Banks serve as the backbone of the economy, facilitating lending, deposits, and financial services that keep businesses and consumers moving forward. 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 9.4% return has trailed the S&P 500 by 3.7 percentage points.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. On that note, here is one resilient bank stock at the top of our wish list and two we’re swiping left on.
Two Bank Stocks to Sell:
Community Bank (CBU)
Market Cap: $2.98 billion
Tracing its roots back to 1866 in upstate New York, Community Financial System (NYSE: CBU) is a financial holding company that provides banking, employee benefits, wealth management, and insurance services to retail, commercial, and municipal customers.
Why Does CBU Worry Us?
- Annual net interest income growth of 6% over the last five years was below our standards for the banking sector
- Performance over the past five years shows its incremental sales were less profitable, as its 4.2% annual earnings per share growth trailed its revenue gains
- Annual tangible book value per share declines of 3.3% for the past five years show its capital management struggled during this cycle
At $58.53 per share, Community Bank trades at 1.5x forward P/B. Check out our free in-depth research report to learn more about why CBU doesn’t pass our bar.
Bank OZK (OZK)
Market Cap: $5.05 billion
Founded in 1903 and rebranded from Bank of the Ozarks in 2018, Bank OZK (NASDAQ: OZK) is a commercial bank that specializes in real estate lending while offering a full range of banking services to individuals and businesses.
Why Do We Think Twice About OZK?
- 9.1% annual revenue growth over the last two years was slower than its banking peers
- Net interest margin dropped by 89 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
- Efficiency ratio is expected to worsen by 2.9 percentage points over the next year
Bank OZK’s stock price of $46.04 implies a valuation ratio of 0.9x forward P/B. Read our free research report to see why you should think twice about including OZK in your portfolio.
One Bank Stock to Watch:
Nicolet Bankshares (NIC)
Market Cap: $1.81 billion
Starting as Green Bay Financial Corporation in 2000 before rebranding in 2002, Nicolet Bankshares (NYSE: NIC) is a regional bank holding company that provides commercial, agricultural, and consumer banking services primarily in Wisconsin, Michigan, and Minnesota.
Why Do We Like NIC?
- Market share has increased this cycle as its 18.5% annual net interest income growth over the last five years was exceptional
- Exciting net interest income outlook for the upcoming 12 months calls for 33.8% growth, an acceleration from its five-year trend
- Net interest margin expanded by 42.7 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
Nicolet Bankshares is trading at $126.70 per share, or 1.5x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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
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