The 10 Best Emerging Regional Banks in the US 2022

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The BankDirector magazine published its 2022 ranking of the best banks in the US under many categories. One of the categories we will look into this in this post is “The Best Emerging Regional Banks”. The banks in the category have assets in the range of $15 – $50 Billion. Since there are thousands of banks in the country and hundreds of them trade on the public markets, investors can use this list as a starting point for further research.

BankDirector selected the banks using various metrics. Below is an excerpt from the study:

To determine the top 10 in each category, we calculated a profitability score based on return on average assets (ROAA) and return on average equity (ROAE) as of year-end 2020. We also looked at year-over-year growth in pre-provision net revenue (PPNR) from 2019 to 2020, as well as absolute PPNR as of year-end 2020. Credit quality was also examined, based on net charge offs and nonperforming loans as a percentage of total loans for 2020. To award building shareholder value, we included five-year total shareholder return from 2015 to 2020. All of these factors were ranked and then averaged — with profitability receiving a double weight — to develop a score.

The Best Emerging Regional Banks:

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Source: RankingBanking, Bank Director

The top ranked Emerging Regional Bank is Arizona-based Western Alliance Bancorp (WAL). The second best bank is Glacier Bancorp (GBCI). Based in the Montana, the bank has operations in eight western states – Washington, Idaho, Wyoming, Colorado, Nevada, Utah, Arizona and Montana. Last year Glacier Bank moved from trading on the NASDAQ to the NYSE.

Disclosure: Long GBCI

S&P/TSX Composite Index Calendar Year Returns From 1924 To 2020: Chart

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Stocks tend to go up in the long term. Though in the short-term stocks can be volatile or earn negative returns, when considered over many years or even decades stocks usually generate a positive return. This is true in the case of Canadian market also. The following chart shows the calendar year returns of the S&P/TSX Composite Index from 1924 to 2020. In most years the return was positive. Or to put it another way, 73% of the time, Canadian stocks yielded calendar year returns above zero.

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Source: 3 Guidelines to keep in mind in volatile markets, Russell Investments

Trading of Russian Companies on US Stock Exchanges Halted

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The New York Stock Exchange (NYSE) and NASDAQ have halted trading of Russian companies trading on their exchanges effective yesterday Feb 28th, 2022. The halt will be in effect until further notice. It is not clear when the halt will be lifted. Until then investors will not be able to buy or sell them. Below is an excerpt from a Reuters article:

NEW YORK, Feb 28 (Reuters) – Nasdaq Inc (NDAQ.O) and Intercontinental Exchange Inc’s (ICE.N) NYSE have temporarily halted trading in the stocks of Russia-based companies listed on their exchanges, their websites showed.

The halts were due to regulatory concerns as the exchanges seek more information following economic sanctions imposed on Russia because of its invasion of Ukraine, people familiar with the matter said.

The Nasdaq-listed stocks halted are: Nexters Inc , HeadHunter Group PLC (HHR.O), Ozon Holdings PLC (OZON.O), Qiwi PLC (QIWI.O) and Yandex (YNDX.O).

Source: NYSE, Nasdaq halt trading in stocks of Russia-based companies, Feb 28, 2022, Reuters

The NYSE-listed stocks that are halted are:

  • Cian PLC (CIAN)
  • Mechel Steel (MTL)
  • Mobile Telesystems Public Joint Stock Company (MBT)

Are Russian stocks trading on the OTC markets also halted?

Currently OTC Markets Group has NOT halted Russian stocks trading on the OTC markets. Per the Reuters piece, they are seeking clarification regarding the sanctions imposed recently on Russia and their impact on trading depository receipts of Russian firms.

So major firms like Gazprom(OGZPY), Lukoil(LUKOY), Surgutneftegas(SGTZY), etc. will continue to be traded as usual.

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Disclosure: No positions

Major Crisis Events Since 1940 and US Stock Market Returns

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The Russian invasion of Ukraine will go down in history as one of the major crisis events of the 21st century. For more than two years the world has been dealing with disastrous impacts of Covid-19. Though the pandemic has not ended in any way, Russia decided its the best time to start a war on Ukraine. Almost overnight the world’s attention has shifted from Covid-19 to this new war.

According to an article by Dr.Shane Oliver at AMP Capital, there is a long history of major crisis events that impacted equity prices. In almost most of these cases, initially the stock market fell sharply only to rebound in the following months and years. Since World War II, the average decline for US stocks has been 6%. But six months later stocks were up by 9% on average. And the returns were even better after 1 year at around 15%.

The following table shows the major crises since 1940 and the performance of US stock market later:

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Source: The escalation in Ukraine tensions – implications for investors by Dr.Shane Oliver, AMP Capital

Comparing the Military Might of Russia and Ukraine: Infographic

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The Russian invasion of Ukraine is now on Day 5. Though it is too early to conclude anything, it appears the war is not going as planned for Russia. An article at The Guardian discusses a few of the early mistakes by Russia particularly the limited use of air force. With that said, the military forces of Ukraine is much smaller than of Russia. The following infographic from Radio Free Europe/Radio Liberty shows a comparison of the military might of the two countries:

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Source: RFE/RL Infographic