THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Banner Corporation (BANR)

3/24/2006 Proxy Information

Mr. Foster is Vice Chairman of Banner Corporation (Banner) and Banner Bank (Bank) and serves as a consultant to the Bank. He retired as an officer of Banner as of the end of 2003 and was formerly the Chief Executive Officer and President of Inland Empire Bank, which he joined in 1962.

Mr. Sirmon joined Banner Bank in 1980 as an Executive Vice President and served as Chief Executive Officer from 1982 until February 2002.

Federal regulations require that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, except for loans made pursuant to programs generally available to all employees, and must not involve more than the normal risk of repayment or present other unfavorable features. The Bank is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made pursuant to programs generally available to all employees, and has adopted a policy to this effect. In addition, loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her related interests, are in excess of the greater of $25,000 or 5% of the institution's capital and surplus (up to a maximum of $500,000) must be approved in advance by a majority of the disinterested members of the Board of Directors.

3/22/2005 Proxy Information

Federal regulations require that all loans or extensions of credit to executive officers and directors of insured financial institutions must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons, except for loans made pursuant to programs generally available to all employees, and must not involve more than the normal risk of repayment or present other unfavorable features. The Bank is therefore prohibited from making any new loans or extensions of credit to executive officers and directors at different rates or terms than those offered to the general public, except for loans made pursuant to programs generally available to all employees, and has adopted a policy to this effect. In addition, loans made to a director or executive officer in an amount that, when aggregated with the amount of all other loans to such person and his or her related interests, are in excess of the greater of $25,000 or 5% of the institution's capital and surplus (up to a maximum of $500,000) must be approved in advance by a majority of the disinterested members of the Board of Directors.

Mr. Foster is Vice Chairman of Banner Corporation (Banner) and Banner Bank (Bank) and serves as a consultant to the Bank. He retired as an officer of Banner as of the end of 2003 and was formerly the Chief Executive Officer and President of Inland Empire Bank, which he joined in 1962.