These beaten-down bank stocks have strong deposit bases and are well liked by analysts

Bank stocks have been pummeled in recent weeks amid the ongoing crisis centered around regional banks — but Wall Street sees some buying opportunities among the financial shares that have solid fundamentals and strong deposit bases. The financial shock spurred by the closure of Silicon Valley Bank has pushed down a bevy of bank stocks in recent days as investors considered the risk of contagion. The SPDR S & P Bank ETF (KBE) has lost 25% since the start of this month, while the SPDR S & P Regional Bank ETF (KRE) has fallen even farther with a 29% drop. Banks with higher percentages of deposits that are uninsured by the Federal Deposit Insurance Corporation — meaning they are larger than $250,000 per depositor — have been under increased scrutiny as customers and investors wonder if they are more prone to a bank run. Silicon Valley Bank had around 95% of it deposits uninsured as of December. (Both Silicon Valley and Signature Bank, which was also taken over, have had all deposits backstopped in a bid from regulators to bolster confidence in the U.S. banking system.) First Republic has lost 89.2% of its share value this month as investors considered whether a pledge of $30 billion from a group of banks was enough to shore up its liquidity given that 68% of its deposits are uninsured, according to JPMorgan data. CNBC reported Monday that JPMorgan has started advising First Republic on strategic alternatives. But Wall Street is expecting some bank stocks to come back as investors look past the broader crisis and find comfort in those with relatively strong fundamentals and customers. To find stocks with fortress-like assets, CNBC Pro screened for stocks that had the lowest portion of uninsured deposits, and at the same time were the most liked by Wall Street, using data from JPMorgan and FactSet. CNBC Pro used JPMorgan’s data on banks to find those with more than half of their deposit bases insured with a majority of customers under the $250,000 threshold, by the FDIC. These stocks currently have more than 55% of analysts rating them a buy and consensus price targets calling for an average upside of at least 20%. Here’s the five that made the list: Charles Schwab has the lowest share of uninsured deposits of the financial institutions on the list at 19%. It’s also one of the most-liked financial names, with nearly two out of every three analysts rating it a buy and the average price target implying the stock could rally nearly 50%. The stock has lost 27.8% since the start of March, helping to drag it down 32.4% since 2023 began. First Citizens BancShares and Goldman Sachs also made the list, with each having 33% of its deposits uninsured. Last year, First Citizens completed its merger with CIT Group. The stock has lost 19.6% so far this month and is down 22.2% this year. Despite the drop, two-thirds of analysts recommend buying the bank’s shares. The average analyst expects its shares to rally slightly over 44% from where they closed Wednesday’s session. Goldman Sachs, a bank considered too systemically important to fail, hasn’t been immune to the selloff with a 10.8% slide this month. The stock has lost 8.7% so far this year. More than half of analysts rate Goldman Sachs a buy. Of the stocks on CNBC Pro’s list, it has the smallest gain expected by analysts at 27.4%. Wells Fargo , also a major bank, has lost 20.5% this month, bringing shares into negative territory for the year. As of Wednesday’s close, the stock was down 9.9% year to date. With 55.2% of analysts rating it a buy, it’s the least favored of the five stocks on the list. But the average analyst’s price target implies shares could advance roughly 43% from Wednesday’s close. Just under half of Citizens Financial ‘s deposits are uninsured, meaning it has the largest share of those that passed CNBC Pro’s screen. The regional bank has outperformed the regional bank ETF with a month-to-date loss of 25.9%. Shares have slid 20.6% since the start of the year. Roughly three out of every five analysts rate the stock a buy. The average analyst expects the stock to surge slightly more than 52% over the next year. — CNBC’s Michael Bloom and Fred Imbert contributed to this report

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