2 Bank Stocks with Solid Fundamentals and 1 We Ignore

Banks serve as the backbone of the economy, facilitating lending, deposits, and financial services that keep businesses and consumers moving forward. But worries about an economic slowdown and potential credit deterioration have kept sentiment in check, and over the past six months, the banking industry’s 7.5% return has trailed the S&P 500 by 2.5 percentage points.

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. With that said, here are two resilient bank stocks at the top of our wish list and one that may face trouble.

One Bank Stock to Sell:

Truist Financial (TFC)

Market Cap: $60.28 billion

Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE:TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions.

Why Do We Avoid TFC?

1. Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 1.6% over the last five years was below our standards for the banking sector
2. Flat earnings per share over the last five years lagged its peers
3. Low return on equity reflects management’s struggle to allocate funds effectively

At $47.90 per share, Truist Financial trades at 1x forward P/B. To fully understand why you should be careful with TFC, check out our full research report (it’s free).

Two Bank Stocks to Watch:

East West Bank (EWBC)

Market Cap: $16.87 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 Does EWBC Stand Out?

1. Annual net interest income growth of 13.9% over the last five years beat the sector average and underscores the value of its loans
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.9% exceeded its revenue gains over the last five years
3. Annual tangible book value per share growth of 12.9% over the past five years was outstanding, reflecting strong capital accumulation this cycle

East West Bank is trading at $123.09 per share, or 1.7x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.

Axos Financial (AX)

Market Cap: $4.90 billion

Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE:AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.

Why Do We Love AX?

1. Annual net interest income growth of 18.6% over the past five years was outstanding, reflecting market share gains this cycle
2. Differentiated product suite leads to a Strong performance of its loan book results in a High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 4.8%
3. Earnings per share grew by 18.1% annually over the last five years and trumped its peers

Axos Financial’s stock price of $86.08 implies a valuation ratio of 1.5x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.

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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.