Banner Corporation · NASDAQ:BANR
Banner — Conference Presentation (January 2017)
24 slides from Banner's conference presentation, Jan 9, 2017
Slide 1: January 10-12, 2017 Boston, New York, Mid-Atlantic
January 10-12, 2017 Boston « Naw York+ Mid-Atlantic
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 $ 9.88 r Recent Additions Deposits $8.18 . ) 201402 2015@1 2015 G4 loans S758 4 nee Ee
Slide 4: Delaying the impact of Dodd-Frank
Delaying the impact of Dodd-Frank Staying below $10 billion through 2016 wy 12 Quarter Total s Total Assets Ending _ Assets z 12/31/16 $ 9,8108 projected 10 0980/16 § 9.8418 12/31/09 _§ 4,7228 AmericanWest Bank —> Siuslaw Bank CreditCrisis SW Oregon Branches oF N
Slide 5: Building value at Banner
Building value at Banner SANNER Core banking competency Growing revenue Protecting net interest margin Spending carefully Maintaining a moderate risk profile Employing capital wisely Take advantage of ideal geography Offer super community bank value proposition Guard and improve reputation Grow mark
Slide 6: Growing revenue ... in a good place since 1890
BANNER Growing revenue ... in a good place since 1890 Population Estimate tition) 2015 2030 Growth Washington 7286 20% Tahoe * AILS Banner states “Galicia 384454 ouingin hes _Ush 03S 16% Regiomhas -A7% of Region 55.0 65.4 U.S. population but. will drive -25% of its growth United: tes 5214 363.6 Stro
Slide 7: Growing revenue ... in an ideal geography
BANNER Growing revenue ... in an ideal geography Powerful and diverse economic drivers From Banner's Pacific Northwest base to ... California From Apple “‘¢ to Z@ zoomerang, Technology Microsoft: (te!) amazon gaicron @Expedia from Silicon Valley to Manufacturing Qeoeme inte) PACCAR the Central Valle
Slide 8: Offer super community bank value proposition
BANNER 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 9: Guard and improve reputation
BANNER Growing revenue uard and improve reputation Included in Forbes 2014: “America’s 50 Most Trustworthy Financial Companies” Received highest rating: BauerFinancial Star Rating™ Seattle/Spokane SBA District: Named “Regional Lender of the Year” in 2016 and 2015 Named “Community Lender of the Year”
Slide 10: Grow transaction deposit accounts
Growing revenue Grow transaction deposit accounts Non-Interest P Interest Bearing weg, —— Sui, _ Ending Number YOY 09/30/16 250,382 7.4%! Number YOY 134,022 4.1%! 1231/09 71178 8.0% 50,955 11% sit accounts has grown yMpound annual gr 4 since wth ral + Including acquisitions, thenumber of transaction
Slide 11: Grow core revenue and deposit fees
Growing revenue Grow core revenue Grow deposit fees Quarter ——_Ouerer TM SG Ending Amount YOYA YoY a 09/30/16 $ 117m 743% $ 455M 79.9% 09/30/16 $129 32.6% $501m 40.2% 12/309 § 45M 5.8% $ 177M -0.6% 12/309 $ 5.3m 1.6% $ 214m -0.7% 120 224 20% 3 Net Interest Income s tex = = Deposit Fees 100 = 20 e 16
Slide 12: 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 13: Protecting net interest margin: earning asset and funding mix
Protecting net interest margin Improve Earning Asset Mix 12/31/2009 09/30/2016 Securities Securities : Securities 0.6 14 D> consumer Comléag 0.9 16 Consumer “cREOwner 0.515, CRE Owner . ae € Owner CRE Investor 0.97 16% Res Mortgage 107) Fos Mortg Res Const/Dev Res Mortgage CRE Investor 20 CRE Invest
Slide 14: Noncore Deposits
$ 28m S$ 6m 0.14% Noncore Deposits Billions — Core Deposit % | $177" Loan Yield $.832m 2.21% — Loan-Deposit Spread 3
Slide 15: Maintain 90-95% loan-to-deposit ratio
NNER Protecting net interest margin Maintain 90-95% loan-to-deposit ratio HRs 24 Quarter ‘ 8 Ending Ratio 110% pean | ede 09/3016 93% 12/81/09 98% 105% 7 Loan-to-Deposit Ratio _ 100% 6 Net Noncore Funding Dependence Banner 95% 5 40% 90% 4 - 85% 3 20% ~ Peer Median q y 80% }2 rom — Ayo 75% a Peer Top
Slide 16: Maintain top quartile net interest margin
BANNER Protecting net interest margin Maintain top quartile net interestmargin B% 4 Quarter LT™ Earning Asset Yield Quarter Funding Cost Ending Amount Rate Amount Rate % 0980/16 $ 94M 415% $370M 4.13% 12/31/09 $ 39M 3.53% $146mM 3.36% a 5.0% 5% — Net interest Margin Net Interest Margin — Banner 45%
Slide 17: 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 AmericanWest provides scale Per the original transaction metrics Control core operatin
Slide 18: Control core operating expense
Spending carefully Control core operating expense Quarter LT™ (Ghar re men EEE Ending Amount YO Amount YOY 09/30/16 $ 77M 74.5% $312m 87.0% 12/31/09 $ 31M -10.1% $132m -2.5% 100% Efficiency Ratio Banneg 80% 70% Peer Median Peer Top Quartile Peer source: Group 2 (S38-SLOB}, Bank Holding Compary Perfo
Slide 19: 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 20: Minimize nonperforming assets
Maintaining a moderate risk profile Minimize nonperforming assets ‘ausrise NPLs OREO Ending Amount %ofTA Amount %ofTA 09/30/16 $ 27M 036% $ SM 0.06% 12/31/09 $214m 5.53% § 78M 2.01% ALLL to Total Loans Banner Peer Top 2x | Cuattile/ 2.0% “ PeerM 1.0% At09/30/16, whenadjustedfor purchase accountingof
Slide 21: Maintain appropriate risk capital
Maintaining a moderate risk profile Maintain appropriate risk capital 20% a2 elle = Total Capital Quarter Tier1. Ending Leverage "CE/TA 09/0/16 11.68% 11.03% 10 16% Tier 1 Leverage Ratio 1231/09 9.62% 5.87% Z TCE/ Tangible Assets 18% oe Tier 1 Leverage 12% Banner 6% "4 ¥ 1 06 14% 8% HTT wx vee TopOu
Slide 22: 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 23: Maintain premium to tangible book value
NNER Maintain premium to tangible book value Maintain favorable stock price to TBV Maintain favorable stock price to EPS Quarter Stock Price/ Quarter Stock PIE Ending Price? TRV Tay. Ending Price? EPSLTM Ratio 09/30/16 $4452 $3114 143% 09/30/16 $4452 $ 2.04 21.9% 06/30/10 $15.07 $ 29.03 52% 06/30/10
Slide 24: Building value at Banner
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 23