On Thursday, Banner (NASDAQ:BANR) Corporation (NASDAQ:BANR) stock maintained its Overweight rating with a steady price target of $67.00, according to Piper Sandler. The financial institution's third-quarter earnings surpassed expectations, with an earnings per share (EPS) of $1.30, which was $0.15 higher than Piper Sandler's estimate and $0.14 above the consensus.
The better-than-expected results were attributed to several factors, including lower expenses, which contributed $0.07 per share to the earnings beat. Banner Corporation's net interest income (NII) also exceeded forecasts by $0.04, benefitting from a larger earning asset base than anticipated and a slight margin expansion to 3.72%, compared to the 3.68% Piper Sandler projected.
Additionally, fee income outperformed Piper Sandler's forecast by $0.01, and the provision for credit losses was smaller than expected, at $1.7 million versus the $3.0 million the firm had estimated, contributing $0.03 to the EPS beat.
Despite an uptick in non-performing assets (NPAs) and classified loans, the firm noted that problem loans remain at very low levels. This increase was seen as a normalization from an historically strong credit environment, aligning with Piper Sandler's broader industry outlook.
In other recent news, Banner Corporation, the parent company of Banner Bank, surpassed Q3 earnings estimates but fell short on revenue. The company reported a net income of $45.2 million or $1.30 per diluted share, beating analysts' projections of $1.16 per share. On the flip side, the revenue of $153.7 million was slightly below the consensus estimate of $154.55 million.
Net interest income climbed to $135.7 million in Q3, marking an increase from the previous quarter's $132.5 million. This rise was attributed to higher interest-earning assets and net interest margin. Total loans and deposits also saw growth, with a 1% sequential and 6% YoY increase in loans to $11.22 billion, and a 4% growth in deposits from the previous quarter to $13.54 billion.
Despite these recent developments, the company's net interest margin of 3.72% in Q3 was lower than the 3.93% reported in the same period last year. Banner's CEO, Mark Grescovich, attributed the successful Q3 results to their super community bank strategy and solid year-over-year loan growth. The company also maintained its quarterly dividend of $0.48 per share.
InvestingPro Insights
Banner Corporation's recent performance aligns with several InvestingPro insights. The company's earnings beat is reflected in InvestingPro Tips, which indicate that analysts have revised their earnings upwards for the upcoming period. This positive outlook is further supported by the company's strong recent performance, with InvestingPro Data showing a 9.35% price total return over the past week and a 12.5% return over the last month.
The bank's solid financial position is underscored by its P/E ratio of 13.71, suggesting a reasonable valuation relative to earnings. Additionally, Banner Corporation has maintained dividend payments for 30 consecutive years, demonstrating a commitment to shareholder returns. The current dividend yield stands at 2.92%, which may be attractive to income-focused investors.
It's worth noting that Banner Corporation is trading near its 52-week high, with its current price at 98.68% of the 52-week peak. This performance is part of a broader trend, as the stock has seen a significant 55.66% price total return over the past six months.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Banner Corporation, providing a deeper understanding of the company's financial health and market position.
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