Banner Corporation · NASDAQ:BANR
Banner — D.A. Davidson 17th Annual Financial Institutions Conference 2015
29 slides from Banner's conference presentation, May 11, 2015
Slide 1: Building Value at Banner
NNER CORPORATION Building Value at Banner of DA DAVIDSON | 17th Annual Financial Institutions Conference May 11 - 13, 2015 Denver
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: A Good Place to Be... Since 1890
¥< A Good Place to Be... Since 1890 Assets $5.2B Deposits 4.3B Loans 4.1B Offices 104 Employees 1,200
Slide 4: A Place to Grow
A Place to Grow Market | Branches| Loans [Deposits Share ColumbiaBasin| 26 |$ 0.88/$ 1.48] 14% E. Washington | 18 |$0.58|$0.65| 8% Puget Sound | 30 |$1.68|$1.35| 1% W. Oregon $1.08|$0.88| 2% Boise $0.28|$0.28) 2%) 44 new branches since 2005 Building Value at Banner
Slide 5: Growing with Siuslaw Financial Group
Growing with =m STUSLAW FINANCIAL GROUP ‘* Adds over $300 million in low cost deposits * Provides entry into attractive Willamette Valley 1-5 corridor with ten branches and meaningful market share in Lane County + Complements existing Portland operations and six branches recently acquired in Western
Slide 6: Transforming with AmericanWest Bank
i jth AmericanWest Transforming with Bank «Adds over $3.6 billion in low cost deposits * Raises deposit market share among regional banks to 3" in Washington and 4" in Oregon + Extends footprint into California and Utah ‘* Combines experienced integrators * Management teams have successfully execute
Slide 7: Building on Strengths
€- Building on Strengths Growing sustainable revenue: * Geographic advantage + Improved reputation + Expanding revenue channels * Gaining market share —— Building Value at Banner
Slide 8: Economically Ideal Geography
€- Economically Ideal Geography Powerful and diverse economic drivers Technology | Microsoft (inte) amazon gaicron @expedia Manufacturing ( BENE (intel) PACCAR consumer | amazon CosTco RR GE NORDSTROM Logisti Port me pt sini of Seattle. Tacoma Forest A Expeditors’ Pont oF portiano (products Weyerhae
Slide 9: Economically Ideal Geography
€- Economically Ideal Geography a | Strong population 2004 to 2014 growth forecast 2014 to 2030 f 2014 Estimate (Thousands) United States | 318,857 Washington | 7,062 Oregon | 3,970] Idaho | 1,634 Region | 12,666 Sources: ‘Wa office of Financial Management O% 5% 10% 15% 20% 25% —— Building Value at
Slide 10: Building on Improved Reputation
€- Building on Improved Reputation Included in Forbes 2014: “America’s 50 Most Trustworthy Financial Companies” Received highest rating: Bankrate.com SAFE & SOUND@ Star Ratings Named “Community Lender of the Year” for two most recent years: SBA Seattle/Spokane District - Small Business Awards Releas
Slide 11: Expanding Revenue Channels
€- Expanding Revenue Channels + Value proposition of “Super Community Bank” model: — Broad and appropriate product offerings to serve middle market, small business and consumer client base — Decision making as close to client as possible — Responsiveness through relationship banking — Alignment of d
Slide 12: Expanding Revenue Channels: Net Interest Income
Expanding Revenue Channels 2 Net Interest Income Grow core revenue £ Other Income 2° | Date Amount YOYA Quarter Ending 03/31/15| $ 60m | 16.1% 12/31/09) ¢ 45m 5.8% Twelve Months Ending 03/31/15| $ 232m | 11.2% 12/31/09| $ 177 | -0.6% ra —— Building Value at Banner ——————_ rm
Slide 13: Expanding Revenue Channels: Deposit Fees
€- Expanding Revenue Channels 2 Deposit Fees Other Fees Grow deposit fees 2 Mortgage Bnkg- 527 Date | Amount | YoYA Quarter Ending 03/31/15| $ 8.1m | 23.1% . 12/31/09| $ 5.3m | 1.6% 6 Twelve Months Ending 7 ‘il 03/31/15| $ 32.1m | 19.3% 12/31/09 | $ 21.4m | -0.7% 2 os e ca —— Building Value at Banne
Slide 14: Gaining Market Share
Gaining Market Share Thousands » i] a PES a8 25 ° » —— Building Value at Banner s\ Non-Int Bearing Interest Be: a Grow transaction deposi accounts Quarter Ending | Number YoyA Non-Interest Bearing Accounts 03/31/15| 154,696 | 8.1%* 12/31/09| 71,178 | 8.0% Interest Bearing Accounts 03/31/15| 81,282 |
Slide 15: Maintaining Earnings Momentum
rs Maintaining Earnings Momentum Enhancing Shareholder Value: + Protecting net interest margins + Improving operating efficiency + Maintaining moderate credit risk + Retaining risk-appropriate capital —— Building Value at Banner 14
Slide 16: Protecting Net Interest Margins
€- Protecting Net Interest Margins Asset Yields —nm Maintain solid Funding Costs net interest margin 7% Date | Amount | Percent Quarter Ending 03/31/15| $ 47m | 4.09% 12/31/09| $ 38m | 3.49% Twelve Months Ending 03/31/15| ¢ 184m | 4.08% 12/31/09| $ 145m | 3.33% —— Building Value at Banner i
Slide 17: Protecting Net Interest Margins
€- Protecting Net Interest Margins 7% Loan Yields Loan-Deposit Deposit Costs — Spread —— Building Value at Banner Reduce deposit costs Date Amount | Percent Quarter Ending 03/31/15 $ 1.7m | 0.18% 12/31/09 $17.7 | 1.83% Twelve Months Ending 03/31/15 $ 7.3m | 0.19% 12/31/09 $83.2m | 2.21% 16
Slide 18: Protecting Net Interest Margins
* Protecting Net Interest Margins e Noncore Deposits Core Deposits —— Building Value at Banner Improve funding mix with lower cost core deposits quar Balance | Percent Ending our 12/31/09 | $ 1,924m 17
Slide 19: Maintain loan-to-deposit ratio of 90-95%
Maintain loan-to- deposit ratio of —— Building Value at Banner 90-95% Quarter Ending | Percent 03/31/15 95% 12/31/09 | 98% Peak 108% 18
Slide 20: Protecting Net Interest Margins
nes Protecting Net Interest Margins 5.0% Net Interest Marg’ Peer 75° Percentile 4.5% Maintain solid net interest margin Quarter Peer Ending | B2?P€F | 75n pce 03/31/15 | 4.09% 12/31/14| 4.08% | 3.98% 12/31/09 | 3.53% | 3.99% 3.0% - —— Building Value at Banner source: ‘Bank Holding Company Performanc
Slide 21: Efficiency Ratio
Other Efficiency Ratio Personnel — 85% 75% 65% 55% —— Building Value at Banner Control core operating expense Date Amount | YOYA Quarter Ending 03/31/15 $ 40m | 13.9% 12/31/09 $ 31m | -10.0% Twelve Months Ending 03/31/15 $ 154m | 9.5% 12/31/09 $ 132m | -2.6% 20
Slide 22: Maintaining Moderate Credit Risk
nes Maintaining Moderate Credit Risk —— Building Value at Banner Reduce nonperforming loans and OREO Quarter Ending Balance Percent Nonperforming Loans 03/31/15) $ 25m 0.6% 12/31/09| $ 214m | 5.5% Peak | $ 243m | 6.2% Other Real Estate Owned 03/31/15| ¢ 5m | 0.1% 12/31/09| $ 78m | 2.0% Peak | $ 107m
Slide 23: Maintaining Moderate Credit Risk
nes Maintaining Moderate Credit Risk Improved Earning Asset Mix 03/31/2015 12/31/2009 Securities, 14% / Const/Dev Building Value at Banner - =
Slide 24: Maintaining Moderate Credit Risk
Maintaining Moderate Credit Risk 3.5% aaa 3 ALLL to Loans be appropriate Peer 75" Percentile loan loss reserves Quarter Peer Ending | B29" | 75x pce ALLL to Loans 03/31/15| 1.83% 12/31/14 | 1.98% | 1.53% 12/31/09| 2.51% | 2.66% source Bank Holding Company Performance Report HCPR — Poor Group 2 ($38-
Slide 25: Tier 1 Leverage Ratio and TCE/Tangible Assets
15% Tier 1Leverage Ratio Total TCE/Tangible Assets Capital Maintain solid capital position 1 —— Building Value at Banner Leverage | TCE/ TA 03/31/15 | 14.50% | 12.04% 12/31/09| 9.62% | 5.87% Low 8.80% | 5.82% 24
Slide 26: Retaining Risk-Appropriate Capital
Retaining Risk-Appropriate Capital 15% - 10% 5% 0% 3 ry ‘ s nid » —— Building Value at Banner Manage capital prudently Quarter Ending | Banner Peer 75% Potl TCE to Tangible Assets 03/31/15 | 12.04% 12/31/14 | 12.30% 10.29% 12/31/09 | 5.87% 8.28% source Bank Holding Company Performance Report HCPR —
Slide 27: Enhancing Shareholder Value
€- Enhancing Shareholder Value TBV/ Share Stock Price Pre Capital Raise (2010.02) 10 —— Building Value at Banner Attain premium to tangible book value Quarter Stock Ending | Price* Per Share TBV 03/31/15 | $ 45.81 | $ 29.75 06/30/10 | $ 15.07 | $ 29.03 Stock Price/ TBV 03/31/15 154% 06/30/10 52% * a
Slide 28: Enhancing Shareholder Value
€- Enhancing Shareholder Value 5.00 50 TBV/ Share TT™ EPs ‘Stock Price 4.00 40 3.00 30 bre capt as 2.00 20 1.00 10 0.00 °o 2 oS Sf Pe Building Value at Banner Attain solid multiple on earnings Quarter Ending Stock Price* Per Share 1™ Earnings 03/31/15 $ 45.81 $ 2.85 06/30/10 $ 15.07 $ -8.06 Stock Pr
Slide 29: Increasing Return to Shareholders
€- Increasing Return to Shareholders + Banner has a scalable franchise with a long history in robust, desirable markets. + Banner is one of the largest remaining banking franchises based in Washington. + Banner has the management depth, organizational model and operational skill to sustain earnings
Banner — D.A. Davidson 17th Annual Financial Institutions Conference 2015 on 6ix