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My Bank vs. The Biggies

Written by Gary North on April 25, 2015

I bank at the Bank of the Ozarks. I have for almost 16 years. The bank bought out a bankrupt Georgia bank a mile down the road from my home.

The Bank of the Ozarks has utterly creamed the big multinational banks over the last ten years. So have a lot of other regional banks.

There is an article on the performance of these small banks. It’s worth considering. I would not advise investing in stocks today. But you should be aware of the following facts. The regional banks were better investments than the giants.

Many of these banks benefitted from heavily discounted government-sponsored acquisitions of failed or greatly troubled peers, with stock performances boosted by resulting gains. For example, Bank of the Ozarks Inc. OZRK, -0.30% acquired four failed banks during 2010 and another three the next year. The company’s acquisition spree has continued, as it has increased assets by 65% over the past year. Meanwhile, its stock has returned 30% over 12 months.

Wells Fargo more than doubled in size and gained a truly national branch network when it bought the foundering Wachovia for $15.1 billion in stock.

Signature Bank SBNY, -0.40% of New York is following an organic growth strategy, driven in part by the recruitment of commercial-lending teams from competitors. Over the past year, the bank has boosted its average commercial loan portfolio by 34% to $18.1 billion. First-quarter net interest income climbed 20% to $222.5 million.

For the rest of the article, click the link.

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