5 Safest Bank Stocks to Buy Now

For the banks, the pain started last year when because of rising rates, banks had to mark down the value of their bond and loan portfolios. Remember, when rates go up, the value of a bond goes down so those investments held by banks; the bonds and loans which for a bank, loans issued are bonds because they pay the fixed rate and regular coupon-like payments, those all took a hit last year and bank stocks crashed 45% in the first five months of the year.

What’s happening now is a little different but still related. Because of those higher rates and plunging property values, a lot of commercial property owners are just letting the banks have the property instead of refinancing. Higher rates have sunk cash flow on rents and drove property values lower so there’s just no point refinancing some of it, especially office space. Banks have been building up their loan loss reserves, the cash account they set aside for in cash loans default, but evidently not enough. New York Community Bancorp, NYCB, shocked everyone last week when it increased this cash reserve account by 345%, moving another $646 million into loan loss provisions from just $187 million in the prior quarter. Besides saying it might not be able to collect on that additional $646 million in loans, the bank also took a writedown of $185 million on two loans…saying it almost certainly wasn’t going to be able to collect.

The broader regional bank ETF, the KRE, sank almost 9% last week on the fear that this problem is going to extend to other banks and lead to another crash like last year.

But the problem at NYCB isn’t as bad across the entire sector and that could create opportunities if you know what to look for.

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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through dividend stocks, investing and ways to make more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

[Muriel-]

I kinda agree to many ppl are choosing AMZN as their
"Stock of the yr". But my question is what stocks can be the next APPL in terms of growth for the next decade? I've set asides 500k to invest and my goal is to retire comfortably rich.

[Tikitin]

Now we just need to see the AMS55K price also move in the same direction as these charts. Up. Very Up.

[sharon]

the yield on bonds have decreased especially on the long end (30 and 10 Y) indicating that the demand is still there even if the supply remains huge showing a preference for safety. I'm still at a crossroad regarding whether or not to liquidate my $138k

[Nemo-ynsp]

NYCB crashed even more today (<$3) and I jumped in for 100 shares and a cash covered put. Added KEY last spring. It's one I'd like to hold long term, but it's likely going to get called away unless there is another big banking upset. In that case, I'd buy more! Seems I remember more of an NYCB analysis on this channel.

[mziobro]

Love the shorter videos and channel overall. If you could cover ALB that would be great. Thx

[HarryGarcia]

Thanks Joseph great content as usual. Like the short snappy ones and be great to see something on MELI, TTWO AND ELF if you you please. Keep up the good work Sir! Your appreciated!

[Angel_garcia]

I would argue more people don't stake AMS55K because you can do more with AMS55K, and staking is harder to do so users do nothing or use liquid staking

[dodgecharger]

I bought a bunch of USBank when it dipped I’m up 40% 🤑

[OldLion]

Been with PNC for a while now. Solid bank. Stock had appreciated 40+% over the last year or so too.

[Coldnose]

Shorter vids are cool, but I do like the analysis of the longer ones

[Dappertrucker]

I hold us bank and bank of America in my portfolio and added recently oil stocks

[monikadidluch]

Shorter and to the point a greatly appreciated.
Please do DKNG, PYPL, SOFI, PLTR

[josephdavis]

FHN has more exposure to commercial real estate than the banks that you mentioned, but from what I can gather, much of their real estate is in a booming area Memphis.

[manoli_hnaris]

Fortinet up a lot after hours! Wish I bought when you mentioned them!

[Rick-sfzl]

Love shorter videos as my time is limited. Should I give up on SOFI or keep holding out for a rebound?

[crozetisles]

Wish you would revisit your view of CCLD.

[dylanriech]

Banks concentrated in commercial office have significant risk, but 22% of NYCB's loan portfolio is in commercial office. This one is idiosyncratic and the C-suite gets a Darwin award for running a bank that had an $8b market cap that way. I work at a $2.5 market cap bank and it's ran like the Navy

[loakland]

Thank you Joseph... Semper Fi....!! Can you do a video on the Canadian Banking dividend stocks...? and do you force them having any issues in '24-25.... Thanks. Enjoy your work.

[monikadidluch]

Bonds subject is still confusing to many, including MUNI for taxable account. How to choose BONDS

[madvol]

Hi Joseph, can you please make a video about Invitae? Things are not going well at all for them, what will happen with the shareholders if they declare bankruptcy? Thanks in advance for your answer!