Bank stocks are starting to come back in a big way, quietly climbing as the overall market gets close to new record highs. On a recent episode of CNBC’s Fast Money, the panelists pointed out that big names like Goldman Sachs and JPMorgan Chase have recently hit all-time highs. That’s thanks to solid earnings, a more favorable interest rate outlook, and growing confidence in the markets. But while these large banks are grabbing headlines, the Fast Money panelists believe there may be even better opportunities in smaller banks that are still trading below their book value.
One example they mentioned is Citigroup, which is trading well below what its assets are worth, even though the company’s performance is improving. At the same time, many regional and mid-sized banks haven’t recovered fully since 2021, with some still down more than 25% from their peak. This shows a split in the market; big banks are doing great, but smaller ones are being left behind. That gap may not last, especially as money starts flowing back into these undervalued stocks. With better economic data and hints of looser banking rules, the stage could be set for a broader rebound. This article highlights 10 best bank stocks trading under book value that could offer strong returns over time.
A banker closely examining a document while seated at his desk.
Our Methodology
To identify the 10 best bank stocks trading under book value, we used Finviz’s screener to weed out non-banking stocks and those trading above their book value. Within the screened stocks, we sorted the list by market cap to prioritize the bigger banks and arrive at the list of 10 stocks. Finally, we organized the list in ascending order of hedge fund interest as of Q1 2025.
Note: All data was recorded on July 28, 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Bank Stocks to Buy Trading Under Book Value
10. Deutsche Bank AG (NYSE:DB)
Price-to-Book Ratio: 0.83x
Market Cap: $63.38 billion
Number of Hedge Fund Holders: 17
Deutsche Bank AG (NYSE:DB) is one of the best bank stocks to buy trading under book value. Deutsche Bank (NYSE: DB), Germany’s largest lender, was downgraded by research firm Oddo BHF on July 25, moving its rating from “Outperform” to “Neutral.” Along with the downgrade, the firm set a new price target of €29, which is about $31.50 in U.S. dollars. This change signals a more cautious outlook from analysts, suggesting that while the bank may still perform steadily, significant near-term upside could be limited.
Despite the downgrade, Deutsche Bank has shown signs of progress in recent quarters. The company has continued to improve its balance sheet, cut costs, and grow profitability after years of restructuring and underperformance. It has also benefited from higher interest rates, which tend to support bank earnings by boosting net interest margins. Furthermore, the bank’s strong presence across investment banking, corporate lending, and asset management gives it a diversified revenue base that helps it weather volatility in any single segment. The shift in analyst opinion may simply reflect the stock’s recent gains and a more balanced risk-reward profile going forward.
9. United Bankshares, Inc. (NASDAQ:UBSI)
Price-to-Book Ratio: 0.97x
Market Cap: $5.22 billion
Number of Hedge Fund Holders: 22
United Bankshares, Inc. (NASDAQ:UBSI) is one of the best bank stocks to buy trading under book value. United Bankshares, Inc. (NASDAQ:UBSI) posted record earnings for the second quarter of 2025 on July 24, delivering strong results that reflect the company’s smart expansion strategy and solid financial management. Total revenue, which includes both interest and noninterest income, came in at $452.6 million for the quarter, a 13.3% year-over-year growth. The bank earned a net income of $120.7 million, or $0.85 per diluted share, which represented a 25.4% year-over-year growth.
Key performance metrics showed solid momentum. Return on average assets reached 1.49%, while return on average equity hit 9.05%, and return on tangible equity climbed to 14.67%. These improvements were largely driven by strong loan growth, higher interest income, and continued benefits from the Piedmont Bancorp acquisition. Net interest income rose to $274.5 million, up 6% from the previous quarter, and the bank’s net interest margin improved to 3.81%.
The bank also did a good job managing expenses. Merger-related costs dropped significantly, helping noninterest expenses fall by $5.6 million compared to the first quarter. Asset quality stayed healthy, with nonperforming loans at just 0.28% of the total loan book. With strong fundamentals, improved efficiency, and growth in new markets like Atlanta, United Bankshares appears to be in a solid position heading into the rest of the year.
8. Barclays PLC (NYSE:BCS)
Price-to-Book Ratio: 0.87x
Market Cap: $68.32 billion
Number of Hedge Fund Holders: 28
Barclays PLC (NYSE:BCS) is one of the best bank stocks to buy trading under book value. Barclays (NYSE:BCS) received a downgrade from Citi on July 18, which moved its rating from Buy to Neutral while slightly raising its price target from 360 to 366 pence. The adjustment follows a solid run in the stock that has pushed it closer to Citi’s valuation ceiling, prompting the firm to temper its outlook despite acknowledging continued operational strength.
Citi cited relative valuation as the key reason for the downgrade, noting that European wholesale banks like Barclays may struggle to match the trading revenue momentum seen among their U.S. counterparts. While Barclays has benefited from stable credit conditions and improving return on tangible equity, it could face headwinds in its investment banking segment as deal activity remains patchy.
Still, Barclays is not without its positives. The bank maintains a strong capital base, a diversified business mix, and competitive positioning in both retail and corporate banking. For long-term investors, those fundamentals could offer some cushion, even if near-term upside appears limited from here. The downgrade doesn’t suggest weakness, but rather that expectations may have caught up with reality, at least for now.
7. Atlantic Union Bankshares Corporation (NYSE:AUB)
Price-to-Book Ratio: 0.96x
Market Cap: $4.70 billion
Number of Hedge Fund Holders: 29
Atlantic Union Bankshares Corporation (NYSE:AUB) is one of the best bank stocks to buy trading under book value. On July 25, Piper Sandler lowered its price target on Atlantic Union Bankshares Corporation (NYSE:AUB) slightly, from $46 to $45, while maintaining an Overweight rating. This still represents a 36.5% upside. This modest adjustment reflects confidence in the company’s ongoing transformation, largely fueled by the acquisition of Sandy Spring Bank. The deal has strengthened Atlantic Union’s footprint, positioning it as a leading regional bank in the lower mid-Atlantic.
The bank’s second-quarter results showed continued momentum, with solid growth in both loans and deposits. Piper Sandler highlighted Atlantic Union’s disciplined approach to managing commercial real estate (CRE) concentration, which helps mitigate risk while supporting expansion. Credit quality remained strong, and the bank achieved a notable net interest margin of 3.83%, indicating effective management of lending and funding costs.
Expense control also played a key role in the quarter’s performance, supporting profitability during this period of integration and growth. Overall, Atlantic Union appears to be successfully balancing growth with prudent risk management. For investors, the bank’s disciplined strategy and enhanced regional presence make it a compelling choice in the regional banking sector, despite the slight pullback in the price target.
6. Prosperity Bancshares, Inc. (NYSE:PB)
Price-to-Book Ratio: 0.84x
Market Cap: $6.43 billion
Number of Hedge Fund Holders: 31
Prosperity Bancshares, Inc. (NYSE:PB) is one of the best bank stocks to buy trading under book value. On July 24, Piper Sandler has maintained its Overweight rating on Prosperity Bancshares, Inc. (NYSE:PB) while slightly lowering the price target from $86 to $84 per share. At the current trading price of $67.42, this revised target implies a potential upside of nearly 25%, signaling that the bank remains an attractive investment opportunity despite the modest target cut.
The price adjustment reflects a cautious approach, possibly influenced by recent market volatility or valuation concerns, but it doesn’t diminish confidence in Prosperity’s solid fundamentals. The bank continues to benefit from strong regional banking dynamics, disciplined management, and a stable credit profile. These factors support the firm’s positive outlook and suggest the stock could outperform peers over the medium term.
Investors looking for exposure to well-managed regional banks may find Prosperity Bancshares appealing given its growth prospects and reasonable valuation. The significant upside potential at current prices keeps the stock well-positioned for gains as it capitalizes on its strategic initiatives and market opportunities.
5. F.N.B. Corporation (NYSE:FNB)
Price-to-Book Ratio: 0.86x
Market Cap: $5.60 billion
Number of Hedge Fund Holders: 32
F.N.B. Corporation (NYSE:FNB) is one of the best bank stocks to buy trading under book value. On July 21, F.N.B. Corporation (NYSE:FNB) received a boost in confidence from Truist Financial, which raised its price target from $17.50 to $18.00 while maintaining a Buy rating on the stock. At the current share price of $15.56, the revised target suggests an upside potential of roughly 16%, signaling that analysts see room for continued growth.
The upgrade highlights Truist’s belief in F.N.B.’s strong fundamentals and solid execution. While the price target bump may seem modest, it reflects steady progress in the bank’s performance, especially in a market where regional banks have been battling mixed investor sentiment and regulatory concerns. F.N.B. has been focused on growing its loan portfolio, maintaining healthy credit quality, and managing costs effectively.
For investors seeking stability with upside, F.N.B. offers a compelling mix of income through dividends and appreciation potential. The bank’s footprint across the Mid-Atlantic and Southeast gives it access to attractive markets, and its consistent operating results make it a reliable player in the regional banking space.
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.
3. Citizens Financial Group, Inc. (NYSE:CFG)
Price-to-Book Ratio: 0.92x
Market Cap: $21.37 billion
Number of Hedge Fund Holders: 50
Citizens Financial Group, Inc. (NYSE:CLG) is one of the best bank stocks to buy trading under book value. Citizens Financial Group, Inc. (NYSE:CLG) is attracting renewed optimism from Wall Street after Citi raised its price target to $60 from $57 on July 21, while maintaining a Buy rating. With shares currently trading around $49.20, that implies a potential upside of over 20%, signaling confidence in the bank’s near-term prospects. The upward revision follows the company’s solid second-quarter performance and encouraging guidance for Q3, particularly in non-interest income areas like fees.
In its Q2 earnings report, Citizens reported earnings of $0.65 per share, beating analysts’ expectations by a few cents. Although net interest income showed some compression, a common theme across regional banks, strong fee-based revenue and solid expense management helped the bank deliver steady results.
Citi noted that Q3 guidance came in stronger than anticipated, especially in fee income, which includes services like wealth management and card-related fees. That improvement could be a sign that Citizens is successfully diversifying its revenue base at a time when interest-rate pressure is hitting lending margins across the sector. As the broader banking sector regains its footing, Citizens’ combination of better-than-expected guidance and strong capital positioning makes it a stock to watch. The valuation still leaves room for upside, particularly if fee growth continues into the second half of the year.
2. Truist Financial Corporation (NYSE:TFC)
Price-to-Book Ratio: 0.99x
Market Cap: $58.92 billion
Number of Hedge Fund Holders: 57
Truist Financial Corporation (NYSE:TFC) is one of the best bank stocks to buy trading under book value. On July 21, Morgan Stanley bumped up its price target on Truist Financial Corporation (NYSE:TFC) to $48 from $47 while maintaining an Equal Weight rating. With shares currently trading at $44.80, the new target suggests modest upside potential of around 7%. The adjustment follows the company’s second-quarter earnings, which the firm described as a “mixed quarter,” reflecting both areas of strength and lingering challenges.
Despite the mixed results, Morgan Stanley raised its earnings per share estimates for Truist by 1.5% for 2025 and 1.9% for 2026. That upward revision points to cautious optimism about the bank’s ability to improve profitability over the next couple of years. Truist continues to work through expense pressures and shifting interest rate dynamics, both of which have impacted the broader regional banking sector.
Still, Truist’s solid credit quality and strong capital levels provide a stable base as it works to navigate this transition period. If the bank can show consistent improvement in fee income and manage costs more effectively, the stock could see more upside potential. For investors seeking dependable income and long-term value, Truist remains a name worth watching.
1. Citigroup, Inc. (NYSE:C)
Price-to-Book Ratio: 0.89x
Market Cap: $178.02 billion
Number of Hedge Fund Holders: 96
Citigroup, Inc. (NYSE:C) is one of the best bank stocks to buy trading under book value. Citigroup, Inc. (NYSE:C) has surged 33% year-to-date, making it the top-performing major U.S. bank stock in 2025. However, according to Wells Fargo banking analyst Mike Mayo, this rally is still in its early stages. With shares currently trading around $95.35, Mayo sees a 12-month price target of $115, implying nearly 21% upside from current levels. Looking further out, he believes the stock could climb to $150 by the end of 2027.
Citi’s recent momentum has been driven by a focused restructuring strategy under CEO Jane Fraser. The bank has simplified its business into five core units, exited underperforming markets, and trimmed layers of management. As a result, it posted second-quarter earnings of $1.96 per share, up 29% year-over-year, with revenue climbing 8%.
Despite the strong performance, Citi still trades below its book value of $94, a rare discount among megabanks. Mayo points out that Citi’s transformation is far from priced in. He expects earnings to reach $10.15 per share in 2026 and nearly $12 in 2027. With a dividend yield of 2.5% and an aggressive share buyback plan that could reduce the share count by 8% in a year, Citi offers a mix of growth and value that’s becoming hard to ignore.
While we acknowledge the potential of C to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than C and that has 100x upside potential, check out our report about this cheapest AI stock.
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