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 has tumbled by 12.8%. This performance was significantly worse than the S&P 500’s 1.6% loss.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. Taking that into account, here are two resilient bank stocks at the top of our wish list and one we’re steering clear of.
One BankStock to Sell:
F.N.B. Corporation (FNB)
Market Cap: $4.90 billion
Tracing its roots back to 1864 during the Civil War era, F.N.B. Corporation (NYSE: FNB) is a diversified financial services holding company that provides banking, wealth management, and insurance services to consumers and businesses across seven states and Washington, D.C.
Why Are We Wary of FNB?
- Muted 1.7% annual revenue growth over the last two years shows its demand lagged behind its bank peers
- Inferior net interest margin of 3.2% means it must compensate for lower profitability through increased loan originations
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 5.3% annually while its revenue grew
At $13.62 per share, F.N.B. Corporation trades at 0.7x forward P/B. Read our free research report to see why you should think twice about including FNB in your portfolio.
Two Bank Stocks to Watch:
Enterprise Financial Services (EFSC)
Market Cap: $1.93 billion
Starting as a single bank in Missouri in 1988 and expanding through strategic growth, Enterprise Financial Services (NASDAQ: EFSC) is a financial holding company that offers banking, lending, and wealth management services to businesses and individuals across seven states.
Why Do We Like EFSC?
- Market share has increased this cycle as its 16.6% annual revenue growth over the last five years was exceptional
- Impressive 19.3% annual net interest income growth over the last four years indicates it’s winning market share this cycle
- Annual tangible book value per share growth of 10.5% over the last five years was superb and indicates its capital strength increased during this cycle
Enterprise Financial Services’s stock price of $52.30 implies a valuation ratio of 1x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
First Citizens BancShares (FCNCA)
Market Cap: $23.95 billion
With roots dating back to 1898 and a significant expansion through its 2023 acquisition of Silicon Valley Bank, First Citizens BancShares (NASDAQGS:FCNC.A) is a bank holding company that provides financial services to individuals and businesses through its First-Citizens Bank & Trust Company subsidiary.
Why Could FCNCA Be a Winner?
- Annual net interest income growth of 49.8% over the past four years was outstanding, reflecting market share gains this cycle
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 51.1% annually
- Balance sheet strength has increased this cycle as its 35% annual tangible book value per share growth over the last five years was exceptional
First Citizens BancShares is trading at $1,819 per share, or 1.1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. 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
