Banner Corporation Receives
a $124 Million Commitment from the U.S. Treasury’s Capital
Purchase
Program
Walla
Walla, WA – November 4, 2008 – Banner Corporation (NASDAQ GSM: BANR), the parent
company of Banner Bank and Islanders Bank, today announced that it has received
preliminary approval to participate in the U.S. Treasury Department’s Capital
Purchase Program. As a participant, Banner plans to issue $124
million in senior preferred stock, with related warrants to purchase up to $18.6
million in common stock, to the U.S. Treasury. The anticipated sale
of the preferred stock and warrants is expected to close in approximately 30
days and is contingent upon completion of standard closing documents and
subsequent registration with the Securities and Exchange
Commission.
“We
appreciate and support the efforts of the U.S. Treasury Department to stabilize
financial markets and increase the flow of credit to deserving borrowers,” said
D. Michael Jones, President and CEO. “We are pleased that we have
been selected to participate in this voluntary program, which will allow us to
be a party to those actions and is an important recognition of the strength and
financial health of Banner. The additional capital will enhance our
capacity to support the communities we serve through expanded lending activities
and economic development. This capital will also add flexibility in
considering strategic opportunities that likely will be available to us as the
financial services industry continues to consolidate. We believe that
participation in this program should be beneficial for the employees, customers
and shareholders of Banner Corporation.”
At
September 30, 2008, Banner Corporation, Banner Bank and Islanders Bank were each
“well-capitalized” under all regulatory guidelines. At that date,
Banner Corporation’s Tier 1 Leverage Capital Ratio was 8.86% and its Total Risk
Based Capital Ratio was 11.00%. The addition of new capital through
the Treasury program will increase Banner Corporation’s Tier 1 Leverage Capital
Ratio to approximately 11.25% and Total Risk Based Capital Ratio to
approximately 13.90%.
The
preferred stock will pay a 5% dividend for the first five years, after which the
rate will increase to 9% if the preferred shares are not redeemed by the
Company. The terms and conditions of the transaction and the
preferred stock will conform to those provided by the U.S.
Treasury. A summary of the Capital Purchase Program can be found on
the Treasury’s web site at
www.ustreas.gov/initiatives/eesa
.
About
Banner Corporation
Banner
Corporation is a $4.7 billion bank holding company operating two commercial
banks in Washington, Oregon and Idaho. Banner serves the Pacific
Northwest region with a full range of deposit services and business, commercial
real estate, construction, residential, agricultural and consumer
loans. Visit Banner Bank on the Web at
www.bannerbank.com
.
This press release contains
statements that the Company believes are “forward-looking statements.” These
statements relate to the Company’s financial condition, results of operations,
plans, objectives, future performance or business. You should not place undue
reliance on these statements, as they are subject to risks and uncertainties.
When considering these forward-looking statements, you should keep in mind these
risks and uncertainties, as well as any cautionary statements the Company may
make. Moreover, you should treat these statements as speaking only as of the
date they are made and based only on information then actually known to the
Company. There are a number of important factors that could cause future results
to differ materially from historical performance and these forward-looking
statements
.
Factors
which could cause actual results to differ materially include, but are not
limited
,
(1) adverse developments in the
capital markets in general or in the markets for financial institutions stock in
particular; (2) changes in legislation or regulatory requirements affecting
financial institutions, including the current debate in Congress as to
restructuring the financial services industry; (3) changes in the interest rate
environment; and (4) adverse changes in general economic conditions and other
risks detailed in Banner’s reports filed with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 and Form 10-Q for quarter ended June 30,
2008. Accordingly, these factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed on such
statements.