Every time the outlook for the US economy increases, one of the beneficiaries is bank stocks because one of the most important aspect of banking is the loan loss ratio – the economy improves and loan losses go down. Another aspect to the outlook for banking is after the 2008 meltdown, banking regulations were tightened. The banks have lived under the regulations which improved the safety of them, however regulations do not necessary bring in income. President elect Trump has discussed lowering regulations and with his appointments to the agencies who control regulations for banking, it would be an good educated guess some of the regulations would be coming off or changed it terms of the bank’s viewpoint. From a stock point of view bank shares could rise in value, Peter Aston of Recognia asked which bank should you focus on, assuming you do not buy the banking index?

His criteria are:

a market capitalization of $ 10 billion

examining the operating margin as a tool for efficient operations The bank needs to have greater than 20% for operating margin is the amount of profit the bank makes on each dollar of revenue.

forward Price Earnings (P/E) ratios of 20% or less

dividend yield of greater than 1.5%

Company                               Mkt Cap                 P/E               Operating            Dividend Yield

(US $ Bil)                this year       Margin                       %

Wells Fargo                          281.8                     13.9                       34.7                      2.7

BB&T                                         38.7                    17.3                       32.2                      2.5

US Bancorp                              89.3                   16.0                       37.4                     2.2

PNC Financial                         57.4                  16.6                        33.5                      1.8

BNY Mellon Corp                   50.4                  15.7                       28.6                      1.6

Regions Financial                  17.9                  17.4                        28.3                     1.8

KeyCorp                                    19.9                   17.7                       25.0                     1.8

Linking to dividend paying stocks, a well run bank should be in your portfolio of holdings for when they do well the economy does well. Depending on which bank you pick you may have holdings in one part of the country or another, but banks tend to be very profitable companies relative to other companies. If you change the about criteria you can find your bank if it is not listed. At the end of the year, the banks should continue to help grow the economy and you will have more money than you started with.

There are more questions than answers, till the next time – to raising questions.