Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Banks industry for Wednesday, September 17, 2025. 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.

Community West Bancshares’s Value Grade

Value Grade:

Community West Bancshares operates as the bank holding company for the Central Valley Community Bank that provides various commercial banking services to small and middle-market businesses and individuals in California. The company accepts demand, savings, and time deposits; certificates of deposit; and non-interest-bearing demand deposits, as well as provides NOW and money market accounts. It also provides products, such as commercial and industrial loans, as well as loans secured by crop production and livestock; commercial real estate construction and other land loans, real estate collateral secured by commercial or professional properties with repayment arising from the owner’s business cash flows, investor commercial real estate loans, farmland, and multi-family loans; 1-4 family close-ended, revolving real estate loans, and residential construction loans; manufactured housing loans; and equity loans, lines of credit, and installment and other consumer loans. In addition, the company offers domestic and international wire transfer, inquiry, account status, bill paying, account transfers, cash management, and other customary banking services. The company was formerly known as Central Valley Community Bancorp and changed its name to Community West Bancshares in April 2024. Community West Bancshares was founded in 1979 and is based in Fresno, California.

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.

Community West Bancshares has a Value Score of 63, which is considered to be undervalued.

When you look at Community West Bancshares’s price-to-sales ratio at 2.99 compared to the industry median at 3.09, this company has a lower price relative to revenue compared to its peers. This could make Community West Bancshares’s stock more attractive for value investors.

Community West Bancshares’s price-earnings ratio is 15.10 compared to the industry median at 12.30. This means it has a higher share price relative to earnings compared to its peers. This could make Community West Bancshares 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. Community West Bancshares’s shareholder yield is lower than its industry median ratio of 2.60%. 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. Community West Bancshares’s price-to-book ratio is lower than its industry median ratio of 1.08. This could make Community West Bancshares more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Community West Bancshares’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Community West Bancshares’s price-to-free-cash-flow ratio is higher than its industry median ratio of 15.40. This could make Community West Bancshares less attractive because the higher P/FCF ratio indicates that Community West Bancshares 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.

Kearny Financial Corp.’s Value Grade

Value Grade:

Kearny Financial Corp. operates as the holding company for Kearny Bank that provides various banking products and services in the United States. The company offers various deposit products, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts, and certificates of deposit accounts. It also provides various loans, such as multi-family and nonresidential real estate mortgage loans, commercial term loans and lines of credit, one- to four-family residential mortgage loans, and home equity loans and lines of credit; loans to individuals, builders, or developers for the construction of multi-family residential buildings or commercial real estate, or for the construction or renovation of one- to four-family residences; overdraft lines of credit; and personal loans, as well as engages in the investment activities. The company was founded in 1884 and is headquartered in Fairfield, New Jersey.

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.

Kearny Financial Corp. has a Value Score of 85, which is considered to be undervalued.

Kearny Financial Corp.’s price-earnings ratio is 15.4 compared to the industry median at 12.3. This means that it has a higher price relative to its earnings compared to its peers. This makes Kearny Financial Corp. less attractive for value investors.

Kearny Financial Corp.’s price-to-book ratio is higher than its peers. This could make Kearny Financial Corp. less attractive for value investors when compared to the industry median at 1.08.

You can read more about Kearny 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.

Northwest Bancshares, Inc.’s Value Grade

Value Grade:

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions in the United States. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate, as well as commercial business loans; home equity loans and lines of credit; commercial real estate loans; commercial loans; and other consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. Northwest Bancshares, Inc. was founded in 1896 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.

Northwest Bancshares, Inc. has a Value Score of 62, which is considered to be undervalued.

Northwest Bancshares, Inc.’s price-earnings ratio is 11.0 compared to the industry median at 12.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Northwest Bancshares, Inc. more attractive for value investors.

Northwest Bancshares, Inc.’s price-to-book ratio is higher than its peers. This could make Northwest Bancshares, Inc. less attractive for value investors when compared to the industry median at 1.08.

You can read more about Northwest Bancshares, 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.

River Financial Corporation’s Value Grade

Value Grade:

River Financial Corporation operates as the bank holding company for the River Bank & Trust that provides financial services to small to medium-sized businesses, organizations, entrepreneurs, and individuals in the United States. The company accepts demand, time, savings, and other deposits, including negotiable orders of withdrawal accounts; and interest-bearing transaction accounts, money market accounts, and certificates of deposit. It also offers commercial real estate term loans, residential mortgage loans, and construction and land development loans; home equity lines of credit; commercial and industrial loans; and consumer loans that consists of loans to purchase automobiles and other consumer durable goods. In addition, the company provides investment brokerage; commercial and retail online banking, automated bill payment, mobile banking, and remote deposit capture services; and loans and investments amortization and prepayment services. River Financial Corporation was founded in 2006 and is headquartered in Prattville, Alabama.

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.

River Financial Corporation has a Value Score of 86, which is considered to be undervalued.

River Financial Corporation’s price-earnings ratio is 6.9 compared to the industry median at 12.3. This means that it has a lower price relative to its earnings compared to its peers. This makes River Financial Corporation more attractive for value investors.

River Financial Corporation’s price-to-book ratio is higher than its peers. This could make River Financial Corporation less attractive for value investors when compared to the industry median at 1.08.

You can read more about River 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.

Timberland Bancorp, Inc.’s Value Grade

Value Grade:

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, commercial real estate loans, and land loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. The company was founded in 1915 and is headquartered in Hoquiam, 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.

Timberland Bancorp, Inc. has a Value Score of 75, which is considered to be undervalued.

Timberland Bancorp, Inc.’s price-earnings ratio is 10.4 compared to the industry median at 12.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Timberland Bancorp, Inc. more attractive for value investors.

Timberland Bancorp, Inc.’s price-to-book ratio is lower than its peers. This could make Timberland Bancorp, Inc. fairly attractive for value investors when compared to the industry median at 1.08.

You can read more about Timberland 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.

Virginia National Bankshares Corporation’s Value Grade

Value Grade:

Virginia National Bankshares Corporation operates as the holding company for Virginia National Bank that provides a range of commercial and retail banking products and services in Virginia. The company operates through Bank, VNB Trust and Estate Services, and Masonry Capital segments. It provides checking accounts, demand deposits, NOW accounts, money market deposit accounts, time deposits, certificates of deposit, individual retirement accounts, and other depository services. The company also offers commercial loans, real estate construction and land loans, commercial real estate loans, and 1-4 family residential mortgages, as well as consumer loans comprising student loans, revolving credit, and other fixed payment loans. In addition, it provides automated teller machine, internet banking, treasury, and cash management services; merchant and debit card services; and investment advisory and management services. Further, the company offers investment management, wealth management, corporate trustee, trust and estate administration, IRA administration, in-house investment management, and custody services. It serves individuals, businesses, and charitable organizations. The company was founded in 1998 and is headquartered in Charlottesville, 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.

Virginia National Bankshares Corporation has a Value Score of 73, which is considered to be undervalued.

Virginia National Bankshares Corporation’s price-earnings ratio is 11.9 compared to the industry median at 12.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Virginia National Bankshares Corporation more attractive for value investors.

Virginia National Bankshares Corporation’s price-to-book ratio is lower than its peers. This could make Virginia National Bankshares Corporation more attractive for value investors when compared to the industry median at 1.08.

You can read more about Virginia National Bankshares 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.

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 6 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.

• Community West Bancshares stock has a Value Grade of B.
• Kearny Financial Corp. stock has a Value Grade of A.
• Northwest Bancshares, Inc. stock has a Value Grade of B.
• River Financial Corporation stock has a Value Grade of A.
• Timberland Bancorp, Inc. stock has a Value Grade of B.
• Virginia National Bankshares Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Banks Stocks for Wednesday, September 17
• 5 Undervalued Banks Stocks for Tuesday, September 16
• Why Citizens Financial Services, Inc.’s (CZFS) Stock Is Down 5.29%
• Why First US Bancshares, Inc.’s (FUSB) Stock Is Up 11.44%

AAII Disclaimer

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