Best Regional Bank Stocks

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Contributor, Benzinga
May 31, 2023

Colony Bankcorp (NASDAQ:CBAN)

Colony Bankcorp, Inc. is a bank holding company for Colony Bank. Operating from Fitzgerald, Georgia, Colony Bank has provided various banking services to commercial and private customers since 1975. It operates 32 branches in Georgia and is listed on the Nasdaq Global Market exchange under the ticker CBAN.

Trading at a price-to-earnings (P/E) ratio of 11.2, the bank is good value even compared to the U.S. Bank Industry average (12x). Its A/E ratio is good at 12.5x, and while bad loans are low (1%), they are well covered with a 119% allowance.

Its L/A ratio is appropriate at 69%, and the bank runs a suitable risk profile with 92% of liabilities from low-risk sources of funding. The company pays a 2.3% dividend which is in line with the industry.

Last update: 4:16PM (Delayed 15-Minutes)
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Vol / Avg.216.138K / 44.992KMkt Cap175.580M
Day Range9.790 - 10.14052 Wk Range8.590 - 14.390

SPDR Bloomberg Convertible Securities ETF (ARCA:CWB)

  • Market cap: $2.5 billion
  • P/E ratio: 11
  • Dividend yield: 3.3%

Canadian Western Bank provides personal and business banking products and services. It focuses on western Canada, having a presence in British Columbia, Alberta and Ontario. The bank was formed in 1988 as a merger by the Bank of Alberta and the Western & Pacific Bank of Canada. Its headquarters are in Edmonton, Alberta. It is listed on the Toronto Stock Exchange under the ticker CWB.

Trading at a P/E of 11, CWB is a good value compared to the broad market. The A/E ratio is very good at 10.2. While allowance for bad loans is not impressive (61%), the level of bad loans remains under 1%.

The L/A ratio is appropriate at 87%, and liabilities primarily consist of low-risk sources of funding (90%). CWB pays a 3.3% dividend that has been increasing steadily over the years. The dividend payout ratio is excellent at 36.5%.

Last update: 8:00PM (Delayed 15-Minutes)
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Vol / Avg.1.002M / 817.061KMkt Cap-
Day Range67.600 - 68.20052 Wk Range62.400 - 71.990

First Keystone (OTCPK:FKYS)

First Keystone Corporation provides various banking and related financial services to individual, business and government customers in Pennsylvania. It operates 19 offices and 20 automated teller machines. Founded in 1864, it is headquartered in Berwick, Pennsylvania. It trades on the over-the-counter market (OTC) under the ticker FKYS.

Trading at the attractive P/E ratio of 10.2, the company also has a price-to-book (P/B) ratio of 1. While ROE is in line with the expectations at 10, the A/E ratio is very good at 8.5. Furthermore, 91% of the liabilities come from low-risk funding sources, and 1% of bad loans are well covered with a 110% allowance. Its L/A ratio is outstanding at 57%.

Finally, the company pays a 4.5% dividend that is well above the industry average (2.3%). The dividend has been stable over the last decade and has a reasonable payout ratio of 46.3%.

Vol / Avg.2.270K / 1.323KMkt Cap104.253M
Day Range16.520 - 17.19052 Wk Range16.750 - 22.990


  • Market cap: $1.63 billion
  • P/E ratio: 12
  • Dividend yield: 5.42%

When it comes to banking services, Switzerland is as famous as they come. Since 1824, Valiant Holding AG has provided various banking products and services for private clients and small and medium enterprises. The company has 96 branch offices in 13 Swiss cantons (districts) with headquarters in Lucerne. It is listed on the SIX Swiss Exchange under the ticker VATN.

The stock trades at a P/E ratio of 12x, which is well below the Swiss market (25.2x). The A/E ratio is moderate at 14.5. The liability profile is acceptable, with 67% coming from low-risk sources of funding. Its L/A ratio is appropriate at 76%.

While ROE is not impressive at 5.1%, it is in line with the industry (5.5%). It is important to note that Switzerland has been running negative interest rates (-0.75%), which doesn’t help the banking industry.

With a dividend of 5.42%, VATN is a good pick for yield-seeking investors. The dividend has been stable and growing for over 10 years, and it is reasonably covered with a 64.8% payout ratio.

Vol / Avg.- / -Mkt Cap-
Day Range- - -52 Wk Range- - -

Although they have been around for centuries, banks have always had a love-hate relationship with investors. Making money off a business that uses the money to make money is not a straightforward process. Due to the nature of their business, banks depend on the state of the broader economy and monetary policy in particular.

Bank stocks, then, are quite dependent on how the American banking system is struck by interest rates, changes in basis points, the machinations of the Federal Reserve, the business loan market, the personal loan market and even the housing market.

While regional banks are slightly different, they still require a fine-tuned approach because of their limited scope of operations. Read on to learn about the current regional bank stocks and what to look out for when analyzing them for an investment.

Quick Look at the Best Regional Bank Stocks:

  • Colony Bankcorp, Inc.
  • Canadian Western Bank
  • First Keystone Corporation
  • Valiant Holding AG

Features to Look for in Regional Bank Stocks

Banks are different from traditional businesses, and it takes a keen eye to go through their balance sheets. Here are the key features to look for when analyzing a bank stock.

  1. Asset-to-equity ratio (A/E): This ratio shows the relationship between shareholders’ total assets and equity as an indicator of the company’s leverage. While there are no guidelines, a high A/E ratio might show substantial debt taken on by the company.

A/E ratio = net worth / total assets

  1. Loans-to-assets ratio (L/A): This ratio measures the total loans outstanding as a percentage of total assets. The higher the ratio — the more risk there is for a bank default.

L/A = loans / total assets

3. Exposure to bad loans: There is always a risk that loans might stop performing — characterized by 90 days without payment. Bank performs due diligence before loaning and, in the worst-case scenario, relies on reserves for bad loans to absorb the negative impact.

4. Liability risks: bank’s liabilities are its sources of funding. This can be internal (deposits) from a checking account or external (borrowed). Relying on deposits is generally seen as a lower risk. Also, debit card losses, credit lines that aren’t receiving payments, local banking turmoil and a downturn in the personal or business loan market could easily destabilize a regional bank.

5. Return on equity (ROE): ROE measures the ability of a company to use investors’ money profitably. ROE numbers vary by industry; therefore, cross-industry comparisons are not feasible. For banks, a good ROE is around 10%.

ROE = net income / total shareholders’ equity

Best Online Brokers for Regional Bank Stocks

With phone calls and personal broker agents in the rear-view mirror, investing is now as easy as a mouse click or a tap on the phone screen. Regardless of your experience, you should be able to find a suitable match in the broker comparison table below.

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Regional Banks Get no Love but Offer High Dividends

It’s no secret that banks got no love from investors in recent years.

They are blamed for the Great Recession and numerous scandals — from unauthorized account opening (Wells Fargo & Co.) to money laundering (Danske Bank). In addition, the low-interest-rate environment reduces the rates banks can charge on their loans.

Some are simply that—regional banks with which you might have a lovely relationship, from PacWest to Western Alliance. Still more like Signature Bank and Silicon Valley Bank have tumbled. When the banking sector slips, everyone does.

Faced with this inconvenience, banks have to raise their non-interest income — fees they charge for various services like deposit accounts and payment processing. It comes directly at the expense of you — the retail investor, with the bank biting the hand that feeds its balance sheet.

Although this has been going on for some time, interest rates won’t be low forever. Eventually, they will rise and, like a tide, lift the banking sector. Until that happens, dividend investors have every right to park some of the money in regional banks as they offer lucrative yields at current prices.

Frequently Asked Questions


What are regional bank stocks?


Regional bank stocks are shares in regional banks.


Are regional bank stocks a good investment?


Regional bank stocks can be a good investment if you do your research before investing.


What are the best regional bank stocks?


You can find a list of the best regional bank stocks on the list above.