These Five Regional Banks Received Zero CFPB Complaints in 2016

In terms of size, regional banks slot in between the large money center banks that operate nationally or internationally and the smaller community banks that operate below the state level. Regional banks turned in a stellar performance in 2016, with net total returns of 34.52 percent, as measured by the S&P Regional Banks Select Industry Index. This compares to the benchmark S&P Composite 1500 Index’s 2016 total return of 13.03 percent, and a 30.48 percent return of all banks in the S&P Banks Select Industry Index.

The Consumer Financial Protection Bureau (CFPB) generally receives fewer complaints about regional banks than they do about the money center ones. This is not surprising based upon the relative sizes of the two banking sectors. But only regional banks were able to score zero CFPB complaints in 2016 – a new analysis of the best and worst banks of 2016 reveals that 12 regional banks had no CFPB complaints. This information is based upon the CFPB Consumer Complaint Database of almost 680,000 complaints involving about 3,000 different companies. In this article, we’ll review the following five regional banks with zero CFPB complaints:

  1. Bank of the Ozarks Inc. (OZRK): The 2016 total return of OZRK was 7.60 percent, well below the sector average. The company has a market capitalization of $6.41 billon compare to $51.52 billion for all banks, and a trailing 12-month (TTM) price to earnings ratio of 22.05 (vs 14.47 for the industry). Earnings per share (EPS) growth TTM was 24.35 percent vs 25.77 for all banks. OZRK is expected to experience 2017 EPS growth of 18.58 percent, about double of that for the bank industry. In recent news, the bank raised its quarterly dividend on January 3, 2017 to 3 percent, or $0.17 per share.OZRK has a history of growth through acquisitions, and it completed two acquisitions in 2016 that are expected to increase earnings. The bank has seen improvements credit quality, loans and deposits that, according to Zacks Financial, should strengthen the company’s financials in 2017. Zacks ranks it as a Buy.
  2. Fulton Financial Corporation (FULT): This bank boasted as 47.66 percent total return in 2016. FULT has a market cap of $3.27 billion, EPS of $0.91 and a P/E of 20.77. The dividend yield is 2.12 percent, compared to an average of 3.33 percent for the industry. Fidelity gives FULT an Equity Summary Score of 6.2 out of 10, a Neutral reading. On January 4, 2017, ValuEngine upgraded FULT’s rating from Hold to Buy.FULT operates a total of 243 branches in its home state of Pennsylvania as well as Delaware, Maryland, New Jersey, and Virginia. It is expected to have 8.33 percent EPS growth in 2017, placing it in the 58th percentile for the industry.
  1. Glacier Bancorp Inc. (GBCI): This regional bank had a stellar total return in 2016 of 40.71 percent. It’s TTM EPS is $1.57, with an expected growth rate of only 3.29 percent. It has a high P/E ratio of 23.16 and a dividend yield of 2.20 percent. GBCI announced a $0.30/share special dividend at the end of 2016. Institutions own 76.21 percent of GBCI shares, compared to 41.33 percent for all banks. It’s Equity Summary Score of 5.4 is Neutral.GBCI achieved unusually high marks for Q4 2016 operating margin (89th percentile) and TTM return on assets (94th percentile). Its debt ratios mostly fall below the median, meaning the bank is doing a good job of controlling its debt. The Montana-based bank operates 143 branches in its home state plus Idaho, Wyoming, Colorado, Utah, and Washington.
  2. Hope Bancorp Inc. (HOPE): In 2016, HOPE turned in a mediocre total return of 29.73 percent. The bank has a market cap of $2.98 billion, an EPS of $1.09, EPS growth estimate of -$5.98 (a contraction), a P/E ratio of 20.00, and a dividend yield of 2.18 percent. It’s negative EPS growth rate places it in the 28th percentile among all banks. The bank’s Equity Summary Score is 4.3, a weak Neutral reading.Hope recently announced the second phase of its branch consolidation plan. It expects this to create pre-tax charges of $1.2 million during the first half of 2017, and is looking to save about $5 million a year in operating expenses by shutting down some of its branches. Formerly known BBCN Bancorp until August 2016, the bank is headquartered in Los Angeles and has 85 branches located in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia, and Alabama.
  3. Great Western Bancorp Inc. (GWB): This hotshot regional bank returned 52.24 percent in 2016. With a market cap of $2.57 billion, GWB has an EPS of $2.14, EPS growth estimated at 12.11 percent, a P/E ratio of 20.55 and a dividend yield of 1.55 percent. Almost 94 percent of its shares are owned by institutions, a very high number. GWB’s stock price is quite volatile, with a beta of 1.92 compared to the industry average of 1.30, putting GWB in the 99thColumbine Capital Services rates the stock as Outperform, whereas its Equity Summary Score of 6 is Neutral. On the first day of 2017 trading, GWB jumped to an all-time high of $69.08 per share. As of Q3 2016, GWB’s branch network consisted of 173 branches located in Arizona, Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota (its home state).

Readers, what’s your take? Have you looked at the U.S. regional banks?

2 Responses to “These Five Regional Banks Received Zero CFPB Complaints in 2016”

  1. TPOHappiness

    Feb 21. 2017

    I haven’t heard of those banks before now.

  2. Dividends 4 Future

    Feb 24. 2017

    I like regional banks. Only one that looks familiar is OZRK. Take a look at PBCT, northeast regional bank.