Fri, Oct 31, 2014, 12:31 PM EDT - U.S. Markets close in 3 hrs 29 mins

Recent

% | $
Quotes you view appear here for quick access.

Banner Corporation Message Board

  • senior6analyst senior6analyst Mar 18, 2010 10:57 AM Flag

    Banner's Earnings Potential?

    Given past questions, I am sharing my rough method for estimating Banner's potential earnings as we emerge from the real estate crisis of 2008/2009. in prior years Banner was generally able to earn a ROA of close to 1%, not unusual for a well run, large regional community bank. To be conservative, I used an 0.8% ROA. For $5 billion of assets that would translate into approximately $40 million of annual earnings in the intermediate time frame, or, almost $2 per share. If they issued more shares, I presume that it would be for an acquisition in a FDIC bank fire sale. In that case, I guessed that their assets would be closer to $6 billion and their outstanding shares would increase by about 12 million shares. Hence, using an 0.8% ROA, the recovered earnings potential could translate into EPS of about $1.40. So, IMHO, Banner might produce EPS of around $1.50+, depending on what their strategy is for growth, capital and acquisitions. Given my assumptions and Banner's history, you can see why I have been accumulating a large position in their stock. If they achieve these expectations and you apply a reasonable P/E of 10x-12x, the upside for the stock could possibly be $15 per share, or, more. During more normal times, their stock traded as high as $40. Hence, I concluded, using my assumptions, that the downside was limited and the upside extremely large. Do your own due diligence. I could be wrong, but these are the assumptions that led to my conclusions. This is one stock that I am not trading. I am holding it.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
 
BANR
43.32+0.56(+1.31%)12:25 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.