Banks use their capital and expertise to help businesses grow while offering consumers essential financial products like mortgages and credit cards. Furthermore, economic conditions have supported loan growth and fee income, a trend that has enabled the banking industry to return 9.6% over the past six months, almost identical to the S&P 500.

Regardless of these results, investors must exercise caution as many banks are sensitive to interest rate fluctuations and economic cycles. Taking that into account, here is one bank stock poised to generate sustainable market-beating returns and two we’re steering clear of.

Two Bank Stocks to Sell:

WesBanco (WSBC)

Market Cap: $3.47 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 Hesitant About WSBC?

1. Weak unit economics are reflected in its net interest margin of 3.4%, one of the worst among bank companies
2. Flat tangible book value per share over the last five years suggests it must find different ways to enhance shareholder value during this cycle
3. ROE of 6.8% reflects management’s challenges in identifying attractive investment opportunities

At $39.41 per share, WesBanco trades at 1x forward P/B. To fully understand why you should be careful with WSBC, check out our full research report (it’s free).

First Busey (BUSE)

Market Cap: $2.41 billion

Tracing its roots back to 1868 during America's post-Civil War reconstruction era, First Busey (NASDAQ: BUSE) is a bank holding company that provides commercial and retail banking, wealth management, and payment technology solutions across Illinois, Missouri, Florida, and Indiana.

Why Are We Cautious About BUSE?

1. Net interest margin of 3.4% is well below other banks, signaling its loans aren’t very profitable
2. Performance over the past five years shows its incremental sales were less profitable, as its 1.9% annual earnings per share growth trailed its revenue gains
3. Tangible book value per share is projected to decrease by 3.4% over the next 12 months as capital generation weakens

First Busey’s stock price of $29.22 implies a valuation ratio of 1.1x forward P/B. Check out our free in-depth research report to learn more about why BUSE doesn’t pass our bar.

One Bank Stock to Buy:

Pathward Financial (CASH)

Market Cap: $1.75 billion

Formerly known as Meta Financial until its 2022 rebranding, Pathward Financial (NASDAQ: CASH) provides banking-as-a-service solutions and commercial finance products, enabling partners to offer financial services like prepaid cards, payment processing, and lending options.

Why Is CASH a Good Business?

1. Unique value proposition resonates with borrowers, as seen in its above-market 13.2% annual net interest income growth over the last five years
2. Strong performance of its loan book leads to a best-in-class net interest margin of 7.2%
3. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue

Pathward Financial is trading at $90.37 per share, or 2.2x forward P/B. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

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.