But Russell Goldsmith, City National's chief executive, says his bank can go it alone. Hughes recommends UnionBanCal, the parent of Union Bank of California. With financial troubles plaguing many of the country's banks, experts think the Japanese bank will sell the unit. Hughes also likes North Valley Bancorp, which is based in Redding and is being helped by a solid Northern California economy. But he cautions that none of the stocks can be had cheaply.
Banks likely can withstand a slight economic downturn, experts say.
But as history has demonstrated, a full-blown recession would most likely pound stock prices as banks' loan losses inevitably mount.