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.

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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 Thursday, July 02, 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.

Banner Corporation’s Value Grade

Value Grade:

Banner Corporation operates as the bank holding company for Banner Bank that engages in the provision of commercial banking and financial products and services to individuals, businesses, and public sector entities in the United States. It accepts various deposit instruments, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, regular savings accounts, and certificates of deposit, as well as treasury management services and retirement savings plans. The company also provides commercial real estate loans, including owner-occupied, investment properties, and multifamily residential real estate loans; one- to four-family residential real estate lending; construction, land, and land development loans; commercial business loans; agricultural mortgage and business loans; consumer and other loans, such as home equity lines of credit, automobile, and boat and recreational vehicle loans, as well as loans secured by deposit accounts; and loan solicitation and processing services. In addition, it provides electronic and digital banking services comprising debit cards and ATM programs, internet banking, remote deposit capture, and mobile banking services. The company was founded in 1890 and is based in Walla Walla, 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.

Banner Corporation has a Value Score of 82, which is considered to be undervalued.

When you look at Banner Corporation’s price-to-sales ratio at 3.52 compared to the industry median at 3.52, this company has a higher price relative to revenue compared to its peers. This could make Banner Corporation’s stock fairly attractive for value investors.

Banner Corporation’s price-earnings ratio is 11.40 compared to the industry median at 12.80. This means it has a lower share price relative to earnings compared to its peers. This could make Banner Corporation 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. Banner Corporation’s shareholder yield is higher than its industry median ratio of 2.30%. 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. Banner Corporation’s price-to-book ratio is lower than its industry median ratio of 1.25. This could make Banner Corporation more attractive to investors looking for a new addition to their portfolio.

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

Princeton Bancorp, Inc.’s Value Grade

Value Grade:

Princeton Bancorp, Inc. operates as the bank holding company for The Bank of Princeton that provides various banking products and services. The company accepts various deposit products, including checking, savings, attorney trust, and money market accounts, as well as certificates of deposit. It also offers traditional retail banking services, one-to-four-family residential mortgage loans, multi-family and commercial mortgage loans, construction loans, and commercial business loans, as well as consumer loans, including home equity loans and lines of credit. In addition, the company provides debit and credit cards, money orders, direct deposits, automated teller machines, cashier’s checks, safe deposit boxes, online banking, wire transfers, night depository, remote deposit capture, bank-by-mail, online, and automated telephone banking services, as well as payroll-related services and merchant credit card processing services through third party. Further, it offers full online statements, online bill payment, account inquiries, mobile banking, transaction histories and details, and account-to-account transfer services. The company was founded in 2007 and is headquartered in Princeton, 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.

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

Princeton Bancorp, Inc.’s price-earnings ratio is 13.7 compared to the industry median at 12.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Princeton Bancorp, Inc. less attractive for value investors.

Princeton Bancorp, Inc.’s price-to-book ratio is higher than its peers. This could make Princeton Bancorp, Inc. less attractive for value investors when compared to the industry median at 1.25.

You can read more about Princeton 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.

KeyCorp’s Value Grade

Value Grade:

KeyCorp operates as the holding company for KeyBank National Association that provides various retail and commercial banking products and services in the United States. It operates in two segments, Consumer Bank and Commercial Bank. The company offers various deposits and investment products; personal finance and financial wellness, lending, student loan refinancing, mortgage and home equity, credit card, treasury, and business advisory; commercial leasing, investment management, consumer finance; and wealth management and investment services for institutional, non-profit, and high-net-worth clients. It also provides lending, cash management, equipment financing, and commercial mortgage loans; and capital market products and services, such as syndicated finance, debt and equity underwriting, fixed income and equity sales and trading, derivatives, foreign exchange, mergers and acquisition, other advisory services, and public finance to large corporate and institutional clients. In addition, the company offers personal and institutional trust custody services, personal financial and planning services, access to mutual funds, treasury services, and international banking services. Further, it provides community development financing, securities underwriting, brokerage, and investment banking services, as well as merchant services. The company was founded in 1849 and is headquartered in Cleveland, 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.

KeyCorp has a Value Score of 62, which is considered to be undervalued.

KeyCorp’s price-earnings ratio is 14.3 compared to the industry median at 12.8. This means that it has a higher price relative to its earnings compared to its peers. This makes KeyCorp less attractive for value investors.

KeyCorp’s price-to-book ratio is lower than its peers. This could make KeyCorp more attractive for value investors when compared to the industry median at 1.25.

You can read more about KeyCorp’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.

OceanFirst Financial Corp.’s Value Grade

Value Grade:

OceanFirst Financial Corp. operates as the bank holding company for OceanFirst Bank N.A. that provides community banking services to retail and commercial customers in the United States. The company accepts deposit products, such as money market accounts, savings accounts, interest-bearing checking accounts, non-interest-bearing accounts, and time deposits, including brokered deposits. It also offers commercial real estate, multi-family, land loans, construction, and commercial and industrial loans; fixed-rate and adjustable-rate mortgage loans that are secured by one-to-four family residences; and consumer loans, such as home equity loans and lines of credit, student loans, loans on savings accounts, overdraft line of credit, and other consumer loans. In addition, the company invests in mortgage-backed securities, securities issued by the U.S. government and agencies, corporate securities, and other investments; and provides bankcard services, trust and asset management products and services, deposit account services, sales of loans and investments, bank owned life insurance and commercial loan swap income. The company was founded in 1902 and is headquartered in Toms River, 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.

OceanFirst Financial Corp. has a Value Score of 75, which is considered to be undervalued.

OceanFirst Financial Corp.’s price-earnings ratio is 16.7 compared to the industry median at 12.8. This means that it has a higher price relative to its earnings compared to its peers. This makes OceanFirst Financial Corp. less attractive for value investors.

OceanFirst Financial Corp.’s price-to-book ratio is higher than its peers. This could make OceanFirst Financial Corp. less attractive for value investors when compared to the industry median at 1.25.

You can read more about OceanFirst 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.

Westamerica Bancorporation’s Value Grade

Value Grade:

Westamerica Bancorporation operates as a bank holding company for Westamerica Bank that provides various banking products and services to individual and commercial customers in the United States. The company accepts various deposit products from local businesses and professionals, as well as retail savings and checking accounts, as well as certificates of deposit. Its loan portfolio includes commercial, commercial real estate, residential real estate, real estate construction, consumer installment loans, as well as indirect automobile loans. The company serves small businesses, professionals, and consumers. The company was formerly known as Independent Bankshares Corporation and changed its name to Westamerica Bancorporation in 1983. Westamerica Bancorporation was founded in 1884 and is headquartered in San Rafael, 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.

Westamerica Bancorporation has a Value Score of 61, which is considered to be undervalued.

Westamerica Bancorporation’s price-earnings ratio is 13.4 compared to the industry median at 12.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Westamerica Bancorporation less attractive for value investors.

Westamerica Bancorporation’s price-to-book ratio is lower than its peers. This could make Westamerica Bancorporation more attractive for value investors when compared to the industry median at 1.25.

You can read more about Westamerica Bancorporation’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.

• Banner Corporation stock has a Value Grade of A.
• Princeton Bancorp, Inc. stock has a Value Grade of B.
• KeyCorp stock has a Value Grade of B.
• OceanFirst Financial Corp. stock has a Value Grade of B.
• Westamerica Bancorporation 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.

• 5 Undervalued Banks Stocks for Wednesday, July 01
• Is Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) Overvalued?
• Is Banco Santander, S.A. (SAN) Overvalued?
• Is Bank of America Corporation (BAC) Overvalued?

AAII Disclaimer

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