Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. These institutions have benefited from improved net interest margins and robust credit growth, so it’s no surprise the banking industry has posted a 17.3% gain over the past six months, beating the S&P 500 by 4.2 percentage points.
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. On that note, here are three bank stocks we’re swiping left on.
Renasant (RNST)
Market Cap: $3.54 billion
Founded in 1904 during a time when the South was rebuilding its economy, Renasant (NYSE: RNST) is a regional bank holding company that offers banking, wealth management, insurance, and specialized lending services throughout the Southeast.
Why Is RNST Not Exciting?
- Sales trends were unexciting over the last five years as its 6.3% annual growth was below the typical banking company
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 6.9% annually
- 4.5% annual tangible book value per share growth over the last two years was slower than its banking peers
Renasant is trading at $37.23 per share, or 0.9x forward P/B. If you’re considering RNST for your portfolio, see our FREE research report to learn more.
FB Financial (FBK)
Market Cap: $3.15 billion
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE: FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
Why Are We Cautious About FBK?
- Annual revenue growth of 3.1% over the last five years was below our standards for the banking sector
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3.5% annually
- ROE of 9.4% reflects management’s challenges in identifying attractive investment opportunities
At $58.89 per share, FB Financial trades at 1.6x forward P/B. Read our free research report to see why you should think twice about including FBK in your portfolio.
East West Bank (EWBC)
Market Cap: $15.63 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 Do We Think Twice About EWBC?
- Sales trends were unexciting over the last two years as its 3.6% annual growth was below the typical banking company
- Concessions to defend its market share have ramped up over the last two years as its net interest margin decreased by 25.3 basis points (100 basis points = 1 percentage point)
- Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
East West Bank’s stock price of $113.71 implies a valuation ratio of 1.8x forward P/B. Dive into our free research report to see why there are better opportunities than EWBC.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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.
