KBW Says These Community Banks Could Challenge The Big Guys

Analysts at Keefe, Bruyette & Woods said that there will be increased opportunities for certain community banks to grow, adopt new lines of business and challenge large financial institutions. Underlying this trend will be large macro forces that include changing technology, new regulation and economic need.

KBW said that the model for this is in the United Kingdom, where the government "supported the development of challenger banks, designed to create competition for their nation's ‘too big to fail' institutions." The UK banks showed "strong growth" and are now going public, KBW said.

The analysts identified 25 U.S. banks as part of this emerging group. These banks generally contain between $5 billion and $50 billion in assets, KBW said. However, KBW did break the banks into two groups: (1) banks that are challenging large national banks by changing the definition of community banking and developing niche vertical lines, and (2) banks that are excelling at traditional community banking and growing market share the "old-fashioned way."

Within that first group, KBW identified the following:

  • BofI Holding, Inc. BOFI
  • East West Bancorp, Inc. EWBC
  • EverBank Financial Corp EVER
  • First Republic Bank FRC
  • Opus Bank OPB
  • PacWest Bancorp PACW
  • Signature Bank SBNY
  • SVB Financial Group SIVB
  • Texas Capital Bancshares Inc TCBI
  • Wal-Mart Stores, Inc. WMT

  • BofI Holding, Inc. BOFI
  • East West Bancorp, Inc. EWBC
  • EverBank Financial Corp EVER
  • First Republic Bank FRC
  • Opus Bank OPB
  • PacWest Bancorp PACW
  • Signature Bank SBNY
  • SVB Financial Group SIVB
  • Texas Capital Bancshares Inc TCBI
  • Wal-Mart Stores, Inc. WMT

Inside the second group, KBW pointed to the following:

  • BankUnited BKU
  • Bank Of The Ozarks Inc OZRK
  • Cathay General Bancorp CATY
  • Columbia Banking System Inc COLB
  • Eagle Bancorp, Inc. EGBN
  • FCB Financial Holdings Inc FCB
  • LegacyTexas Financial Group Inc LTXB
  • Home Bancshares Inc HOMB
  • IBERIABANK Corp IBKC
  • Renasant Corp. RNST
  • Pinnacle Financial Partners PNFP
  • PrivateBancorp Inc PVTB
  • South State Corporation SSB
  • Sterling Bancorp STL
  • Umpqua Holdings Corp UMPQ
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