Banner Corporation · NASDAQ:BANR
Banner — Conference Presentation (February 2016)
23 slides from Banner's conference presentation, Feb 3, 2016
Slide 1: LY FIG
LY FIG ber ad Partners February 3-4, 2016 Los Angeles
Slide 2: Disclosure Statement
Disclosure Statement Today's presentation deals with Banner's business outlook and will include forward-looking statements. Those statements include descriptions of management's plans, objectives or goals for future operations, products or services, forecast of financial or other performance measure
Slide 3: Building value at Banner
Building value at Banner Building value for stakeholders ... by focusing on core banking competency ... that is sustainable through change events ... and scalable with acquisition growth Banner Corporation Assets S$ 9.8B $ Recent Additions Deposits $8.1B 2014@2 2015Q1 2015 a4 ‘ SW Oregon Siuslew Ame
Slide 4: Building value at Banner: Core banking competency
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Growing revenue Take advantage of ideal geography Offer super community bank value proposition Guard and improve repu
Slide 5: Growing revenue ... in a good place since 1890
BANNER Growing revenue ... in a good place since 1890 Population Estimate tmitions 2014 2030 Growth Washington 74-86 22% Oregon 40 48 ldaho 1620 21% Caltornia Bae 464 20% * AllS Bannerstates California 5a8 464 20% * AlSBannes states Utah 2935 18% —atowinginthes TRegon bad 422% * Regionhas ~17%of US.
Slide 6: Growing revenue ... in an ideal geography
Growing revenue ... in an ideal geography Powerful and diverse economic drivers From Banner's Pacific Northwest base to ... California From Apple ‘¢ to @ zoomerang, Technology Microsoft’ (ate) amazon qicron GExpedia from Silicon Valley to Manufacturing 7 garner (intel) PACCAR the Central Valley... C
Slide 7: Growing revenue
Growing revenue Offer super community bank value proposition Broad product offerings serving middle market, small business and consumer client base Decision making as close to client as possible Delivery channels aligned to maximize tactical execution of strategic plan Community investment
Slide 8: Growing revenue
Growing revenue uard and improve reputation Included in Forbes 2014: “America’s 50 Most Trustworthy Financial Companies Received highest rating: Bankrate.com SAFE & SOUNDo Star Ratings Named SBA “Regional Lender of the Year” for Seattle/Spokane District following two years as “Community Lender of th
Slide 9: Growing revenue
NNER Growing revenue Grow transaction deposit accounts wy 400 P med Interest Bearinc Non-interest interest Bearing 5 Non-Interest Bearing QU ar cer no a 3 350 Ending Number YOY Number YOY z 12/3115 187,072 8.9%! 185,394 4.3%" AmericanWes Bank —> 12/81/09 71478 8.0% 50,955 11% 209 * sluslaw Bank 250
Slide 10: Growing revenue
Growing revenue Grow core revenue Grow deposit fees Guanes, Geter Quarter aati Ending Amount YOYA Ending Amount 1231s § $ 1/309 § 45m 5.8% § Im -0.6% 1/309 -§ S3m 16% § 21am -07% 120 20% ther Income 2 Net Interest Income 1g | Mortgage Bnkg 18% = Deposit Fees 100 16 16% — Deposit eesas xf CoreRevenue
Slide 11: Building value at Banner: Protecting net interest margin
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Protecting net interest margin Improve earning asset mix Improve funding mix Reduce deposit costs Maintain loan-to-de
Slide 12: Protecting net interest margin
Protecting net interest margin Improve Earning Asset Mix 12/31/2009 12/31/2015 Securities ul oe Billions 2009 201! Coml & Ag Com! 8 Ag ‘Consumer Securities Commis Ag Consumer “Gar owner CREInvestor 0.9 11% Res Mortgage “Res CenstiDev Res Mortgage CRE Investor 21% CRE Investor 27% Res ConstiDev “Tota
Slide 13: Protecting net interest margin
rotecting net intere sian Quarter ™ Quarter ee Ending Amount Aol Total 12/315 $ 668M 11.8% BBN 7 12/3UIS$ 34m 015% BAM 0.16% 42/3/09 $1924m 168% 50% 42/3/09 § 177m 183% S$ BRAM 2.21% ° 90% 8% 2°] Noncore Deposts Loan Yield Core Deposits . Deposit Cost Es Hoe % 7 70% 6% — Loan-Depost Spread = CoreDep
Slide 14: Protecting net interest margin
NNER Protecting net interest margin Maintain 90-95% loan-to-deposit ratio HRsEyg 7 9 Deposits Quarter 2 Ending Ratio 110% Pa | 12,81) 91% 12/31/09 98% 105% 7 Loan-to-Deposit Ratio oy 100% 6 Net Noncore Funding Dependence Banner 95% 5 40% 90% 4 85% 3 ~ : 80% 2 10% si * 75% 1 ox | 70% 4 4 o S$ 2 2 9 L
Slide 15: Protecting net interest margin
Protecting net interest margin Maintain top quartile net interestmargin Quarter Quarter LT Ending Amount Rate Amount Rate 12B1N5 $ 92m 4.05% $242m 4.10% 12/31/09 $ 39M 3.53% $146M 3.36% Net Interest Margin — Banner 45% Peer Top Quartile Peer source: Group? ($28-$108), BankHolding Company Performance
Slide 16: Building value at Banner: Spending carefully
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Spending carefully , AmericanWest provides scale. Benefit from scale Per the original transaction metrics Control cor
Slide 17: Spending carefully
Spending carefully 90 100% Control core operating expense : her Quarter LT™ 8 = (Quarter eo anEe RS Ending Amount YO Amount YOY 80 cupancy 0% 12/315 $ 82m 113.0% $210M 41.1% ai hm 12/31/09 $ 31M -101% $132m — -2.5% 70 | we 100% 60 — Efficiency Ratio Efficiency Ratio 0% — Banner 50 60% 40 -_ “ +0 r ,
Slide 18: Building value at Banner: Maintaining a moderate risk profile
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Maintaining a moderate risk profile Embrace effective enterprise risk management Minimize nonperforming assets Mainta
Slide 19: Maintaining a moderate risk profile
Maintaining a moderate risk profile Minimize nonperforming assets g 350 = 2 her Real E dwned Quarter NDS ERED) g Nonperforming Loans Ending Amount %ofTA Amount %oFTA 5 500 12B1N5 $ 15m 0.21% § 12m 0.16% 12/31/09 $214m 5.53% $ 78M 2.01% 250 35% ALLL to Total Loans . Banner 200 PeerTop / 25x | Ouartie
Slide 20: Maintaining a moderate risk profile
Maintaining a moderate risk profile Maintain appropriate risk capital 20% 12 Rove P Total Capital Quarter Tier1 Ending Leverage "CE/TA 12B115 11.06% 10.68% 10 5% Tier 1 Leverage Ratio 12/31/09 9.62% 5.87% 16% 7 é ' “a Me 19% os Tier 1 Leverage 12% all Banner y 16% y 14% 8% 12% Peer Top Quartile 0.4
Slide 21: Building value at Banner: Employing capital wisely
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Employing capital wisely Maintain premium to tangible book value Pay appropriate dividends Prepare for future opportu
Slide 22: Maintain premium to tangible book value
Maintain premium to tangible book value Maintain favorable stock price to TBV Maintain favorable stock price to EPS Quarter Stock Quarter Stock Ending Price® TRV Ending Price? _EPSLTM 1/315 $4220 $29.66 12/315 $42.20 § 2.07 10 $15.07 $29.03 06/30/10 $15.07 $-8.06 $50 $5.00 Tangible BV per Share Earn
Slide 23: Building value at Banner
Building value at Banner Building value for ... Shareholders by delivering top quartile financial performance Clients by delivering super community bank service and products Employees by offering opportunity and reward Communities by providing capital and staying involved 22