Banner Corporation · NASDAQ:BANR
Banner — Merger or Acquisition (July 2018)
11 slides from Banner's merger presentation, Jul 26, 2018
Slide 1: Safe Harbor Forward-Looking Statements
2 Safe Harbor Forward-Looking Statements When used in this communication 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 e
Slide 2: Additional Important Information
3 Additional Important Information In connection with the proposed acquisition of Skagit, Banner will file a registration statement on Form S-4 with the SEC to register the shares of Banner’s common stock to be issued in connection with the merger. The registration statement will include a proxy sta
Slide 3: Transaction Highlights
4 Transaction Highlights • • • • • • Creates the largest community bank deposit franchise in the state of Washington Strong deposit base with 0.17% cost of deposits and ~96% core deposits1 Diverse loan mix with historically good asset quality Complements Banner’s existing footprint between Seattle a
Slide 4: Skagit Bancorp Overview
5 Skagit Bancorp Overview • • Founded in 1958 and headquartered in Burlington, WA Commercial bank with focus on community stewardship and “Genuine, Lasting Relationships” 11 branches and 1 loan production office serving the I-5 corridor from Seattle to the Canadian border #1 in deposit market share
Slide 5: Puget Sound Pro Forma Branch Footprint
6 Puget Sound Pro Forma Branch Footprint Ska gi t Ba nner Pro Forma Yea r County Depos i ts Depos i ts Deposi ts Deposi ts Ma rket Ma rket CAGR Snohomish, WA 1 48,898 6 186,554 7 235,452 11,639,679 2.02% 12 7.44% Source: S&P Global Market Intelligence, FDIC deposit data as of June 30, 2017 Pro Forma
Slide 6: Creates the Largest Community Bank in WA
7 Creates the Largest Community Bank in WA Washington • On a pro forma basis Banner will have the most Washington deposits of any bank headquartered in Washington, with nearly $5.5 billion Out of 77 Institutions Source: S&P Global Market Intelligence, pro forma FDIC deposit data as of June 30, 2017
Slide 7: Diversified Loan Portfolio
8 Diversified Loan Portfolio • • • Total loan 11% CAGR 2013 – Q2 2018 Strong asset quality and underwriting standards Diverse loan mix, similar to Banner $7,764mm $599mm $8,362mm Note: Pro forma as of 6/30/18; excludes purchase accounting adjustments Pro Forma Loan Mix Skagit Loan Mix Banner Loan Mi
Slide 8: Low Cost Deposit Base
9 Low Cost Deposit Base • • • • 0.17% cost of deposits 24% non-interest bearing deposits 85% non-CD deposits ~96% core deposits1 $8,528mm $811mm $9,338mm 1.Core deposits excludes jumbo time deposits with balances greater than $250,000 2.Pro forma as of 6/30/18; excludes growth and purchase accountin
Slide 9: Transaction Overview
10 Transaction Overview • Fixed exchange ratio of 5.6664x - Skagit shareholders will receive ~3.1mm BANR shares • 100% stock transaction for common shareholders (cash for outstanding options) • Skagit shareholders will have pro forma ownership of approximately 8.7% Aggregate consideration of $191.1
Slide 10: Deal Economics and Merger Assumptions
11 Deal Economics and Merger Assumptions • Immediately accretive to EPS; ~4% accretive in 2019 • Tangible book value dilution of 3% at close • TBV earnback < 3.8 years using both crossover and simple methods • ~19% internal rate of return • Strong capital ratios with post merger TCE ratio of 9.4% •
Slide 11: Deal Economics and Merger Assumptions
Deal Economics and Merger Assumptions + Immediately accretive to EPS; ~4% accretive in 2019 + Tangible book value dilution of 3% at close Financial Impacts + TBV earnback < 3.8 years using both crossover and simple methods + ~19% internal rate of return + Strong capital ratios with post merger TCE r