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4 Strong Regional Bank Stocks with Potential

  +Follow August 18, 2013 11:06AM
Tickers Mentioned:

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. 

Results for FRC
Stock News 24
22 Apr 14 23:19:30
$FRC - Bank of Hawaii Beats on Earnings, Revs -> http://t.co/EKXIa8BzvF #stock #stocks #stockaction
Patty Porter
22 Apr 14 20:20:45
Do you need #Stock #Research on $LGF $FRC $OCR $RT #wallstreet http://t.co/VBoe1ya7Og
Babara Blodgett
22 Apr 14 17:09:48
Insider Trading alerts on $NDAQ $RHI $FRC $ISRG #financialnews http://t.co/qQKjXBSA2j
22 Apr 14 16:18:46
$FRC Awesome #Stock #Research $SEIC $SE $CADX #Research http://t.co/bXOZauWpnq
Miller Bailey
22 Apr 14 13:44:39
Small-cap stocks breaking 52-wk high prices $MCHP $MSG $FRC $IBM #Stock http://t.co/bQlQp9ANqU
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22 Apr 14 13:27:05
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22 Apr 14 13:06:40
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Mariano Maesta
22 Apr 14 06:11:04
$FRC First Republic Beats Earnings on S http://t.co/9WNwdC8nWw
Robin Cage
22 Apr 14 02:07:59
5 Stocks you should be watching $BKU $CYH $FRC $GAIN Click http://t.co/bsdriR0cs7
Fausto Tilley
22 Apr 14 00:02:51
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Milford Schwarz
21 Apr 14 16:01:43
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Franco Clark
21 Apr 14 13:34:03
$FRC #Pennystock Research on $ERIE $APC $LIVE #wealthmanagement http://t.co/4zghiNtiCW
Ticker Report
21 Apr 14 10:27:28
First Republic Bank Upgraded to “Outperform” at FIG Partners $FRC http://t.co/Je2cFJb3u8
Haiden Dallas
21 Apr 14 10:26:34
Stocks I'm keeping my Eye on...should you? $WCC $EQT $FRC $DF Must see http://t.co/W480HddzHw
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21 Apr 14 09:23:16
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21 Apr 14 09:12:23
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Demarcus Griffin
21 Apr 14 09:12:13
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Stock Market News
21 Apr 14 07:50:24
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Stock Watch
21 Apr 14 05:29:36
$FRC First Republic Beats Earning http://t.co/TKDiHCgnFM
Ansel Galvan
21 Apr 14 02:38:10
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Laird Cabrera
21 Apr 14 00:54:18
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Stock Watch
21 Apr 14 00:51:23
$FRC Get the latest on $ERIE $BR $ABX #Research http://t.co/PcQpnM1EaH
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20 Apr 14 23:49:17
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Gary Rosovsky
20 Apr 14 20:59:53
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Lilly Bynum
20 Apr 14 20:27:17
5 Stocks you should be watching $FRC $RGLD $ADT $GRPN #moneymanagement http://t.co/oS7xrz9oGl
20 Apr 14 18:29:05
First Republic Bank (FRC) 52.08 $FRC First Republic Beats Earnings on Strong Revs - Analyst Blog Zacks Equity http://t.co/SZHV3Isgv8
Lekisha Longoria
20 Apr 14 16:54:58
$FRC First Republic Beats Earning http://t.co/UoWEv04eCa
Ambrose Long
20 Apr 14 16:33:26
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Adria Mosley
20 Apr 14 12:31:05
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Mariano Husher
20 Apr 14 11:25:19
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Stock Watch
20 Apr 14 10:58:53
$PNW #Stocks you might want to buy $MSG $FRC $DF #moneymanagement http://t.co/7XLpq4Y4pn
Haiden Dallas
20 Apr 14 10:10:33
$FRC First Republic Beats Ear http://t.co/8cKUvSqkea
Marius Jackson
20 Apr 14 09:13:05
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Albert Perales
20 Apr 14 08:30:58
Could be breaktout time on $BOKF $FRC $BG $DF #moneymanagement http://t.co/XvD2IeU8h1
Vito the Guru
20 Apr 14 07:37:18
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Jaydan Kyler
20 Apr 14 03:54:55
$MCHP Todays Stocks you should Watch $INCY $FRC $NUAN Worth a look http://t.co/Aiu3NwLlDJ
Leighton Aldaine
20 Apr 14 03:12:41
$FRC First Republic Beats Earning http://t.co/DFd1GWoZtl
20 Apr 14 02:36:26
RT @theflynews: $FRC First Republic Bank upgraded to Outperform from Market Perform at Fig Partners: Full Story http://t.co/CscmggCTCQ
Basil Gall
20 Apr 14 02:00:08
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Hans Hoskins
20 Apr 14 01:06:03
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North Carter
20 Apr 14 00:49:25
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Byrne Bray
19 Apr 14 22:35:06
Esau Braxton
19 Apr 14 20:36:12
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Basil Gall
19 Apr 14 20:08:51
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Esau Braxton
19 Apr 14 18:30:25
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Byrne Bray
19 Apr 14 17:48:33
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Byrne Bray
19 Apr 14 17:37:03
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Brice Latimer
19 Apr 14 16:59:13
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  +Follow August 18, 2013 11:06AM



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