Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. Furthermore, economic conditions have supported loan growth and fee income, a trend that has enabled the banking industry to return 15.5% over the past six months, almost identical to the S&P 500.

Although banks have produced good results, only a handful will thrive over the long term as fintech disruptors are rapidly taking market share from traditional institutions. With that said, here are two bank stocks we think can generate sustainable market-beating returns and one that may face trouble.

One Bank Stock to Sell:

Regions Financial (RF)

Market Cap: $24.13 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 Are We Cautious About RF?

1. Muted 5.2% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
2. Estimated net interest income growth of 2.8% for the next 12 months implies demand will slow from its five-year trend
3. Net interest margin shrank by 36 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive

At $27.04 per share, Regions Financial trades at 1.4x forward P/B. Check out our free in-depth research report to learn more about why RF doesn’t pass our bar.

Two Bank Stocks to Watch:

Nicolet Bankshares (NIC)

Market Cap: $2.05 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 Are We Bullish on NIC?

1. Market share has increased this cycle as its 18.4% annual net interest income growth over the last five years was exceptional
2. Net interest margin increased by 40.3 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more capital to invest or return to shareholders
3. Earnings per share grew by 14.9% annually over the last two years, massively outpacing its peers

Nicolet Bankshares is trading at $137.68 per share, or 1.6x forward P/B. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

BancFirst (BANF)

Market Cap: $4.51 billion

Operating as a "super community bank" with a decentralized management approach that emphasizes local responsiveness, BancFirst Corporation (NASDAQ: BANF) operates as a financial holding company providing commercial banking services to retail customers and small to medium-sized businesses primarily in Oklahoma and Texas.

Why Is BANF on Our Radar?

1. Annual revenue growth of 8.7% over the last five years beat the sector average and underscores the unique value of its offerings
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 15% over the last five years outstripped its revenue performance
3. Annual tangible book value per share growth of 11% over the last five years was superb and indicates its capital strength increased during this cycle

BancFirst’s stock price of $137.86 implies a valuation ratio of 2.5x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum 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).

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

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