With California's economy thought to be on the mend, analysts are predicting that Bank-America Corp. will regain its earnings momentum this year.

NatWest Securities Corp. analyst Stephen Berman said he thinks the San Francisco-based banking company this year will enjoy its "first meaningful rise in per-share profits in the past three years."

He expects BankAmerica's earnings to increase 16% in 1994, to $5.40 per share, and to grow at an annual rate of 13% to 15% for the three succeeding years. "Annual dividend growth should not be far off this pace either," said Mr. Berman, who has a "buy" rating on the stock.

Eyeing Revenue Growth

James M. Rosenberg of Lehman Brothers Inc., who also rates the stock a "buy," said a rally in BankAmerica shares beyond next year would depend on revenue growth. "There was no real evidence of that in the first quarter," he cautioned.

Last year, BankAmerica's quarterly profits were stuck in a tight range - from $1.18 to $1.21 per share.

The bank earned $1.26 in the first quarter this year, including 7 cents from nonoperating gains. Mr. Berman said he thinks earnings will hit $1.30 in the second quarter, $1.40 in the third quarter, and $1.50 in the fourth quarter.

Wednesday, BankAmerica's shares closed down 50 cents, to $45.125, amid fresh selling pressure in both stock and bond markets.

Low Price-Earnings Ratio

The stock is attractively valued, at 8.5 times the Wall Street consensus earnings estimate of $5.30 per share for 1994, Mr. Berman said. "This price-earning ratio is well below the projected three-year earning and dividend growth range."

Despite a relatively strong performance by the stock recently, Mr. Berman said, he does not feel "the full potential of even a moderate recovery for business and consumer spending in California is discounted yet."

Even in its recession, California contributed more than 50% of the banking company's profits last year, he pointed out. Now, the state's economy seems to have bottomed out, and business confidence is improving.

"Even Los Angeles County, the weakest area in the state, is showing signs of resurgence," he said. BankAmerica's presence in Los Angeles and Southern California is huge after its April 1992 acquisition of Security Pacific Corp.

Earnings Momentum Seen

"There now is some momentum" for BankAmerica's earnings, agreed Mr. Rosenberg. But the Lehman Brothers analyst put the stock in his "high-risk" category, signaling some uncertainty about the makeup of its recent earnings.

"Part of the earnings breakout is a result of having dramatically lowered the loan-loss provision to a level I don't think is sustainable," he said.

Beyond 1995, the company is going to have to "build reserves to accommodate loan growth and even to match chargeoffs," the analyst said. "Their provisioning now is even below the level of consumer chargeoffs."

To this point, however, "between bringing costs down and lowering the provision, they've jump-started earnings," Mr. Rosenberg said. "What it is going to take to build on that is some revenue growth, and that's not in the bag yet."

As the state's economy turns around, "we will begin to see some [revenue growth] by the second half of this year," he said, "but I'm not sure how robust the revenues will be."

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