In a previous post, I wrote about some good bank stocks that you should consider investing in to get exposure to the financial sector of the stock market. Today I want to talk to you more about bank stocks, but this time focus on regional bank stocks.
Why regional bank stocks? Unlike national banks like Wells Fargo, regional bank stocks can be better investments. There are many reasons for this including:
- More targeted to a certain customer
- Ability to take part in prosperous regions
- Less red tape than a national bank
- Potentially better service and happier customers
Of course, some could argue negatives for regional bank stocks based on the same strengths that I listed above. But I feel that the 3 stocks I list below do have an advantage over national banks.
Let’s take a look at these 3 stocks and see which one makes sense for your portfolio.
3 Great Regional Bank Stocks
#1. First Hawaiian (NASDAQ:Â FHB)
First Hawaiian Bank is an interesting play. Because of the isolation of the state of Hawaii, First Hawaiian is in a position that controls banking in the state. In fact, they control 37% of deposits in the state.
And with little competition, they can set their own saving and lending rates without much pressure to get into a pricing war with other banks.
In their recent earnings release, First Hawaiian reported earnings per share of $0.41 which met expectations. Revenue hit $180 million, which missed estimates by $2.5 million. However, this was an increase of 8%.
As interest rates are expected to continue to rise, I expect revenues to continue to grow. The only downside to this stock is the inability to expand into new markets, again because of the isolation. Even so, I think this stock is a good investment.
#2. M&T Bank (NYSE:Â MTB)
M&T first caught my attention when I heard that the company has not lost money in a quarter since 1976. That is impressive even without the housing and stock market collapse in 2008. But when you dig into that a little more, you realize why this stock is so solid.
