Slide 1: Fourth Quarter 2024
Fourth Quarter 2024 Photo by Photo by Photo by Photo by Siti Alimah Yvonne McDonald Maria DeVecchio Salvador Saldana
Slide 2: Disclosure Statement
Disclosure Statement This presentation includes forward-looking statements. These statements include descriptions of management’s plans, objectives or goals for future operations, products or services, forecast of financial or other performance measures and statements about Banner’s general outlook
Slide 3: Fourth quarter 2024 highlights
Fourth quarter 2024 highlights • Net income of $46.4 million, compared to $45.2 million for the prior quarter • HFI Loan growth of $130 million (5% annualized) • Total loan originations (excluding HFS) were $802 million • Total funding costs decreased 13 basis points; deposit costs decreased 8 basis
Slide 4: 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 Acquisition History Assets $16.2B 2019 Q4 2018 Q4 2015 Q4 2015 Q1 2014 Q2 Deposits $13.5B AltaPacifi
Slide 5: Building value at Banner: core banking competency
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 reputation
Slide 6: Growing revenue … in a good place since 1890
Growing revenue … in a good place since 1890 Population Estimate (millions) 2020 2030 Growth Washington 7.7 8.4 9%* Oregon 4.2 4.5 5% Idaho 1.8 2.2 20%* California 39.5 39.5 0% Region 53.3 54.6 2% * Among the fastest United States 331.4 344.6 4% growing in the country Source: U.S. Census Bureau Mood
Slide 7: 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 Technology From Apple to Manufacturing from Silicon Valley to the Central Valley … Consumer the world’s 6th largest economy Logistics Natural Resources Agriculture Tradi
Slide 8: Growing revenue: 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 8
Slide 9: Growing revenue: guard and improve reputation
Growing revenue Guard and improve reputation Outstanding CRA Rating FDIC 2021, most recent 3-year examination cycle Most Trustworthy Companies in America Newsweek 2023 & 2024 World’s Most Trustworthy Companies Newsweek 2023 & 2024 (Highest ranked U.S. based bank in 2024) America’s Best Regional Bank
Slide 10: Growing revenue
Growing revenue Core revenue1 Noninterest income1 Quarter Last 12 Months Quarter Last 12 Months Quarter Quarter Ending Amount Amount Ending Amount Amount 12/31/24 $160M $615M 12/31/24 $19.6M $73.1M 12/31/09 $45M $177M 12/31/09 $6.6M $31.1M Other Fees Deposit Fees as % of Core Other Income Mortgage B
Slide 11: 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 12: Protecting net interest margin
Protecting net interest margin Low Cost Funding Mix Earning Asset Mix FHLB, Sub Debt & Other 12/31/2024 12/31/2024 Certificates of Securities & Deposit Non-Interest Int-bearing Loans Bearing Deposits Cost $ Millions Avg Bal (in bps) Interest Bearing and Non-Interest 4,641 0 Savings Interest Bearing
Slide 13: Protecting net interest margin: core deposits and deposit costs
Protecting net interest margin Focus on core deposits Manage deposit costs Quarter Last 12 Months Quarter Quarter Ending Balance % of Total Deposits Ending Amount Rate Amount Rate 12/31/24 $12,015M 89% 12/31/24 $52.2M 1.53% $199.5M 1.50% 12/31/09 $1,924M 50% 12/31/09 $17.7M 1.83% $83.2M 2.21% Noncor
Slide 14: Protecting net interest margin: loan-to-deposit ratio
Protecting net interest margin Deposits Net Noncore Funding Loans Dependence Banner Loan-to-Deposit Ratio Peer Median Peer Top Quartile Peer source: Group 1 ($10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supe
Slide 15: Protecting net interest margin: top quartile margin
Protecting net interest margin Maintain top quartile net interest margin Earning Asset Yield Quarter Last 12 Months Quarter Funding Cost Net Interest Margin Ending Amount Rate Amount Rate 12/31/24 $141M 3.74% $542M 3.66% 12/31/09 $39M 3.53% $146M 3.36% Net Interest Margin Banner Peer Top Quartile Pe
Slide 16: Conservative investment portfolio
Conservative investment portfolio 12 Month Net Interest Income Sensitivity ($MM), % Change Investment Portfolio Composition ($3.11 billion) Ramp % Shock % $ Millions Ramp $MM Change Shock $MM Change Up 200 596,609 0.6% 598,751 0.9% 79% of investments are Agency MBS/CMO or AAA rated Up 100 597,129 0.
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 Control core operating expense 17
Slide 18: Spending carefully
Spending carefully Control core operating expense Other Quarter Last 12 Months Quarter Information Services Ending Amount Amount Occupancy 12/31/24 $97M $383M Compensation 12/31/09 $31M $132M Efficiency Ratio Banner Efficiency Ratio Peer Median Peer Top Quartile Peer source: Group 1 ($10B and over),
Slide 19: 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 20: Diversified loan portfolio
Diversified loan portfolio Loan Originations Loan Composition (commitments, $MM) 12/31/2024 CRE Breakout $MM % Owner Ooccuped CRE 1,027 9 % Investment Properties 1,624 14 % Small Balance CRE 1,214 11 % Total Comm CRE 3,865 34 % Construction Breakout $MM % Commercial 122 1% Multifamily 514 5 % 1-4 Fa
Slide 21: Characteristics of highlighted loan segments
Characteristics of highlighted loan segments Office 1 Retail 2 Healthcare 3 Multifamily Balances ($MM) $622.2 Balances ($MM) $1,403.6 Balances ($MM) $409.3 Balances ($MM) $894.4 Percent of Total Loans 5.5% Percent of Total Loans 12.4% Percent of Total Loans 3.6% Percent of Total Loans 7.9% Balance o
Slide 22: Characteristics of highlighted loan segments
Characteristics of highlighted loan segments Origination Year Portfolio Segment Balance % Owner Occupied 2024 2023 2022 2021 and earlier Office $622.2 55% $28.5 $40.0 $77.5 $476.2 Retail (CRE Secured) $1,304.0 53% $214.8 $149.5 $189.1 $750.6 Medical Office $163.1 51% $15.1 $8.1 $24.2 $115.7 Multifam
Slide 23: Allowance for credit losses
Allowance for credit losses Change assessment: Portfolio Economic factors Changes to allowance: Net charge-offs Provision $ Millions ACL - Loans 154.6 1.8 (0.9) (2.3) 3.2 155.5 ACL - Unfunded Commitments 13.8 (0.1) (0.1) — (0.2) 13.6 ACL - HTM Securities 0.3 — — — — 0.3 Total ACL 168.7 1.7 (1.0) (2.
Slide 24: Maintaining a moderate risk profile: minimize nonperforming assets
Maintaining a moderate risk profile Minimize nonperforming assets NPAs REO Quarter Ending Amount % of TA Amount % of TA 12/31/24 $40M 0.24% $2M 0.01% 12/31/09 $292M 6.11% $78M 2.01% Real Estate Owned Nonperforming Loans ACLL to Total Loans Banner Peer Top Quartile ACLL Peer Median Peer source: Group
Slide 25: 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 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Quarters Ended Year Ended PRE-TAX PRE-PROVISION EARNINGS Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Income before provision for income taxes (GAAP) $ 58,093 $ 55,755 $ 53,318 $ 209,485 $ 227,087 Provision for credit losses 3,000 1
Slide 27: 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