RBCAA - These Two High Yielding Regional Banks Offer Value

• Regional banks' stock prices are still down in some cases over -30% year-to-date. They have not participated in the market recovery.
• Many regional banks have high yields over 4% or even over 5%. The dividends are covered by earnings.
• Net interest margins are compressing due to low interest rates pressuring profitability. But some banks are seeing volume growth in mortgage banking.
• Asset quality is still good with low non-performing assets and loans. Capital ratios are high and above the minimum levels to be considered well capitalized.
• Two regional banks that are trading below their fair value estimate are buys.

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