Banner Corporation · NASDAQ:BANR
Banner — Shareholder Meeting (April 2012)
19 slides from Banner's shareholder meeting presentation, Apr 26, 2012
Slide 1: Building Value at Banner – Annual Meeting
NNER CORPORATION Building Value at Banner Annual Meeting April 24, 2012
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: Today's Discussion of Banner
€- Today’s Discussion of Banner * Banner has a scalable franchise with a long history in stable markets. ¢ Banner is well positioned in robust markets to generate organic growth. ¢- Banner has improved performance by executing on its strategic priorities, continuing to drive shareholder value. ¢- Ba
Slide 4: A Good Place to Be... Since 1890
ms § Good Place to Be... Since 1890 Assets $4.28 Deposits 3.4B Loans 3.2B Offices 89 Employees 1,050
Slide 5: Markets: branches, loans, deposits and share
Market Branches} Loans |Deposits|Share| Columbia Basin} 26 |$0.9B|$ 1.3B] 17% E. Washington 19 |$0.5B/$0.6B| 9% Puget Sound 29 |$1.1B/$1.1B| 2% {Portland 9 |$0.5B/$0.3B) 1% Boise 6 |$0.2B/$0.1B| 2% J 27 new branches = ~ since 2005 —— Building Value at Banner
Slide 6: Strategy and Opportunity
Strategy and Opportunity Strengthen Foundation 1. Improve capitalization and liquidity to weather storm and grow organically 2. Aggressively identify problem assets and improve resolution 3. Lower funding costs and grow core earnings base 4. Prepare for impact from failed institutions 5. Invest in c
Slide 7: Maximizing Shareholder Value
ies = Maximizing Shareholder Value Achieve a moderate risk profile Establish executive risk management committee Reduce nonperforming loans and OREO Reduce construction and land development concentration Limit concentration risks Build sustainable revenue growth and profitability Maximize relationsh
Slide 8: Achieving a Moderate Risk Profile
Achieving a Moderate Risk Profile Improve capital and loss reserve ratios 03/31/2012 | 12/31/2009 Total capital to 0 a risk-weighted assets 18.98% 12.73% Tier 1 capital to 6 6 risk-weighted assets Lee DLAs Tier 1 leverage capital to 14.00% 9.62% average assets Tangible common equity to 10.15% 5.87%
Slide 9: Achieving a Moderate Risk Profile: Improve Earning Asset Mix
€- Achieving a Moderate Risk Profile Improve Earning Asset Mix 03/31/2012 12/31/2009 Securities 14% Securities 18% Const/ Dev ~ Const/ Dev — Building Value at Banner ————————_ 6
Slide 10: Reduce residential construction and land development concentration
4- Achieving a Moderate Risk Profile 5 5 z 2 Residential Const & Land Dev Reduce residential 2 All Other Loans construction and land = a development concentration = 03/31/2012 |$ 238m 7% 12/31/2009 |$ 523m| 14% Peak $ 1,075m| 32% —— Building Value at Banner ———————_ 9
Slide 11: Reduce nonperforming loans and OREO
9 220 Sano Reduce nonperforming & NPL's —=pitt loans and OREO = Date Balance | Percent Nonperforming Loans 03/31/2012 $ 65m 2.0% 12/31/2009 $ 214 5.5% Peak $ 243M 6.2% Other Real Estate Owned 03/31/2012 $ 28M 0.9% 12/31/2009 $ 78M 2.0% Peak $ 107m 3.0% —— Building Value at Banner ———————_ 10
Slide 12: Grow core revenue: Net Interest Income
2 Net Interest Income Grow core revenue 2 Other Income = Date Amount Quarter Ending 03/31/2012 $ 50m 7.2% 12/31/2009 $ 45m 5.8% Twelve Months Ending 03/31/2012 $ 200m 4.3% 12/31/2009 $ 177m -0.6% —— Building Value at Banner ———————_ am
Slide 13: Building Sustainable Profitability
Building Sustainable Profitability €- BY Asset Yields _ Improve net interest margin Funding Costs — Ee 7% | Date Amount | Percent 6% 2 Quarter Ending 03/31/2012 $ 41m 4.11% 12/31/2009 $ 38M 3.49% Twelve Months Ending 03/31/2012 $ 166m 4.09% 12/31/2009 $ 145m 3.33% 5% 4% 3% —— Building Value at Banne
Slide 14: Grow transaction deposit accounts
Non-Int Bearing Interest Bearing Grow transaction deposit accounts Date Number | YOYA Non-Interest Bearing Accounts 03/31/2012 98,877 | 26.1% 12/31/2009 71,178 8.0% Interest Bearing Accounts 03/31/2012 62,030 11.2% 12/31/2009 50,955 1.1% —— Building Value at Banner Excludes CD's 13
Slide 15: Maintain loan-to-deposit ratio of 90-95%
115% 4.5 L/DRatiom yiSans 110% 4.0 Maintain loan-to- deposit ratio of Billions 90-95% Date Percent 03/31/2012 94% 12/31/2009 98% Peak 108% —— Building Value at Banner ———————_ 14
Slide 16: Improving Operating Leverage
€- Improving Operating Leverage ¢ Focused value proposition: Reorganize around “Super Community Bank” model to further develop commercial bank attributes — Broad and appropriate product offerings to serve middle market, small business and consumer client base — Decision making as close to client as
Slide 17: Improving Operating Leverage: Core Deposits
Improving Operating Leverage Improve funding mix with Noncore Deposits 5 lower cost core deposits Core Deposits Billions 03/31/2012 |$ 2,229m 65% 12/31/2009 |$ 1,924 50% —— Building Value at Banner ———————_ 16
Slide 18: Improving Operating Leverage: Reduce OREO
€- Improving Operating Leverage 60 7 150 2 Additions OREO a Reduce OREO and 250 | Dispositions ___“""""_| 495 & collection costs = W/D and Loss = =40 100 = Cycle-to-Date 30 75 Begin $ 2m 20 50 Additions 287m 10 25 Dispositions 223m o o Write-downs 34m -10 Loss on Sale 4m 20 End $ 28M -30 -40 Ss iF 9
Slide 19: Worth Repeating ...
mee = Worth Repeating ... * Banner has a scalable franchise with a long history in stable markets. ¢ Banner is well positioned in robust markets to generate organic growth. ¢- Banner has improved performance by executing on its strategic priorities, continuing to drive shareholder value. ¢- Banner's