Forbes Magazine's America's Best Banks: Are they best for investors?

Abstract

This paper investigates announcement effects and longer‐term performance associated with the Forbes' America's Best Banks survey release. Although the market reacted positively to the announcement, the overall event window effects were insignificant. Raw and risk‐adjusted returns are statistically insignificant over longer‐time horizons. Investors cannot just use the Best Banks list to earn positive announcement window returns. However, a direct relation exists between movement in survey rank and subsequent accounting profitability measures, suggesting investors may benefit from monitoring movements on the Best Banks list. We also find support for a size effect as smaller, matched sample banks have higher Jensen's alphas than the Forbes larger Best Banks.