Banner Corporation · NASDAQ:BANR
Banner — Conference Presentation (November 2015)
29 slides from Banner's conference presentation, Nov 30, 2015
Slide 1: Building Value at Banner
NNER CORPORATION Building Value at Banner r Conference
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: A Good Place to Be... Since 1890
¥< A Good Place to Be... Since 1890 Assets $5.3B Deposits 4.4B Loans 4.4B Offices 104 Employees 1,200
Slide 4: A Place to Grow
A Place to Grow Market | Branches| Loans [Deposits Share ColumbiaBasin| 26 |$ 0.88/$ 1.38 13% E. Washington | 18 |$0.68|$0.68| 7% Puget Sound | 30 |$1.85/$1.45| 1% W. Oregon $1.08|$0.98| 2% Boise $0.28|$0.28) 2%) 44 new branches since 2005 Building Value at Banner
Slide 5: Growing with Siuslaw Financial Group
Growing with =m STUSLAW FINANCIAL GROUP ‘* Adds over $300 million in low cost deposits * Provides entry into attractive Willamette Valley 1-5 corridor with ten branches and meaningful market share in Lane County + Complements existing Portland operations and six branches recently acquired in Western
Slide 6: Transforming with AmericanWest Bank
i jth AmericanWest Transforming with Bank «Adds over $3.6 billion in low cost deposits * Raises deposit market share among regional banks to 3" in Washington and 4" in Oregon + Extends footprint into California and Utah ‘* Combines experienced integrators * Management teams have successfully execute
Slide 7: Building on Strengths
€- Building on Strengths Growing sustainable revenue: * Geographic advantage + Improved reputation + Expanding revenue channels * Gaining market share —— Building Value at Banner
Slide 8: Economically Ideal Geography
€- Economically Ideal Geography Powerful and diverse economic drivers Technology | Microsoft (inte) amazon gaicron @expedia Manufacturing ( BENE (intel) PACCAR consumer | amazon CosTco RR GE NORDSTROM Logisti Port me pt sini of Seattle. Tacoma Forest A Expeditors’ Pont oF portiano (products Weyerhae
Slide 9: Economically Ideal Geography
€- Economically Ideal Geography a | Strong population 2004 to 2014 growth forecast 2014 to 2030 f 2014 Estimate (Thousands) United States | 318,857 Washington | 7,062 Oregon | 3,970] Idaho | 1,634 Region | 12,666 Sources: ‘Wa office of Financial Management O% 5% 10% 15% 20% 25% —— Building Value at
Slide 10: Building on Improved Reputation
€- Building on Improved Reputation Included in Forbes 2014: “America’s 50 Most Trustworthy Financial Companies” Received highest rating: Bankrate.com SAFE & SOUND@ Star Ratings Named SBA “Regional Lender of the Year” for Seattle/Spokane District following two years as “Community Lender of the Year”
Slide 11: Expanding Revenue Channels
€- Expanding Revenue Channels + Value proposition of “Super Community Bank” model: — Broad and appropriate product offerings to serve middle market, small business and consumer client base — Decision making as close to client as possible — Responsiveness through relationship banking — Alignment of d
Slide 12: Expanding Revenue Channels
Expanding Revenue Channels Net Interest Income Grow core revenue Other Income Date | Amount | YoYA Quarter Ending 09/30/15| $ 67M | 14.3% 70 60 50 a0 12/31/09| $ 45m | 5.8% - Twelve Months Ending 09/30/15| $ 253m | 16.8% 20 12/31/09| $ 177m | -0.6% 10 ° a oS eo S PP PP PP OP oh —— Building Value at
Slide 13: Expanding Revenue Channels
€- Expanding Revenue Channels —— Building Value at Banner Grow deposit fees Date Amount | YOYA Quarter Ending 09/30/15 $ 9.7m | 17.6% 12/31/09 $ 5.3m | 1.6% Twelve Months Ending 09/30/15 $35.8m | 23.7% 12/31/09 $21.4 | -0.7% 12
Slide 14: Grow transaction deposit accounts
Thousands » i] a y 8 Non-Int Bear Grow transaction deposit accounts gE Quarter Ending Non-Interest Bearing Accounts = 09/30/15 | 161,253 | 8.3%* a2 12/31/09| 71,178 | 8.0% Interest Bearing Accounts 09/30/15] 83,765 | 5.4% 12/31/09] 50,955 | 1.1% Excludes CD's * Voar-over-year growth rates exclude ac
Slide 15: Maintaining Earnings Momentum
rs Maintaining Earnings Momentum Enhancing Shareholder Value: + Protecting net interest margins + Improving operating efficiency + Maintaining moderate credit risk + Retaining risk-appropriate capital —— Building Value at Banner 14
Slide 16: Protecting Net Interest Margins
€- Protecting Net Interest Margins ‘Asset Yields —iae Maintain solid — go [g_Funding Costs net interest margin Date Amount Percent 6% - Quarter Ending 5% 09/30/15| $ S2m | 4.14% 4% 12/31/09| $ 38m | 3.49% - Twelve Months Ending %o 09/30/15] $ 197m | 4.13% 2% 12/31/09| $ 145m | 3.33% 1% 2 9 aad » ee
Slide 17: Protecting Net Interest Margins
€- Protecting Net Interest Margins 8% Loan Yields Loan-Deposit if pve g_Devosit costs poy Reduce deposit costs Date Amount Percent 6% - Quarter Ending 5% 09/30/15| $ 1.7m | 0.16% 4% 12/31/09 | $17.7m | 1.83% - Twelve Months Ending %o 09/30/15] $ 7.0m | 0.17% 2% 12/31/09 | $ 83.2m | 2.21% 1% 2 9 aad
Slide 18: Protecting Net Interest Margins
Protecting Net Interest Margins e ca Noncore Deposits Core Deposits ~ - a SPP PP PP og —— Building Value at Banner Improve funding mix with lower cost core deposits quar Balance | Percent Ending o2/0rs 12/31/09 | $ 1,924™ 17
Slide 19: Protecting Net Interest Margins
Protecting Net Interest Margins Maintain loan-to- deposit ratio of 90-95% Quarter Ending | Percent 09/30/15 100% 12/31/09 | 98% Peak 108% —— Building Value at Banner 18
Slide 20: Protecting Net Interest Margins
nes Protecting Net Interest Margins 5.0% Net Interest Marg’ Peer 75° Percentile Maintain solid net interest margin Quarter Peer Ending | B29P€F | 75n pce 09/30/15| 4.14% 06/30/15} 4.19% | 3.78% 12/31/09 | 3.53% | 3.99% Fy NP we nid —— Building Value at Banner source: ‘Bank Holding Company Performanc
Slide 21: Improving Operating Efficiency
€- Improving Operating Efficiency Other Efficiency Ratio Svatrol core Personnel 95% operating expense Date | Amount | YoYA Quarter Ending 09/30/15| $ 44m | 13.7% 85% 12/31/09| $ 31m | -10.0% 75% | | Twelve Months Ending 09/30/15| $ 167m | 14.4% 65% | | 12/31/09| $ 132m | -2.6% 55% —— Building Value
Slide 22: Maintaining Moderate Credit Risk
Maintaining Moderate Credit Risk Millions OREO a inn » oo nd —— Building Value at Banner Reduce nonperforming loans and OREO Quarter Ending Balance | Percent Nonperforming Loans 09/30/15| $ 24m | 0.5% 12/31/09| $ 214m | 5.5% Peak | $ 243m | 6.2% Other Real Estate Owned 09/30/15 $ 6m | 0.1% 12/31/09
Slide 23: Maintaining Moderate Credit Risk
nes Maintaining Moderate Credit Risk Improved Earning Asset Mix 09/30/2015 12/31/2009 Securities, 14% / Building Value at Banner - =
Slide 24: Maintaining Moderate Credit Risk
nes Maintaining Moderate Credit Risk Se a Maintain appropriate ALLL to Loans Peer 75* Percentile loan loss reserves Quarter Peer Ending | B29" | 75x pce ALLL to Loans 09/30/15| 1.77% 06/30/15} 1.82% | 1.47% 12/31/09| 2.51% | 2.66% source Bank Holding Company Performance Report HCPR — Poor Group 2 ($
Slide 25: Retaining Risk-Appropriate Capital
15% Total Capital Tier 1 Leverage Ratio TCE/Tangible Assets Maintain solid capital position 1 —— Building Value at Banner Leverage | TCE/TA 09/30/15 12.20% 12/31/09| 9.62% | 5.87% Low 8.80% | 5.82% 24
Slide 26: Retaining Risk-Appropriate Capital
€- Retaining Risk-Appropriate Capital 20% 2 | Tier 1 Leverage Ratio pene spital Peer 75" Percentile prudently Quarter Rear 15% - Ending | Ba"Per | 75» pct 09/30/15 | 13.85% 06/30/15 | 13.89% | 11.21% 12/31/09 | 9.62% | 10.17% 10% — Retired Perpetual Preferred Stock during 2” half of 2012 5% ne — San
Slide 27: Attain premium to tangible book value
TBV/ Share Stock Price Attain premium to tangible book value —— Building Value at Banner Graing | Prices | BV Per Share 09/30/15 | $ 48.91 | $ 30.75 06/30/10 | $ 15.07 | $ 29.03 Stock Price/ TBV 09/30/15| 159% 06/30/10} 52% * average closing price for the ‘month following quarter-end. 26
Slide 28: Enhancing Shareholder Value
€- Enhancing Shareholder Value 5.00 50 TT™ EPS TBV/ Share Stock Price, 4.00 40 3.00 30 re capt ease "Gio os) (2.00 20 1.00 10 0.00 ° S$ 9 Pat ol af PPS of Building Value at Banner Attain solid multiple on earnings Stock Price* 1™ Earnings Quarter Ending Per Share 09/30/15| $ 48.91| $ 2.47 06/30/10 |
Slide 29: Increasing Return to Shareholders
€- Increasing Return to Shareholders + Banner has a scalable franchise with a long history in robust, desirable markets. + Banner is one of the largest remaining banking franchises based in Washington. + Banner has the management depth, organizational model and operational skill to sustain earnings