3 Stocks To Own As Regional Banks Rebound

Hingham Institution for Savings (HIFS)

HIFS was founded in 1834 and has 10 branches spread across the Boston, southern Massachusetts and Nantucket markets. In its Q3 earnings, the bank reported $2.719 billion in assets, up from $2.48 billion one year earlier.

HIFS’ book value per share was $130.24 as of Sept. 30 closing date of Q3, representing 17% annualized growth year-to-date and 17% growth year-over-year.  In addition to the increase in book value per share, HIFS declared $2.31 in dividends per share since Q3 2019, including a special dividend of $0.60 per share declared during the fourth quarter of 2019 – HIFS’ regular dividend per share has been rising over the last four quarters.

At the close of Q3, the bank had modified less than 1% of its total loan portfolio by number and less than 3% by dollar in response to pandemic. HIFS Chairman Robert H. Gaughen Jr. announced the Q3 earnings by noting that the bank has responded to “unusual opportunities” in the pandemic-era economy while remaining “focused on careful capital allocation, defensive underwriting and disciplined cost control – the building blocks for compounding shareholder capital through all stages of the economic cycle.” 

HIFS is trading at $216.21, slightly below its 52-week high of $230.02 and a comfortable distance from its 52-week low of $125.55. It holds an overall POWR Rating of “A” (Strong Buy), with POWR Components of “A” for Trade Grade, “A” for Buy & Hold Grade, and “A” for Peer Grade.

Webster Financial Corp. (WBS - Get Rating)

WBS is the parent company of Waterbury, Connecticut-headquartered Webster Bank and its HSA Bank division. The company was founded in 1935 and operates 156 branches across Connecticut, New York, Rhode Island and Massachusetts. 

In its Q3 earnings report, WBS reported $32.9 billion in assets, up from $29.8 billion one year earlier. WBS’ Q3 loan growth of $2.3 billion was up by 11.8% from a year ago – excluding Paycheck Protection Program (PPP) loans, Q3 total loan growth was $946 million, or 4.8% year-over-year. Q3 deposit growth was $3.6 billion, or 15.6% year-over-year, fueled by a $1.8 billion rise in demand deposits and $688 million in HSA deposits.

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