3 Bank Stocks We Approach with Caution Adam Hejl Thu, October 8, 2026 at 4:48 AM EDT 4 min read CUBI -1.13% ^GSPC -0.22% BANC -1.49% WD -3.25% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Banks use their capital and expertise to help businesses grow while offering consumers essential financial products like mortgages and credit cards. Still, investors are uneasy as banks face challenges from credit quality concerns and potential regulatory changes. These doubts have caused the industry to lag recently as banking stocks have collectively shed 1.7% over the past six months. This performance is a noticeable divergence from the S&P 500's 15.2% return.
A cautious approach is imperative when dabbling in banks as many are sensitive to interest rate changes and economic cycles. Taking that into account, here are three bank stocks best left ignored.
Originally founded with a "high-tech, high-touch" branch-light banking strategy, Customers Bancorp (NYSE:CUBI) is a bank holding company that provides commercial and consumer banking services through its Customers Bank subsidiary, with a focus on business lending and digital banking.
Muted 9.5% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
Net interest margin of 3.2% is well below other banks, signaling its loans aren't very profitable
Annual earnings per share growth of 4.2% underperformed its revenue over the last five years, showing its incremental sales were less profitable
At $74.10 per share, Customers Bancorp trades at 1.1x forward P/B. To fully understand why you should be careful with CUBI, check out our full research report (it's free).
Originally established in 1941 and now operating with a tech-forward approach that includes its SmartStreet platform for homeowner associations, Banc of California (NYSE:BANC) is a California-based bank holding company that provides banking services to small and middle-market businesses, entrepreneurs, and individuals.
Net interest income trends were unexciting over the last five years as its 2.5% annual growth was below the typical banking firm
Day-to-day expenses have swelled relative to revenue over the last five years as its efficiency ratio increased by 15.9 percentage points
Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 24.3% annually
Banc of California's stock price of $17.14 implies a valuation ratio of 0.9x forward P/B. Check out our free in-depth research report to learn more about why BANC doesn't pass our bar.
Originating as a small mortgage banking firm during the Great Depression in 1937, Walker & Dunlop (NYSE:WD) provides commercial real estate financing, property sales, appraisal, and investment management services with a focus on multifamily properties.
Loans are facing significant end-market challenges during this cycle as net interest income has declined by 41.6% annually over the last five years
Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 13.7% annually
Loan losses and capital returns have eroded its tangible book value per share this cycle as its tangible book value per share declined by 8.5% annually over the last five years
Walker & Dunlop is trading at $34.22 per share, or 0.7x forward P/B. Read our free research report to see why you should think twice about including WD in your portfolio, it's free.
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