NEW YORK ( TheStreet) -- Banner (Nasdaq: BANR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 108.57% and other important driving factors, this stock has surged by 34.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • BANNER CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BANNER CORP continued to lose money by earning -$6.79 versus -$16.80 in the prior year. This year, the market expects an improvement in earnings (-$0.28 versus -$6.79).
  • The gross profit margin for BANNER CORP is currently very high, coming in at 78.60%. It has increased significantly from the same period last year. Despite the strong results of the gross profit margin, BANR's net profit margin of 10.10% significantly trails the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Commercial Banks industry and the overall market, BANNER CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has remained constant at $19.84 million with no significant change when compared to the same quarter last year. Even though there was no significant change, BANNER CORP's cash flow growth rate is severely below the industry average.

Banner Corporation operates as the holding company for Banner Bank and Islanders Bank that provide commercial banking and financial products and services to individuals, businesses, and public sector entities. Banner has a market cap of $293.7 million and is part of the financial sector and banking industry. Shares are up 3.2% year to date as of the close of trading on Thursday.

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