Banks use their capital and expertise to help businesses grow while offering consumers essential financial products like mortgages and credit cards. But worries about an economic slowdown and potential credit deterioration have kept sentiment in check, and over the past six months, the banking industry has tumbled by 5.9%. This drop is a noticeable divergence from the S&P 500’s 5.4% return.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here is one bank stock poised to generate sustainable market-beating returns and two we’re passing on.

Two Bank Stocks to Sell:

Provident Financial Services (PFS)

Market Cap: $2.37 billion

Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE: PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.

Why Does PFS Fall Short?

1. Weak unit economics are reflected in its net interest margin of 3.2%, one of the worst among bank companies
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 7.1% annually
3. Products and services are facing profitability challenges during this cycle, as seen in its flat tangible book value per share over the last five years

At $18.12 per share, Provident Financial Services trades at 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than PFS.

Pacific Premier Bancorp (PPBI)

Market Cap: $2.12 billion

With a specialized division that serves homeowners' associations nationwide and a trust division that handles self-directed IRAs with alternative assets, Pacific Premier Bancorp (NASDAQ: PPBI) is a Western US regional bank that provides banking services to small and middle-market businesses, corporations, non-profits, and specialty markets.

Why Should You Dump PPBI?

1. Customers borrowered less money this cycle as its net interest income declined by 4.8% annually over the last four years
2. Expenses have increased as a percentage of revenue over the last four years as its efficiency ratio degraded by 15.4 percentage points
3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 9.1% annually while its revenue grew

Pacific Premier Bancorp’s stock price of $21.86 implies a valuation ratio of 0.7x forward P/B. Read our free research report to see why you should think twice about including PPBI in your portfolio.

One Bank Stock to Watch:

WSFS Financial (WSFS)

Market Cap: $2.99 billion

Founded in 1832 as Wilmington Savings Fund Society and one of the oldest banks in America still operating under its original name, WSFS Financial (NASDAQ: WSFS) operates a community banking and wealth management franchise primarily serving customers in the Mid-Atlantic region through its main subsidiary, WSFS Bank.

Why Do We Like WSFS?

1. Annual revenue growth of 9.2% over the last five years was superb and indicates its market share increased during this cycle
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 21.8% outpaced its revenue gains
3. Annual tangible book value per share growth of 18.6% over the past two years was outstanding, reflecting strong capital accumulation this cycle

WSFS Financial is trading at $53.34 per share, or 1.1x forward P/B. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 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

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