A Message From the CEO

Dear Bank of the Pacific Customers,

The Boards of Directors of Pacific Financial Corporation and Banner Corporation have approved an agreement to merge Pacific Financial into Banner, pending shareholder and regulatory approval. The merger will also result in the merger of Bank of the Pacific into Banner Bank.

Throughout our 55-year history, we have taken great pride in what we have achieved and the outstanding service we provide to our customers and our contributions to our community.

We believe the merger with Banner will expand the resources and capabilities we can offer customers, employees and the communities we serve.

We chose Banner because, like us, they are financially strong and community minded. They are known for outstanding service, strong financial performance and a focus on community involvement. Throughout their more than 135 years in business, they have demonstrated the ability to grow and serve customers well through all economic cycles, and their culture and values are closely aligned with ours.

Like us, Banner is a Washington-based bank, with extensive expertise serving Western Washington and Oregon—choosing a partner that values this area was very important to me and to the Board of Directors.

By joining a broader bank, you will benefit from access to even more resources, expanded product and service offerings, more technology tools, higher lending limits for commercial customers, robust mortgage lending and more locations to choose from as you travel throughout the West.

When our companies combine, I plan to join the Banner executive team and you can count on many of the same friendly faces serving your financial needs—with the added benefit of more products and services, tools and locations to choose from.

In the coming weeks and months, you will receive more information regarding how the proposed transaction will impact our customers, including details on specific products and services.

We have every confidence that your banking relationship will continue to be outstanding in the combined company.

On behalf of the Board and management team, thank you for your business.

Sincerely,

Denise Portmann

President & Chief Executive Office