1 Bank Stock on Our Buy List and 2 We Ignore

Barchart·10/16/2026 04:20:24

Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. Still, investors are uneasy as banks face challenges from credit quality concerns and potential regulatory changes. These doubts have caused the industry to lag recently as banking stocks have collectively shed 1.3% over the past six months. This drawdown is a far cry from the S&P 500’s 9.7% ascent.

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 is one bank stock poised to generate sustainable market-beating returns and two that may face trouble.

Two Bank Stocks to Sell:

Provident Financial Services (PFS)

Market Cap: $2.90 billion

Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE:PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.

Why Is PFS Not Exciting?

1. Weak unit economics are reflected in its net interest margin of 3.4%, one of the worst among bank companies
2. Incremental sales over the last five years were less profitable as its 2.1% annual earnings per share growth lagged its revenue gains
3. Tangible book value per share was flat over the last five years, indicating it’s failed to build equity value this cycle

At $22.20 per share, Provident Financial Services trades at 1x forward P/B. Check out our free in-depth research report to learn more about why PFS doesn’t pass our bar.

First Financial Bancorp (FFBC)

Market Cap: $3.30 billion

Tracing its roots back to 1863 during the Civil War era, First Financial Bancorp (NASDAQ:FFBC) is a bank holding company that provides commercial banking, lending, deposit services, and wealth management to individuals and businesses.

Why Do We Think Twice About FFBC?

1. 9.3% annual net interest income growth over the last five years was slower than its banking peers
2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 9% annually
3. Estimated tangible book value per share growth of 10.7% for the next 12 months implies profitability will slow from its two-year trend

First Financial Bancorp is trading at $31.41 per share, or 1x forward P/B. To fully understand why you should be careful with FFBC, check out our full research report (it’s free).

One Bank Stock to Buy:

Nicolet Bankshares (NIC)

Market Cap: $3.45 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 Is NIC a Top Pick?

1. Impressive 24.8% annual net interest income growth over the last five years indicates it’s winning market share this cycle
2. Net interest margin expanded by 69 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
3. Additional sales over the last two years increased its profitability as the 26.2% annual growth in its earnings per share outpaced its revenue

Nicolet Bankshares’s stock price of $163.94 implies a valuation ratio of 1.4x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

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