There are literally hundreds of metrics investors can reference to assess the quality of a bank stock. Fool contributor John Maxfield wades through them and narrows the list down to the three that he always looks at: (1) interest rate margin, (2) ratio of non-interest income to non-interest expenses, and (3) non-current loan ratio.
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John Maxfield owns shares of Bank of America. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo & Company and has the following options: short OCT 2012 $33.00 puts on Wells Fargo and short OCT 2012 $36.00 calls on Wells Fargo. Motley Fool newsletter services recommend Wells Fargo. Try any of our Foolish newsletter services free for 30 days.