Slide 1: First Quarter 2022
NNER ‘CORPORATION First Quarter 2022
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: First quarter 2022 highlights
First quarter 2022 highlights Loan growth of 11% (4.6% annualized), not including PPP Total loan originations (excluding HFS) were $1.1 billion Core deposits grew 1.7% (7.1% annualized), and represent 94% of total deposits $7.0 million recapture of the provision for credit losses; Allowance for cred
Slide 4: Banner Forward progress update
Banner Forward progress update Operating Leverage Trend: wy $140 2,200 é © $130 2,150 = $120 2,100 $u10 2,050 $100 2,000 $90 1,950 $80 1,900 $70 1,850 $60 1,800 @4'20 Qt '21 G2 21 @3 21 Q4 21 at 22 mmmCore Expense mmmCore Revenue ——FTE Banner Forward Prostar iniiat\: TTT 4.7 Implernentation Status?
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 Banner Corporation Assets $16.88 | Recent Additions Deposits $14.58 U 2019 G4 2018 G4 2015 G4 2015 G1 2014 G2 Loa
Slide 6: Environmental, Social & Governance
Environmental, Social & Governance Program highlights and overview With Board of Directors’ oversight, Banner's Executive Management and its ESG Working Group are committed to providing transparency in our efforts and achievements in ESG matters. Environmental A\, Provided and participated in constr
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 778.6 Oregon 43 46 Idaho 1824 California 396 407 gion S34 65.9 5% + Among the fastest United States 3295 3464 5% gramingin the country Strong Population Growth Forecast 2010te 2020 United Stat
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 Technology Microsoft (intel) 2MAZON saicron @expedia From Apple @ to Z@ zoomerang, Manufacturing Qi) aenves (intel) PACCAR from Silicon Valley to the Central Valley.
Slide 10: 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
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 in Customer Satisfaction for Retail Banking in the Northwest* J.D. Power 2022 Consistent recipient of highest rating BauerFinancial 5-Star Rating™ ATop 50 USS. Public Bank (with a
Slide 12: Growing revenue: core revenue and noninterest income
INNER Growing revenue Grow core revenue Grow noninterest income? uarter Quarter LT cuarter Quarter uM Ending Amount Amount Ending Amount Amount 3/322 $ 188m $5840 3/322 $ 189m $ 865m 12/31/08 S$ 4sm $7 12/31/08 S$ 66m $ 311m 30 28% Other Fees Mortgage Bnkg = Deposit Fees as % Deposit Fees of Core Re
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 Certiticates 03/31/2022 3/31/2022 of Deposit, Interest-bearing Deposits FHLB Sub — Loans Debt 8 other Non-interest Bearing Securities Avg Cost fog Yield $ millions Bal in bps) $ millions Bal tin bps) Non-Interest saa 0 Loans
Slide 15: Protecting net interest margin: core deposits and deposit costs
INNER Protecting net interest margin aa Grow core deposits Reduce deposit costs Quarter Quarter Quarter ETM Ending Balance of Total Ending Amount Rate Amount ‘Rate OF/3V22 $13,723 94% 3/322 $ 24m 0.06% — § 10.2m 0.07% 1231409 $1924 50% 1zsyoo $ 177m 183% $ 83.2m 2.21% , 16 00% 1% g Noncore Deposits
Slide 16: Protecting net interest margin
Protecting net interest margin 50% 40% Net Noncore Funding Dependence — Banner 50% 20% 10% Peer Top Guartite ox 4 “10% Peer source: Group 1 ($108 ancover!, Bank Holding Company Performance Report (BHCPR), Nationalinformation Center, Federal Reserve System, Divisionof Banking Supervisionand Regulatio
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 O3/S1/22 $119M 3.12% $498m 3.27% 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 ($108 andover),
Slide 18: Well positioned for rising rates and conservative investment portfolio
Well positioned for rising rates and conservative investment portfolio 12 Month Net Interest Income Shock ($MM), % Change Investment Portfolio Composition ($4.19 billion) 600 574592 20% . coms. omar ss, BB 152 sony sie" nh 10% posse 82% of investments are Agency 500 46 MBS/CMO or AAA rated 5% 3.3% n
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 3/81/22 $ 85M $346M 12/31/09 $ 31M $132 100% Efficiency Ratio — Banner 90% 80% 70% 60% Peer Top Guartite Peer source: Group 1 ($108 andover), Bank Holaing Company Performance Report (BHCPR), Nationalinformati
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 Minimize nonperforming assets Quarter Wrlis _ Ending Amount %of TA Amount % of TA 03/31/22 $ 19M 0.20% $ Om 0.00% 12/31/09 $214m 5.53% $ 78M 2.019% ACLL to Total Loans — Banner Peer Top Guartite Peer source: Group 1 ($108 andover), Bank Holaing Company Performance
Slide 23: Allowance for credit losses
Allowance for credit losses Day 1 CECL adjustrnents Change assessment: lm Portfolio Economic factors Changes to allowance IME Net charge-offs l= Provision INNER %ACL-Loans excluding PPP a 1.39% == aca cial sie 1.38% %ACL-Loans 116% $145 ; | =— ° 2 % 6 Act Loans ams| 70| (e0| 959° 154 a3, 19 (37a) (2
Slide 24: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Income before provision far income taxes (GAAP) (Recapture)/Provision for credit losses Pretax pre provision earnings (non-GAAP) Exclude net gain on sale of securities Exclude net changein valuation for financial instruments carried at fair value Exclu
Slide 25: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures $ Thousands Quarters Ended INNER 3/31/2022 12/31/2021 REVENUE FROM CORE OPERATIONS 9/30/2021 6/30/2021 3/31/2021 12/31/2020, Net interest income before provision for loan losses $ 116654 $ 121530 $ 180146 $ 127,584 $ 117,661 $ 121,497 Total non-interestincome 19,4
Slide 26: 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 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 26