Banner Corporation · NASDAQ:BANR
Banner — Q1 2025 Earnings Presentation
27 slides from Banner's earnings presentation, Apr 17, 2025
Slide 1: First Quarter 2025
First Quarter 2025 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: First quarter 2025 highlights
First quarter 2025 highlights • Net income of $45.1 million, compared to $46.4 million for the prior quarter • HFI Loan growth of $570 million year-over-year (5%) • Total loan originations (excluding HFS) were $536 million • Total funding costs decreased 5 basis points; deposit costs decreased 6 bas
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 $13.6B AltaPacifi
Slide 5: 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 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 protect our reputation
Growing revenue Guard and protect our reputation Best in Customer Satisfaction for Retail Banking in the Northwest J.D. Power *for J.D. Power 2025 Award Information, visit jdpower.com/awards Most Trustworthy Companies in America Newsweek 2023 & 2024 World’s Most Trustworthy Companies Newsweek 2023 &
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 03/31/25 $160M $624M 03/31/25 $18.8M $74.4M 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: 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 12: Protecting net interest margin
Protecting net interest margin Low Cost Funding Mix Earning Asset Mix FHLB, Sub Debt & Other 3/31/2025 3/31/2025 Certificates of Securities & Deposit Non-Interest Int-bearing Loans Bearing Deposits Cost $ Millions Avg Bal (in bps) Interest Bearing and Non-Interest 4,527 0 Savings Interest Bearing 7,
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 03/31/25 $12,089M 89% 03/31/25 $48.7M 1.47% $203.6M 1.53% 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 net interest 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 03/31/25 $141M 3.83% $550M 3.70% 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 ($3.10 billion) Ramp % Shock % $ Millions Ramp $MM Change Shock $MM Change Up 200 610,184 1.0% 616,163 2.0% 79% of investments are Agency MBS/CMO or AAA rated Up 100 609,471 0.
Slide 17: 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 17
Slide 18: Spending carefully
Spending carefully Control core operating expense Other Quarter Last 12 Months Quarter Information Services Ending Amount Amount Occupancy 03/31/25 $99M $387M 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: 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 20: Diversified loan portfolio
Diversified loan portfolio Loan Originations Loan Composition (commitments, $MM) 3/31/2025 CRE Breakout $MM % Owner Ooccuped CRE 1,021 9 % Investment Properties 1,598 14 % Small Balance CRE 1,217 10 % Total Comm CRE 3,837 33 % Construction Breakout $MM % Commercial 146 1% Multifamily 619 6 % 1-4 Fam
Slide 21: Characteristics of highlighted loan segments
Characteristics of highlighted loan segments Office 1 Retail 2 Healthcare 3 Multifamily Balances ($MM) $613.8 Balances ($MM) $1,398.1 Balances ($MM) $411.9 Balances ($MM) $877.7 Percent of Total Loans 5.4% Percent of Total Loans 12.3% Percent of Total Loans 3.6% Percent of Total Loans 7.7% Balance o
Slide 22: Characteristics of highlighted loan segments
Characteristics of highlighted loan segments Origination Year Portfolio Segment Balance % Owner Occupied 2025 2024 2023 2022 and earlier Office $613.8 56% $8.8 $27.6 $39.8 $537.6 Retail (CRE Secured) $1,291.3 53% $13.6 $228.7 $140.0 $909.0 Medical Office $159.3 52% $1.2 $14.7 $8.0 $135.5 Multifamily
Slide 23: Allowance for credit losses
Allowance for credit losses Allocation of Allowance for Credit Losses-Loans Allowance Non Performing % Coverage ($000) % Coverage ($000) NPLs Commercial RE 40,076 1.04% 2,182 1,837% Multifamily 10,109 1.15% 0 0% Construction 32,042 1.92% 4,359 735% 1-4 Family 20,752 1.30% 10,457 198% Commercial 38,6
Slide 24: Maintaining a moderate risk profile
Maintaining a moderate risk profile Minimize nonperforming assets NPAs REO Quarter Ending Amount % of TA Amount % of TA 03/31/25 $43M 0.26% $3M 0.02% 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: 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 26: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Quarters Ended PRE-TAX PRE-PROVISION EARNINGS Mar 31, 2025 Dec 31, 2024 Mar 31, 2024 Income before provision for $ 55,793 $ 58,093 $ 46,389 income taxes (GAAP) Provision for credit losses 3,139 3,000 520 Pretax pre provision earnings (non- 58,932 61,09
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