BANR
Banner Corporation
$70.36
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 16.8% below fair value
You pay
$70.36
Bear
$59.22
Fair
$84.60
Bull
$109.98
Bear
$59.22
-15.8%
ROTCE 9.3% → 1.11x TBV
Fair
$84.60
+20.2%
ROTCE 12.4% → 1.75x TBV
Bull
$109.98
+56.3%
ROTCE 14.3% → 2.14x TBV
Adjust Assumptions
12.4%
8.8%
Key Value Driver
ROTCE (12.4%) vs. cost of equity (8.8%)
Implied Market Multiple
1.52x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$76.00
Divergence from AlphaVal
11%
Summary
With ROTCE of 12.4% vs. 8.8% cost of equity, fair P/TBV is 1.75x on $46.25 tangible book, implying $84.60 per share. DDM cross-check: $38.66.
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: $38.66 (54% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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