Slide 1: Fourth Quarter 2021
NNER ‘CORPORATION Fourth Quarter 2021
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: Fourth quarter 2021 highlights
Fourth quarter 2021 highlights Loan growth of 0.5% (1.9% annualized), not including PPP Total loan originations (excluding HFS and PPP loans) were $1.1 billion Core deposits grew 1.3% (5.2% annualized), and represent 94% of total deposits $5.2 million recapture of the provision for credit losses; Al
Slide 4: Banner Forward progress update
INNER Banner Forward progress update aa Operating Leverage Trend! re Revenue FTE Forward minis a 26: ntation Status? + Core Expense reflects non-core expense adjustments including restructuring costs and legal settlernents: Core Revenue excludes ial mortgage gain on sale and SB PPP Loan interest inc
Slide 5: 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 ~— Assets $16.88 Recent Additions Deposits $14.38 2019 G4 2018 G4 201504 201501 2014 2 AltaPacific Skagit Ametica
Slide 6: Community, Diversity & Sustainability
INNER Community, Diversity & Sustainability aa Community Banner Bank received an Outstanding Rating on its most recent Community Reinvestment Act Performance Evaluation by the FDIC in which the following were highlighted: + Geographic distribution of loans reflects good penetration throughout assess
Slide 7: 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 reputati
Slide 8: Growing revenue ... in a good place since 1890
Growing revenue ... in a good place since 1890 pase Population Estimate itiona 2020 2030. Growth Washington 7786 14% + Banner's 3northern en ES OE Mates are among the Gresen AS; 48 fastest graming in the Idaho 1824 country. California 396 407 Region 534 559 United States 3295 3461 Strong Population
Slide 9: 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 4 to BD zoomerang, Technology Microsoft. (te!) amazon (aicron Géxpedia from Silicon Valley to Manufacturing 75 geenver (intel) PACCAR o ce the Central Val
Slide 10: Growing revenue: 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 11: Growing revenue: Guard and improve reputation
Growing revenue Guard and improve reputation Outstanding CRA Rating FDIC 2021, most recent 3 year examination cycle Best Regional Bank in the Pacific Region of the U.S. Money 2018 & 2019* Residential Diversity and Inclusion Leadership Award Mortgage Bankers Association 2020 2020 A+ Health Grade Depo
Slide 12: Growing revenue
INNER Growing revenue Grow revenues Grow noninterest income? uarter Quarter LT cuarter Quarter um Ending Amount Amount Ending Amount Amount 127824 S1aam $5880 127824 $ 219m $ 913m 12/31/08 S$ 4sm $7 12/31/08 S$ 66m $ 311m 28% Other Income Other Fees 150 | Net Interest Income Mortgage Bnkg — Deposit
Slide 13: Building value at Banner: Protecting net interest margin
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 r
Slide 14: Protecting net interest margin
Protecting net interest margin Low Cost Funding Mix Earning Asset Mix INNER 12/31/2021 12/31/2021 Certificates oat = interest-bearing Deposits Loans FHLB, Sub —% Non-Interest, Debt 8 Other Bearing Securties tug Cost Avg Yield $ Millions Bal (in bps) $ Millions Bal (in bps) Noninteret 68250 Loans Ss
Slide 15: Protecting net interest margin: Grow core deposits
Protecting net interest margin Grow core deposits INNER Reduce deposit costs Quarter Quarter —_Quarter_ Lis Ending Balance of Tetal Ending Ammount Rate Amount ‘Rate A2sur2t $13,488 m 94% 123u21$ 24m 0.07% $ 118m 0.09% 123409 $ 19240 50% 1zsyoo $ 177m 183% $ 83.2m 2.21% 7 00% 8x 2 4, Noncore Deposits
Slide 16: Protecting net interest margin
Protecting net interest margin 50% 40% Net Noncore Funding Dependence 50% — Banner 20% 10% Peer Top Guartite on 4 “10% OO ch oh ch oh ch ch oh ht ch Gh ch SLL LS oe Peer source: Group 1 ($108 ancover!, Bank Holding Company Performance Report (BHCPR), Nationalinformation Center, Federal Reserve Syste
Slide 17: Maintain top quartile net interest margin
Protecting net interest margin Maintain top quartile net interest margin Quarter Quarter UTM Ending Amount Rate Amount Rate 12/31/21 $122M 3.11% $497M 3.33% 12/31/09 $ 39M 3.53% $146M 3.36% 5.0% Net Interest Margin — Banner 45% 4.0% Peer Top Guartite 38% 5.0% 28% Peer source: Group 1 ($108 andover),
Slide 18: Well positioned for rising rates and conservative investment portfolio
Well positioned for rising rates and conservative investment portfolio pss INNER 12 Month Net Interest Incorne Shock ($MM), % Change Investment Portfolio Composition ($4.19 billion) 560 540 520 500 480 460 440 420 538 S34 -25 Base +100 +200 +300 +400 bps bps bps bps bps 16% 14% 12% 10% 8% 6% 4% 2% 0
Slide 19: 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 18
Slide 20: Spending carefully
Spending carefully Control core operating expense aliartet Quarter UTM Ending Amount Amount 12/81/24 $ 86M $354M 12/31/09 $ 31M $132 100% Efficiency Ratio — Banner 90% 80% Peer Meda 70% 60% Peer Top Guartite Peer source: Group 1 ($108 andover), Bank Holaing Company Performance Report (BHCPR), Nation
Slide 21: Building value at Banner: 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 22: Maintaining a moderate risk profile
Maintaining a moderate risk profile aa INNER Minimize nonperforming assets Quarter NPLs Other REO Ending Amount %of TAs Amount 9% of TAs 12/31/21 $ 23m 0.14% $ 1M 0.01% 12/31/09 $214m 4.48% $ 78M 1.63% ACLL to Total Loans — Banner Peer Top Guartite Peer source: Group 1 ($108 andover), Bank Holaing C
Slide 23: Allowance for credit losses
Allowance for credit losses Fisses Day 1 CECL adjustments Change assessment: lm Portfolio Economic factors Changes to allowance IME Net charge-offs %ACL-Loans excluding PPP = 1.45% lm Provision % “ % % ACL- Loans 100.6 78 (8.0) 66.9 (5.4) 64.30 167.3 19) (37.1) (24) (33.1) 132.2 ACL - Unfunded Commi
Slide 24: Maintaining a moderate risk profile: Maintain appropriate risk capital
Maintaining a moderate risk profile Maintain appropriate risk capital Total Quarter Capital = TCE/TA Ending Ratio 12/34/21 14.71% 7.93% 12/31/09 9.62% 5.87% 18% Tier 1 Leverage — Banner Peer source: Group 1 ($108 andover), Bank Holaing Company Performance Report (BHCPR), Nationalinformation Center,
Slide 25: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Incomebefore provision for income taces (GAAP) (Recapture/Provision for credit losses Pretax pre pravision earnings (non-GAAP) Excludenet gain on saleof securities Excludenet changein valuation for financial instruments carried atfair value Excludeacqu
Slide 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Quarters Ended 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 REVENUE FROM CORE OPERATIONS Netinterestincome before provision for loan losses $ 121530 $ 130,146 $ 127,554 $ 117,661 $ 121437 Total non-interest income 2ATA 25,334 22,336 24,272 23,50
Slide 27: 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 28: 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 27