BANR
Banner Corporation
$67.58
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.1% below fair value
You pay
$67.58
Bear
$56.37
Fair
$80.53
Bull
$104.69
Bear
$56.37
-16.6%
ROTCE 9.3% → 1.09x TBV
Fair
$80.53
+19.2%
ROTCE 12.4% → 1.73x TBV
Bull
$104.69
+54.9%
ROTCE 14.3% → 2.12x TBV
Key Value Driver
ROTCE (12.4%) vs. cost of equity (8.9%)
Implied Market Multiple
1.46x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $64.25 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $80.53 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $37.15 (56% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $64.25 (from 13 analysts). Our estimate is 32% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly