3 Bank Stocks We Approach with Caution

Banks serve as the backbone of the economy, facilitating lending, deposits, and financial services that keep businesses and consumers moving forward. These institutions have benefited from improved net interest margins and robust credit growth, so it’s no surprise the banking industry has posted a 8.7% gain over the past six months, beating the S&P 500 by 2.2 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. Taking that into account, here are three bank stocks we’re swiping left on.

WesBanco (WSBC)

Market Cap: $3.54 billion

Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ:WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.

Why Are We Cautious About WSBC?

1. 10% annual revenue growth over the last five years was slower than its banking peers
2. Estimated net interest income growth of 1.7% for the next 12 months implies demand will slow from its five-year trend
3. Products and services are facing profitability challenges during this cycle, as seen in its flat tangible book value per share over the last five years

WesBanco is trading at $36.85 per share, or 0.9x forward P/B. Check out our free in-depth research report to learn more about why WSBC doesn’t pass our bar.

Texas Capital Bank (TCBI)

Market Cap: $4.64 billion

Founded during the Texas banking renaissance of the 1990s with an entrepreneurial spirit, Texas Capital Bancshares (NASDAQ:TCBI) is a financial services firm that provides banking, wealth management, and investment banking services to businesses and individuals across Texas and beyond.

Why Are We Hesitant About TCBI?

1. Muted 3.9% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
3. Low return on equity reflects management’s struggle to allocate funds effectively

Texas Capital Bank’s stock price of $105.01 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including TCBI in your portfolio.

First Hawaiian Bank (FHB)

Market Cap: $3.24 billion

Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ:FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.

Why Should You Sell FHB?

1. 4.4% annual net interest income growth over the last five years was slower than its banking peers
2. Estimated net interest income growth of 2.4% for the next 12 months implies demand will slow from its five-year trend
3. Annual tangible book value per share growth of 1.6% over the last five years was below our standards for the banking sector

At $26.39 per share, First Hawaiian Bank trades at 1.1x forward P/B. If you’re considering FHB for your portfolio, see our FREE research report to learn more.

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 Growth Stocks for this month. 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.