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Is Bank of America the Best Bank Stock for 2019?

Will Ashworth

There’s no question that Bank of America (NYSE:BAC) is an exceptional bank. But is BAC stock the best option in the banking sector for 2019?

When it comes to banks, some people view them as plain vanilla, since they all appear to do the same thing: take deposits and lend out that money at a higher rate than they pay depositors.

Of course, we know that’s not true.

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That’s like saying McDonald’s (NYSE:MCD) is the same as Jack in the Box (NASDAQ:JACK) or Burger King.

What is the Best Bank Stock to Own in 2019?

I don’t think you can or should answer that question because beauty is in the eye of the beholder. While you might view Bank of America stock as the best name to own for the long haul, I might disagree.

And I do.

In late September, I wrote a piece entitled 7 Bank Stocks to Own for the Long Haul. Bank of America stock didn’t make the cut. Neither did JPMorgan (NYSE:JPM) or Citigroup (NYSE:C),

From my perspective, the best bank stock to own in 2019 should be one that stands out because it’s different in some way.

The Tech Sector’s Bank

The bank at the top of my list for long-term investors is SVB Financial (NASDAQ:SIVB), the Santa Clara-based holding company, that got its start lending to tech innovators in Silicon Valley and leveraged that focus to become one of the most respected banks in the country.

On Nov. 13, SVB Financial announced that it would buy Leerink Holdings LLC for $340 million (including potential earn-outs). A Boston investment bank, Leerink specializes in healthcare and life sciences companies. 

“SVB and Leerink share a focus on providing financing and strategic advice at critical stages in a company’s growth and development,” said Greg Becker, CEO of SVB Financial Group and Silicon Valley Bank. “Together, we will deliver a complete capital markets offering – including debt, convertible debt and equity financing – and advisory services – including mergers & acquisitions – for private and public healthcare and life science companies.”

That’s the beauty of SVB Financial. It understands what its strengths are and stays in those lanes.

For the entire fiscal 2018, SVB expects its net-interest margin (NIM) to be 3.55%-3.65%, as much as 60 basis points higher than in 2017, and more than 100 basis points higher than its 2015 NIM of 2.57%.

That’s significantly higher than Bank of America’s third-quarter NIM of 2.61%.

Bank of America Stock Is Not My Choice for 2019

I don’t think Bank of America stock is a bad choice. In fact, if you told me you owned it, I wouldn’t bat an eye.

That said, this article is about which bank stock I believe is the best one to own in 2019.

Since SVB, America’s most innovative bank, has lost 39% of its value over the past three months and trades within 8% of its 52-week low, I’ll vote for it as the best bank stock to own in 2019.

As of this writing Will Ashworth did not hold a position in any of the aforementioned securities.

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