Banner Corporation Declares $0.16 Quarterly Cash Dividend.

WALLA WALLA, Wash. -- Banner Corporation (Nasdaq:BANR), the parent of Banner Bank, today announced its Board of Directors declared a $0.16 per share cash dividend to be paid July 9, 2004 to shareholders of record on June 30, 2004.

"We are successfully building our franchise, increasing profits and growing the balance sheet. Paying a cash dividend is an excellent way for us to share this success with our shareholders," said D. Michael Jones, President and CEO. "This represents our 35th consecutive quarterly cash dividend payment."

In April, Banner reported first quarter net income increased 27% to $4.4 million, or $0.38 per diluted share, compared to a year earlier. Revenues increased 9% to $26.5 million for the quarter, compared to $24.2 million in the first quarter of 2003. Assets grew 12% to $2.7 billion, deposits increased 8% to $1.7 billion and loans grew 13% to $1.8 billion during the twelve months ending March 31, 2004.

Banner Corporation is the parent of Banner Bank, a commercial bank that operates a total of 46 branch offices and twelve loan offices in 23 counties in Washington, Oregon and Idaho. Banner serves the Pacific Northwest region with 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.

Statements concerning future performance, developments or events, concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward-looking statements, which are subject to a number of risks and uncertainties that might cause actual results to differ materially from stated objectives. These factors include but are not limited to: BANR's ability to maintain current dividend payments or increase dividend payouts to shareholders. Banner undertakes no responsibility to update or revise any forward-looking statements.