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1. Company Snapshot

1.a. Company Description

Banner Corporation operates as the bank holding company for Banner Bank that provide commercial banking and financial products and services to individuals, businesses, and public sector entities in the United States.It accepts various deposit instruments, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, regular savings accounts, and certificates of deposit, as well as treasury management services and retirement savings plans.The company also provides commercial real estate loans, including owner-occupied, investment properties, and multifamily residential real estate loans; construction, land, and land development loans; residential mortgage loans; commercial business loans; agricultural loans; and consumer and other loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts.


In addition, it engages in the mortgage banking operations through the origination and sale of one-to four-family and multi-family residential loans, as well as small business administration loans.Further, the company provides electronic and digital banking services.As of December 31, 2021, it operated 150 branch offices and 18 loan production offices located in Washington, Oregon, California, Idaho, and Utah.


Banner Corporation was founded in 1890 and is headquartered in Walla Walla, Washington.

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1.b. Last Insights on BANR

Banner Corporation's recent performance was negatively impacted by a decline in its stock price following a strong Q4 earnings beat. Despite reporting quarterly earnings of $1.33 per share, beating the Zacks Consensus Estimate of $1.22 per share, the company's revenue growth was slower than expected. Additionally, the company's credit costs and loan loss provisions rose, indicating potential challenges in its lending business. However, the company's management expressed optimism about its future prospects, citing a strong balance sheet and a growing pipeline of new business opportunities.

1.c. Company Highlights

2. Banner Corporation Delivers Strong Earnings with Robust Loan Growth and Margin Stability

Banner Corporation reported a net profit of $45.5 million, or $1.31 per diluted share, for the second quarter of 2025, surpassing analysts' estimates of $1.32. This represents a 14.3% increase from the $1.15 per share reported in the second quarter of 2024 and a slight rise from $1.30 in the first quarter of 2025. The company's core revenues grew to $163 million, up from $150 million year-over-year, driven by solid loan growth and stable margins. Pretax pre-provision earnings, excluding securities gains and losses, rose to $62 million from $52 million in the prior year, reflecting strong operational performance.

Publication Date: Jul -21

📋 Highlights
  • Net Profit Growth: Banner Corporation reported a net profit of $45.5 million, up 14% from $1.15 per share in Q2 2024 to $1.31 per share in Q2 2025.
  • Loan Growth Acceleration: Loans grew 5% year-over-year and 9% annualized in Q2, driven by strong performance in commercial real estate, C&I, and construction loans.
  • Stable Net Interest Margin: The net interest margin remained unchanged at 3.92%, supported by a 5 basis point increase in loan yields.
  • Expense Growth Ahead: IT expenses are expected to rise in the second half of 2025 due to ongoing investments in deposit and loan origination systems.
  • Funding Cost Reduction: The company redeemed $100 million of sub-debt with a 5% cost, anticipating a reduction in funding costs.

Loan Growth and Credit Quality

Banner's loans saw a 5% year-over-year increase, with a notable 9% annualized growth in the quarter, primarily in commercial real estate, C&I, and construction loans. The loan-to-deposit ratio stood at 87%, reflecting healthy balance sheet dynamics. Deposits dipped 4% sequentially due to seasonal factors, but core deposits remained robust at 89% of total deposits. Jill Rice, Chief Credit Officer, highlighted an 80% quarter-over-quarter surge in loan originations, underscoring strong demand across key sectors.

Margins and Noninterest Income

The net interest margin held steady at 3.92%, supported by a 5 basis point increase in earning asset yields, driven by higher loan yields. Noninterest income, however, declined by $1.4 million due to a loss on asset disposal related to back-office consolidation, slightly offsetting margin stability.

Management Insights and Outlook

Rob Butterfield, CFO, emphasized Banner's strong capital and liquidity, positioning it well for continued growth. The redemption of $100 million in sub-debt is expected to reduce funding costs, enhancing profitability. Management anticipates deposit growth to outpace loans in the third quarter, aligning with historical trends. While IT expenses will rise due to system upgrades, the focus remains on organic growth, with M&A not deemed necessary.

Valuation and Dividend

Trading at a P/E of 12.54 and P/B of 1.22, Banner's valuation reflects its stable performance. The 2.91% dividend yield and 12.5% free cash flow yield highlight its attractiveness. With a tangible book value of 1.64, the stock is reasonably priced relative to its peers.

3. NewsRoom

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Edgestream Partners L.P. Has $3.85 Million Stock Position in Banner Corporation $BANR

Dec -04

Source: defenseworld.net

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Fisher Asset Management LLC Has $24.54 Million Stock Position in Banner Corporation $BANR

Dec -03

Source: defenseworld.net

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Gouverneur Bancorp Inc./MD (OTCMKTS:GOVB) & Banner (NASDAQ:BANR) Head to Head Survey

Dec -03

Source: defenseworld.net

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EZCorp: Still A Bargain After Another Banner Year

Dec -02

Source: seekingalpha.com

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Connor Clark & Lunn Investment Management Ltd. Takes $1.45 Million Position in Banner Corporation $BANR

Nov -17

Source: defenseworld.net

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Banner Corporation (NASDAQ:BANR) Given Consensus Recommendation of “Moderate Buy” by Analysts

Nov -15

Source: defenseworld.net

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Nisa Investment Advisors LLC Has $106,000 Stake in Banner Corporation $BANR

Nov -05

Source: defenseworld.net

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Mutual of America Capital Management LLC Reduces Stake in Banner Corporation $BANR

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.50%)

6. Segments

Banking and Related Activities

Expected Growth: 7.5%

Banner Corporation's 7.5% growth in Banking and Related Activities is driven by increasing loan demand, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cost savings initiatives, and a favorable interest rate environment have contributed to its growth momentum.

7. Detailed Products

Deposit Accounts

Checking and savings accounts for individuals and businesses, offering convenient banking services and competitive interest rates.

Loans and Credit

Personal and commercial loans, lines of credit, and credit cards for various purposes, including mortgages, home equity, and construction loans.

Investment and Insurance Services

Wealth management, investment, and insurance products, including brokerage services, retirement accounts, and life insurance.

Treasury Management

Cash management and treasury services for businesses, including account management, payment processing, and fraud prevention.

Online and Mobile Banking

Digital banking platforms for individuals and businesses to manage their accounts, transfer funds, and pay bills online or through mobile devices.

8. Banner Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Banner Corporation is medium due to the presence of alternative banking services and financial institutions that offer similar products and services.

Bargaining Power Of Customers

The bargaining power of customers for Banner Corporation is low due to the lack of concentration of buyers and the presence of multiple banking options.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Banner Corporation is medium due to the presence of multiple suppliers of technology and services, but the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Banner Corporation is low due to the high barriers to entry in the banking industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Banner Corporation is high due to the presence of multiple competitors in the banking industry, including large national banks and regional banks.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.14%
Debt Cost 3.95%
Equity Weight 70.86%
Equity Cost 9.08%
WACC 7.58%
Leverage 41.13%

11. Quality Control: Banner Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CF Bankshares

A-Score: 6.5/10

Value: 8.4

Growth: 6.9

Quality: 6.3

Yield: 2.0

Momentum: 6.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Banner

A-Score: 6.4/10

Value: 6.6

Growth: 5.1

Quality: 7.8

Yield: 6.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

View Full Report
Stock-Card
FS Bancorp

A-Score: 6.2/10

Value: 7.3

Growth: 7.6

Quality: 5.8

Yield: 6.0

Momentum: 3.5

Volatility: 7.3

1-Year Total Return ->

View Full Report
Stock-Card
First Busey

A-Score: 6.0/10

Value: 5.2

Growth: 5.2

Quality: 5.6

Yield: 8.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
HomeTrust Bancshares

A-Score: 5.9/10

Value: 6.8

Growth: 8.0

Quality: 7.3

Yield: 2.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Park National

A-Score: 5.8/10

Value: 4.9

Growth: 5.6

Quality: 6.2

Yield: 6.0

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.54$

Current Price

64.54$

Potential

-0.00%

Expected Cash-Flows