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 Wednesday, March 04, 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.

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.

California BanCorp’s Value Grade

Value Grade:

California BanCorp operates as the bank holding company for California Bank of Commerce, N.A. that provides various financial products to individuals, professionals, and small- to medium-sized businesses in the United States. The company offers checking, savings, and money market accounts; and certificates of deposit. It also provides business loans; lines of credit; construction and land development loans; commercial real estate loans; commercial and industrial loans; small business administration loans; consumer loans; home equity lines of credit; and letters of credit. In addition, the company offers treasury management; cash vault, sweep accounts, and remote deposit capture services; online and mobile banking services; and ACH origination, courier, and lockbox services. It serves businesses, business owners and their trusts, limited liability corporations, business partnerships, associations, organizations, and governmental authorities. The company was formerly known as Southern California Bancorp and changed its name to California BanCorp in August 2024. California BanCorp was founded in 2001 and is headquartered in San Diego, 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.

California BanCorp has a Value Score of 63, which is considered to be undervalued.

When you look at California BanCorp’s price-to-sales ratio at 2.94 compared to the industry median at 3.26, this company has a lower price relative to revenue compared to its peers. This could make California BanCorp’s stock more attractive for value investors.

California BanCorp’s price-earnings ratio is 9.60 compared to the industry median at 12.65. This means it has a lower share price relative to earnings compared to its peers. This could make California BanCorp more 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. California BanCorp’s shareholder yield is lower than its industry median ratio of 2.35%. 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. California BanCorp’s price-to-book ratio is lower than its industry median ratio of 1.15. This could make California BanCorp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at California BanCorp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. California BanCorp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 16.20. This could make California BanCorp more attractive because the lower P/FCF ratio indicates that California BanCorp 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.

BankUnited, Inc.’s Value Grade

Value Grade:

BankUnited, Inc. operates as the bank holding company for BankUnited, a national banking association that provides a range of banking services in the United States. The company offers deposit products, such as checking, money market deposit, and savings accounts; certificates of deposit; and treasury, payments and cash management services. Its loans portfolio includes commercial loans, including equipment loans, secured and unsecured lines of credit, formula-based lines of credit, owner-occupied commercial real estate term loans and lines of credit, mortgage warehouse lines, subscription finance facilities, letters of credit, commercial credit cards, small business administration and U.S. department of agriculture product offerings, export-import bank financing products, trade finance, and business acquisition finance credit facilities; commercial real estate loans; residential mortgages; and other consumer loans. The company offers loan servicing and deposit transaction processing systems, cloud-based data storage, electronic funds transfer transaction processing, online banking services, ERP systems and computer and networking infrastructure. It operates through a network of banking centers located in Florida counties and the New York metropolitan area, as well as Dallas, Texas. The company was formerly known as BU Financial Corporation. BankUnited, Inc. was incorporated in 2009 and is headquartered in Miami Lakes, Florida.

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.

BankUnited, Inc. has a Value Score of 70, which is considered to be undervalued.

BankUnited, Inc.’s price-earnings ratio is 13.4 compared to the industry median at 12.6. This means that it has a higher price relative to its earnings compared to its peers. This makes BankUnited, Inc. less attractive for value investors.

BankUnited, Inc.’s price-to-book ratio is lower than its peers. This could make BankUnited, Inc. fairly attractive for value investors when compared to the industry median at 1.15.

You can read more about BankUnited, 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 Citizens BancShares, Inc.’s Value Grade

Value Grade:

First Citizens BancShares, Inc. operates as the holding company for First-Citizens Bank & Trust Company that provides retail and commercial banking services to individuals, businesses, and professionals in the United States and internationally. It operates through the General Bank, Commercial Bank, and Rail segments. The General Bank segment offers deposit products, including checking, savings, money market, and time deposit accounts; conforming and jumbo residential mortgage, and business and commercial loans; brokerage, investment advisory, private stock loans, other secured and unsecured lending products, and vineyard development loans; planning-based financial strategies, family office, financial planning, tax planning, and trust services; and payment and treasury services. This segment also includes a community association bank business that supports deposit, cash management, and lending to homeowner associations and property management companies. Its Commercial Bank segment provides a range of leasing, capital markets, asset management, and other financial and advisory services; factoring, receivable management, supply chain financing, and secured financing services; and commercial deposit products and services through online and mobile banking platforms, as well as physical locations. The Rail segment offers customized leasing and financing solutions on a fleet of railcars and locomotives to railroads and shippers. Its railcar types include covered hopper cars used to ship grain and agricultural products, plastic pellets, sand, and cement; tank cars for energy products and chemicals; gondolas for coal, steel coil and mill service products; open-top hopper cars for coal and aggregates; boxcars for paper and auto parts; and centerbeams and flat cars for lumber. First Citizens BancShares, Inc. was founded in 1898 and is headquartered in Raleigh, North Carolina.

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 Citizens BancShares, Inc. has a Value Score of 76, which is considered to be undervalued.

First Citizens BancShares, Inc.’s price-earnings ratio is 11.9 compared to the industry median at 12.6. This means that it has a lower price relative to its earnings compared to its peers. This makes First Citizens BancShares, Inc. more attractive for value investors.

First Citizens BancShares, Inc.’s price-to-book ratio is lower than its peers. This could make First Citizens BancShares, Inc. fairly attractive for value investors when compared to the industry median at 1.15.

You can read more about First Citizens 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.

First Merchants Corporation’s Value Grade

Value Grade:

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides commercial and consumer banking services. The company offers a range of financial services, including checking, savings, and deposit products; debit and credit cards; mortgages, refinance, construction or renovation of residential properties, agricultural lending, treasury management services and depository products. It also provides personal and commercial wealth management services, brokerage, investment management, private banking, fiduciary estate, and financial planning services. The company operates banking locations in Indiana, Ohio, and Michigan counties. It offers its services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893 and is headquartered in Muncie, Indiana.

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 Merchants Corporation has a Value Score of 85, which is considered to be undervalued.

First Merchants Corporation’s price-earnings ratio is 10.1 compared to the industry median at 12.6. This means that it has a lower price relative to its earnings compared to its peers. This makes First Merchants Corporation more attractive for value investors.

First Merchants Corporation’s price-to-book ratio is higher than its peers. This could make First Merchants Corporation less attractive for value investors when compared to the industry median at 1.15.

You can read more about First Merchants 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.

Home Bancorp, Inc.’s Value Grade

Value Grade:

Home Bancorp, Inc. operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana, Mississippi, and Texas. It offers deposit products, including interest-bearing and noninterest-bearing checking, money market, savings, NOW, and certificates of deposit accounts. The company also provides various loan products comprising one-to four-family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans, and consumer loans. Further, it invests in securities, as well as offers credit cards and online banking services. The company was founded in 1908 and is headquartered in Lafayette, Louisiana.

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.

Home Bancorp, Inc. has a Value Score of 78, which is considered to be undervalued.

Home Bancorp, Inc.’s price-earnings ratio is 10.8 compared to the industry median at 12.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Home Bancorp, Inc. more attractive for value investors.

Home Bancorp, Inc.’s price-to-book ratio is higher than its peers. This could make Home Bancorp, Inc. less attractive for value investors when compared to the industry median at 1.15.

You can read more about Home 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.

Independent Bank Corporation’s Value Grade

Value Grade:

Independent Bank Corporation operates as the bank holding company for Independent Bank that provides banking services in the United States. The company offers demand deposits, interest checking, money market accounts, savings accounts, and time certificates of deposit, including free checking accounts. It also provides consumer loans that consists of real estate loans comprising residential mortgages and home equity loans and lines, all secured by one-to-four family residential properties, as well as other consumer loans; and investment and financial services. In addition, the company offers cash management; investment management and trust services; additional services, such as estate settlement, financial planning, tax services, and other special services; sale of mutual fund shares, unit investment trust shares, third party model portfolios, general securities, and fixed and variable annuities, as well as life insurance products; debit and credit card; safe deposit box services; automatic teller machines; and internet and mobile banking services. Independent Bank Corporation was founded in 1864 and is based in Grand Rapids, Michigan.

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.

Independent Bank Corporation has a Value Score of 73, which is considered to be undervalued.

Independent Bank Corporation’s price-earnings ratio is 10.9 compared to the industry median at 12.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Independent Bank Corporation more attractive for value investors.

Independent Bank Corporation’s price-to-book ratio is lower than its peers. This could make Independent Bank Corporation more attractive for value investors when compared to the industry median at 1.15.

You can read more about Independent Bank 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.

Pinnacle Financial Partners, Inc.’s Value Grade

Value Grade:

Pinnacle Financial Partners, Inc. operates as the bank holding company for Pinnacle Bank that provides various banking products and services to individuals, businesses, and professional entities in the United States. It accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, such as online wire origination, enhanced ACH origination, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services, small business and commercial credit cards corporate purchasing cards, and virtual accounting/deposit escrow solutions. The company also offers equipment and working capital loan; commercial real estate loans, such as investment properties and business loan; secured and unsecured loans comprising installment and term, lines of credit, and residential first mortgage, as well as home equity loans and home equity lines of credit; and credit cards for consumers and businesses. In addition, the company provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, including personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. Further, it offers insurance agency services in the property and casualty area; investment, merger and acquisition advisory services, private debt, equity and mezzanine, and other middle-market advisory services; and other banking services, including telephone and online banking, mobile banking, debit cards, direct deposit and remote deposit capture, mobile deposit option, automated teller machine, and cash management services. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.

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.

Pinnacle Financial Partners, Inc. has a Value Score of 78, which is considered to be undervalued.

Pinnacle Financial Partners, Inc.’s price-earnings ratio is 11.7 compared to the industry median at 12.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Pinnacle Financial Partners, Inc. more attractive for value investors.

Pinnacle Financial Partners, Inc.’s price-to-book ratio is higher than its peers. This could make Pinnacle Financial Partners, Inc. less attractive for value investors when compared to the industry median at 1.15.

You can read more about Pinnacle Financial Partners, 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.

• California BanCorp stock has a Value Grade of B.
• BankUnited, Inc. stock has a Value Grade of B.
• First Citizens BancShares, Inc. stock has a Value Grade of B.
• First Merchants Corporation stock has a Value Grade of A.
• Home Bancorp, Inc. stock has a Value Grade of B.
• Independent Bank Corporation stock has a Value Grade of B.
• Pinnacle Financial Partners, 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 Wednesday, March 04
• Is Banco Santander, S.A. (SAN) Overvalued?
• Is Bank of America Corporation (BAC) Overvalued?
• Is HDFC Bank Limited (HDB) Overvalued?

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.