8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 1, 2015

Banner Corporation

(Exact name of registrant as specified in its charter)

Washington	0-26584	91-1691604
(State or other jurisdiction	(Commission File	(I.R.S. Employer
of incorporation)	Number)	Identification No.)

10 S. First Avenue

Walla Walla, Washington 99362

(Address of principal executive offices and zip code)

(509) 527-3636

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On October 2, 2015, Banner Corporation (“Banner”), announced that it had completed the acquisition of AmericanWest Bank, effective as of 11:59 p.m. October 1, 2015. Pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of November 5, 2014, by and among Banner, Elements Merger Sub, LLC, a wholly owned subsidiary of Banner (“Merger Sub”), SKBHC Holdings LLC (“Holdings”) and Starbuck Bancshares, Inc. (“Starbuck”) (as amended, the “Merger Agreement”), Starbuck merged with and into Merger Sub (the “Merger”), and immediately following the Merger, Starbuck’s wholly owned subsidiary bank, AmericanWest Bank merged with and into Banner’s wholly owned subsidiary bank, Banner Bank (the “Bank Merger”). The consideration paid by Banner pursuant to the Merger Agreement was 13,230,000 shares of Banner’s common stock and non-voting common stock and $130,000,000 in cash.

Pursuant to the terms of the Merger Agreement, Banner has offered registration rights to members of Holdings for the Banner common stock they are to receive in the Merger, including certain demand registration rights and piggyback registration rights to participate in subsequent registered offerings of Banner’s common stock, on terms substantially similar to those Banner has entered into with each of Friedman Fleischer and Lowe Capital Partners III, L.P. and certain of its affiliates (collectively, “FFL”), Oaktree Principal Fund V (Delaware) and certain of its affiliates, and GS Capital Partners VI Fund, L.P., and certain of its affiliates. The terms of such registration rights are included as Annex B to Exhibit 10.1 to our Current Report on Form 8-K filed November 12, 2014.

The summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which was included as Exhibit 2.1 to our Current Report on Form 8-K filed November 12, 2014, as amended by the Amendment to Agreement and Plan of Merger, dated May 18, 2015, which was included as Exhibit 2.1 to our Current Report on Form 8-K filed May 19, 2015.

Item 3.02. Unregistered Sales of Equity Securities.

As described in Item 2.01 of this Current Report on Form 8-K, which is incorporated into this Item 3.02 by reference, Banner issued 13,230,000 shares of common stock and non-voting common stock as partial consideration for the Merger. The issuance of such shares upon closing of the Merger was a private transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Merger, effective October 1, 2015, the Banner board of directors increased the number of members of the Banner board of directors from 12 to 17, and thereafter appointed Michael J. Gillfillan and Spencer Fleischer to fill two of the resulting vacancies. Mr. Gillfillan will serve on the Banner board of directors’ Corporate Governance / Nominating Committee and Executive Committee.

Two of the three remaining vacancies are being reserved for such persons as may be mutually agreed by the Banner board of directors and the Holdings board of directors pursuant to the terms of the Merger Agreement, and the remaining vacancy is being reserved for a nominee to be appointed pursuant to the terms of the Investor Letter Agreement (the “Oaktree Investor Letter”), dated as of November 5, 2014, between Banner and Oaktree Principal Fund V (Delaware) and certain of its affiliates.

Mr. Gillfillan was appointed to the board pursuant to the terms of the Merger Agreement, and Mr. Fleischer was appointed the board pursuant to the terms of the Investor Letter Agreement (the “FFL Investor Letter”), dated as of November 5, 2014, between Banner and FFL. FFL’s right to designate a board member remains in effect until FFL’s holdings of Banner common stock represent less than five percent of the outstanding shares of Banner common stock and non-voting common stock, excluding the dilutive effect of primary issuances of Banner common stock or non-voting common stock (or securities convertible or exchangeable therefor).

Other than as may be disclosed by (i) Mr. Spenser and FFL in their filings with the SEC on Schedule 13D, (ii) the FFL Investor Letter and (iii) the Merger Agreement, Banner is not aware of any arrangement or understanding between Mr. Spenser or Mr. Gillfillan and any other person pursuant to which Mr. Spenser or Mr. Gillfillan was selected as a director or any direct or indirect material interest by Mr. Spenser or Mr. Gillfillan in any prior, existing or proposed transaction, or series of transactions with Banner, or any of its subsidiaries or management.

The foregoing descriptions of the Oaktree Investor Letter and the FFL Investor Letter do not purport to be complete and are qualified in their entirety by reference to the full text of the respective agreements, attached hereto as Exhibits 10.1 and 10.2 respectively, which are incorporated herein by reference.

Item 8.01 Other Events.

On October 2, 2015, Banner issued a press release announcing the completion of the Merger and the Bank Merger, a copy of which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(a) Financial statements of business acquired.

Banner will file by amendment to this Current Report on Form 8-K the financial statements required by this Item 9.01(a) not later than 71 calendar days after the date this Current Report on Form 8-K was required to be filed.

(b) Pro Forma Financial Information

Banner will file by amendment to this Current Report on Form 8-K the pro forma financial information required by this Item 9.01(b) not later than 71 calendar days after the date this Current Report on Form 8-K was required to be filed.

(d) Exhibits

The following exhibits are being filed herewith and this list shall constitute the exhibit index:

2.1 Agreement and Plan of Merger, dated as of November 5, 2014, by and between SKBHC Holdings LLC, Starbuck Bancshares, Inc. and Banner Corporation (incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed with the SEC on November 12, 2014). 

2.2	Amendment to Agreement and Plan of Merger, dated May 18, 2015 by and between SKBHC Holdings LLC, Starbuck Bancshares, Inc., Banner Corporation and Elements Merger Sub, LLC (incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed with the SEC on May 19, 2015)
10.1	Investor Letter Agreement dated as of November 5, 2014 by and between Banner Corporation, and Oaktree Principal Fund V (Delaware), L.P. and certain of its affiliates (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed with the SEC on November 12, 2014).
10.2	Investor Letter Agreement dated as of November 5, 2014 by and between Banner Corporation, and Friedman Fleischer and Lowe Capital Partners III, L.P. and certain of its affiliates (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed with the SEC on November 12, 2014).
99.1	Press Release dated October 2, 2015, issued by Banner Corporation.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BANNER CORPORATION                               (Registrant)
Date: October 2, 2015	By: /s/ Lloyd W. Baker
	Name: Lloyd W. Baker       Title:   Executive Vice President and                 Chief Financial Officer

EX-99.1

Media Contact Kelly McPhee
VP, Communications &
Public Relations (509) 991-0575     Contact:    Mark J. grescovich, President & CEO Lloyd W. Baker, CFO (509) 527-3636 News
Release

Banner Corporation Completes Merger of AmericanWest Bank

WALLA WALLA, WASHINGTON – October 2, 2015 - Banner Corporation (NASDAQ GSM: BANR), the holding company for Banner Bank and Islanders Bank, today announced that it had completed the acquisition of Starbuck Bancshares, Inc. and its wholly-owned subsidiary, AmericanWest Bank, of Spokane, Washington, which has been merged with and into Banner Bank. Pursuant to the previously announced terms of the merger, the equityholders of AmericanWest are receiving an aggregate of $130 million in cash and 13.23 million shares of Banner common stock. As of the closing date, the combined company has approximately $9.9 billion in assets and 203 branches across five western states.

“We are pleased to announce the completion of the merger and to welcome AmericanWest’s equityholders, customers and employees as part of the Banner Bank team,” stated Mark G. Grescovich, Banner’s President and Chief Executive Officer. “This strategic combination is an exciting step forward, providing the opportunity to deploy our super community bank model throughout a strengthened presence in Washington, Oregon and Idaho and into attractive growth markets in California and Utah. In addition, the combination is expected to result in considerable operating synergies and provide significant benefits to our expanded group of clients, communities, shareholders and employees.”

Banner was advised in the transaction by Sandler O’Neill + Partners, L.P., as financial advisor, and Cleary Gottlieb Steen & Hamilton LLP, as legal counsel. AmericanWest was advised by Jefferies, LLC, as financial advisor, and Wachtell, Lipton, Rosen & Katz, as legal counsel. Key investors of AmericanWest were advised by Skadden, Arps, Slate, Meagher & Flom LLP and Sullivan & Cromwell LLP.

Election of Directors

In connection with the merger, the Banner board of directors appointed Spencer Fleischer and Michael J. Gillfillan to the Banner board of directors.

Spencer Fleischer is a founder, Co-CEO and President of Friedman Fleischer & Lowe, LLC, a director of The Clorox Company, Levi Strauss & Co., and Strategic Investment Group. He is a member of the Fellowship Campaign Executive Committee for Lincoln College, Oxford and a Director of Americans for Oxford, Inc. Mr. Fleischer served as an advisor to the Investment Committee of the William and Flora Hewlett Foundation for ten years. Mr. Fleischer previously spent 19 years with Morgan Stanley as an investment banker and manager. He was a member of the worldwide Investment Banking Operating Committee, Head of Investment Banking in Asia and Head of Corporate Finance for Europe. He earned an M.Phil. in Management Studies at Oxford University as a Rhodes Scholar and graduated from the University of the Witwatersrand in Johannesburg with a B.A. (Hons) in Economics.

Michael J. Gillfillan co-founded AloStar Bank of Commerce in 2011 and served as its Chief Executive Officer and Chairman from April 2011 to April 15, 2015. Mr. Gillfillan spent 35 years in banking and finance positions, with extensive leadership experience in troubled debt restructuring, turnaround management and strategic finance issues dealing with capital structure and capital adequacy. Mr. Gillfillan spent more than 25 years at Wells Fargo and Company, serving as its Vice Chairman and Chief Credit Officer for the greater part of the period from 1991 to 1999. He previously served as Director of Union Bank of California, N.A., MUFG Union Bank, N.A. and UnionBanCal Corporation. Mr. Gillfillan received an M.B.A. from the University of California at Los Angeles and a B.A. in History from the University of California at Berkeley.

About Banner Corporation

Banner Corporation is a bank holding company operating two commercial banks in five Western states through a network of branches offering a full range of deposit services and business, commercial real estate, construction, residential, agricultural and consumer loans. Visit Banner Bank on the Web at www.bannerbank.com.

Forward Looking Statements

When used in this press release and in other documents filed with or furnished to the Securities and Exchange Commission (the "SEC"), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases "believe," "will," "will likely result," “may,” “shall,” "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," “forecast,” “initiative,” “objective,” “goal,” “outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,” “commence,” or the negative of any of those words or phrases or similar expressions are intended to identify "forward-looking statements" within the meaning of applicable federal securities laws, including the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date such statements are made. These statements may relate to future financial performance, strategic plans or objectives, revenues or earnings projections, or other financial information. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements. Statements about the expected timing, completion and effects of the proposed transactions and all other statements in this release other than historical facts constitute forward-looking statements.

Important factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (1) expected revenues, cost savings, synergies and other benefits from the merger of Banner Bank and AmericanWest Bank (“AmericanWest”) might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (2) the credit risks of lending activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses, which could necessitate additional provisions for loan losses, resulting both from loans originated and loans acquired from other financial institutions; (3) results of examinations by regulatory authorities, including the possibility that any such regulatory authority may, among other things, require increases in the allowance for loan losses or writing down of assets; (4) competitive pressures among depository institutions; (5) interest rate movements and their impact on customer behavior and net interest margin; (6) the impact of repricing and competitors' pricing initiatives on loan and deposit products; (7) fluctuations in real estate values; (8) the ability to adapt successfully to technological changes to meet customers' needs and developments in the market place; (9) the ability to access cost-effective funding; (10) changes in financial markets; (11) changes in economic conditions in general and in Washington, Idaho, Oregon and California in particular; (12) the costs, effects and outcomes of litigation; (13) new legislation or regulatory changes, including but not limited to the Dodd-Frank Act and regulations adopted thereunder, changes in capital requirements pursuant to the Dodd-Frank Act and the implementation of the Basel III capital standards, other governmental initiatives affecting the financial services industry and changes in federal and/or state tax laws or interpretations thereof by taxing authorities; (14) changes in accounting principles, policies or guidelines; (15) future acquisitions by Banner or AmericanWest of other depository institutions or lines of business; (16) and future goodwill impairment due to changes in Banner's business, changes in market conditions, or other factors.

Banner does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date on which the forward-looking statement is made except where expressly required by law.