Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. Furthermore, economic conditions have supported loan growth and fee income, a trend that has enabled the banking industry to return 17.3% over the past six months. At the same time, the S&P 500 was up 13%.

Although banks have produced good results, only a handful will thrive over the long term as fintech disruptors are rapidly taking market share from traditional institutions. On that note, here are three bank stocks that may face trouble.

United Bankshares (UBSI)

Market Cap: $5.61 billion

With roots dating back to 1982 and a strong presence in the Mid-Atlantic region, United Bankshares (NASDAQ: UBSI) is a bank holding company that provides commercial and retail banking services through its United Bank subsidiary across multiple states.

Why Is UBSI Risky?

1. Muted 4.5% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Earnings per share lagged its peers over the last five years as they only grew by 3.9% annually
3. Estimated tangible book value per share growth of 6.2% for the next 12 months implies profitability will slow from its two-year trend

At $40.08 per share, United Bankshares trades at 1x forward P/B. To fully understand why you should be careful with UBSI, check out our full research report (it’s free for active Edge members).

Annaly Capital Management (NLY)

Market Cap: $15.43 billion

Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE: NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.

Why Should You Sell NLY?

1. Net interest income trends were unexciting over the last five years as its 4.7% annual growth was below the typical banking firm
2. Inferior net interest margin of 0.5% means it must compensate for lower profitability through increased loan originations
3. Earnings per share have contracted by 7.3% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance

Annaly Capital Management is trading at $22.66 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than NLY.

Citigroup (C)

Market Cap: $202 billion

With operations in nearly 160 countries and a history dating back to 1812, Citigroup (NYSE: C) is a global financial services company that provides banking, investment, wealth management, and payment solutions to consumers, corporations, and governments.

Why Do We Steer Clear of C?

1. Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 5.9% for the last five years
2. Estimated net interest income growth of 2.2% for the next 12 months implies demand will slow from its five-year trend
3. Net interest margin of 2.4% reflects its high servicing and capital costs

Citigroup’s stock price of $112.74 implies a valuation ratio of 1x forward P/B. Check out our free in-depth research report to learn more about why C doesn’t pass our bar.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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.