors for
Impairment of a Loan, and SFAS 118, Accounting by Creditors for
Impairment of a Loan – Income Recognition and Disclosure, for loans
reduced to such expected recovery values, an additional allowance for losses is
not appropriate.  This accounting treatment, while

            Mr. Kevin
Vaughan

            Branch
Chief

            Securities
and Exchange Commission

            May 15, 2009

            Page 3 of 7

        appropriately
supporting the additions to and adequacy of the allowance for loan losses, had
the effect of reducing the allowance for loan losses as a percentage of
non-performing loans as of December 31, 2008 when compared to December 31,
2007.

      As we
note on page 56 of our Form 10-K, “as of December 31, 2008, we
had identified $211 million of impaired loans as defined by SFAS No.
114.  Of those loans, $92 million have related allowances for credit
losses totaling $15 million.  The remaining $119 million in impaired
loans have no allowances for credit losses as the estimated collateral value is
equal to or exceeds their carrying costs. Impaired loans with related allowances
for credit losses that are individually evaluated for reserve needs total $53
million and account for $11 million of the allowance for impaired
loans.  Impaired loans with related allowances for credit losses that
are collectively evaluated as homogeneous pools total $38 million and account
for $4 million of the total allowance related to impaired
loans.”

      While we
could have made the point more directly in our filing, the excerpt above
indicates that for our impaired loans, which includes all non-performing loans,
at December 31, 2008 slightly more than 80% were individually evaluated to
determine the adequacy of allowance for loan losses and their appropriate
carrying values.  Of course, in many instances those carrying values
were net of recorded charge-offs implying no need for an additional
allowance.  As more impaired loans were identified and individually
evaluated, with corresponding charge-offs recorded, the allowance for loan
losses to non-performing loans ratio was naturally reduced.  It is
also important to note that most of those loans were not included in our
non-performing loan totals at December 31, 2007, which totaled just $42 million,
as the rapid increase in delinquencies occurred subsequent to that
date.  In fact, only $4.9 million of the net charge-offs ($6.6 million
of charge-offs, net of $1.8 million of recoveries) we recorded in 2008 related
to the $42 million of non-performing loans reported at December 31,
2007.   As such, it is not meaningful to relate a significant
portion of the current year’s charge-offs to the prior year-end balance of
non-performing loans or allowance for loan losses.  By contrast, those
charge-offs have had a significant impact on our historical loss factors which
are applied to both performing portions of our portfolio and those
non-performing loans that are not individually evaluated, resulting in increased
loss provisioning during 2008 and contributing to the increase in the ratio of
allowance for loan losses to total loans which was 1.90% at December 31, 2008
compared to 1.20% at December 31, 2007.

      While we
cannot predict future losses with certainty, we do believe it is likely that we
will not have a similar percentage increase in non-performing loans in 2009 as
the 342% increase you have noted that we experienced in
2008.  Nonetheless, going forward we do expect that the trend for
changes in non-performing loans will continue to be one of the primary
considerations in determining our loan loss

              Mr. Kevin
Vaughan

              Branch
Chief

              Securities
and Exchange Commission

              May 15, 2009

              Page 4 of 7

        provisioning,
as it was in 2008 when our provision for loan losses increased by 959% compared
to the previous year and was nearly double the level of net charge-offs that we
recorded.  Because of the significant amount of collateral-dependent
real estate loans in our portfolio, another primary factor impacting future loan
loss provisioning will be trends in property values.  While the
adequacy of our allowance at December 31, 2008 reflected current valuation
estimates supported by recent appraisals performed by independent outside
appraiser, future market trends are as uncertain today as they were at the
beginning of 2008, implying that subsequent property value declines, should they
occur, should be reflected in future period earnings as prescribed in SFAS No.
5, Accounting for
Contingencies, as well as SFAS No. 114 and SFAS No. 118.

      Financial
Statements

      Note
24:  Fair Value of Financial Instruments, page 124

                2.

                Please
      tell us and revise future filings to discuss in detail the specific
      procedures, if any, management performs to review the pricing information
      received from independent third parties, including the frequency of your
      reviews and the percentage of pricing information received that is
      reviewed.

      We review
all of the pricing information received from third parties prior to including it
in our quarterly financial statements.  The review is based upon the
market knowledge of our Treasurer and Chief Financial Officer and also includes
our Accounting Staff identifying material changes from prior
periods.  If the pricing information contains values that are
significantly different from the Treasurer’s or Chief Financial Officer’s
expectations, follow up procedures would include discussion with the valuation
service provider and with securities dealers or other market participants to
validate or challenge the pricing.

                3.

                Please
      tell us and revise future filings to clarify how you determine when
      pricing information received from independent third parties represents
      illiquid or inactive markets.  Also, for each type of financial
      instrument, explain how the market was deemed inactive (illiquid), how
      adjustments were made for this illiquidity in the fair value estimates,
      and how inactive/illiquid markets affected the choice of valuation
      technique.

                At
      December 31, 2008, all of the financial instruments that we considered to
      be subject to illiquid or inactive markets were either trust preferred
      securities (TPS) issued by banks or bank holding companies (including
      those issued by the Company) or collateralized debt obligation securities
      that are backed by such trust preferred securities issued by banks,
      thrifts, and insurance companies (TRUP

              Mr. Kevin
Vaughan

              Branch
Chief

              Securities
and Exchange Commission

              May 15, 2009

              Page 5 of 7

                  CDOs).  These
      securities represent a narrowly defined class of capital instruments that,
      prior to 2008, were very actively originated and traded by a number of
      securities broker/dealers and certain banking institutions.  The
      lack of liquidity in these securities was initially evidenced by a
      significant widening of the spreads, both relative to other market indices
      and the bid/ask spread quoted by market participants, associated with the
      instruments.  Subsequently, the illiquidity was evidenced by a
      nearly complete lack of new originations and purchase and sale
      transactions reported by formerly active market participants, including
      numerous previously active broker/dealers from whom we regularly poll
      market information.

                Because
      we were unable to identify any reliable, observable transaction or market
      quotation data with respect to these types of securities, our valuation
      estimates were based upon discounted cash flow models.  For the
      TPS issues, the cash flow estimates did not assume any payment deferrals
      or defaults by the individual issuers and the discount rate of three-month
      LIBOR plus a spread of 700 basis points that we utilized was intended to
      incorporate both a credit risk component and an illiquidity
      component.  For the TRUP CDOs, the projected cash flows included
      default assumptions (the credit risk component), as detailed in Note 24 on
      page 125 of our Form 10-K, while the discount rate of three-month LIBOR
      plus 200 basis points was intended to incorporate only an illiquidity
      component over and above the risk free
rate.

                4.

                Please
      tell us and revise future filings to disclose why you have not included
      securities available for sale in the tabular presentation on page 127,
      considering that they are accounted for under SFAS 157 and re-measured on
      a recurring basis.

      Excluding
securities available-for-sale from this tabular presentation was an oversight
and has been corrected in our Form 10-Q for the quarter-ended March 31,
2009.  The template for this table was created in a period when we did
not have any securities available-for-sale.  At December 31, 2008, our
available-for-sale securities were reported in our Consolidated Statement of
Financial Condition at a fair value of $53,272,000, which included $1,082,000,
or $692,000 after deferred income tax, of unrealized holding
gains.  The $692,000 after-tax amount was reported in the Consolidated
Statement of Comprehensive Income and included in the Stockholders’ Equity
section of the Consolidated Statement of Financial
Condition.   All of these securities were considered Level 1
assets for valuation purposes at December 31, 2008.  Our future
filings will include any available-for-sale securities in the tabular
presentation in the fair value note.

      The
revised table as presented in Note 10 of the Selected Notes to Consolidated
Financial Statements in our recently filed March 31, 2009 Form 10-Q is presented
on the following page of this letter.

            Mr. Kevin
Vaughan

            Branch
Chief

            Securities
and Exchange Commission

            May 15, 2009

            Page 6 of 7

      T

CORRESP
1
filename1.htm

    corr429.htm

    April 29,
2009

    Via Telecopy and
EDGAR

    Kevin
Vaughn

    Branch
Chief

    Division
of Corporate Finance

    Securities
and Exchange Commission

    100 F
Street, N.E.

    Washington,
D.C.  20549-4561

            Re:
            Banner
      Corporation

            File No.
      0-26584

              Form
      10-K for the period ended December 31,
  2008

    Dear Mr.
Vaughan:

    This letter is to acknowledge receipt
of the comment letter, dated April 22, 2009.  As a result of time
commitments driven by our Annual Shareholders Meeting and first quarter earnings
release and Report on Form 10Q, as well as the untimely death of our Chief
Accountant two weeks ago, we respectfully request that we be given an extension
to respond to your comment letter until May 15, 2009 to allow for us, our legal
counsel and our auditors to have sufficient time to review and respond to the
comments.

    If you have any questions concerning
this matter, please contact the undersigned at 509-526-8896 or e-mail at lbaker@bannerbank.com.

            Sincerely,

            /s/ Lloyd W.
      Baker

            Lloyd W.
      Baker

            Executive Vice
      President and

            Chief Financial
      Officer

              cc:

              Paul
      Kline, Staff Accountant, SEC

Mail Stop 4561
April 22, 2009

By U.S. Mail and facsimile to (509)526-8873

Lloyd W. Baker Executive Vice President and Chief Financial Officer Banner Corporation 10 South First Avenue Walla Walla, WA 99362
Re: Banner Corporation  File No. 0-26584  Form 10-K for the period ended December 31, 2008

Dear Mr. Baker:

We have reviewed your response letter, filed with the Commission on March 13,
2009, to our comment letter of February 23, 2009 and have the following additional
comments.
Form 10-K

Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 34

Asset Quality, page 51

1. Please refer to your response and revisions made in response to comment 4 of our
February 23, 2009 letter.  We note the numerous changes to your disclosure, both qualitative and quantitative, of the signi ficant increase in the provision for loan
losses in 2008, of the effect of the pr ovision on operations and of the allowance
for loan losses to total loans.  We also note the disaggregated information you
have disclosed for your non-performing.  Ho wever, these disclosures do not seem
to address how you determined the appropriateness of the al lowance for loan
losses at each balance sheet date in light  of the significant deterioration of your
asset quality ratios.  Please tell us and revise future filings to discuss the reasons surrounding the decrease in the allowance as a percentage of non-performing loans to 40% at December 31, 2008 from 1.08% at December 31, 2007, as disclosed on page 56, which represents an  approximately 63% decrease in that
measure between periods. Clarify why it appears you do not expect similar severe
loss trends in 2009 as you experienced in 2008.  Also, please clarify how you considered the following trends:

Lloyd W. Baker
Banner Corporation
February 23, 2009 Page 2
• Non-performing loans increased approxi mately 342% at December 31, 2008 from
December 31, 2007.

• Non-performing loans to net loans before the allowance for loan losses increased
approximately 326% at December 31, 2008 from December 31, 2007.

• Charge-offs in 2008 represented approximately 83% of non-performing loans at December 31, 2007.

• Charge-offs increased approximate ly 737% at December 31, 2008 from
December 31, 2007.

• Charge-offs in 2008 approximated 80% of the allowance for loan losses at
December 31, 2007.

Financial Statements

 Note. 24:  Fair Value of Financial Instruments, page 124

 2. Please tell us and revise future filings to discuss in detail the specific procedures,
if any,  management performs to review pricing information received from independent third parties, including the frequency of your reviews and the
percentage of the pricing information received that is reviewed.

3. Please tell us revise future filings to  clarify how you determine when pricing
information received from independent thir d parties represents illiquid or inactive
markets.  Also, for each type of financia l instrument, explain how the market was
deemed inactive (illiquid), how adjustments were made for this illiquidity in the
fair value estimates, and how inactive/ illiq uid markets affected the choice of the
valuation technique.

4. Please tell us and revise future filings to disclose why you have not included
securities available for sale in the ta bular presentation on page 127, considering
that they are accounted for under SFAS 157 and re-measured on a recurring basis.
   *  *  *  *  *
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please furnish a cover letter that keys your response to our
comments and provide us drafts of your proposed revisions to future filings and any requested supplemental information.  Please file your response on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comment.

Lloyd W. Baker
Banner Corporation February 23, 2009 Page 3
You may contact Paul Cline, Staff A ccountant, at (202) 551-6851, or me at
(202)551-3494 if you have questions.

Sincerely,    Kevin Vaughn Branch Chief

UNITED STATES
SECURITIES  AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE

Mail Stop 4561
February 23, 2009

By U.S. Mail and facsimile to (509)526-8873

Lloyd W. Baker Executive Vice President and Chief Financial Officer Banner Corporation 10 South First Avenue Walla Walla, WA 99362
Re: Banner Corporation  File No. 0-26584  Form 10-K for the period ended December 31, 2007  Forms 10-Q for the periods ended March 31, June 30 and September
30, 2008
 Form 8-K  Filed January 28, 2009
 Dear Mr. Baker:
 We have reviewed your filings and have the following comments.  Where
indicated, we think you should revise your future  filings in response to our comment.  If
you disagree, we will consider your explanation as to why our comments are inapplicable
or a revision is unnecessary.  Please be as detailed as necessary in your explanation and provide us drafts of your propos ed revisions to your future filings in response to our
comments.  In our comments, we may as k you to provide us with supplemental
information so we may better understand your  disclosure.  After reviewing this
information, we may or may not raise additional comments.
Form 10-K

Business, page 4

Lending Activities, page 5

1. Please refer to your response to comment 1 of our December 23, 2008 letter, in which you reiterate many of the disclosure s included in your document.  We have
read your document and continue to believe that an increased level of transparency surrounding your underwriting policies and procedures is appropriate.  We re-issue our comment and request that you revise future filings
accordingly.  Also, please disclose your definition of sub-prime lending in your future revisions.

Lloyd W. Baker
Banner Corporation
February 23, 2009 Page 2   2. Please refer to your response to comment 2 of our December 23, 2008 letter.  Please revise future filings to clarify the following:

• We note your disclosure that generally AR M loans held in portfolio do not allow
for interest-only payments or negative am ortization of principal.  While we note
from your response that you do not maintain  a database that would allow you to
identify all exceptions to your underw riting practices, we assume you can
quantify the ARM loans that do allow for interest-only payments and/or negative
amortization.  Please revise to quantify these loans and to provide an expanded
discussion of your underwriting policies and procedures for them.  If you are not
able to quantify the amounts of such loans,  disclose that fact.  To the extent you
believe the amounts are immaterial, please quantify them for us in your response and provide us your related underwriting policies and procedures.

• Please revise future filings to discuss the circumstances under which you would
not require private mortgage insurance on residential loans with a loan-to-value
ratio greater then 80% and quantify the amount of these loans.  To the extent you
believe the amounts are immaterial, please include in your response a discussion
of the circumstances under which you would not require private mortgage
insurance on residential loans with a lo an-to-value ratio greater then 80% and
quantify the amount of these loans.

• Where you use the terms such as “genera lly” and “usually” in future filings,
please specifically disclose, if true, that any exceptions to your disclosed policies
and procedures are immaterial.  Also, incorporate the portion of your response that discusses your decision process fo r making exceptions to your standard
underwriting practices into your disclosures.
 3. Please refer to your response to comment 3 of our December 23, 2008 letter and revise future filings to incorporate, as set forth in your response, that all adjustable
rate loans are underwritten at fu lly indexed interest rates.
 Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 27

Non-Performing Assets, page 41

4. Please refer to your response to comment 5 of our December 23, 2008 letter.  We understand that the development of the allo wance for loan losses is not a simple
mathematical formula tied to one or two ra tios; however, we continue to believe
that asset quality ratios can identify impor tant trends in the allowance for loan
losses, non-performing assets and your loan portfolio.  We re-issue comment 5 of our December 23, 2008 letter and request that you revise future filings to include an expanded discussion of the trends depi cted by your asset qu ality ratios between

Lloyd W. Baker
Banner Corporation
February 23, 2009 Page 3
quarters, including a chronology of events th at lead to the deteriorating assets
quality ratios between periods.  Also, considering the sign ificant provision
recorded in the fourth quarter of 2008, in clude a discussion of the specific facts
and circumstances that occurred in that quarter that were not present prior to
September 30, 2008.
 Form 10-Q for the Period Ended June 30, 2008

Financial Statements beginning on page 3

5. Please refer to your response to comme nt 14 of our December 23, 2008 letter.
We agree that the expanded tables in  your MD&A are helpful in understanding
changes in your balance sheet ; however, we believe that footnote disclosure of the
items cited in our comment is appropri ate because of their significance to your
business.  Given the significant fluctuations experienced in the interim periods, updated disclosures of such activity are warranted in your  interim footnotes.  At a
minimum, please revise future filings to  include summary information of loans,
the allowance for loan losses and associated  credit disclosures in  your footnotes to
your interim financial statements.
 Non-GAAP Measurements, page 24

 6. Please refer to your response to comme nt 18 of our December 23, 2008 letter.
We have considered your response and con tinue to believe that the presentation of
non-GAAP measures for recurring items does not comply with the spirit of the
Commission’s guidance on these measures.  Accordingly, please revise your
presentations as necessary to address the following:

• Based on the guidance of Question 11 under Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures (the FAQ’s) which is available on our website, it a ppears that your earnings per share and other equity-
related measures which exclude such ite ms are prohibited and should be removed
because the items which are being excluded do in fact accrue directly to shareholders.

• Similarly, your other performance m easures, including the “Other operating
income (Loss) EXCLUDING change in valu ation of financial instruments carried
at fair value and goodwill write-off/Aver age assets”, “Other operating expense
EXCLUDING goodwill write-off/Average asse ts”, “Efficiency ratio (other
operating expense/revenue) EXCLUDING change in valuation of financial
instruments carried at fair value a nd goodwill write-off”, and “Return (Loss) on
average assets EXCLUDING change in valu ation of financial instruments carried
at fair value and goodwill write-off”, app ear to be prohibited as your disclosures
and response do not provide the disclosure s required by Questi on 8 of the FAQ’s
to substantiate its usefulness.  Further,  the usefulness of these measures is not
apparent because the items being exclude d are directly attributable to the

Lloyd W. Baker
Banner Corporation
February 23, 2009 Page 4
measures being adjusted.  For instance, goodwill impairments and valuation adjustments would be expected to affect an entity’s return on average assets and
therefore should not be exclude d from such measures.

• Similarly, your disclosures and response do not provide sufficient support to
substantiate the usefulness of “
NET INCOME (LOSS)  FROM RECURRING
OPERATIONS ” as prescribed in the guidance of Question 8 of the FAQ’s.  Absent
such disclosures, this measure is prohibited.

• Further, if you are able to s upport this measure, its title “ NET INCOME (LOSS)
FROM RECURRING OPERATIONS ” does not appear to adequately convey the
amounts reflected in that you are ex cluding certain recurring operating
adjustments.

• Your current presentation gi ves undue emphasis to such measures.  For example,
see page 26 of your Form 10-Q for th e periods ended September 30, 2008 where
you state that you “believe that they provide more useful and comparative
information to assess trends in the Co mpany’s core operations reflected in the
current and comparative financial statement”.

• Therefore, please revise your future filings to eliminate such Non-GAAP
measures which exclude recurring items such as the change s in valuation of
financial instruments.  In light of the additional goodwill impairments charges
recorded in the fourth quarter of 2008, it appears such charges may be considered
recurring charges as well.

• We understand the needs of investors and an alysts and that they may choose to
adjust reported information for any numb er of items.  We also understand the
volatility that can be associ ated with the items you have indentified; however, we
note significant volatility in numerous line items in your financial statements.  We
believe that the effects of recu rring items are best discussed narratively  in the
context of MD&A and that an alysts and investors can best select what items to
adjust reported GAAP information based  on their needs.  Accordingly, we would
not object to a narrative  discussion of the effects of the change in valuation of
financial instruments carried at fair value.

Item 11. Executive Compensation

Compensation Discussion and Anal ysis, page 12 of DEF 14A

7. Please refer to comment 8 in our letter  dated December 23, 2008.  Please tell the
staff, and disclose in future filings, what  factors the committee considered that led
to the equity awards granted for 2007.  We note that the committee does not use a formalized system for weighting the factors considered.

Lloyd W. Baker
Banner Corporation
February 23, 2009 Page 5  8. Please refer to comments 11 and 12 in our letter dated D ecember 23, 2008.  We
note your response that the committee’s de cisions regarding certain forms of
compensation were subjective in natu re, taking into account individual and
corporate performance.  We also note th at performance targets were not used.
Please tell the staff, and in future filings disclose, how corporate and individual performance influenced the board’s co mpensation decisions, and describe the
extent to which the board exercised its discretion in awarding compensation.

Form 8-K filed January 28, 2009

9. We note that you recognized a $71.1 million im pairment to goodwill in the fourth
quarter of 2008.  Please tell the staff the approximate date on which it was determined that a charge for impairment to goodwill would be recognized.
   *  *  *  *  *
Please respond to our comments within 10 business days or tell us when you will
provide us with a response.  Please furnish a cover letter that keys your response to our
comments and provide us drafts of your proposed revisions to future filings and any requested supplemental information.  Please file your response on EDGAR.  Please
understand that we may have additional comm ents after reviewing your response to our
comment.   We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing review ed by the staff to be certain that they have provided all
information investors require for an info rmed decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;
 ‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
 ‚ the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

Lloyd W. Baker
Banner Corporation February 23, 2009 Page 6
You may contact Paul Cline, Staff A ccountant, at (202) 551-6851 if you have
questions regarding comments on the financial statements and related matters.  Please
contact Matt McNair, Staff Attorney, at (202) 551-3583 or me at (202) 551-3698 with any other questions.

Sincerely,    Mark Webb Legal Branch Chief

CORRESP
1
filename1.htm

    cor_31609.htm

    [BANNER
CORPORATION LETTERHEAD]

    March 13,
2009

    Via Edgar
and Overnight Mail

    Mark
Webb, Esquire

    Legal
Branch Chief

    Securities
and Exchange Commission

    Division
of Corporation Finance

    Mail Stop
4561

    100 F
Street, N.E.

    Washington,
DC 20549-4561

    RE:  Banner
Corporation

            Form
10-K for the Period Ended December 31, 2007

            Form
10-Q for the Periods Ended March 31, June 30, and September 30,
2008

            File
No. 0-26584

    Dear Mr.
Webb:

    This
letter sets forth the responses of Banner Corporation (the “Company”) to the
comments received from the staff (the “Staff”) of the Securities and Exchange
Commission (the “Commission”) by letter dated February 23, 2009 in connection
with the Staff’s review of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2007, Form 10-Qs for the fiscal quarters ended
March 31, June 30 and September 30, 2008 and Form 8-K filed January 28,
2009.  The February 23, 2009 comments were supplemental to the
December 23, 2008 letter from the Staff and we provided a response to those
earlier comments on January 23, 2009.

    The
relevant text of the Staff’s comments has been included in this
letter.  The numbering of the Company’s responses corresponds to the
numbering in the Staff’s letter.

    Form
10-K

    Business, page
4

    Lending Activities, page
5

              1.

              Please
      refer to your response to comment 1 of our December 23, 2008 letter, in
      which you reiterate many of the disclosures included in your
      document.  We have read your document and continue to believe
      that an increased level of transparency surrounding your underwriting
      policies and procedures is appropriate.  We re-issue our comment
      and request that you revise future filings accordingly.  Also,
      please disclose your definition of sub-prime lending in your future
      revisions.

    We have
modified the Lending Activities section beginning on page 5 of our Form 10-K for
the year ended December 31, 2008 (filed on March 16, 2009) (“2008 Form 10-K”) to
address the concerns expressed in your December 23, 2008 letter, as well as to
bring it current for the year ended December 31, 2008.   We
believe the modified discussion included is thorough and reasonably addresses
our underwriting policies and procedures on all significant loan

              Mark Webb, Esquire

              Legal Branch Chief

              Securities and Exchange Commission

              March 13, 2009

              Page 2 of
    10

    products
that we offer.  In particular reference to your comment above, we have
added our definition of subprime lending,  “which we
define as loans to borrowers with poor credit histories or undocumented
repayment capabilities and with excessive reliance on the collateral as the
source of repayment.”  Also, as noted in response to comment 3
below, we have affirmed that “For ARM
loans, our standard practice provides for underwriting based upon fully indexed
interest rates and payments.”  Further, as in prior filings, we
again note that “we( do
not) hold any option-payment or negatively amortizing loan products in our
portfolio.”

              2.

              Please
      refer to your response to comment 2 of our December 23, 2008
      letter.  Please revise future filing to clarify the
      following:

      ·

              We
      note your disclosure that generally ARM loans held in portfolio do not
      allow for interest-only payments or negative amortization of
      principal.  While we note from your response that you do not
      maintain a database that would allow you to identify all exceptions to
      your underwriting practices, we assume you can quantify the ARM loans that
      do allow for interest-only payments and/or negative
      amortization.  Please revise to quantify these loans and provide
      an expanded discussion of your underwriting policies and procedures for
      them.  If you are not able to quantify the amounts of such
      loans, disclose that fact.  To the extent you believe the
      amounts are immaterial, please quantify them for us in your response and
      provide us your related underwriting policies and
    procedures.

    We have
determined that as of December 31, 2008 we had three ARM loans totaling
$1,334,500 in our residential loan portfolio that provide for interest-only
payments until their first rate adjustment date; however, as noted above, we do
not have any option-payment or negatively amortizing loans.  These
loans when granted were subject to our normal underwriting standards, including
evaluation of the borrowers’ ability to repay the loans based upon fully indexed
interest rates and payments.  Although we have modified the disclosure
in the lending section on page six of the 2008 Form 10-K to note that “ARM
loans in our portfolio may allow for interest- only payments for an initial
period up to five years,” we believe this total is
immaterial and does not merit additional comment in our filings.  Our
underwriting for these loans is no different than the standards applied to all
other residential loans including appropriate consideration of the borrowers’
credit history, employment stability and ability to repay the debt.

              ·

              Please
      revise future filings to discuss the circumstances under which you would
      not require private mortgage insurance on residential loans with a
      loan-to-value ratio greater than 80% and quantify the amount of these
      loans.  To the extent you believe the amounts are immaterial,
      please include in your response a discussion of the circumstances under
      which you would not require private mortgage insurance on

            Mark
Webb, Esquire

            Legal
Branch Chief

            Securities
and Exchange Commission

            March 13, 2009

            Page 3 of 10

                           residential loans with a
      loan-to-value ratio greater than 80% and quantify the amount of these
      loans.

    On page
six of our 2008 Form 10-K we have added the following disclosure to our
discussion on residential loan underwriting: “A
growing but immaterial number of exceptions to these general underwriting
guidelines have been granted in connection with the sale or refinance of
properties, particularly new construction, for which we were already providing
financing.  These exceptions most commonly relate to loan-to-value and
mortgage insurance requirements and not to credit underwriting or loan
documentation standards.  Such exceptions will likely increase in the
near term to facilitate troubled loan resolution in the current distressed
housing market, but likely will not have a material effect on the performance
characteristics of our one- to four-family loan portfolio or become a
significant portion of our total loan portfolio.”

              ·

              Where
      you use the terms such as “generally” and “usually” in future filings,
      please specifically disclose, if true, that exceptions to your disclosed
      policies and procedures are immaterial.  Also, incorporate the
      portion of your response that discusses your decision process for making
      exceptions to your standard underwriting practices into your
      disclosures.

    We have
attempted to limit the use of the terms “generally” and “usually” in our current
filing and, while we still believe it is appropriate to qualify certain
statements with those terms, we believe the number of underwriting exceptions
are immaterial.  Also, with the exception of the disclosures noted in
the preceding paragraph concerning loan-to-value and mortgage insurance
requirements with respect to previously financed properties, the decisions to
make exceptions to our standard underwriting practices are made on a
case-by-case basis depending on the nature of the loan request and the
borrowers’ circumstances and could not easily be generalized into specific
patterns.

              3.

              Please
      refer to your response to comment 3 of our December 23, 2008 letter and
      revise future filings to incorporate, as set forth in your response, that
      all adjustable rate loans are underwritten at fully indexed interest
      rates.

    On page
six of our 2008 Form 10-K we have added the following disclosure to our
discussion on residential loan underwriting: “For ARM
loans, our standard practice provides for underwriting based upon fully indexed
interest rates and payments.”

          Mark
Webb, Esquire

          Legal
Branch Chief

          Securities
and Exchange Commission

          March 13,
2009

          Page  of 4
of 10

    Managements discussion and
Analysis of Financial Condition and Results of

    Operations, page
27

    Non-performing Assets, page
41

              4.

              Please
      refer to your response to comment 5 of our December 23, 2008
      letter.  We understand that the development of allowance for
      loan losses is not a simple mathematical formula tied to one or two
      ratios; however, we continue to believe that asset quality ratios can
      identify important trends in the allowance for loan losses, non-performing
      assets and your loan portfolio.  We re-issue comment 5 of our
      December 23, 2008 letter and request that you revise future filings to
      include an expanded discussion of the trends depicted by your asset
      quality ratios between quarters, including a chronology of events that
      lead to the deteriorating assets quality ratios between
      periods.  Also, considering the significant provision recorded
      in the fourth quarter of 2008, include a discussion of the specific facts
      and circumstances that occurred in that quarter that were not present
      prior to September 30, 2008.

    We agree
that increases or decreases in non-performing loans and net charge-offs are
factors that should be considered in evaluating the adequacy of our provision
and allowance for loan losses and we have always disclosed and discussed those
items in our annual and quarterly filings.  When appropriate we have
also discussed the economic trends affecting those factors.  This has
been particularly true in 2008, as first the housing market and more recently
the general economy have deteriorated throughout the year but at an accelerating
pace in the fourth quarter and as our level of provisioning has
increased.  Because of this economic deterioration and the resulting
need for a significantly larger loss provision, our 2008 Form 10-K contains even
more discussion and disclosure than prior filings.  In that regard we
have included relevant portions of that document with this letter, which we
believe clearly convey to the reader the significant adverse impact of the
increase in non-performing loans, particularly construction and land development
loans, on the level of loan loss provisioning and on our operating results for
the year, with particular emphasis on the slowdown in home sales and increase in
distressed properties in the second half of the year (see excerpts
below).

    As we
noted in our previous response, our filings have always provided an extensive
discussion of the factors we consider to support the judgments, estimates and
assumptions that ultimately result in our conclusions with respect to the
adequacy of the allowance and therefore the appropriate amount of
provisioning.  That discussion highlights the fact that our loan loss
allowance and  provisioning are supported by considering multiple
factors including “changes
in the size and composition of the loan portfolio, delinquency rates, actual
loan loss

                  Mark
      Webb, Esquire

                  Legal
      Branch Chief

                  Securities
      and Exchange Commission

                  March
      13, 2009

                  Page  of 5
      of 10

                experience,
      current and anticipated economic conditions, detailed analysis of
      individual loans for which full collectibility may not be assured, and
      determination of the existence and realizable value of the collateral and
      guarantees securing the loans.”  The
      complete text of this discussion was included with our earlier
      response.  In response to your previous letter, we have moved
      this discussion to the Critical Accounting Policies section of the
      Management Discussion & Analysis portion of our 2008 Form
      10-K.

    Excerpts
from Banner Corporation December 31, 2008 Report on Form 10-K:

    Item 7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations

    Executive
Overview

    .........
Deteriorating economic conditions and ongoing strains in the financial and
housing markets which accelerated throughout 2008 presented an unusually
challenging environment for banks and their holding companies, including Banner
Corporation.  This was particularly evident in our need to provide for
credit losses at a significantly higher level than our historical
experience. ........  The provision for loan losses was $62.5 million
for the year ended December 31, 2008, an increase of $56.6 million compared to
the year ended December 31, 2007.  The increase in the provision for
loan losses in the current year reflects material increases in delinquencies,
non-performing loans and net charge-offs, particularly for loans for the
construction of one- to four-family homes and for acquisition and development of
land for residential properties.  ........

    Comparison of Financial Condition at
December 31, 2008 and 2007

    ......... Asset Quality:  We have always placed a
strong emphasis on managing our asset quality by applying a disciplined approach
to credit approval and monitoring for signs of deterioration in loan
quality.  Nonetheless, over the past two years as housing markets have
continued to weaken in many of our primary service areas, we have experienced
significantly increasing delinquencies and non-performing assets, primarily in
our construction and land development loan portfolios.  During the
third and fourth quarters of 2008, in particular, home and lot sales activity
was exceptionally slow, causing additional stress on builders’ and developers’
cash flows and ability to service debt, which is reflected in our increased
non-performing asset totals.  In addition, other non-housing-related
segments of the loan portfolio are beginning to show signs of stress and
increasing levels of non-performing loans as the effects of the slowing economy
are becoming more evident.  As a result, our provision for loan losses
was significantly higher in the current year than historical levels and normal
expectations.  This higher level of delinquencies and non-accruals
also had a material adverse effect on operating income as a result of foregone
interest revenues and increased loan collection costs.  Although much
will depend on the depth and duration of the current economic recession, we
believe that we can work our way through the housing market-related problems and
we are actively engaged with our borrowers in resolving problem
loans.  While property values have continued to decline, our reserve
levels are substantial and, along with our impairment analysis and charge-off
actions, reflect current appraisals and valuation estimates.

    Non-performing
assets increased to $209 million, or 4.56% of total assets, at December 31,
2008, compared to $44 million, or 0.99% of total assets, at December 31,
2007.  Slower sales and excess inventory in certain housing markets
have been the primary cause of the increase in delinquencies and foreclosures of
residential construction and land development loans, which represent
approximately 82% of our non-performing assets.  Whil

CORRESP
1
filename1.htm

    Unassociated Document

    January
23, 2009

    Via Edgar
and Overnight Mail

    Mark
Webb, Esquire

    Legal
Branch Chief

    Securities
and Exchange Commission

    Division
of Corporation Finance

    Mail Stop
4561

    100 F
Street, N.E.

    Washington,
DC 20549-0408

    RE:  Banner
Corporation

            Form
10-K for the Period Ended December 31, 2007

            Form
10-Q for the Periods Ended March 31, June 30, and September 30,
2008

            File
No. 0-26584

    Dear Mr.
Webb:

    This
letter sets forth the responses of Banner Corporation (the “Company”) to the
comments received from the staff (the “Staff”) of the Securities and Exchange
Commission (the “Commission”) by letter dated December 23, 2008 in connection
with the Staff’s review of the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2007 and Form 10-Qs for the fiscal quarters ended
March 31, June 30 and September 30, 2008.

    The
Company understands that the Division of Corporation Finance views the comment
process as a dialogue with the Company about its disclosure, and we appreciate
the opportunity to engage in that dialogue.  Below, the relevant text of
the Staff’s comments has been included in this letter, followed by our
responses.  The numbering of the Company’s responses corresponds to
the numbering in the Staff’s letter.

    Form
10-K

    Business, page
4

    Lending Activities, page
5

              1.

              We
      note your disclosures that you have developed a variety of floating or
      adjustable interest rate loan products that correlate to your cost of
      funds and that floating or adjustable rate loans comprise approximately
      64% of loans due after December 31, 2007.   Please tell us
      and revise future filings to provide a robust discussion of your
      underwriting policies and procedures on all significant loan products, to
      include levels of loan documentation, FICO scores, interest rate reset
      characteristics, whether floating or adjustable rate loans are
      underwritten at fully indexed interest rate and whether or not you have
      loan products that offer payment
options.

    While we
understand the sensitivity to underwriting standards and adjustable rate loan
product parameters given the recent turmoil and rising consumer default rates in
the

          Mark
Webb, Esquire

          Legal Branch Chief

          Securities and Exchange
Commission

          January 23, 2009

          Page 2 of 16

    mortgage
market, we believe the discussion included in the Lending Activities section of
our Form 10-K is thorough and addresses most, if not all, of the concerns
expressed in your comment above.  Nonetheless, where possible, we will
attempt to clarify future filings with respect to these issues.  We
also offer the following observations with respect to our current
reports:

    In the
General section (page
5), we have specifically noted that “we do not now and have not
previously engaged in any sub-prime lending.”  We reiterate and
expand upon this statement in our discussion of Asset Quality (page 40 of the
Form 10-K) contained in the Management Discussion and Analysis section of the
annual and quarterly reports and provide detailed information concerning
non-performing assets in the accompanying tables (Table 10, page 41 of the Form
10-K).

    In the
section on One- to Four-Family
Residential Real Estate Lending (page 5), we provide detailed discussion
of the interest rate reset characteristics of the ARM loans that we offer and/or
hold including a statement that “ARM loans held in our
portfolio do not allow for interest-only payments nor negative amortization of
principal and carry no prepayment restrictions.”  We also note
that one- to four- family “ARM loans have represented
only a small portion of  loans originated during this period and of
our portfolio.”  In this section we further provide a paragraph
of discussion on our underwriting standards, noting that our loans are generally
(while providing for the exception to the rule) underwritten and documented to
the guidelines established by Freddie Mac, Fannie Mae, HUD or the VA, whichever
may be applicable to a specific loan request.  We also state that
“In the loan approval
process, we assess the borrower’s ability to repay the loan, the adequacy of the
proposed security, the employment stability of the borrower and the credit
worthiness of the borrower.”

    In the
remaining sections of our discussion on Lending Activities (pages
5-8), we provide similar information with respect to loan terms, including
adjustable, floating and fixed rate characteristics, for our Construction and Land, Commercial
and Multifamily Real Estate, Commercial Business, Agricultural and Consumer and Other
Lending.  We also provide discussion of general underwriting
standards for each of these lending categories.  While none of this
discussion is detailed to the level of acceptable FICO scores or specific loan
documentation requirements, we believe it is sufficient to convey to the reader
the level of diligence employed in our underwriting process and standards and
the nature of the loan portfolio.   We further believe that this
discussion, combined with the risk disclosures and asset quality discussion and
loan performance data made available in other sections of the filings, provide a
comprehensive view of our lending activities, portfolio performance and credit
risk exposure.

    Finally,
it is important to note that a close examination of the information contained in
Table 6(a):  Loans Maturing after One Year (page 37 of Form 10-K)
indicates that while Floating or Adjustable Rate loans comprise 64%, or $1.65
billion, of loans maturing after

          Mark
Webb, Esquire

          Legal Branch
Chief

          Securities and
Exchange Commission

          January 23,
2009

          Page 3 of
16

    one year,
these loans are predominately to commercial borrowers ($1.43 billion, or 87% of
the total).  Adjustable or floating rate loans are commonly made to
commercial borrowers and are not indicative of the kinds of abusive or poorly
designed consumer loans, such as Payment Option ARMs, that have been the subject
of recent regulatory, credit quality and consumer protection
concerns.  As noted earlier, the Company and its subsidiaries do not
hold any Payment Option ARMs (“negative amortization of
principal”).  Further, for both consumer (including one- to
four-family mortgages) and commercial borrowers our standard lending practices
provide for underwriting adjustable rate loans at fully indexed interest
rates.

              2.

              We
      note the use of the terms "generally" and "usually" in discussing loan
      terms such as loan to value ratios and private mortgage insurance
      requirements.  Please tell us and revise future filings to more
      definitively quantify the amounts of loans that exceed general and usual
      terms, including a discussion of how management determines when to extend
      those loans.

    We use
the terms “generally” and “usually” throughout the discussion of our lending
activities to acknowledge that, in a portfolio as large as ours and with credit
granting authority delegated to a significant group of people, there are
undoubtedly exceptions to our standard underwriting practices that have
occurred.  While we do not maintain a data base that would allow us to
identify all of those exceptions, we are confident they would comprise an
immaterial portion of our portfolio.  The decisions to make exceptions
to our standard underwriting practices are made on a case-by-case basis
depending on the nature of the loan request and the borrowers’ circumstances and
could not easily be generalized into specific patterns.

              3.

              To
      the extent you do not underwrite floating and adjustable rate loans at
      full indexed interest rates, please tell us and revise future filings to
      discuss how you monitor and access credit risk on these loan
      products.

    For both
consumer (including one- to four-family mortgages) and commercial borrowers our
standard lending practices provide for underwriting adjustable rate loans at
fully indexed interest rates.

    Management's Discussion and
Analysis of Financial Condition and Results of Operations, page
27

    Critical Accounting
Policies, page 28

              4.

              Please
      revise this section to provide an expanded discussion of why management
      believes the policies disclosed are critical to its business. Please
      include a discussion that identifies and describes the
      following:

          Mark
Webb, Esquire

          Legal Branch Chief

          Securities and Exchange
Commission

          January 23, 2009

          Page 4 of 16

    Our
approach to the critical accounting policies disclosure in the MD&A was to
identify significant financial statement items, which by their nature were
inherently subject to estimation techniques, valuation assumptions and other
subjective assessments, that due to the judgments involved could result in
material differences in our financial condition or results of operations if
alternative judgments, assumptions or estimates were used.  The common
thread was that each of these items is subject to estimates which require
management to employ informed judgment which could be challenged by
others.  It was our intent to highlight those policies so that readers
of the report would be particularly sensitive to them as they reviewed the
discussion in the MD&A and the Notes to the Consolidated Financial
Statements.  We believed the references to the Notes and the MD&A
and the discussion contained in each was sufficient to provide readers with a
thorough understanding of the significance of each item.  With the
benefit of hindsight, we now believe that two of the policies enumerated, the
valuation of mortgage servicing rights and the valuation of real estate held for
sale, were unlikely to result in a material misstatement during the periods
covered and, therefore, could have been omitted from the list of most critical
accounting policies.  We also believe that by moving certain
information from other sections of the MD&A and including some of the
disclosure from the Notes to the Consolidated Financial Statements in this
section of the report we can improve the usefulness of this
disclosure.  In future filings we propose to revise this section as
follows:

    Critical
Accounting Policies

    In the
opinion of management, the accompanying consolidated statements of financial
condition and related consolidated statements of income, comprehensive income,
changes in stockholders’ equity and cash flows reflect all adjustments (which
include reclassification and normal recurring adjustments) that are necessary
for a fair presentation in conformity with Generally Accepted Accounting
Principles (“GAAP”).  The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions that
affect amounts reported in the financial statements.

    Various
elements of our accounting policies, by their nature, are inherently subject to
estimation techniques, valuation assumptions and other subjective
assessments.  In particular, management has identified several
accounting policies that, due to the judgments, estimates and assumptions
inherent in those policies, are critical to an understanding of our financial
statements.  These policies relate to (i) the methodology for the
recognition of interest income, (ii) determination of the provision and
allowance for loan and lease losses, (iii) the valuation of financial assets and
liabilities recorded at fair value and (iv) the valuation of
goodwill.  These policies and judgments, estimates and assumptions are
described in greater detail below in Management’s Discussion and Analysis and in
the Notes to the Consolidated Financial Statements.  Management
believes that the judgments, estimates and assumptions used in the preparation
of the financial statements are appropriate based on the factual circumstances
at the time.  However, because of the sensitivity of the financial
statements to these critical accounting policies, the use of other judgments,
estimates and assumptions could result in material differences in our results of
operations or financial condition.  Further, subsequent changes in
economic or market conditions could have a material impact on these estimates
and our financial condition and operating results in future
periods.  There have been no significant changes in our application of
accounting policies since December 31, 2006, except for the adoption of
Statements of Financial Accounting Standards (“SFAS”) Nos. 157 and 159 discussed
below.  For additional information on the adoption of this standard
and the valuation of financial assets, see Notes 4

          Mark
Webb, Esquire

          Legal Branch Chief

          Securities and Exchange
Commission

          January 23, 2009

          Page 5 of 16

    and 9 of
the Notes to the Consolidated Financial Statements.   For
additional information concerning these critical accounting policies see Notes
1, 9, 11, 12 and 24 of the Notes to the Consolidated Financial Statements and
the following:

    Interest
Income:  (Notes 1 & 11)  Interest on loans and
securities is accrued as earned unless management doubts the collectibility of
the asset or the unpaid interest.  Interest accruals on loans are
generally discontinued when loans become 90 days past due for payment of
interest and the loans are then placed on nonaccrual status.  All
previously accrued but uncollected interest is deducted from interest income
upon transfer to nonaccrual status.  For any future payments
collected, interest income is recognized only upon management's assessment that
there is a strong likelihood that the full amount of a loan will be repaid or
recovered.  A loan may be put on nonaccrual status sooner than this
policy would dictate if, in management’s judgment, the loan may be
uncollectible.  While less common, similar interest reversal and
nonaccrual treatment would apply to investment securities if their ultimate
collectibility became questionable.

    Provision and Allowance for Loan
Losses:  (Notes 1 & 12) [Note, the following information is
presently included in the Comparison of Results of Operations section of the
MD&A and will be moved to this location in future filings.] The provision
for loan losses reflects the amount required to maintain the allowance for
losses at an appropriate level based upon management’s evaluation of the
adequacy of general and specific loss reserves.  We maintain an
allowance for loan losses consistent in all material respects with the GAAP
guidelines outlined in SFAS No. 5, Accounting for
Contingencies.  We have established systematic methodologies
for the determination of the adequacy of our allowance for loan
losses.  The methodologies are set forth in a formal policy and take
into consideration the need for an overall general valuation allowance as well
as specific allowances that are tied to individual problem loans.  We
increase our allowance for loan losses by charging provisions for probable loan
losses against our income and value impaired loans consistent with the
guidelines in SFAS No. 114, Accounting by Creditors for
Impairment of a Loan, and SFAS No. 118, Accounting by Creditors for
Impairment of a Loan—Income Recognition and Disclosure.

    The
allowance for losses on loans is maintained at a level sufficient to provide for
estimated losses based on evaluating known and inherent risks in the loan
portfolio and upon our continuing analysis of the factors underlying the quality
of the loan portfolio.  These factors include changes in the size and
composition of the loan portfolio, delinquency rates, a

CORRESP
1
filename1.htm

    corr123008.htm

    December
30, 2008

    Via Telecopy and
EDGAR

    Mark
Webb, Esq.

    Legal
Branch Chief

    Division
of Corporate Finance

    Securities
and Exchange Commission

    100 F
Street, N.E.

    Washington,
D.C.  20549-4561

    Re:          Banner
Corporation

    File No.
0-26584

    Form 10-K for the period ended December
31, 2007

    Form 10-Q for the periods ended March
31, June 30 and September 30, 2008

    Dear Mr.
Webb:

    This letter is to acknowledge receipt
of the comment letter, dated December 23, 2008.  As a result of the
holidays and the number of comments contained in the comment letter, we
respectfully request that we be given an extension to respond to your comment
letter until January 24, 2009 to allow for us, our legal counsel and our
auditors to have sufficient time to review and respond to the
comments.

    If you have any questions concerning
this matter, please contact the undersigned at 509-526-8896 or e-mail at lbaker@bannerbank.com.

            Sincerely,

            /s/Lloyd W.
      Baker

            Lloyd W.
      Baker

            Executive Vice
      President and

            Chief Financial
      Officer

              cc:

              Paul
      Kline, Staff Accountant, SEC

            Matt
      McNair, Staff Attorney

              10
      South First Avenue • P.O. Box 907 • Walla Walla, WA
99362-0265

                509-527-3636 • Fax: 509-526-8891
      • www.bannerbank.com • Member
      FDIC