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3 Growing Bank Stocks for Black Friday

NEW YORK ( TheStreet) -- It's time for bank stock investors to look beyond the "cheap" and add some higher quality names to their portfolios.

Some of the best bank stock money makers this year have been the names that were so lousy last year, and they still haven't made up what they lost.

Bank of America (BAC - Get Report) is a great example, and, of course, a favorite punching bag. The company's shares were up 76% year-to-date as of Wednesday's close at $9.77, which is, of course, quite impressive. However, this year's stellar performance follows a 58% decline during 2011. The shares are actually down 26% since the end of 2010, and are down 74% over the past five years.

Bank of America's shares trade for just Bank of America's shares trade for a low 0.7 times their reported Sept. 30 tangible book value of $13.48, and for 10 times the consensus 2013 earnings estimate of 97 cents a share, among analysts polled by Thomson Reuters. The consensus 2014 EPS estimate is $1.27. Stifel Nicolaus analyst Christopher Mutascio on Monday upgraded the shares to a "Buy" rating, saying that because of cost cuts, Bank of America will see much greater earnings growth in 2014 than the other money center banks.

Another high flyer among stocks of the largest U.S. banks is Regions Financial (RF - Get Report) of Birmingham, Ala., with shares returning 54% year-to-date through Wednesday's close at $6.58. This year's recovery -- during a year of transition with Regions selling its Morgan Keegan subsidiary in the first quarter followed by a common equity raise and exit from the Troubled Assets Relief Program (TARP) in the second quarter -- follows a 38% decline for the stock in 2011. Shares of Regions are down 5% since the end of 2010, with a negative five-year total return of 68%.

Shares Regions trade for 0.9 times their reported Sept. 30 tangible book value of $7.02, and for nine times the consensus 2013 EPS estimate of 77 cents. The consensus 2014 EPS estimate is 82 cents. Following the next round of Federal Reserve stress tests during the first quarter, long-suffering investors will be looking for a return of capital from the company. Credit Suisse analyst Craig Siegenthaler on Nov. 14 estimated that Regions will be approved by the Fed to raise its quarterly dividend to four cents from once cent, and to buy back $249 million worth of shares during 2013."

Bank of America and Regions have been winding down certain areas of their business over the past few years, as they have navigated the credit crisis, and now face the industry-wide challenges of narrowing net interest margins and weak loan demand. Both trade at relatively low multiples, and may well see another year of outstanding returns next year.

But bottom-fishing isn't for every investor. The three growing regional names that we profile below have seen positive total returns year-to-date, and for five years, through Wednesday's close. All have been steady earners and all are well-positioned for the difficult rate environment, with strong loan growth and two have strong or growing fee revenue.

These names also trade at significantly higher valuations than Bank of America and Regions, however, you must pay a premium to own a growing business that is also growing earnings, and these names appear to have significantly lower downside than many of the big names, if the U.S. economy slips back into recession.

Here are the three growing bank stocks for Black Friday, in order of ascending total assets:
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BAC $17.50 0.34%
FRC $68.78 0.48%
SIVB $131.47 -0.33%
SBNY $160.28 -0.28%
RF $10.16 0.69%


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