Nearly half of the top yielding bank stocks are from Ohio, including Farmers National Banc Corp. (NASDAQ:FMNB), which pays 6.1%, and First Citizens Banc (NASDAQ:FCZA), giving a yield of 5.7%. At the top of the list is Beverly Hills Bancorp (BHBC) yielding 6.11%. It is the holding company for First Bank of Beverly Hills which serves the southern California area.
Although the big advantage to investing in these stocks is the much higher yield than a passbook account, the significant risks should be considered. First, if interest rates rise, the profit margins on their fixed loans will be squeezed. Second, most banks issued a substantial number of ‘risky’ loans [high loan to equity, low credit quality, etc] over the last few years. In addition, a continued drop in housing prices would lead to more foreclosures. One other important factor to be careful of with regards to many of these bank stocks, is the lack of liquidity. For example, NB&T Financial Group Inc. (NASDAQ:NBTF) hasn’t traded since December 12. And because of the illiquidity, the bid and asked spread can be very wide.
Listed below are the fourteen highest yielding banking companies which trade fairly regularly, along with the symbol, yield, and state that they are based in. Yield is based on the latest annualized quarterly dividend divided by the current share price:
Beverly Hills Bancorp (BHBC) 6.11%, CA
Farmers Natl Banc Corp (FMNB) 6.1%, OH
Community Bank & Trust (OTC:CBNH) 5.9%, NH
First Citizens Banc (FCZA) 5.7%, OH
Trustco Bank Copr. of NY (NASDAQ:TRST) 5.7%, NY
Community Bancorp (OTCQX:CMTV) 5.2%, VT
F N B Corp (NYSE:FNB) 5.2%, PA
NB&T Financial Group Inc (NBTF) 5.1%, OH
Union Bankshares Inc (NASDAQ:UNB) 5.05%, VT
United Bancorp Inc (NASDAQ:UBCP) 5.0%, OH
Ames National Corp (NASDAQ:ATLO) 5.0%, IA
First Commonwealth Finan. (NYSE:FCF) 4.97%, PA
Cortland Bancorp (OTCQX:CLDB) 4.8%, OH
FirstMerit Corp (NASDAQ:FMER) 4.8%, OH
Disclosure: The author does not own any of the above-mentioned stocks.