Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. But worries about an economic slowdown and potential credit deterioration have kept sentiment in check, and over the past six months, the banking industry’s 7.5% return has trailed the S&P 500 by 10.9 percentage points.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. With that said, here is one bank stock poised to generate sustainable market-beating returns and two best left ignored.
Two Bank Stocks to Sell:
Wintrust Financial (WTFC)
Market Cap: $8.81 billion
Founded in 1991 as a community-focused alternative to big banks in the Chicago area, Wintrust Financial (NASDAQGS:WTFC) operates community banks in the Chicago area and provides specialty finance services including insurance premium financing and wealth management.
Why Do We Think Twice About WTFC?
- Estimated net interest income growth of 7% for the next 12 months implies demand will slow from its five-year trend
- High debt servicing costs relative to its earnings leave little margin for error in meeting its financial obligations
Wintrust Financial’s stock price of $131.60 implies a valuation ratio of 1.3x forward P/B. Dive into our free research report to see why there are better opportunities than WTFC.
F.N.B. Corporation (FNB)
Market Cap: $5.76 billion
Tracing its roots back to 1864 during the Civil War era, F.N.B. Corporation (NYSE: FNB) is a diversified financial services holding company that provides banking, wealth management, and insurance services to consumers and businesses across seven states and Washington, D.C.
Why Does FNB Give Us Pause?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- 27.3 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
- Sales over the last two years were less profitable as its earnings per share fell by 7% annually while its revenue was flat
At $16.09 per share, F.N.B. Corporation trades at 0.9x forward P/B. Check out our free in-depth research report to learn more about why FNB doesn’t pass our bar.
One Bank Stock to Buy:
Amalgamated Financial (AMAL)
Market Cap: $808.7 million
Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.
Why Will AMAL Outperform?
- Solid 10% annual net interest income growth over the last five years indicates its offerings are gaining share
- Additional sales over the last two years increased its profitability as the 8% annual growth in its earnings per share outpaced its revenue
- Annual tangible book value per share growth of 20.4% over the last two years was superb and indicates its capital strength increased during this cycle
Amalgamated Financial is trading at $26.86 per share, or 1x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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