Additionally, regional banks’ valuations look more attractive. Chris Marinac, director of research at boutique broker/dealer FIG Partners, points out that regaionl banks are largely undervalued. For instance, KRE shows a price-to-earnings ratio of 15.2 and a price-to-book of 1.3, IAT has a 13.9 P/E and 1.3 P/B, and KBWR has a 15.6 P/E and a 1.4 P/B. In contrast, the S&P 500 index is currently showing a 17.8 P/E and a 2.4 P/B.
“Regional banks are making more money,” Marinac said in the article, “They’re in the early innings of a profit comeback, as loan credit quality continues to grow.”
SPDR S&P Regional Banking ETF
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Max Chen contributed to this article.