Slide 1: Third Quarter 2023
NNER . CORPORATION Third Quarter 2023
Slide 2: Disclosure Statement
Disclosure Statement This presentation includes forward-looking statements. These statements include descriptions of management's plans, objectives or goals for future operations, products or services, forecast of financial or other performance measures and statements about Banner's general outlook
Slide 3: Third quarter 2023 highlights
Third quarter 2023 highlights * Net income of $45.9 million, compared to $39.6 million for the second quarter of 2023 * Loan growth of $139 million (5% annualized) * Total loan originations (excluding HFS) were $786 million * Total deposits increased by $75 million (0.6%); core deposits declined by
Slide 4: 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 SAY Banner Corporation Assets $15.58 Acquisition History Deposits $13.28 20194 20184 201504 2015Q1 2014Q2 AltaPac
Slide 5: Building value at Banner: Growing revenue
Building value at Banner 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 reputation
Slide 6: Growing revenue in a good place since 1890
Growing revenue ... ina good place since 1890 pS Population Estimate (mitions) 2020 2030 Growth Washington 77 84 9%* Oregon 42 45 5% Idaho 18 2.2 20%* California 39.5 39.5 0% Region 53.3546 2% * Among the fastest United States 331.4 3446 4% growing in the country Strong Population Growth Forecast Un
Slide 7: 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 é Technology Microsoft (intel) amazon @icron GE pedir to ZOOM from Silicon Valley to Manufacturing intel) CCA Qeccwe ae ™ R the Central Valley ... Consume
Slide 8: Our super community bank value proposition
Growing revenue €- Our 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 9: Guard and improve reputation
Growing revenue Guard and improve reputation Outstanding CRA Rating FDIC 2021, most recent 3-year examination cycle Most Trustworthy Companies in America Newsweek 2023 World's Most Trustworthy Companies *NEW* Newsweek 2023 5-Star rating™ (highest category) BauerFinancial; 42 consecutive quarters Top
Slide 10: Growing revenue: core revenue
Growing revenue Core revenue * % Quarter Last 12 Months luarter Ending Amount Amount 09/30/23 $ 158m $ 662M 12/31/09 $ 45M $ 177 200 5 Other Income Net Interest Income 175 $ Millions 150 125 100 7S 50 + 25 1 Excludes net gain/loss on sale of securities, change in valuation of financial instruments c
Slide 11: Building value at Banner
Building value at Banner ; 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-deposit
Slide 12: Low cost funding mix and earning asset mix
Protecting net interest margin PSE Low Cost Funding Mix Earning Asset Mix FHLB, Sub Debt & Other_ 9/30/2023 9/30/2023 Securities & Non-Interest Int-bearing Certificates of Deposit Bearing Deposits Leas Avg Cost $ Millions Bal _(inbps) Non-Interest 5,613 0 Interest Bearing 6425 119 Avg Yield Interest
Slide 13: Focus on core deposits
Protecting net interest margin Focus on core deposits Quarter Ending Balance % of Total Deposits 09/30/23 $ 14,716m 89% 12/31/09 $ 1,924m 50% Noncore Deposits Core Deposits — Core Deposit % Manage deposit costs Goaier Quarter Last 12 Months Ending Amount _ Rate Amount _ Rate 09/30/23 $ 310M 0.94% $
Slide 14: Net Noncore Funding Dependence
Protecting net interest margin 50% 40% Net Noncore Funding Dependence — Banner 30% 20% Peer Median 10% Peer Top Quartile 0% -10% Peer source: Group 1 (S10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision
Slide 15: Maintain top quartile net interest margin
Protecting net interest margin pees Maintain top quartile net interest margin Quarter Quarter Last 12 Months Ending Amount Rate Amount Rate 09/30/23 $142M 3.85% $597mM 4.04% 12/31/09 $ 39m 3.53% $146m 3.36% 5.0% Net Interest Margin — Banner 45% 4.0% 4 Peer Top Quartile 3.5% 4 \ Peer Median 3.0% Peer
Slide 16: Conservative investment portfolio
INNER Conservative investment portfolio ps 12 Month Net Interest Income Shock (SMM), % Change Investment Portfolio Composition ($3.40 billion) 800 $ Millions 596 600 Agency, $35. other. $3 600 ss1_574 Comp, $116, 3.4%" one Ae a a 79% of the investment values are 400 Agency MBS/CMO or AAA rated 7.3%
Slide 17: Building value at Banner: Spending carefully
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Spending carefully Benefit from scale Control core operating expense 16
Slide 18: Spending carefully
Spending carefully Control core operating expense Quarter Quarter Last 12 Months Ending Amount Amount 09/30/23 $ 93M $374M 12/31/09 $ 31M $132M 100% 90% 80% 70% 60% Peer source: Group 1 ($108 and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve Sys
Slide 19: Maintaining a moderate risk profile
Building value at Banner 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 Maintain appr
Slide 20: Diversified loan portfolio
Diversified loan portfolio Loan Composition Loan Originations (commitments, $MM) INNER 9/30/2023 $1,400 Goneuiner CRE Breakout sum % $1900 = OO CRE 911 4, Investment Properties 1,530 Small Balance CRE 1,170 $1,000 TotalCommCRE 3,611 34% $800 Agricultural 3% $600 $400 $200 Multifamily $0 _Constructio
Slide 21: Characteristics of highlighted loan segments
Characteristics of highlighted loan segments “4 Balances (SMM) Percent of Total Loans Total Investor Office Total Owner Occupied Average Loan Size Largest Loan Size 30 + days Past Due Adversely Classified $667.2 6.3% $309.0 $358.1 $0.8 Other 4% 1 By collateral code Balances ($MM) $1,260.3 Percent of
Slide 22: Allowance for credit losses rollforward
ACL - Loans 144.7 2.0 0.3 (0.7) 2.9 147.0 ACL - Unfunded Commitments 14.7 0.2 0.1 0.0 0.3 15.0 ACL - HTM Securities 0.4 (0.0) (0.0) 0.0 (0.0) 0.3 ACL - AFS Securities 2.0 0.0 (1.3) 0.0 (1.3) 0.8 Total ACL 161.7 2.2 (0.8) (0.7) 2.0 163.1 $161.7 $163.1
Slide 23: Building value at Banner: Employing capital wisely
Building value at Banner Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Employing capital wisely Maintain premium to tangible book value Pay appropriate dividends Prepare for future opportunities
Slide 24: Pre-tax pre-provision earnings reconciliation
PRE-TAX PRE-PROVISION EARNINGS Sep 30, 2023 Jun 30, 2023 Sep 30, 2022 Income before provision for income taxes (GAAP) 56,506$ 48,771$ 60,907$ Provision for credit losses 2,027 6,764 6,087 Pretax pre provision earnings (non-GAAP) 58,533 55,535 66,994 Exclude net (gain) loss on sale of securities 2,65
Slide 25: 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 24