Bank Directors Seminar, Coeur d'Alene, ID

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Scarcity for Mid-Sized Community Banks

Continued M&A in the region has resulted in a significant reduction in the number of mid-sized community banks ($500M - $1.5B in assets) in the region

Only 6 banks in the $1.5B - $10.0B asset range left in the region – this group has historically been some of the most active acquirors

Number of Banks in the Pacific Northwest – By Asset Size

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

6 4

Over 60% of banks in the

Pacific Northwest have total assets under $500 million

PNW

Below $500MM $500MM - $1.5B $1.5B - $10.0B Above $10.0B

Source: S&P Global Market Intelligence, regulatory data as of 6/30/2018

Market Disruption – Washington

Significant disruption in the Washington banking market with over a third of the top-30 banks going away since 2007

Washington - 2017 Rank

Washington - 2007 Rank

PNW HQ Institution (State)

Number of Branches

Deposits in Market

Market Share

PNW HQ Institution (State)

Number of Branches

Deposits in Market

Market Share

Total

1 2 3 4 5

- - - - -

Bank of America Corp. (NC) Wells Fargo & Co. (CA) JPMorgan Chase & Co. (NY)

168 152 202 180 154

33,023,671 $ 21.46% 18,397,887 $ 11.96% 17,393,198 $ 11.30% 16,096,115 $ 10.46%

Bank of America Corp. (NC)

236 187 185 153 158

23,628,875 $ 22.36% 13,001,669 $ 12.30%

2 1 Washington Mutual Inc. (WA)

3 4 5

- - -

U.S. Bancorp (MN)

8,224,688 $ 8,040,155 $ 7,412,044 $ 3,844,756 $ 2,862,795 $ 2,834,046 $ 2,600,418 $ 2,408,237 $ 1,955,114 $ 1,255,566 $ 1,052,405 $

7.78% 7.61% 7.01% 3.64% 2.71% 2.68% 2.46% 2.28% 1.85% 1.19% 1.00% 0.93% 0.90% 0.85% 0.83% 0.79% 0.77% 0.76% 0.75% 0.74% 0.73% 0.72% 0.69% 0.59% 0.58% 0.57% 0.53% 0.46%

KeyCorp (OH)

U.S. Bancorp (MN)

Wells Fargo & Co. (CA)

KeyCorp (OH)

10,946,087 $ 5,484,749 $ 5,421,205 $ 5,342,515 $ 5,017,150 $ 4,063,803 $ 3,796,623 $ 3,164,010 $ 2,654,963 $ 1,408,200 $ 1,400,239 $ 1,382,451 $ 1,304,216 $ 1,204,840 $ 1,142,899 $ 1,010,684 $

7.11% 3.56% 3.52% 3.47% 3.26% 2.64% 2.47% 2.06% 1.73% 0.92% 0.91% 0.90% 0.85% 0.78% 0.74% 0.66% 0.64% 0.63% 0.56% 0.54% 0.50% 0.49% 0.46% 0.42% 0.38% 0.34%

6 2 Sterling Financial Corp. (WA)

70 60 46 44 24 36 15 10 20 37 20

6 1 Banner Corp. (WA)

97 74 81 83 26 59 39 21 23 10 12 16 22 21 24 10 11 14 15 13 20 13 4 1 4

7 3 Banner Corp. (WA)

7 2 Columbia Banking System Inc. (WA) 8 3 Washington Federal Inc. (WA) 9 4 Umpqua Holdings Corp. (OR) 10 5 W.T.B. Financial Corp. (WA) 11 6 Heritage Financial Corp. (WA)

8 4 Frontier Financial Corp. (WA) 9 5 Washington Federal Inc. (WA) 10 6 W.T.B. Financial Corp. (WA) 11 7 Columbia Banking System Inc. (WA) 12 8 HomeStreet Inc. (WA) 13 9 Yakima FS&LA (WA) 14 10 Horizon Financial Corp. (WA) 15 11 AmericanWest Bancorp. (WA) 16 12 Cascade Financial Corp. (WA) 17 13 First Financial Northwest Inc. (WA) 18 14 Venture Financial Group Inc. (WA) 22 18 Cashmere Valley Financial Corp. (WA) 23 19 Heritage Financial Corp. (WA) 24 20 First Mutual Bancshares Inc. (WA) 25 21 Washington Banking Co. (WA) 26 22 Olympic Bancorp Inc. (WA) 27 23 Riverview Bancorp Inc. (WA) 28 24 Seattle Financial Group Inc. (WA) 19 15 City Bank (WA) 20 16 First Independent Invest. Group Inc. (WA 22 21 17 Peoples Bancorp (WA) 25 10 21 12 20 25 14 1 20 8

12 7 HomeStreet Inc. (WA)

13 -

Mitsubishi UFJ Financial Group Inc.

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

987,836 955,714 901,659 874,354 838,925 809,984 800,157 797,063 785,246 774,494 764,925 732,940 623,773 608,459 607,404 557,179 483,323

14 8 Peoples Bancorp (WA)

15 -

East West Bancorp Inc. (CA)

16 9 Yakima FS&LA (WA) 17 10 Cashmere Valley Bank (WA) 19 11 FS Bancorp Inc. (WA) 20 12 Olympic Bancorp Inc. (WA) 22 13 Timberland Bancorp Inc. (WA) 23 14 First Financial Northwest Inc. (WA) 24 15 First Northwest Bancorp (WA) 26 16 Riverview Bancorp Inc. (WA) 27 17 Pacific Financial Corp. (WA) 28 18 Coastal Financial Corp. (WA) 18 - Opus Bank (CA) 21 - Zions Bancorp. (UT) 25 - HSBC Holdings PLC

$ $ $ $ $ $ $ $ $ $

982,612 972,571 856,324 826,581 766,675 760,866 714,356 643,364 581,789 520,671

6 1 8

29 -

Zions Bancorp. (UT)

29 - 30 -

First Interstate BancSystem Inc. (MT) Glacier Bancorp Inc. (MT) Total For Institutions In Market

30 25 First FS&LA of Port Angeles (WA)

Total For Institutions In Market Total Disruption (11 Companies)

1,903 $105,673,251

1,711 $153,876,655

462

26,472,611 $ 25.05%

Source: S&P Global Market Intelligence Note: Deposit data as of 6/30 for the respective year

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