Featured Tickers:

CPF

FHB

FMBH

NRIM

WBS

Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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.

Click the button below to learn more about A+ Investor and subscribe today.

5 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Banks industry for Wednesday, February 25, 2026. Let’s take a closer look at their individual scores to see how they measure up against each other and the Banks industry median.

Company	Ticker	Price/Sales	Price/Earnings	EV/EBITDA	Shareholder Yield	Price/Book Value	Price/Free Cash Flow	Value Grade
Central Pacific Financial Corp.	CPF	3.40	13.5	na	3.9%	1.50	12.9	B
First Hawaiian, Inc.	FHB	3.83	12.2	na	6.9%	1.13	18.2	B
First Mid Bancshares, Inc.	FMBH	2.98	11.5	na	2.1%	1.05	10.2	B
Northrim BanCorp, Inc.	NRIM	2.68	8.7	na	2.2%	1.72	4.4	A
Webster Financial Corporation	WBS	4.68	13.5	na	5.4%	1.30	9.3	B

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.

Central Pacific Financial Corp.’s Value Grade

Value Grade:

Metric	Score	CPF	Industry Median
Price/Sales	67	3.40	3.35
Price/Earnings	29	13.5	12.9
EV/EBITDA	na	na	0.0
Shareholder Yield	21	3.9%	2.4%
Price/Book Value	40	1.50	1.18
Price/Free Cash Flow	33	12.9	16.1

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. The company offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. It also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, the company offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. Central Pacific Financial Corp. was founded in 1954 and is headquartered in Honolulu, Hawaii.

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.

Central Pacific Financial Corp. has a Value Score of 69, which is considered to be undervalued.

When you look at Central Pacific Financial Corp.’s price-to-sales ratio at 3.40 compared to the industry median at 3.35, this company has a higher price relative to revenue compared to its peers. This could make Central Pacific Financial Corp.’s stock less attractive for value investors.

Central Pacific Financial Corp.’s price-earnings ratio is 13.50 compared to the industry median at 12.90. This means it has a higher share price relative to earnings compared to its peers. This could make Central Pacific Financial Corp. 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. Central Pacific Financial Corp.’s shareholder yield is higher than its industry median ratio of 2.40%. 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. Central Pacific Financial Corp.’s price-to-book ratio is higher than its industry median ratio of 1.18. This could make Central Pacific Financial Corp. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Central Pacific Financial Corp.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Central Pacific Financial Corp.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.10. This could make Central Pacific Financial Corp. more attractive because the lower P/FCF ratio indicates that Central Pacific Financial Corp. 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.

First Hawaiian, Inc.’s Value Grade

Value Grade:

Metric	Score	FHB	Industry Median
Price/Sales	71	3.83	3.35
Price/Earnings	23	12.2	12.9
EV/EBITDA	na	na	0.0
Shareholder Yield	9	6.9%	2.4%
Price/Book Value	28	1.13	1.18
Price/Free Cash Flow	46	18.2	16.1

First Hawaiian, Inc. operates as a bank holding company for First Hawaiian Bank that provides a range of banking products and services to consumer and commercial customers in the United States. The company operates in three segments: Retail Banking, Commercial Banking, and Treasury and Other. It offers various deposit products, including checking, savings, and time deposit accounts, and other deposit accounts. The company also provides residential and commercial mortgage loans, home equity lines of credit and loans, automobile loans and leases, secured and unsecured lines of credit, installment loans, small business loans and leases, as well as commercial lease and auto dealer financing. In addition, it offers wealth management, personal installment, individual investment and financial planning, insurance protection, trust and estate, private banking, investment management, retirement planning, and credit card and merchant processing services, as well as consumer and commercial credit cards processing services. Further, the company provides commercial and industrial lending, such as auto dealer flooring, commercial real estate lending, and construction lending services. The company offers its products through branch, online, and mobile distribution channels. The company was formerly known as BancWest Corporation and changed its name to First Hawaiian, Inc. in April 2016. First Hawaiian, Inc. was founded in 1858 and is headquartered in Honolulu, Hawaii.

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 Hawaiian, Inc. has a Value Score of 74, which is considered to be undervalued.

First Hawaiian, Inc.’s price-earnings ratio is 12.2 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes First Hawaiian, Inc. more attractive for value investors.

First Hawaiian, Inc.’s price-to-book ratio is higher than its peers. This could make First Hawaiian, Inc. less attractive for value investors when compared to the industry median at 1.18.

You can read more about First Hawaiian, 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.

First Mid Bancshares, Inc.’s Value Grade

Value Grade:

Metric	Score	FMBH	Industry Median
Price/Sales	62	2.98	3.35
Price/Earnings	21	11.5	12.9
EV/EBITDA	na	na	0.0
Shareholder Yield	31	2.1%	2.4%
Price/Book Value	25	1.05	1.18
Price/Free Cash Flow	25	10.2	16.1

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company’s loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate owner and non-owner occupied, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning and investment services to individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.

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 Mid Bancshares, Inc. has a Value Score of 79, which is considered to be undervalued.

First Mid Bancshares, Inc.’s price-earnings ratio is 11.5 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes First Mid Bancshares, Inc. more attractive for value investors.

First Mid Bancshares, Inc.’s price-to-book ratio is higher than its peers. This could make First Mid Bancshares, Inc. less attractive for value investors when compared to the industry median at 1.18.

You can read more about First Mid 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.

Northrim BanCorp, Inc.’s Value Grade

Value Grade:

Metric	Score	NRIM	Industry Median
Price/Sales	58	2.68	3.35
Price/Earnings	10	8.7	12.9
EV/EBITDA	na	na	0.0
Shareholder Yield	30	2.2%	2.4%
Price/Book Value	45	1.72	1.18
Price/Free Cash Flow	9	4.4	16.1

Northrim BanCorp, Inc. operates as the bank holding company for Northrim Bank that provides commercial banking products and services to businesses and professional individuals. The company operates through three segments: Community Banking, Home Mortgage Lending, and Specialty Finance. It offers noninterest-bearing checking accounts and interest-bearing time deposits, checking and savings accounts, individual retirement and money market deposit accounts, certificates of deposit, and business sweep accounts. The company also provides short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans, as well as short and medium-term working capital. In addition, it offers consumer and business online banking, mobile app, and mobile deposits; and debit and credit cards. Further, the company provides mobile web and app banking, consumer online account opening, personal finance, online documents, consumer debit cards, business debit cards, my rewards for consumer debit cards, retail lockbox services, card control, corporate purchase cards, integrated payables, home equity advantage access cards, telebanking, and automated teller services. Additionally, it offers personalized checks at account opening, overdraft protection from a savings account, commercial drive-up banking, automatic transfer and payment, external transfer, bill pay, wire transfer, direct payroll deposit, electronic tax payment, automated clearing house origination and receipt, remote deposit capture, account reconciliation and positive pay, merchant, cash management, annuity, and long-term investment portfolio products and services. The company also provides investment advisory, trust, wealth management, factoring, and mortgage services. The company was founded in 1990 and is headquartered in Anchorage, Alaska.

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.

Northrim BanCorp, Inc. has a Value Score of 83, which is considered to be undervalued.

Northrim BanCorp, Inc.’s price-earnings ratio is 8.7 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Northrim BanCorp, Inc. more attractive for value investors.

Northrim BanCorp, Inc.’s price-to-book ratio is lower than its peers. This could make Northrim BanCorp, Inc. more attractive for value investors when compared to the industry median at 1.18.

You can read more about Northrim 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.

Webster Financial Corporation’s Value Grade

Value Grade:

Metric	Score	WBS	Industry Median
Price/Sales	76	4.68	3.35
Price/Earnings	29	13.5	12.9
EV/EBITDA	na	na	0.0
Shareholder Yield	14	5.4%	2.4%
Price/Book Value	35	1.30	1.18
Price/Free Cash Flow	22	9.3	16.1

Webster Financial Corporation operates as the bank holding company for Webster Bank, National Association that provides various financial products and services to businesses, individuals, and families in the United States. It operates through three segments: Commercial Banking, Healthcare Financial Services, and Consumer Banking. It offers checking, savings, and money market accounts; individual retirement account retirement savings; certificates of deposit; mortgages; home equity loans and lines of credit; business and commercial lines of credit; overdrafts; and term, commercial, student, SBA, and personal loans. The company also provides commercial real estate financing, equipment and lender finance, asset-based and community lending, and public finance solutions; financial planning, life and long-term insurance, personal retirement, and portfolio management solutions; employee retirement plans; credit cards; payroll services; automated clearing house payables and wires; bill pay, remote deposit capture, merchant, and lockbox services; treasury management and investment services; private banking services; capital markets and finance solutions; employee benefits solutions, including administrators of HSAs, emergency savings accounts, and flexible spending accounts administration services; wealth management services; and online and mobile banking services. Webster Financial Corporation was founded in 1870 and is headquartered in Stamford, Connecticut.

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.

Webster Financial Corporation has a Value Score of 74, which is considered to be undervalued.

Webster Financial Corporation’s price-earnings ratio is 13.5 compared to the industry median at 12.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Webster Financial Corporation less attractive for value investors.

Webster Financial Corporation’s price-to-book ratio is lower than its peers. This could make Webster Financial Corporation more attractive for value investors when compared to the industry median at 1.18.

You can read more about Webster 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.

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 5 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.

Central Pacific Financial Corp. stock has a Value Grade of B.
First Hawaiian, Inc. stock has a Value Grade of B.
First Mid Bancshares, Inc. stock has a Value Grade of B.
Northrim BanCorp, Inc. stock has a Value Grade of A.
Webster Financial Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 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.

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.