1 Bank Stock for Long-Term Investors and 2 We Find Risky

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 certainly contributed to banking stocks’ recent underperformance - over the past six months, the industry’s 23.4% gain has fallen behind the S&P 500’s 32.7% rise.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here is one resilient bank stock at the top of our wish list and two we’re passing on.

Two Bank Stocks to Sell:

Valley National Bank (VLY)

Market Cap: $5.96 billion

Tracing its roots back to 1927 during the economic boom before the Great Depression, Valley National Bancorp (NASDAQGS:VLY) operates Valley National Bank, providing commercial, consumer, and wealth management banking services across several states.

Why Are We Wary of VLY?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 2.1% annually over the last two years
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 25% annually, worse than its revenue
3. Annual interest expenses are high relative to its profits, increasing the probability of its failure to meet certain borrowing obligations

Valley National Bank’s stock price of $10.79 implies a valuation ratio of 0.8x forward P/B. Read our free research report to see why you should think twice about including VLY in your portfolio.

Franklin BSP Realty Trust (FBRT)

Market Cap: $910 million

Operating as a specialized real estate investment trust (REIT) with roots dating back to 2012, Franklin BSP Realty Trust (NYSE:FBRT) originates and manages a diversified portfolio of commercial real estate debt investments secured by properties in the United States and abroad.

Why Is FBRT Risky?

1. Annual sales declines of 3.7% for the past two years show its products and services struggled to connect with the market during this cycle
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 2.9% annually over the last five years

Franklin BSP Realty Trust is trading at $11.31 per share, or 0.8x forward P/B. Check out our free in-depth research report to learn more about why FBRT doesn’t pass our bar.

One Bank Stock to Watch:

First Citizens BancShares (FCNCA)

Market Cap: $22.61 billion

With roots dating back to 1898 and a significant expansion through its 2023 acquisition of Silicon Valley Bank, First Citizens BancShares (NASDAQGS:FCNC.A) is a bank holding company that provides financial services to individuals and businesses through its First-Citizens Bank & Trust Company subsidiary.

Why Does FCNCA Stand Out?

1. Impressive 37.8% annual net interest income growth over the last five years indicates it’s winning market share this cycle
2. Earnings per share have massively outperformed its peers over the last two years, increasing by 23.2% annually
3. Balance sheet strength has increased this cycle as its 37.2% annual tangible book value per share growth over the last five years was exceptional

At $1,771 per share, First Citizens BancShares trades at 1x forward P/B. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-micro-cap company Tecnoglass (+1,754% 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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