1 Bank Stock to Own for Decades and 2 We Avoid

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 12.5% over the past six months. At the same time, the S&P 500 was up 6.7%.

Regardless of these results, investors must exercise caution as many banks are sensitive to interest rate fluctuations and economic cycles. With that said, here is one bank stock poised to generate sustainable market-beating returns and two that may face trouble.

Two Bank Stocks to Sell:

Webster Financial (WBS)

Market Cap: $11.68 billion

Founded during the Great Depression in 1935 and evolving into a major Northeastern financial institution, Webster Financial (NYSE:WBS) is a bank holding company that provides commercial banking, consumer banking, and employee benefits solutions through its Webster Bank and HSA Bank division.

Why Is WBS Not Exciting?

1. Sales trends were unexciting over the last two years as its 3.7% annual growth was below the typical banking company
2. Efficiency ratio is expected to worsen by 2.4 percentage points over the next year
3. Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew

Webster Financial’s stock price of $72.47 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including WBS in your portfolio.

Regions Financial (RF)

Market Cap: $26.09 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 Does RF Worry Us?

1. Muted 5.1% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
2. Net interest margin dropped by 38.2 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
3. Earnings per share lagged its peers over the last two years as they only grew by 2.2% annually

At $30.12 per share, Regions Financial trades at 1.4x forward P/B. To fully understand why you should be careful with RF, check out our full research report (it’s free).

One Bank Stock to Buy:

Nicolet Bankshares (NIC)

Market Cap: $2.25 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 Will NIC Outperform?

1. Impressive 18.8% annual net interest income growth over the last five years indicates it’s winning market share this cycle
2. Market share is on track to rise over the next 12 months as its 60.4% projected net interest income growth implies demand will accelerate from its five-year trend
3. Net interest margin grew by 65 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more chips to play with

Nicolet Bankshares is trading at $153.60 per share, or 1.9x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.