Banner (BANR) AI Stock Analysis

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Banner

(NASDAQ:BANR)

68Neutral

Banner Corporation's stock score reflects a solid financial performance with robust revenue growth and operational efficiency, despite concerns over declining profit margins and ROE. The technical analysis indicates mixed market momentum, while the valuation is appealing with a reasonable P/E ratio and a decent dividend yield. The earnings call further underscores strong performance but also highlights some risks, such as increased delinquent loans.

Banner (BANR) vs. S&P 500 (SPY)

Market Cap

$1.96B

Dividend Yield3.38%

Average Volume (3M)257.86K

Price to Earnings (P/E)11.6

Beta (1Y)1.04

Revenue Growth11.04%

EPS Growth-8.38%

CountryUS

Employees1,956

SectorFinancial

Sector Strength86

IndustryBanks - Regional

Share Statistics

EPS (TTM)4.88

Shares Outstanding34,485,046

10 Day Avg. Volume256,149

30 Day Avg. Volume257,864

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.64

Price to Cash Flow (P/CF)5.50

P/FCF Ratio3.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$77.00

Price Target Upside36.26% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Banner Business Overview & Revenue Model

Company DescriptionBanner Corporation (BANR) is a bank holding company primarily engaged in providing commercial banking services to individuals, businesses, and public entities. Headquartered in Walla Walla, Washington, Banner operates through its subsidiary, Banner Bank, offering a comprehensive range of financial products and services including consumer and commercial loans, deposit services, and wealth management solutions. The company focuses on serving customers across the Western United States, with a strong presence in Washington, Oregon, Idaho, and California.

How the Company Makes MoneyBanner Corporation generates revenue primarily through interest income from its lending activities, which include commercial and consumer loans, as well as real estate loans. The company also earns income from service charges and fees associated with deposit accounts and other banking services. Additionally, Banner benefits from non-interest income sources such as wealth management services and mortgage banking activities. Key revenue streams include net interest income, which is the difference between the interest earned on loans and the interest paid on deposits, and non-interest income from fees and service charges. Strategic acquisitions and organic growth in its core markets also contribute to Banner's earnings, alongside maintaining strong relationships with local communities and fostering customer loyalty.

Banner Financial Statement Overview

Summary

Banner shows strong revenue growth and operational efficiency, but declining net profit margins indicate profitability concerns. The balance sheet is robust with low leverage, though declining ROE suggests inefficiencies. Cash flow analysis is limited due to missing data, necessitating careful monitoring of cash generation capabilities.

Income Statement

Positive

Banner shows a solid revenue growth of 23.46% from 2023 to 2024, with a strong gross profit margin consistently at 100% due to the nature of the banking industry. The EBIT margin improved significantly to 99.33% in 2024, indicating operational efficiency. However, the net profit margin decreased from 29.60% in 2023 to 22.05% in 2024, showing declining profitability.

Balance Sheet

Positive

Banner has a low debt-to-equity ratio of 0.083, reflecting strong leverage management. The equity ratio is healthy at 10.95%, indicating a sound capital structure. However, the return on equity decreased from 11.11% in 2023 to 9.52% in 2024, which may point to inefficiencies in generating profits from equity.

Cash Flow

Neutral

Banner's free cash flow growth is unavailable for 2024 due to missing data. In 2023, the operating cash flow to net income ratio was positive at 1.40, indicating effective cash generation relative to earnings. However, the absence of free cash flow data for 2024 raises concerns about cash flow stability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
602.94M	620.41M	623.75M	607.16M	598.67M
	Gross Profit
601.02M	620.41M	623.75M	607.16M	598.67M
	EBIT
259.52M	227.09M	240.78M	246.59M	142.45M
	EBITDA
0.00	248.72M	262.99M	270.51M	168.31M
	Net Income Common Stockholders
168.90M	183.62M	195.38M	201.05M	115.93M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
501.86M	254.46M	3.03B	5.77B	3.56B
	Total Assets
16.20B	15.67B	15.83B	16.80B	15.03B
	Total Debt
147.75M	713.80M	279.01M	328.13M	424.52M
	Net Debt
-354.10M	459.34M	35.95M	-1.81B	-809.66M
	Total Liabilities
14.43B	14.02B	279.01M	328.13M	424.52M
	Stockholders Equity
1.77B	1.65B	1.46B	1.69B	1.67B
Cash Flow		Free Cash Flow
279.44M	242.55M	223.33M	291.08M	112.58M
	Operating Cash Flow
293.19M	257.20M	238.05M	301.58M	125.39M
	Investing Cash Flow
-51.16M	191.93M	-1.44B	-1.02B	-1.45B
	Financing Cash Flow
325.38M	-437.73M	-684.73M	1.61B	2.26B

Banner Technical Analysis

Technical Analysis Sentiment

Negative

Last Price56.51

Price Trends

50DMA

65.26

Negative

100DMA

67.63

Negative

200DMA

62.95

Negative

Market Momentum

MACD

-0.75

Negative

RSI

42.04

Neutral

STOCH

21.96

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BANR, the sentiment is Negative. The current price of 56.51 is below the 20-day moving average (MA) of 62.05, below the 50-day MA of 65.26, and below the 200-day MA of 62.95, indicating a bearish trend. The MACD of -0.75 indicates Negative momentum. The RSI at 42.04 is Neutral, neither overbought nor oversold. The STOCH value of 21.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BANR.

Banner Risk Analysis

Banner disclosed 32 risk factors in its most recent earnings report. Banner reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Banner Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PFS	72 Outperform	$2.07B	15.10	5.38%	6.47%	63.85%	-39.11%
RNST	69 Neutral	$2.64B	8.49	7.86%	3.17%	16.70%	27.09%
WAFD	68 Neutral	$2.00B	11.31	6.90%	4.29%	29.57%	-36.51%
BANR	68 Neutral	$1.96B	11.64	9.86%	3.38%	11.04%	-8.38%
SBCF	67 Neutral	$2.02B	16.60	5.64%	3.05%	5.40%	16.13%
FBK	66 Neutral	$1.90B	16.48	7.68%	1.72%	1.71%	-3.44%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%

* Financial Sector Average

Performance Comparison

BANR

Banner

56.51

14.06

33.12%

PFS

Provident Financial Services

14.69

1.36

10.20%

RNST

Renasant

27.68

-0.36

-1.28%

SBCF

Seacoast Banking Of Florida

22.04

0.15

0.69%

WAFD

Washington Federal

24.54

-1.44

-5.54%

FBK

FB Financial

40.56

6.61

19.47%

Banner Earnings Call Summary

Earnings Call Date: Jan 22, 2025 | % Change Since: -18.90% | Next Earnings Date: Apr 16, 2025

Earnings Call Sentiment Positive

The earnings call reflected a generally positive sentiment with strong core performance, stable revenue growth, and recognition from industry bodies. However, challenges such as increased delinquent loans and impacts from the California wildfires were notable concerns.

Highlights

Solid Revenue Growth

Banner Corporation reported fourth quarter revenue from core operations of $160 million, up from $154 million in the third quarter of 2024.

Strong Core Deposit Base

Core deposits represent 89% of total deposits, indicating a stable funding source.

Positive Net Income Trends

Net profit available to common shareholders was $46.4 million or $1.34 per diluted share for Q4 2024, up from $1.30 per share in Q3 2024.

Recognition and Awards

Banner was named one of America's 100 Best Banks and Best Banks in the World by Forbes, and received several other accolades.

Lowlights

Increase in Delinquent and Adversely Classified Loans

Delinquent loans rose to 0.49%, up 9 basis points from the previous quarter, and adversely classified loans increased to 1.69% of total loans.

Impacts of California Wildfires

The wildfires in California resulted in limited exposure of $1 million in HELOC commitments, but personal losses for clients were significant.

Loan Originations Decline

Loan originations declined moderately due to muted construction and development loan closings, along with reduced consumer demand.

Company Guidance

During the Banner Corporation's fourth quarter 2024 earnings call, the company provided guidance that highlighted several key financial metrics and strategic initiatives. Banner Corporation reported a net profit of $46.4 million, or $1.34 per diluted share, for the quarter, marking an increase from $1.24 per share in the same quarter of 2023 and $1.30 per share in the third quarter of 2024. For the full year, net income was $168.9 million. The company's core earnings for 2024 were $223.2 million, with fourth-quarter revenue from core operations at $160 million, compared to $154 million in the previous quarter, and $615 million for the year. Banner's core deposit base remained strong, representing 89% of total deposits, contributing to a net interest margin of 3.82% and a return on average assets of 1.15% for the fourth quarter. Additionally, the company announced a core dividend of $0.48 per share and emphasized its commitment to environmental, social, and governance (ESG) principles, as well as marketplace recognition as one of America's 100 Best Banks by Forbes and other accolades. Looking forward, Banner Corporation is targeting mid-single-digit loan growth for 2025, despite uncertainties related to interest rates, immigration reform, and tariffs.

Banner Corporate Events

DividendsFinancial Disclosures

Banner Reports Q4 2024 Growth and Dividend Announcement

Positive

Jan 22, 2025

On January 22, 2025, Banner Corporation reported a net income of $46.4 million for the fourth quarter of 2024, showing an increase from the previous quarter and the same quarter a year prior. The company announced a quarterly cash dividend of $0.48 per share, payable on February 14, 2025. Banner’s financial performance benefited from loan growth and lower funding costs, although this was partially offset by a declining interest rate environment. The company maintained strong credit metrics and a robust capital base, with core deposits representing a significant portion of total deposits, highlighting a resilient position in a competitive market.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.