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Here's Why Banner (BANR) Stock is Worth Betting on Right Now
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Banner Corporation (BANR - Free Report) is well-positioned for growth driven by decent loan growth, high interest rates and strategic initiatives to boost operational efficiency. Moreover, higher liquidity and product expansion efforts will support financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved 2.4% north. The consensus estimate for 2025 has moved marginally upward. BANR currently carries a Zacks Rank #2 (Buy).
Over the past three months, shares of Banner have gained 4.9% against the industry’s decline of 4.2%.
Image Source: Zacks Investment Research
Let’s dig deeper into the factors that make BANR stock worth buying now.
Earnings Growth: Banner witnessed earnings growth of 11.4% over the past three to five years, significantly outperforming the industry earnings growth of 4.60%. This was largely driven by the company’s organic growth strategy, solid customer relationships, product expansion and strategic initiatives to enhance operational efficiency.
Also, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and lagged in one.
The Zacks Consensus Estimate for earnings indicates an 11.4% decline on a year-over-year basis in 2024. Nonetheless, earnings are projected to rebound and grow at the rate of 5.2% in 2025.
Revenue Strength: Driven by decent growth in loan balance and product expansion, Banner’s total revenues witnessed a compound annual growth rate (CAGR) of 5% over the last five years (2018-2023). Though the trend reversed in the first quarter of 2024 due to higher deposit costs, organic growth measures and a high interest rate scenario are likely to support top-line expansion. However, rising funding costs will weigh on it to some extent.
The Zacks Consensus Estimate for revenues indicates a 2.8% decline on a year-over-year basis in 2024. Nonetheless, the same is projected to rebound and grow 4.9% next year.
Strong Balance Sheet: As of Mar 31, 2024, BANR’s total cash and cash equivalents (consisting of cash and due from banks and interest-bearing deposits) were $209.3 million. Other borrowings were $183.3 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
Impressive Dividends: Banner’s dividend payouts are encouraging. The company has been paying dividends regularly, with the most recent one announced in April 2024. Moreover, the company has hiked its dividend thrice during the last five years. The five-year annualized dividend growth is 4.2%, with a 36% dividend payout ratio.
Given its decent earnings strength and strong liquidity position, the company is expected to continue dividend distribution, thus enhancing shareholder value.
Superior Return on Equity (ROE): BANR’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 11.47% compares favorably with 7.31% of the industry.
Stock Seems Undervalued: BANR’s price-to-cash flow and price-to-earnings (F1) ratios of 7.11 and 9.84 are well below the industry average of 8.04 and 10.99, respectively. Thus, the stock seems to be available at a better valuation than its peers. Also, the stock has a Value Score of B. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
The Zacks Consensus Estimate for FFBC’s current-year earnings has moved 5.2% north over the past 60 days. Shares of the company have lost 11.3% in the past six months.
The Zacks Consensus Estimate for UMBF’s 2024 earnings has moved 14.4% upward in the past two months. Over the past six months, shares of the company have lost 1.4%.
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Here's Why Banner (BANR) Stock is Worth Betting on Right Now
Banner Corporation (BANR - Free Report) is well-positioned for growth driven by decent loan growth, high interest rates and strategic initiatives to boost operational efficiency. Moreover, higher liquidity and product expansion efforts will support financials.
Over the past 60 days, the Zacks Consensus Estimate for 2024 has moved 2.4% north. The consensus estimate for 2025 has moved marginally upward. BANR currently carries a Zacks Rank #2 (Buy).
Over the past three months, shares of Banner have gained 4.9% against the industry’s decline of 4.2%.
Image Source: Zacks Investment Research
Let’s dig deeper into the factors that make BANR stock worth buying now.
Earnings Growth: Banner witnessed earnings growth of 11.4% over the past three to five years, significantly outperforming the industry earnings growth of 4.60%. This was largely driven by the company’s organic growth strategy, solid customer relationships, product expansion and strategic initiatives to enhance operational efficiency.
Also, the company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and lagged in one.
The Zacks Consensus Estimate for earnings indicates an 11.4% decline on a year-over-year basis in 2024. Nonetheless, earnings are projected to rebound and grow at the rate of 5.2% in 2025.
Revenue Strength: Driven by decent growth in loan balance and product expansion, Banner’s total revenues witnessed a compound annual growth rate (CAGR) of 5% over the last five years (2018-2023). Though the trend reversed in the first quarter of 2024 due to higher deposit costs, organic growth measures and a high interest rate scenario are likely to support top-line expansion. However, rising funding costs will weigh on it to some extent.
The Zacks Consensus Estimate for revenues indicates a 2.8% decline on a year-over-year basis in 2024. Nonetheless, the same is projected to rebound and grow 4.9% next year.
Strong Balance Sheet: As of Mar 31, 2024, BANR’s total cash and cash equivalents (consisting of cash and due from banks and interest-bearing deposits) were $209.3 million. Other borrowings were $183.3 million. Hence, a solid liquidity position allows the company to address its near-term obligations.
Impressive Dividends: Banner’s dividend payouts are encouraging. The company has been paying dividends regularly, with the most recent one announced in April 2024. Moreover, the company has hiked its dividend thrice during the last five years. The five-year annualized dividend growth is 4.2%, with a 36% dividend payout ratio.
Given its decent earnings strength and strong liquidity position, the company is expected to continue dividend distribution, thus enhancing shareholder value.
Superior Return on Equity (ROE): BANR’s trailing 12-month ROE reflects its superiority in terms of utilizing shareholders’ funds. The company’s ROE of 11.47% compares favorably with 7.31% of the industry.
Stock Seems Undervalued: BANR’s price-to-cash flow and price-to-earnings (F1) ratios of 7.11 and 9.84 are well below the industry average of 8.04 and 10.99, respectively. Thus, the stock seems to be available at a better valuation than its peers. Also, the stock has a Value Score of B. Our research shows that stocks with a Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Bank Stocks to Consider
Some other top-ranked stocks from the banking space worth a look are First Financial Bancorp. (FFBC - Free Report) and UMB Financial Corporation (UMBF - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FFBC’s current-year earnings has moved 5.2% north over the past 60 days. Shares of the company have lost 11.3% in the past six months.
The Zacks Consensus Estimate for UMBF’s 2024 earnings has moved 14.4% upward in the past two months. Over the past six months, shares of the company have lost 1.4%.