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’s 8% return has trailed the S&P 500 by 5 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 are two bank stocks boasting durable advantages and one that may face trouble.
One Bank Stock to Sell:
First Interstate BancSystem (FIBK)
Market Cap: $3.67 billion
Tracing its roots back to 1971 and still guided by founding family principles, First Interstate BancSystem (NASDAQ: FIBK) operates a network of community banks across 14 western and midwestern states, offering comprehensive banking services to individuals, businesses, and government entities.
Why Should You Sell FIBK?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Projected 6.5 percentage point efficiency ratio increase over the next year signals its day-to-day expenses will rise
- Incremental sales over the last five years were less profitable as its 1.3% annual earnings per share growth lagged its revenue gains
At $38.53 per share, First Interstate BancSystem trades at 1.1x forward P/B. Check out our free in-depth research report to learn more about why FIBK doesn’t pass our bar.
Two Bank Stocks to Watch:
Popular (BPOP)
Market Cap: $11.24 billion
Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ: BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.
Why Could BPOP Be a Winner?
- Exciting net interest income outlook for the upcoming 12 months calls for 16.7% growth, an acceleration from its five-year trend
- Net interest margin increased by 58.8 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more capital to invest or return to shareholders
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Popular is trading at $176.24 per share, or 1.7x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
East West Bank (EWBC)
Market Cap: $18.5 billion
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Does EWBC Stand Out?
- Solid 13.9% annual net interest income growth over the last five years indicates its offerings are gaining share
- Impressive 12.3% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
- ROE punches in at 17.1%, illustrating management’s expertise in identifying profitable investments
East West Bank’s stock price of $135.32 implies a valuation ratio of 1.9x 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
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
