Best Bank Stocks To Buy Now Yield Up To 5%

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The almost-continuous stream of good news about a COVID-19 vaccine finally revived community and regional bank stocks in November. The SPDR S&P Regional Banking ETF (NYSE Arca: KRE) bounced back more than 25% in November after being down more than 50% at its lowest point.

The index is still down 15% year to date, but it has been an impressive recovery. It may continue to go in that direction, which will fuel some of the best bank stocks we're covering today.

The widespread distribution of a vaccine and improving prospects for at least some form of stimulus from Congress means the worst-case scenario for banks is off the table.

The worst-case was potentially pretty dire, with widespread mortgage defaults and the commercial real estate industry's crumbling. That combination would have made 2008 look like a picnic.

Instead, we are now looking at a world where things can get back to normal. The result of that is banks that will continue to be in great shape.

What most investors have overlooked when it comes to banks is that the banking industry had more capital than ever before the pandemic tried to shut down the world.

Credit conditions were also as good as they had ever been, with minuscule loan losses at most banks.

It would have taken the worst-case scenario to harm most of the U.S. banking industry permanently. That didn't happen, so the picture will get brighter by the day for bank stocks.

Some will shine brighter than others. Here's our first, a profit machine….

This Bank Stock Had Record Profits in 2020

ESSA Bancorp Inc. (NASDAQ: ESSA) of Stroudsburg, Pa., has seen record levels of net income in 2020.

ESSA was a stellar producer of Payroll Protection Program loans with 637 loans for $75.6 million originated through June 30, 2020.

Many of those were for new customers whose bigger banks could not process the loans quickly enough. Many of those customers will transfer a significant portion of their business to ESSA Bancorp. These new business customers should help drive continued growth for the bank.

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