Banner Corporation · NASDAQ:BANR

Banner — Q4 2022 Earnings Presentation

28 slides from Banner's earnings presentation, Jan 19, 2023

  1. Slide 1: Fourth Quarter 2022

    Exhibit 99.2 NNER CORPORATION Fourth Quarter 2022

  2. Slide 2: Disclosure Statement

    Disclosure Statement This 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 measures a

  3. Slide 3: Fourth quarter 2022 highlights

    Fourth quarter 2022 highlights * Loan growth of 3.3% (12.9% annualized) * Total loan originations (excluding HFS) were $937 million * Core deposits declined by $616 million (4.6%), representing 95% of total deposits; Loan-to-deposit ratio increased from 69% to 74% « Net interest margin (tax equivale

  4. Slide 4: Banner Forward progress update

    Banner Forward progress update Operating Leverage Trend: Q4'20 Qi ‘21 Q2 ‘21 Q3'21 Q4'21 Qt '22 Q2'22. Q3'22. 422 mm™mCore Expense mamCore Revenue FTE Banner Forward Program initiative aS 91. Implementation Status? INNER 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1,500 1 Core Expense reflects non-cor

  5. 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 '| M&A Activity 2019Q4 2018Q4 2015Q4 2015Q1 2014Q2 AltaPacific Skagit + AmericanWest. Siuslaw

  6. Slide 6: Environmental, Social & Governance

    Environmental, Social & Governance Program highlights and overview We published our inaugural ESG Highlights Report during Q4 2022, which can be found on our website: www.bannerbank.com/esg Environmental Social Governance 4\, Provided and participated in Received an Outstanding Ratin The Board has a

  7. Slide 7: Building value at Banner

    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

  8. Slide 8: Growing revenue ... in a good place since 1890

    Growing revenue ... ina good place since 1890 pS Population Estimate (mitions) 2020 2030 Growth Washington 77 8.6 11%* Oregon 43 46 8%* Idaho 18 21 16%* California 39.6 40.7 3% Region pS, 3512) __2% * Among the fastest United States 329.5 346.1 5% growing in the country Strong Population Growth Fore

  9. 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 é Technology < ‘ Microsoft: (inte) amazon (4icron GExpedia i: @ zoomerang, from Silicon Valley to Manufacturing intel) CCA Qecuwe ce PA R the Central Vall

  10. 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

  11. 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™ A Top 50 U.S. Public Bank (with

  12. Slide 12: Growing revenue

    Growing revenue Core revenue * Quarter LT™ Quarter Ending Amount Amount 12/31/22 $ 176m $ 623M 12/31/09 $ 45M $ 177 200 5 Other Income Net Interest Income Millions 175 150 125 100 7S 50 25 1 Excludes net gain/loss on sale of securities, change in valuation of financial instruments carried at fair va

  13. 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

  14. Slide 14: Protecting net interest margin

    Protecting net interest margin Low Cost Funding Mix FHLB, Sub Debt & Other _ Certificates of Deposit Interest Bearing and Savings 12/31/2022 Non-Interest Bearing Avg Cost $ Millions Bal_ (in bps) Non-Interest 6,402 0 Interest Bearing 6,837 16 CDs 710 48 Subtotal Deposits 13,949 10 FHLB & Other 44725

  15. Slide 15: Diversified loan portfolio

    Diversified loan portfolio Loan Composition INNER Loan Originations (commitments, $MM) 12/31/2022 $1,400 Consumer s % 7% CRE Breakout SMM %* §1200 OO CRE 845 8% investment Properties 1590 1 SmallBalanceCRE 1.200 12% $1,000 TotalCommCRE 3,635 36% Agricultural $800 3% $600 $400 $200 $0 Multifamily 6%

  16. Slide 16: Protecting net interest margin: core deposits

    Protecting net interest margin Grow core deposits Reduce deposit costs Quarter Ending Balance % of Total 12/31/22 $12,897M 95% 12/31/09 $ 1,924m 50% 16 5 Noncore Deposits Core Deposits 14 12 J — Core Deposit % Quarter Quarter LTM Ending Amount Rate Amount Rate 12/31/22 $ 3.6M 0.10% $ 10.1M 0.07% 12/

  17. Slide 17: Protecting net interest margin: funding dependence and loan-to-deposit

    Protecting net interest margin 50% 40% 30% 20% 10% -10% Net Noncore Funding Dependence — Banner Peer Median Peer Top Quartile Peer source: Group 1 (S10B and over), Bank Holding Company Performance Report (BHCPR), National Information Center, Federal Reserve System, Division of Banking Supervision an

  18. Slide 18: Protecting net interest margin: top quartile NIM

    INNER Protecting net interest margin pees Maintain top quartile net interest margin 6% 4 ; LTM 9 Earning Asset Yield Quarter Marsh Funding Cost = . Ending Amount Rate Amount Rate Net Interest Margin "12/31/22 $159m 416% $553mM 3.61% 5% 12/31/09 $ 39m 3.53% $146mM 3.36% 9 5.0% 4% Net Interest Margin

  19. Slide 19: Well positioned for rising rates and conservative investment portfolio

    Well positioned for rising rates and i i i Eocene conservative investment portfolio 12 Month Net Interest Income Shock (SMM), % Change Investment Portfolio Composition ($3.94 billion) 808 675 681 678 600 635 661 5% Agency, $55, other, $3. 600 0% Corp, $151 sm ad S es a8 <q 80% of investments are Age

  20. Slide 20: 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 19

  21. Slide 21: Spending carefully

    INNER Spending carefully pss Control core operating expense » 100 > 100% c Other Quarter Quarter LIM 2 Info Services Ending Amount Amount = Occupancy 90% 12/31/22 $ 96m $ 361M 30 Compensation 12/31/09 $ 31m $132m g0% 100% 60 70% Efficiency Ratio 90% — Banner 60% “™" Efficiency Ratio i , 4 80% ° 50%

  22. Slide 22: Building value at Banner: 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

  23. Slide 23: Allowance for credit losses roll-forward

    ACL - Loans 135.9 4.5 1.0 (0.5) 6.0 141.5 ACL - Unfunded Commitments 14.0 0.3 0.4 0.0 0.7 14.7 ACL - HTM Securities 0.4 (0.0) (0.0) 0.0 (0.0) 0.4 Total ACL 150.4 4.8 1.4 (0.5) 6.7 156.6 $150.4 $156.6

  24. Slide 24: Maintaining a moderate risk profile

    Maintaining a moderate risk profile Minimize nonperforming assets Quarter NPAs REO Ending Amount %of TA Amount %of TA a c {eo} = 12/31/22 $ 23m 0.15% $ Om 0.00% 12/31/09 $292m 611% $ 78M 1.63% 4.0% ACLL to Total Loans 3.5% — Banner 3.0% Peer Top Quartile 2.5% 2.0% 15% Peer Median 1.0% 0.5% . - FPP S

  25. Slide 25: Pre-tax pre-provision earnings reconciliation

    PRE-TAX PRE-PROVISION EARNINGS Dec 31, 2022 Sep 30, 2022 Dec 31, 2021 Dec 31, 2022 Dec 31, 2021 Income before provision for income taxes (GAAP) 66,424$ 60,907$ 59,442$ 240,775$ 246,594$ (Recapture)/Provision for credit losses 6,704 6,087 (5,243) 10,364 (33,388) Pretax pre provision earnings (non-GAA

  26. Slide 26: Revenue from core operations reconciliation

    12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 12/31/2020 REVENUE FROM CORE OPERATIONS Net interest income before provision for loan losses 159,071$ 146,443$ 129,011$ 118,654$ 121,530$ 130,146$ 127,554$ 117,661$ 121,437$ Total non-interest income 13,070 15,585 27,1

  27. 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

  28. 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

Banner — Q4 2022 Earnings Presentation on 6ix