10 Best Bank Stocks to Buy Trading Under Book Value

4. Flagstar Financial, Inc. (NYSE:FLG)

Price-to-Book Ratio: 0.62x

Market Cap: $4.70 billion

Number of Hedge Fund Holders: 36

Flagstar Financial, Inc. (NYSE:FLG) is one of the best bank stocks to buy trading under book value. Flagstar Financial, Inc. (NYSE:FLG) is navigating a challenging but potentially improving environment, following a revised price target from JPMorgan analyst Anthony Elian. The firm lowered its target from $13 to $12 while maintaining a Neutral rating. With shares currently trading at $11.31, the new target suggests a modest upside of around 6%. The revision comes in the wake of Flagstar’s second-quarter earnings report, which showed a mixed financial picture.

In Q2, Flagstar posted an adjusted net loss of $0.14 per share, falling short of expectations. Revenue declined 26% year-over-year to $496 million, missing consensus estimates by over $28 million. However, the quarter wasn’t without positives. Operating expenses were cut by $24 million from the previous quarter, and the bank improved its credit profile with a 9% drop in criticized loans and a 4% decline in nonaccrual loans. Commercial real estate exposure also shrank due to nearly $1.5 billion in payoffs.

Additionally, net interest margin ticked up to 1.81%, and the CET1 capital ratio improved to 12.3%, signaling stronger capital reserves. Flagstar is also building momentum in commercial banking, with a pipeline growth of 80% quarter-over-quarter. Despite ongoing losses, these developments point to gradual progress and a path toward stabilizing long-term performance.