3 Buy-Rated Regional Bank Stocks to Add to Your Portfolio

While the near-zero interest-rate environment remains unchanged amid concerns over the pace of economic recovery, the banking sector has been recovering steadily on the back of increasing financial transactions and capital market activities. Investors’ growing interest in the regional bank stocks is evidenced by the SPDR S&P Regional Banking ETF’s (KRE) 4.4% gains over the past month.

Moreover, the sector is expected to grow further thanks to the integration of advanced technologies. According to a CNBC report, several investors are optimistic about regional banks’ performance in the second half of this year.

Given this backdrop, we think it could be wise to bet on regional bank stocks Synovus Financial Corp. (SNV), Popular, Inc. (BPOP), and Hancock Whitney Corporation (HWC). They are each expected to continue  thriving based on their fundamental strength. Furthermore, they each have an overall B (Buy) rating in our proprietary POWR Ratings system.

Synovus Financial Corp. (SNV)

Based in Columbus, Ga., SNV is the bank holding company for Synovus Bank that provides commercial and retail banking products and services. The company has 289 branches and 389 ATMs across Alabama, Florida, Georgia, South Carolina, and Tennessee. It operates through three segments: Community Banking; Wholesale Banking, and Financial Management Services.

The company introduced Synovus Accelerate AR on June 1, 2021. It is an  all-new, fully integrated receivables suite. Katherine Weislogel, SNV’s Head of Treasury & Payment Solutions, said, "Synovus Accelerate AR anticipates the rapidly evolving requirements of organizations to accelerate capture of payments, improve the cash conversion cycle, and make better business decisions.”

SNV’s total deposits surged 6.7% year-over-year to $47.17 billion in the second quarter, which ended June 30, 2021. Its adjusted FTE revenue grew 3.8% year-over-year to $488.61 million. Its adjusted net income came in at $178.97 million, representing a 426.1% year-over-year increase, and its adjusted EPS was  $1.20, up 421.7% year-over-year.

SNV’s EPS is expected to be  $4.53 in fiscal 2021, representing an 88% year-over-year increase. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. The company’s revenue is expected to increase 4.2% year-over-year to $489.47 million for the current quarter, ending September 30, 2021. Over the past year, the stock has soared 90% in price to close yesterday’s trading session at $42.84.

SNV’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has a B grade for Growth and Sentiment. In addition, , within the B-rated Mid-Atlantic Regional Banks industry, SNV is ranked #11 of 42 stocks. Click here to see the additional POWR Ratings for SNV (Momentum, Value, Quality, and Stability).

Popular, Inc. (BPOP)

BPOP provides retail, mortgage, and commercial banking products and services in Puerto Rico and the United States. It operates 172 branches and 619 ATMs in Puerto Rico, 23 ATMs in the Virgin Islands, and 118 ATMs in the United States Mainland. BPOP is based in Hato Rey, Puerto Rico.

BPOP’s total interest income surged 4.2% year-over-year to $529.76 million for the second quarter, ended June 30, 2021. Its total non-interest income grew 37.9% year-over-year to $154.54 million. Its adjusted net income came in at $218.08 million, representing a 70.9% year-over-year increase. In addition, its adjusted EPS was at $2.66, up 78.5% year-over-year.

Analysts expect BPOP’s EPS and revenue to increase 73.8% and 20.4%, respectively,  year-over-year to $10.20 and $2.24 billion in its fiscal year 2021. In addition, it surpassed the Street’s EPS estimates in each of the trailing four quarters. The stock has gained 99.4% over the past year to close yesterday’s trading session at $75.98.

BPOP’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has a B grade for Value as well.

We have also graded BPOP for Growth, Momentum, Stability, Sentiment, and Quality. Click here to access all BPOP’s ratings. BPOP is ranked #3 of 31 stocks in the Southeast Regional Banks industry.

Hancock Whitney Corporation (HWC)

HWC operates as the bank holding company for Hancock Whitney Bank and  provides a range of banking products and services to commercial, small business, and retail customers. The Gulfport, Miss.-based bank offers various deposit products, such as non-interest-bearing demand deposits, interest-bearing transaction accounts, savings accounts, money market deposit accounts, and time deposit accounts.

On July 21, 2021, John M. Hairston, the company’s President and CEO, said, “Our capital remains solid, and with materially all expense initiatives announced, and one-time expenses accounted for, we are looking toward the future with a relentless focus and determination designed to improve performance and value."

HWC’s non-interest income surged 27.5% year-over-year to $94.27 billion in the second quarter, which ended June 30, 2021. In addition, its average total deposits grew 9.5% year-over-year to $29.23 billion. Its net income for the quarter came in at $88.72 million, versus a $117.07 million net loss in the year-ago period. Also, the company’s EPS came in at $1 compared to a $1.36 loss per share  in the prior-year period.

For its fiscal year 2021, analysts expect HWC’s EPS and revenue to increase 977.8% and 2.2%, respectively, year-over-year to $4.74 and $1.29 billion. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has soared 123.1% year-to-date to close yesterday’s trading session at $45.50.

HWC’s POWR Ratings reflect this promising outlook. In addition, the stock has a B grade for Stability.

Click here to see HWC’s ratings for Momentum, Growth, Value, Quality, and Sentiment as well. HWC is ranked #4 in the Southeast Regional Banks industry.

SNV shares were trading at $43.10 per share on Tuesday morning, up $0.26 (+0.61%). Year-to-date, SNV has gained 35.01%, versus a 21.64% rise in the benchmark S&P 500 index during the same period.

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.

More...