Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. But concerns about loan losses and tightening regulations have tempered enthusiasm, and over the past six months, the banking industry has pulled back by 5.8%. This performance was disappointing since the S&P 500 climbed 1.9%.

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. Keeping that in mind, here are two bank stocks we think can generate sustainable market-beating returns and one we’re swiping left on.

One BankStock to Sell:

Flagstar Financial (FLG)

Market Cap: $4.75 billion

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE: FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Why Are We Out on FLG?

1. Sales tumbled by 22.8% annually over the last two years, showing market trends are working against its favor during this cycle
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 24.6% annually while its revenue grew
3. Annual tangible book value per share declines of 6.2% for the past five years show its capital management struggled during this cycle

Flagstar Financial’s stock price of $11.42 implies a valuation ratio of 0.7x forward P/B. If you’re considering FLG for your portfolio, see our FREE research report to learn more.

Two Bank Stocks to Watch:

Coastal Financial (CCB)

Market Cap: $1.25 billion

Pioneering the intersection of traditional banking and financial technology in the Pacific Northwest, Coastal Financial (NASDAQ: CCB) operates as a bank holding company that provides traditional banking services and Banking-as-a-Service (BaaS) solutions to consumers and businesses.

Why Do We Love CCB?

1. Annual net interest income growth of 46% over the past four years was outstanding, reflecting market share gains this cycle
2. Operating profits are forecasted to increase over the next year as it scales and becomes more productive
3. Earnings growth has trumped its peers over the last five years as its EPS has compounded at 25.6% annually

At $83.11 per share, Coastal Financial trades at 2.5x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

Ameris Bancorp (ABCB)

Market Cap: $4.16 billion

Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.

Why Are We Fans of ABCB?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 8.4% annual sales growth over the last five years
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 7.2% outpaced its revenue gains
3. Balance sheet strength has increased this cycle as its 14.3% annual tangible book value per share growth over the last five years was exceptional

Ameris Bancorp is trading at $60.66 per share, or 1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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-small-cap company Comfort Systems (+782% 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