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4 Strong Regional Bank Stocks with Potential

  +Follow August 18, 2013 11:06AM
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Financials are on an upswing as of late, and have a strong chance to overtake technology and once again become the most valuable sector in the S&P 500.

The Big Four banks often get the most attention from investors and experience the most volume, but there are thousands of stocks to choose from in the financial sector, and many great banking stocks still out there. The question is, of course, which ones are worth investing in.

After the Great Recession some investors are understandably leery of investing in banks, but not all banking stocks are prone to the volatility of highly leveraged, highly complex megabanks. Regional bank stocks tend to have strong roots in basic, fundamental banking, and can be stable and quite healthy, even in economic downturns. As interest rates continue their rise that began earlier this summer, banks can expect to reap nice profits.

To find the banks trading on the American market with strongest fundamentals, we applied the following four pieces of criteria to every bank stock on the market:

1) The company has a P/C and P/B greater than 1

It is important for finance companies to have strong book value and cash in addition to validation of these assets by the market.  As a result, a P/C (profit to cash ratio) or P/B (price to book ratio) of 1 should be a minimum “floor” for investing.  

2)      The bank has an operating margin greater than 25% 

Operating margin shows how efficiently a company is operating is business after a good is sold.  Gross profit-operating costs.  The operating margin is more appropriate for banks because the costs associated with operating are much more significant for a bank than the cogs. 

3) The bank has an ROI greater than 25% 

Return on Investment, or ROI, shows how well a company is using its invested capital.  Since banks are essentially made up of all invested capital, this is a very important statistic.

4) The bank is a mid-cap or larger

Banks with a designation of “mid” market capitalization have a valuation of at least $2 billion. They tend to be slightly less volatile than small and micro-cap “penny stock” banks.

There are currently four publically-traded banks in the US that can answer “yes” to all of these questions, and thus can be considered to have strong fundamentals for a regional bank:

First Republic Bank (FRC)

This San Francisco-based bank has 59 locations, with the majority located in Northern California and a dozen located on the Eastern seabord. The bank has been buoyed by rising home prices in San Francisco, which is currently the fourth most expensive city to live in in the country.

First Republic is up 32.22 percent on the year to hit $43.83 a share.

Bank of Hawaii Corporation (BOH)

This Honolulu, Ha.-based bank is Hawaii’s second oldest bank, and has been in operation since 1897. The bank is unique in that it has locations in American unincorporated territories, with locations in Guam, Saipan, and Palau.

Bank of Hawaii is up 20.21 percent on the year to hit $54.89 a share.

First Citizens Bancshares Inc. (FCNCA)

First Citizens Bank (and its subsidiary IronStone) services the Southeastern United States, with 493 locations spread out over 17 states. The company was founded in 1898 under the name of Bank of Smithfield.

First Citizens is up 24.61 percent on the year to hit $208.73 a share.

East West Bancorp, Inc. (EWBC)

East West is a California-based bank that operates predominantly in California, with scattered branches in New York, Georgia, Massachusetts, Texas and Washington. The bank is popular with Asian immigrants in te US, and has several locations in Hong Kong and China.

East West is up 39.26 percent on the year to hit $31.04 a share. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for FRC
BNK Invest
28 Jan 15 14:33:27
First Republic Bank Breaks Below 200-Day Moving Average - Notable for $FRC $IAT #dividends http://t.co/CcAlgxaDAG
Penny Stock Secret
28 Jan 15 00:00:06
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $FRC-D $FRC-E $FRF
Penny Stock Secret
27 Jan 15 23:59:06
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $FRC-A $FRC-B $FRC-C
Penny Stock Secret
27 Jan 15 23:58:06
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $FR $FRA $FRC
ProVesting
27 Jan 15 18:12:02
$FRC: New apartment on Village Dr. in San Marcos sold: http://t.co/F4kOVmlVNu
Chasing Stars
27 Jan 15 09:59:41
$AMBS EOD Data Click Here: http://t.co/siJ0jbQHu4 Also See: $FRC $NFX $VINS $VOLAF ~
mikeychu
27 Jan 15 09:05:02
@stephensonfiles is shorting Canyon Energy Services (and still shorting Lightstream) Watch @BNN.ca why: http://t.co/xNSybH8C1z $FRC $LTS
The Legacy News
27 Jan 15 08:56:19
Keefe, Bruyette & Woods Lowers First Republic Bank to Market Perform $FRC http://t.co/AWJo68oIzj
The Legacy News
27 Jan 15 07:28:04
Canyon Services Group Given Consensus Recommendation of “Buy” by Analysts $FRC http://t.co/0TIGgey7kt
WKRB News
27 Jan 15 06:55:47
First Republic Bank Receives Average Recommendation of “Hold” from Analysts $FRC http://t.co/scVdMbkn9n
Ike Manglona
27 Jan 15 04:52:11
$FRC Ex Div. Date 1/27/15
Bruce H Snyder
26 Jan 15 12:43:25
$FRC $0.14 dividend tomorrow. Watch out for early assignment of short ITM Calls, esp Feb 45 and below. S=$51.57
InterCooler
26 Jan 15 08:50:46
Keefe, Bruyette & Woods Downgrades First Republic Bank to Market Perform $FRC http://t.co/QDF8Dr0dSg
StockNewsWires
26 Jan 15 08:36:03
$VSTM $FRC: 5 Stocks: Verastem (NASDAQ:VSTM), Prothena Corporation plc ...: http://t.co/IZF7GeEUYA
dividata.com
26 Jan 15 06:00:54
Tomorrow's ex-dividend dates $LEN $FRC $WPT $BSRR http://t.co/8K76Lb9lPN $$
ProTradersNews
26 Jan 15 05:51:03
$FRC: First Republic (NYSE:FRC) Is a Safe Stock: http://t.co/A5EEf99EhK
Ticker Report
26 Jan 15 05:40:51
First Republic Bank to Issue Quarterly Dividend of $0.14 on February 12th $FRC http://t.co/IcfVF7cgZZ
ProVesting
26 Jan 15 05:36:02
$FRC: First Republic Bank to Issue Quarterly Dividend of $0.14 on ...: http://t.co/cAM6ROJXP9
ProTradersNews
26 Jan 15 04:11:04
$FRC: This Bank Is Growing Nearly 20% Per Year, but Can It Continue?: http://t.co/kw7GAz77DX
TickerChirp
25 Jan 15 20:07:46
Top in Twitter About $FRC (First Rep Bk San Fran symbol FRC) on 01/26/2015 http://t.co/gfbjtXwVCX
ProTradersNews
25 Jan 15 05:06:03
$FRC: First Republic Bank Stock: A Solid Dividend With Room to Grow: http://t.co/70IHTejAaR
ProTradersNews
24 Jan 15 09:11:03
$FRC: Lessons From How This CEO Earned $144 Million for Himself and ...: http://t.co/c1xofFMqgW
Ticker Report
23 Jan 15 11:41:46
First Republic Bank Lowered to Market Perform at Keefe, Bruyette & Woods $FRC http://t.co/56Tesci6ki
US Banking News
23 Jan 15 09:05:22
First Republic Bank Cut to Market Perform at Keefe, Bruyette & Woods $FRC http://t.co/2HNtJLKQyF
clayton
23 Jan 15 08:47:30
Stocks Trending Now: http://t.co/2RP342qvZt $EEDG $FCBE $EPGNF $DNTUF $CCAA $PRTDF $SURRF $TCOK $PNTZF $BSMX $TROV $FRC ~
BNK Invest
23 Jan 15 07:50:08
Cash Dividend On The Way From First Republic Bank $FRC $IAT #dividends http://t.co/vUNwM3Kqwg
Media Sentiment
23 Jan 15 06:25:31
$FRC received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 193
Analyst Ratings
23 Jan 15 06:17:41
First Republic Bank downgraded by Keefe, Bruyette & Woods to market perform. http://t.co/v4xyuh4Tda $FRC #FRC
US Consumer News
23 Jan 15 06:17:32
First Republic Bank downgraded by Keefe, Bruyette & Woods to market perform. http://t.co/uArWRLTXGg $FRC #FRC
WKRB News
23 Jan 15 06:12:43
First Republic Bank Stock Rating Lowered by Keefe, Bruyette & Woods $FRC http://t.co/ZXpSdK4W9p
ProVesting
23 Jan 15 03:46:03
$FRC: Stocks Buzz - First Republic (FRC), Agrium (AGU), UDR, (UDR ...: http://t.co/zVotVizxBL
				
				
  +Follow August 18, 2013 11:06AM
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