Company Description
Banner Corporation is the holding company for Banner Bank, a regional bank focused on the Pacific Northwest and Western U.S. It specializes in commercial real estate (CRE), C&I lending, and residential mortgages for small to mid-sized businesses.
Current Stock Price
~$64.18
Market Capitalization
~$2.21 billion
Valuation
Trading at 11.4x trailing earnings ($5.64 EPS for FY2025). The valuation has re-rated higher following a clear margin recovery that exceeded peer averages.
In Q4 2025, Banner reported a significant EPS beat of $1.55 (vs. $1.45 expected). The narrative of “flat” income is outdated; Net Interest Income grew 8.5% year-over-year to $152.4 million. Most notably, Net Interest Margin (NIM) expanded to 4.03% (up from 3.98% in Q3), successfully breaking the “plateau” as the bank effectively lowered its funding costs.
Credit remains a pillar of strength. Non-performing assets (NPAs) are exceptionally low at 0.31% of total assets. While the provision for credit losses was $2.4 million, this was actually a decrease from both the prior quarter and the prior year, signaling high confidence in the existing loan book.
Reasons to Pass on BANR
- Revenue Mix: Total revenue ($167.7M) narrowly missed estimates due to sluggish non-interest income; the bank remains 86%+ dependent on interest income.
- Regional Concentration: Performance is tied strictly to the Pacific Northwest economic cycle.
- Growth Pace: While profitable, 5-year compound revenue growth remains modest at ~2.6%.
