Banks use their capital and expertise to help businesses grow while offering consumers essential financial products like mortgages and credit cards. But concerns about loan losses and tightening regulations have tempered enthusiasm, limiting the banking industry’s gains to 6.1% over the past six months. This return lagged the S&P 500’s 10.8% climb.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is 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:
Regions Financial (RF)
Market Cap: $26.09 billion
Tracing its roots back to 1971 and operating in a region known as the "heart of Dixie," Regions Financial (NYSE:RF) is a financial holding company that provides banking services, wealth management, and specialty financial solutions across the South, Midwest, and Texas.
Why Does RF Fall Short?
- Net interest income trends were unexciting over the last five years as its 5.3% annual growth was below the typical banking firm
- Estimated net interest income growth of 4.1% for the next 12 months is soft and implies weaker demand
- Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable
Regions Financial’s stock price of $30.58 implies a valuation ratio of 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than RF.
Columbia Banking System (COLB)
Market Cap: $8.64 billion
Created through the merger of two Pacific Northwest banking institutions with deep regional roots, Columbia Banking System (NASDAQ:COLB) operates Umpqua Bank, providing commercial, consumer, and wealth management services across eight western states.
Why Does COLB Give Us Pause?
- Estimated net interest income growth of 4.6% for the next 12 months implies demand will slow from its five-year trend
- Earnings per share fell by 4.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Tangible book value per share tumbled by 1.7% annually over the last five years, showing banking sector trends are working against it during this cycle
At $30.54 per share, Columbia Banking System trades at 1.1x forward P/B. Read our free research report to see why you should think twice about including COLB in your portfolio.
One Bank Stock to Buy:
Nicolet Bankshares (NIC)
Market Cap: $3.59 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 Should You Buy NIC?
- Market share has increased this cycle as its 24.8% annual net interest income growth over the last five years was exceptional
- Net interest margin expanded by 69 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 26.2% outpaced its revenue gains
Nicolet Bankshares is trading at $171.17 per share, or 1.5x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.