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 14.4% return has trailed the S&P 500 by 14.9 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. Taking that into account, here is one bank stock poised to generate sustainable market-beating returns and two we’re passing on.

Two Bank Stocks to Sell:

United Community Banks (UCB)

Market Cap: $3.64 billion

Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.

Why Is UCB Not Exciting?

1. Sales trends were unexciting over the last two years as its 1.2% annual growth was below the typical banking company
2. Net interest margin of 3.3% reflects its high servicing and capital costs
3. Operational productivity has decreased over the last four years as its efficiency ratio worsened by 3.2 percentage points

At $29.96 per share, United Community Banks trades at 1x forward P/B. To fully understand why you should be careful with UCB, check out our full research report (it’s free for active Edge members).

United Bankshares (UBSI)

Market Cap: $4.98 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 Are We Cautious About UBSI?

1. Muted 1.7% annual revenue growth over the last two years shows its demand lagged behind its banking peers
2. Annual tangible book value per share growth of 7.3% over the last two years was below our standards for the banking sector

United Bankshares is trading at $35.50 per share, or 0.9x forward P/B. Dive into our free research report to see why there are better opportunities than UBSI.

One Bank Stock to Buy:

First Commonwealth Financial (FCF)

Market Cap: $1.66 billion

Tracing its roots back to the Great Depression era of 1934, First Commonwealth Financial (NYSE: FCF) is a financial holding company that provides consumer and commercial banking, wealth management, and insurance services across Pennsylvania and Ohio.

Why Do We Love FCF?

1. Projected net interest income growth of 15.5% for the next 12 months is above its five-year trend, pointing to accelerating demand
2. Efficiency ratio improvement of -3.5 percentage points is projected for next year as the firm achieves greater operating leverage
3. Incremental sales significantly boosted profitability as its annual earnings per share growth of 13.4% over the last five years outstripped its revenue performance

First Commonwealth Financial’s stock price of $15.91 implies a valuation ratio of 1.1x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

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 Kadant (+351% 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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