While the big banks may have the attention of the Street right now, it's the smaller regional and community banks that are among the best stocks to buy now.
These small bank growth stocks are starting to show dazzling growth as their balance sheets improve dramatically. And they are still very early in the recovery cycle, so there is still plenty of time for individual investors to catch this train…
You see, these small banks are seeing rapid increases in bottom-line profits. The recent back-up in longer-term interest rates should help these banks continue to improve profits and it will allow their net interest margins to increase.
Earnings are being driven by credit improvements right now, but as the economy improves these banks will see stronger loan demand and higher interest margins to drive sustained profit growth.
Best of all, we have not even begun to see improved demand or loans from business or individuals, so there is ample room for growth there. Demand is expected to pick up in 2014.
To stay ahead of Wall Street, we've found two of these smaller banks that rank among the best stocks to buy now…
Bank Mutual: Among the Best Stocks to Buy for Ample Upside
Bank Mutual (Nasdaq: BKMU) is not going to be confused with one of the big-money-center banks anytime soon.
The Wisconsin-based bank has 75 branches and about $2.4 billion in total assets. In the most recent quarter, earnings improved by 99% over the year-ago period and for the first six months of the year they are up 114%.
Bank Mutual has seen its problem assets decline steadily and problem assets are now just 1.54% of total assets, down from almost 6% just two years ago. Management has also worked hard to change its funding mix and is one of the few banks to see its net interest margin rise for the previous four quarters in a row.
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