America's 7 safest banks

Moody’s, the big credit-rating agency, recently downgraded 15 of the world’s largest  banks. The downgrading, along with JPMorgan Chase’s multibillion-dollar trading loss on risky derivatives, make it clear that big banks aren’t as safe as depositors may think.
But we ordinary people have to keep our money somewhere, despite record-low interest rates on savings. While the FDIC guarantees your deposits, it only insures so much, and there are financial instruments that are not FDIC insured.
To help consumers find the best places to stash our cash, Jon C. Ogg and Samuel Weigley of 24/7 Wall St. have compiled a list of the safest banks. These are the criteria they used. The bank must have:

  • A market capitalization of more than $2 billion.
  • A share value less than 14 times earnings (P/E ratio), and a share price to book value of less than 2.0.
  • A minimum return on equity of 8% or more.
  • A dividend yield to its common holders of 2.0% or higher.
  • An investment grade credit rating by ratings agencies.
  • Wall Street analysts had to value the bank’s share price above the current price.
  • A regional bank with more than 100 branches.
  • Among the top 50 banks by assets with a large retail banking presence (which excludes the fiduciary banks of State Street Corporation and Bank of New York Mellon).
  • “Problem banks,” which include Citigroup Inc. and Bank of America Corporation, were excluded even though it would seem nearly impossible that depositors would have any risk with them.
  • Also excluded are  regional banks located in the troubled Southeast and the entire Pacific Coast where so many faced financial troubles from housing and lending during and after the recession.
  • Also excluded from the list are some of the large banks that have been involved very recently in mergers and acquisitions, as well as banks with questionable viability and survival during another recession.

Here are the Seven Safest Banks. Click on the bank’s name for details:
7. BOK Financial Corporation
6. Key Bank
5. PNC Financial Services
4. M&T Bank Corporation
3. U. S. Bancorp
2. JPMorgan Chase & Co.
1. Wells Fargo & Company
~Eowyn

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0 responses to “America's 7 safest banks

  1. Thank you Dr. Eowyn for this interesting and important post! I am so glad we are in a safe bank! Your research is appreciated always!

     
  2. edward oleander

    This one got me thinking about a somewhat tangential subject, so here’s a question for the group: What would it take for you to NOT patronize one of the above banks? Would you drop BOA for it’s unethical treatment of some customers, or would it take something personal (like an experience I had with Wells Fargo at a grocery store checkout lane) for you to fire your bank? If the safest and best performing bank on the list backed a Democrat or a progressive policy like support for gay marriage, would you fire them then? Would you reward a poorly performing bank with your business if they espoused “traditional” family values?
    How does the notion of corporate culture affect your buying habits outside of banking? I know many of you prefer not to shop at companies that appear to support gay pride (you can add Stanley Steamer to that list, btw), and I wonder what OTHER criteria you would consider for either supporting or boycotting most businesses in general. Anecdotes are welcome, and I promise not to turn this into a plug for companies I like, or a rant against those I don’t. I’m just curious…
    Thanks!
    ~ed

     
  3. It becomes easier , as discretionary income dwindles , to less
    often frequent businesses that support ones enemies or even competition…..I’m well invested but have gone from
    being the Bank of Dad, to just being a depository of experience
    and a benevolent trust. My youngest and I watched THE PATRIOT
    for our 4th …which puts into perspective that which men should
    hold dear and have been willing to sacrifice and invest.

     

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