Banner Corporation

AI-generated fair value estimate for this company.

Method: Residual income (excess-return) model on tangible book value: TBVPS ~$48.00, sustainable ROE ~11.5%, cost of equity ~10.0% (4.3% 10-yr Treasury + 1.05 beta x 5.5% equity risk premium), perpetual growth g=4.0%. Value = TBVPS x [1 + (ROE-COE)/(COE-g)] = 48 x [1 + (0.115-0.10)/(0.10-0.04)] = 48 x 1.25 = ~$60/share.

Reasoning: Banner is a bank holding company where equity value is driven by ROE earned on tangible book relative to cost of equity, not unlevered FCF; its ~11% ROE modestly exceeds an estimated ~10% cost of equity, and the Sept-2026 Pacific Financial acquisition is expected to be modestly accretive without materially changing the long-run ROE-COE spread.