UMB Financial Corporation (UMBF), SVB Financial Group (SIVB), Prosperity Bancshares, Inc. (PB): Yields Are Up, and These Banks Will Benefit the Most

High quality acquisitions mounting

Prosperity Bancshares, Inc. (NYSE:PB), with 54% of its assets invested into cash equivalent securities, is the third bank in my list. The bank has been one of the most acquisitive banks in the country and, with the recently-announced acquisition of First Victoria National Bank, it remains on the right track for continued growth. Through the First Victoria acquisition for $374 million in stock and cash, Prosperity Bancshares, Inc. (NYSE:PB) has cemented its philosophy of acquiring high-quality assets.The deal will add 30 new branches in Texas and $540 million of trust assets, leaving the combined entity with 250 branches in Texas and $13 billion of deposits.

Texas’s business-friendly environment and favorable demographics will help the bank going forward as much as the current interest rate trends. Prosperity Bancshares, Inc. (NYSE:PB)’s 9.13% return on equity and 1.34% return on assets makes it a good bet even when the bank trades at 16.5 times its price to earnings ratio and 154% price to book value.

Foolish conclusion

Interest rates are going up, and all the industries that benefit from such a trend will be profitable. The three banks profiled above are the financial institutions that should benefit the most from rising interest rates. Their strong fundamentals and huge cash piles are going to be the key of their operational outperformance. Go long!

The article Yields Are Up, and These Banks Will Benefit the Most originally appeared on Fool.com and is written by Federico Zaldua.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.