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, and over the past six months, the banking industry has pulled back by 6.2%. This performance is a stark contrast from the S&P 500’s 5.2% gain.
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 bank stock poised to generate sustainable market-beating returns and two we’re steering clear of.
Two Bank Stocks to Sell:
First Hawaiian Bank (FHB)
Market Cap: $2.95 billion
Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ: FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.
Why Are We Hesitant About FHB?
- Annual net interest income growth of 4% over the last five years was below our standards for the bank sector
- Net interest margin of 3% is well below other banks, signaling its loans aren’t very profitable
- Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle
At $23.96 per share, First Hawaiian Bank trades at 1.1x forward P/B. Read our free research report to see why you should think twice about including FHB in your portfolio.
CVB Financial (CVBF)
Market Cap: $2.62 billion
With roots dating back to 1974 and a focus on serving small and medium-sized businesses, CVB Financial (NASDAQ: CVBF) operates Citizens Business Bank, providing banking, lending, and trust services to businesses and individuals across California.
Why Is CVBF Not Exciting?
- Muted 1.4% annual net interest income growth over the last five years shows its demand lagged behind its bank peers
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Muted 2.8% annual tangible book value per share growth over the last five years shows its capital generation lagged behind its bank peers
CVB Financial’s stock price of $18.96 implies a valuation ratio of 1.1x forward P/B. Check out our free in-depth research report to learn more about why CVBF doesn’t pass our bar.
One Bank Stock to Watch:
FirstSun Capital Bancorp (FSUN)
Market Cap: $956.1 million
Tracing its roots back to 1892 when it first opened its doors in Kansas, FirstSun Capital Bancorp (NASDAQ: FSUN) operates Sunflower Bank, providing commercial and consumer banking services to businesses and individuals across the Southwest region.
Why Are We Fans of FSUN?
- Annual net interest income growth of 18.7% over the past five years was outstanding, reflecting market share gains this cycle
- Non-interest operating profits and efficiency rose over the last four years as it benefited from some fixed cost leverage
- Impressive 8.8% annual tangible book value per share growth over the last four years indicates it’s building equity value this cycle
FirstSun Capital Bancorp is trading at $35.11 per share, or 0.8x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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).
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