Earnings momentum for
) has been advancing since its strong second quarter results, which
included an earnings surprise of 114.8%. This commercial bank has
now surpassed the Zacks Consensus Estimate for seven straight
quarters with an average surprise of 130.2%.
The strong second quarter led to positive earnings estimate
revisions, helping BANR to achieve Zacks #1 Rank (Strong Buy)
status on August 7. The stock also reached its 52-week high on the
same day. In addition, a P/B multiple of just 0.9 makes this stock
an attractive pick for value investors.
Impressive Second Quarter Results
On July 25, Banner Corporation reported second quarter 2012
earnings per share of 58 cents, topping the Zacks Consensus
Estimate of 27 cents by 114.8%. After considering one-time items,
earnings stood at $1.27 per share, significantly up from a penny in
the year-ago quarter. The upsurge was mainly aided by growth in net
interest income, reduced other operating expenses and a lower
provision for loan losses.
Net interest income climbed 15.4% year over year to $38.3 million.
Net interest margin expanded 17 basis points (bps) to 4.26%.
Additionally, the company's other operating expenses declined 11.4%
to $35.7 million. However, the other operating loss recorded was
$9.1 million, compared with income of $9.3 million in the
Credit metrics continued to improve at Banner Corporation.
Provision for loan losses decreased on a year-over-year basis, with
net charge-offs declining. Net charge-offs were 0.16% of average
loans outstanding, down 25 bps from the year-ago quarter. Provision
for loan losses decreased 50.0% from the year-ago quarter to $4
Earnings Momentum on an Upswing
Over the last 30 days, the Zacks Consensus Estimate for 2012 jumped
73.2% to $2.46 per share on the back of upward revisions from four
of six estimates. This implies year-over-year growth of 949.4%. For
2013, four positive revisions out of six total estimates helped the
Zacks Consensus Estimate increase 21.7% to $1.29 over the same time
Along with a P/B multiple of 0.9, Banner Corporation has a forward
P/E ratio as low as 9.8. (A P/E ratio under 15.0 and a P/B ratio
below 3.0 generally indicate value.) Furthermore, the company's
share price has gained nearly 40% year-to-date.
Additionally, Banner Corporation currently enjoys a dividend yield
of 0.2%. Therefore, in addition to being a value stock, the company
also offers an income opportunity.
The chart below clearly shows that after a plunge in October 2011,
the stock is back on the recovery path.
Headquartered in Walla Walla, Washington, Banner Corporation, the
holding company for Banner Bank and Islanders Bank, provides
various banking products and services. The company was founded in
1890 and conducts operations for individuals, businesses and public
sector entities in the United States. Banner Bank operates through
86 branch offices and 7 loan production offices in Washington,
Oregon and Idaho, while Islanders Bank conducts business from 3
locations in San Juan County, Washington. With a market capital of
about $436.1 million, Banner Corporation competes with Flagstar
Bancorp Inc. (
) among others.
BANNER CORP (BANR): Free Stock Analysis Report
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