Among top beneficiaries of the Trump rotation following Election Day are regional banking stocks. These smaller banks benefit for a few reasons. First, there’s the belief that rates will rise next year. Some think that under a Trump Presidency they will rise at a faster rate than they would have under Hillary Clinton. Higher rates are great for banks because they help their net interest margin, which is the difference between what they pay customers in interest and what they make on their lending and other banking actions.

The other big boost for banks is hope in the underlying American economy. People believe that increased GDP growth will generally benefit financial institutions. Another reason is more specific to these smaller banks. They are often the lender of choice for small business in America. If President Trump makes good on his promise spend big money on American infrastructure projects then small businesses will expand, borrowing money, and again helping the smaller regional banks.

That being said, I don’t believe you should go out there and buy every regional bank you lay your eyes on. You need to do a little bit of research on the banks you invest in if you are in fact buying individual names. Today’s Bear of the Day is Zacks Rank #5 (Strong Sell) Opus Bank (OPB - Free Report) .

Opus Bank provides various banking products, services, and solutions for small to mid-sized companies, entrepreneurs, real estate investors, professionals, and high net worth individuals. It offers demand deposits, checking accounts, money market accounts, savings accounts, and certificates of deposit. The company also provides multifamily residential loans, commercial real estate loans, commercial business loans, small business administration loans, construction loans, and single-family residential and consumer loans; and loans and lines for working capital, expansion, acquisitions, consolidation, and transition. As of December 6, 2016, it operated 56 banking offices, including 32 in California, 21 in the Seattle/Puget Sound region in Washington, 2 in the Phoenix metropolitan area of Arizona, and 1 in Portland, Oregon. 

The stock took a frightening tumble during the month of October, diving from $35 to $18 in less than two weeks. Since that dip shares have recovered most of the move, getting back near $30 with the post-election rally.

The reason for the Zacks Rank #5 (Strong Sell) is the drastic cut in earnings estimates the stock has seen from analysts. Over the last ninety days, analysts have dropped their estimates for the current year and next year. The bearish sentiment has cut our Zacks Consensus Estimate for the current year from $2.26 to $1.32 while slashing next year’s number from $3.13 to $1.94.

Investors looking for other regional banking options should investigate BOK Financial (BOKF - Free Report) and BancFirst (BANF - Free Report) . Both of these stocks are Zacks Rank #2 (Buy) stocks right now.