Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Banks industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Banks Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Banks industry for Friday, October 04, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Banks industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Citizens Holding Company’s Value Grade

Value Grade:

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Citizens Holding Company has a Value Score of 63, which is considered to be undervalued.

When you look at Citizens Holding Company’s price-to-sales ratio at 1.19 compared to the industry median at 2.79, this company has a lower price relative to revenue compared to its peers. This could make Citizens Holding Company’s stock more attractive for value investors.

Citizens Holding Company’s price-earnings ratio is 12.00 compared to the industry median at 11.60. This means it has a higher share price relative to earnings compared to its peers. This could make Citizens Holding Company less attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Citizens Holding Company’s shareholder yield is higher than its industry median ratio of 3.10%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Citizens Holding Company’s price-to-book ratio is higher than its industry median ratio of 0.97. This could make Citizens Holding Company less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Citizens Holding Company’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Citizens Holding Company’s price-to-free-cash-flow ratio is higher than its industry median ratio of 14.40. This could make Citizens Holding Company less attractive because the higher P/FCF ratio indicates that Citizens Holding Company is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

CSB Bancorp, Inc.’s Value Grade

Value Grade:

CSB Bancorp, Inc. operates as the bank holding company for The Commercial and Savings Bank of Millersburg that provides various banking, trust, financial, and brokerage services to corporate, institutional, and individual customers in Northeast Ohio. Its deposit products include checking and savings accounts, time deposits, and IRAs; and loan portfolio comprises personal, commercial, real estate mortgage, installment, consumer, and residential and commercial real estate loans. The company also provides safe deposit and night depository facilities. CSB Bancorp, Inc. was founded in 1879 and is headquartered in Millersburg, Ohio.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

CSB Bancorp, Inc. has a Value Score of 86, which is considered to be undervalued.

CSB Bancorp, Inc.’s price-earnings ratio is 8.5 compared to the industry median at 11.6. This means that it has a lower price relative to its earnings compared to its peers. This makes CSB Bancorp, Inc. more attractive for value investors.

CSB Bancorp, Inc.’s price-to-book ratio is higher than its peers. This could make CSB Bancorp, Inc. less attractive for value investors when compared to the industry median at 0.97.

You can read more about CSB Bancorp, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Primis Financial Corp.’s Value Grade

Value Grade:

Primis Financial Corp. operates as the bank holding company for Primis Bank that provides a range of financial services to individuals and small and medium sized businesses in the United States. Its deposit products include checking, NOW, savings, and money market accounts, as well as certificates of deposits. The company also provides commercial business and real estate, construction, secured asset based, small business administration, mortgage warehouse lending products, as well as financing for medical, dental, and veterinary businesses; residential mortgage, trust mortgage, home equity lines of credit, secured and unsecured personal, and consumer loans, as well as life insurance premium financing and demand loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, depository transfer, merchant, ACH origination, and remote deposit capture services. In addition, the company provides debit cards, ATM services, notary services, and mobile and online banking. It operates full-service branches in Virginia and Maryland. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. Primis Financial Corp. was founded in 2004 and is based in McLean, Virginia.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Primis Financial Corp. has a Value Score of 64, which is considered to be undervalued.

Primis Financial Corp.’s price-earnings ratio is 28.9 compared to the industry median at 11.6. This means that it has a higher price relative to its earnings compared to its peers. This makes Primis Financial Corp. less attractive for value investors.

Primis Financial Corp.’s price-to-book ratio is higher than its peers. This could make Primis Financial Corp. less attractive for value investors when compared to the industry median at 0.97.

You can read more about Primis Financial Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

First United Corporation’s Value Grade

Value Grade:

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

First United Corporation has a Value Score of 74, which is considered to be undervalued.

First United Corporation’s price-earnings ratio is 13.2 compared to the industry median at 11.6. This means that it has a higher price relative to its earnings compared to its peers. This makes First United Corporation less attractive for value investors.

First United Corporation’s price-to-book ratio is lower than its peers. This could make First United Corporation more attractive for value investors when compared to the industry median at 0.97.

You can read more about First United Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Huntington Bancshares Incorporated’s Value Grade

Value Grade:

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States. The company offers financial products and services to consumer and business customers, including deposits, lending, payments, mortgage banking, dealer financing, investment management, trust, brokerage, insurance, and other financial products and services. It also provides 24-hour grace, asterisk-free checking, money scout, $50 safety zone, standby cash, early pay, instant access, savings goal getter, and Huntington heads up; digitally powered consumer and business financial solutions to consumer lending, regional banking, branch banking, and wealth management customers; direct and indirect consumer loans, as well as dealer finance loans and deposits; and private banking, wealth management and legacy planning through investment and portfolio management, fiduciary administration and trust, institutional custody, and full-service retail brokerage investment services. The company offers equipment financing, asset-based lending, distribution finance, structured lending, and municipal financing solutions, as well as Huntington ChoicePay. In addition, it offers lending, liquidity, treasury management and other payment services, and capital markets; government and non-profits, healthcare, technology and telecommunications, franchises, financial sponsors, and global services; and corporate risk management, institutional sales and trading, debt and equity issuance, and additional advisory services. The company offers its products through a network of channels, including branches and ATMs, online and mobile banking, and through customer call centers to customers in middle market banking, corporate, specialty, and government banking, asset finance, commercial real estate banking, and capital markets. The company was founded in 1866 and is headquartered in Columbus, Ohio.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Huntington Bancshares Incorporated has a Value Score of 67, which is considered to be undervalued.

Huntington Bancshares Incorporated’s price-earnings ratio is 13.4 compared to the industry median at 11.6. This means that it has a higher price relative to its earnings compared to its peers. This makes Huntington Bancshares Incorporated less attractive for value investors.

Huntington Bancshares Incorporated’s price-to-book ratio is lower than its peers. This could make Huntington Bancshares Incorporated more attractive for value investors when compared to the industry median at 0.97.

You can read more about Huntington Bancshares Incorporated’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Pacific Financial Corporation’s Value Grade

Value Grade:

Pacific Financial Corporation operates as the bank holding company for Bank of the Pacific that provides various banking products and services in Washington and Oregon. The company offers personal and business checking, savings, and money market accounts; certificates of deposit; individual retirement accounts; and auto and recreation loans, credit cards, and home equity lines of credit. It also provides business and commercial, commercial real estate, commercial vehicle, purchase, construction, equipment, and SBA loans, as well as working capital and lines of credit; Visa business cards; commercial deposits; and treasury management, merchant, and online and mobile banking services. The company was founded in 1971 and is headquartered in Aberdeen, Washington.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Pacific Financial Corporation has a Value Score of 80, which is considered to be undervalued.

Pacific Financial Corporation’s price-earnings ratio is 10.8 compared to the industry median at 11.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Pacific Financial Corporation more attractive for value investors.

Pacific Financial Corporation’s price-to-book ratio is lower than its peers. This could make Pacific Financial Corporation more attractive for value investors when compared to the industry median at 0.97.

You can read more about Pacific Financial Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Union Bankshares, Inc.’s Value Grade

Value Grade:

Union Bankshares, Inc. operates as the bank holding company for Union Bank that provides retail, commercial, and municipal banking products and services in northern Vermont and New Hampshire. It offers retail depository services, such as personal checking, savings, money market, IRA/SEP/KEOGH, and health savings accounts, as well as certificates of deposit. The company also provides commercial real estate loans; commercial loans for plant and equipment, working capital, real estate renovation, and other business purposes to business owners and investors; small business administration guaranteed loans; residential construction and mortgage loans; municipal financing, including loans and excess deposits secured by FHLBB letters of credit; and home improvement loans and overdraft checking privileges against preauthorized lines of credit. In addition, it offers online cash management services, including account reconciliation, credit card depository, automated clearing house origination, wire transfers, positive pay and night depository services; merchant credit card services for the deposit and immediate credit of sales drafts; remote deposit capture services; and online mortgage application and consumer deposit account opening services. Further, the company provides business checking accounts; standby letters of credit, bank checks or money orders, and safe deposit boxes; ATM cards and services; debit cards; telephone, internet, and mobile banking services, including bill pay; and wealth management, fiduciary, and trust services. It offers retail banking services to individuals; and commercial banking services to small and medium sized business corporations, limited liability companies, partnerships, and sole proprietorships, as well as nonprofit organizations, local municipalities, and school districts. Union Bankshares, Inc. was founded in 1891 and is headquartered in Morrisville, Vermont.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Union Bankshares, Inc. has a Value Score of 66, which is considered to be undervalued.

Union Bankshares, Inc.’s price-earnings ratio is 11.8 compared to the industry median at 11.6. This means that it has a higher price relative to its earnings compared to its peers. This makes Union Bankshares, Inc. less attractive for value investors.

Union Bankshares, Inc.’s price-to-book ratio is lower than its peers. This could make Union Bankshares, Inc. more attractive for value investors when compared to the industry median at 0.97.

You can read more about Union Bankshares, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Banks Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Banks stocks as well as other industrys.

Choosing Which of the 7 Best Banks Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Citizens Holding Company stock has a Value Grade of B.
• CSB Bancorp, Inc. stock has a Value Grade of A.
• Primis Financial Corp. stock has a Value Grade of B.
• First United Corporation stock has a Value Grade of B.
• Huntington Bancshares Incorporated stock has a Value Grade of B.
• Pacific Financial Corporation stock has a Value Grade of B.
• Union Bankshares, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Banks industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Banks Stocks

Want to learn more about Banks stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Banks Stocks for Friday, October 04
• 6 Undervalued Banks Stocks for Thursday, October 03
• 6 Undervalued Banks Stocks for Tuesday, October 01
• Which Is a Better Investment, Merchants Bancorp or OFG Bancorp Stock?

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.