The 7 Safest Banks in America

24/7 Wall St.: The 7 Safest Banks in America

Moody’s recent downgrade of fifteen of the world’s largest banks, along with JPMorgan Chase & Co.’s (NYSE: JPM) multi-billion trading loss, make it clear that certain big banks are just not as safe as depositors might have hoped. Still, consumers have to keep their money somewhere.

24/7 Wall St. has compiled a list of the safest banks to help consumers navigate through continued difficult times. The criteria were very strict. They focused on the universe of the money-center banks, super-regional banks, and banks with retail branches that encompass several states

24/7 screened for banks with a market capitalization of more than $2 billion. They further screened for banks whose share value is be less than 14 times earnings (P/E ratio). The share price to book value had to be less than 2.0. The bank had to have a minimum return on equity of 8% or more. To demonstrate how confident a candidate bank is, it had to pay its common holders a dividend yield of 2.0% or higher.

(AP Photo/Paul Sakuma)

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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The 7 Safest Ban... Moody’s recent downgrade of fifteen of the world’s largest banks, along with JPMorgan Chase & Co.’s (NYSE: JPM) multi-billion trading loss, make it clear that certain big banks are just not as safe as depositors might have hoped. Still, consumers have to keep their money somewhere.

24/7 Wall St. has compiled a list of the safest banks to help consumers navigate through continued difficult times. The criteria were very strict. They focused on the universe of the money-center banks, super-regional banks, and banks with retail branches that encompass several states

24/7 screened for banks with a market capitalization of more than $2 billion. They further screened for banks whose share value is be less than 14 times earnings (P/E ratio). The share price to book value had to be less than 2.0. The bank had to have a minimum return on equity of 8% or more. To demonstrate how confident a candidate bank is, it had to pay its common holders a dividend yield of 2.0% or higher.

(AP Photo/Paul Sakuma)

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
7. BOK Financial... BOK Financial Corporation (NASDAQ: BOKF) is the smallest bank on the list with a $3.8 billion market value and $26 billion in assets. The bank holding company is based in Tulsa, Oklahoma, and its common branch names in other states are Bank of Albuquerque, Bank of Arizona, Bank of Arkansas, Bank of Kansas City, Bank of Oklahoma, Bank of Texas and Colorado State Bank and Trust. BOK is worth about 12.5 times earnings and is valued at 1.3 times book value. The return on equity is 11%, and it offers a 2.7% dividend yield to the common holders. Shares are trading around $56.00, and Wall Street analysts have a target above $59.00.

(iStock Photo)

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6. KeyCorp KeyCorp (NYSE: KEY) is the one exception to our rule about share prices under $10.00. Its other metrics more than make up for this exception. It has a market cap of just $7.12 billion against some $87 billion in assets. It operates in 14 states throughout the Rocky Mountain states, Northwest, the Great Lakes and the Northeast. It is impressive that KeyCorp is on the list considering that its headquarters is in Cleveland where many troubled loans arose. The bank has a return on equity of 9.2% and pays out a 2.7% dividend yield. Shares trade around $7.50 but have a target price of $9.00 from Wall Street.

(AP Photo/Amy Sancetta)

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5. PNC Financial... PNC Financial Services (NYSE: PNC) is based in Pittsburgh and has almost $300 billion in assets, with over 2,500 branches and almost 7,000 ATMs in 14 states. It has a market cap of $31.01 billion, and its stock is valued at 10.6 times earnings and at less than 0.9 times book value. The return on equity is 8.9%, and the company pays out a 2.73% dividend. Shares are trading at under $59, but Wall Street is eyeing a price of $70.50. PNC was even strong enough financially to close its National City acquisition at the end of 2008 when there was so much risk in the financial markets. PNC owns almost one-fourth of the great asset management firm of BlackRock Inc. (NYSE: BLK).

(AP Photo/Gene J. Puskar)

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4. M&T Bank Corp... M&T Bank Corporation (NYSE: MTB) is based in Buffalo, New York and now has more than $79 billion in assets. Excluding any small purchases made recently, M&T had nearly 700 branches, 2,000 ATMs and a presence in eight states. The market cap is $10.12 billion, its P/E ratio is 12.7, and its price-to-book value is only 1.07. M&T has a return on equity of 9.5% and pays out a dividend of 3.5% to common stockholders. The stock is trading just north of $80 a share, but analysts have set a target price of about $90. Berkshire Hathaway Inc. (NYSE: BRK-A) owns almost 5.4 million M&T Bank common shares worth more than $400 million.

(AP Photo/ Matt Houston)

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3. U.S. Bancorp U.S. Bancorp (NYSE: USB) is often overlooked as a money-center bank because it is a super-regional located in Minneapolis. It is the fifth largest commercial bank in the United States and caters to millions of consumers. U.S. Bancorp has $341 billion in assets, more than 3,000 branch locations, more than 5,000 ATMs, and its operations spread out over 25 states in America. Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) owns some 69 million shares worth more than $2.1 billion. The bank’s market cap is $59 billion. It is worth about 10 times earnings and 1.6 times book value. The return on equity is very high at 16%, and it offers a 2.5% dividend yield to the common holders. Shares are trading around $31.50, and Wall Street analysts have a target of about $34.25 on this great safe bank.

(AP Photo/Nati Harnik, File)

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2. JPMorgan Chas... Despite the media attention surrounding the JPMorgan Chase & Co.’s (NYSE: JPM) multi- billion dollar trading loss, the firm is still in good shape compared to many of its peers. It has a fortress-like balance sheet with about $2.3 trillion in assets, and CEO Jamie Dimon said the only risk to the bank’s failure is a collision of the earth and moon. Despite the share price decline following the trading loss, the company still has a sizable market cap of $135.17 billion. JPMorgan shares trade at less than 8 times earnings and only about 0.7 times book value. The return on equity is 9.8%, and the company pays a dividend yield of 3.4% on the common stock. While the bank shares are trading at just over $36, analysts value the company at $47 a share.

(AP Photo/Mark Lennihan, File)

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1. Wells Fargo &... Wells Fargo & Company (NYSE: WFC) is now the undisputed safest bank in America now that JPMorgan Chase & Co. (NYSE: JPM) has come under scrutiny — even if Chase has about $1 trillion more in assets. Wells Fargo has branches in almost every state in the U.S. with some 6,200 storefront branches and over 12,000 ATMs. The bank has an asset base of over $1.3 trillion. To prove how safe this bank is, Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) owns close to $13 billion worth of the common stock, and that stake keeps rising. The market cap is a whopping $171 billion. The shares trade at less than 9 times earnings and at almost 1.2 times book value. The return on equity is just above 12%, and it offers a 2.7% dividend yield to the common holders. While shares trade at around $32.50, Wall Street values the top bank at almost $38.00 per share.

(AP Photo/Paul Sakuma)

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The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.
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