3 Good Bank Stocks Under $20

Warren Buffett is a big fan of bank stocks.

(Image credit: iStock)

Warren Buffett is a big fan of bank stocks. His holding company, Berkshire Hathaway (BRK.B (opens in new tab)), owns billions of dollars' worth of shares of some of the nation's biggest banks including Bank of New York Mellon (BK (opens in new tab)), Goldman Sachs (GS (opens in new tab)), M&T Bank (MTB (opens in new tab)), U.S. Bancorp (USB (opens in new tab)) and Wells Fargo (WFC (opens in new tab)). Buffett really loves bank stocks when the Federal Reserve is hiking interest rates, a monetary-policy cycle that can boost banks' bottom lines.

But how do you jump on the bank bandwagon if you're a small investors lacking Buffett's billions? One cost-effective approach is to focus on low-priced shares of smaller regional banks that can profit from the same tailwinds that are benefiting big banks. We found three promising regional bank stocks trading under $20 that look attractive.

But before you place a buy order, don't neglect to weigh the impact of trading commissions. Let's say you want to invest $100 in each of the three bank stocks we recommend. Even at just $4.95 per online trade, the going rate at brokerages such as Fidelity and Schwab, your investment would already be down 5%. For small trades, consider opening a free Robinhood account instead. You can use the brokerage's smartphone app to make no-commission stock trades. An upgrade to the premium service, which gives investors access to after-hours trading and margin accounts, starts at $10 a month.

Data is as of May 2, 2017, unless otherwise indicated. Click on ticker-symbol links for current share prices and more.

(Stocks are listed in alphabetical order. Analyst ratings are per Zacks and Thomson Reuters.)

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.