Although we’re far removed from the financial sector crisis, many investors understandably feel shaky about bank stocks to buy. According to a CNN report at the end of May this year, the lingering effects of the calamity have not been fully extinguished. It’s just that we’re distracted with other concerns, meaning we could see another repeat.
Now, I’m not about to put my neck out there and give a definite outcome. However, regional banking firms currently face significant challenges. As Money reported a few days ago, the chain of failures led many Americans to withdraw their own deposits in fear of a contagion. Therefore, many institutions are struggling to win back trust.
Therefore, the concept of bank stocks to buy – especially in the regional space – presents exceptional risk. Nevertheless, if you want to take a speculative shot, you might win out with the below ideas.
Bank Stocks: Wintrust Financial (WTFC)
A financial holding firm, Wintrust Financial (NASDAQ:WTFC) operates 15 chartered community banks in northern Illinois and southern Wisconsin. While only a mid-sized institution susceptible to sector-wide pressures, WTFC represents one of the resilient regional bank stocks to buy. Since the beginning of this year, shares only slipped less than 8%. Considering the circumstances, that’s pretty good.
For its second quarter of 2023 earnings report, Wintrust posted net interest income of $448 million, up 32.5% from the year-ago tally of $338 million. That’s important because the entity is making the best out of the high-interest rate environment. Also, its non-interest income came in at $113 million, above the year-ago result of $103 million.
Also, insiders have much love for their own stock, which is great to see. According to data from Fintel, most of the insider transactions this year have been buys. Lastly, analysts rate WTFC a consensus strong buy with a $90.89 price target, implying almost 18% growth.
Formerly known as the Columbus Bank and Trust Company, Synovus (NYSE:SNV) is a financial services firm with approximately $62 billion in assets. Based in Columbus, Georgia, Synovus provides commercial and retail banking, investment, and mortgage services through multiple branches across Georgia, Alabama, South Carolina, Florida, and Tennessee. While offering a sizable presence among regional bank stocks, it’s a risky endeavor.
Since the January opener, SNV has fallen almost 29%. Based on its posture, it has not made forward progress from the sector crisis earlier this year. Nevertheless, I find some pieces of encouragement for those willing to speculate. In Q2 of this year, the banking firm posted net interest income of $456 million, up 7.3% from the year-ago tally of $425 million.
Also, its non-interest income came in at $110 million, up 13.4% on a year-over-year basis. Plus, insiders have shown tremendous confidence, buying up their own stock since the second half of September. Analysts peg SNV as a consensus strong buy with a $33.94 target, implying over 28% upside.
Byline Bancorp (BY)
Headquartered in Chicago, Illinois, Byline Bancorp (NYSE:BY) represents one of the regional bank stocks to buy that cuts in between the performance of the above two enterprises. Since the beginning of this year, BY lost almost 15% of its equity value. While it has suffered some sentiment-related setbacks, it’s on a more discernible path to recovery since this year’s doldrums.
Moving forward, the financials may help put speculators’ minds somewhat at ease. In Q2 2023, Byline posted net interest income of $76.2 million, up 23.7% from the $61.6 million generated at the year-ago level. Also, its non-interest income came in at $13.5 million, up from $13.1 million in Q2 2022.
In terms of valuation, I’m not going to say that Byline offers a remarkable profile. However, it’s worth pointing out that with forward earnings multiple of 7.56x, BY has been de-risked from its December 2022 forward multiple of 9.73X. As well, since August of last year, all insider transactions have been buys. Finally, analysts rate BY a consensus moderate buy with a $25.28 target, implying over 30% growth.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.