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10 Best Small Bank Stocks To Invest In

In this article, we will be taking a look at the 10 best small bank stocks to invest in. To skip our detailed analysis of banking stocks and the sector in general, you can go directly to see the 5 Best Small Bank Stocks To Invest In.

After a rigorous period of recession and inflation, the global economy is expected to demonstrate the strongest post-recession growth in about 80 years. A Deloitte report on the banking and capital markets outlook for 2022 cited the International Monetary Fund as stating that global GDP is expected to grow by 4.9% in 2022. In the midst of this growth, the banking industry in the United States is expected to sustain itself supported by government stimulus programs. The top 100 US banks released about $24 billion in loan loss reserves in H1 2021 alone. American and Canadian banks are expected to demonstrate a faster growth rate in terms of profitability than other major markets. The Deloitte Center for Financial Services forecast mentioned that the average return on equity in the US banking industry could improve to 10.4% by 2025, for instance.

Major bank stocks such as JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Morgan Stanley (NYSE:MS), among others, are thus set to benefit. They have been performing well in a time of higher interest rates, to begin with. However, smaller bank stocks are also proving their mettle with their successful acquisitions and continuous additions of more assets under their belt. Bank stocks began performing well on the market generally this summer as well. According to a Wall Street Journal article published this August, since the end of June, five out of the six largest US banks managed to outperform the S&P 500’s 13%. Morgan Stanley (NYSE:MS) and Bank of America Corporation (NYSE:BAC) were both up by 21% and 17%, respectively, showing that the worst of it is over for bank stocks this year, allowing them to climb across the board.

According to a latest Deloitte report on banking and financial markets outlook for 2023, even in an uncertain macroeconomic situation, the retail banking business is expected to perform favorably. In the US, consumer loan growth is continuing to stay resilient, offering a cause for optimism. Additionally, wealth management is proving itself to be a key source of profitability for banking companies. Total global wealth crossed the $400 trillion mark in 2020, and high net-worth households are expected to grow at a compound annual growth rate of 7% to $52 million by 2026. Bank stocks are the direct beneficiaries of this growth, showing that prospects for the sector are beginning to seem bright moving into 2023.

Our Methodology

We have selected lesser-known bank stocks with significant growth potential and impressive recent performance in the third quarter for our list below. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest. A few of the factors we have taken into consideration while selecting these stocks include analyst ratings and price targets, past acquisition successes and addition of assets to the banks’ profiles, efficiency ratios, and more.

Best Small Bank Stocks To Invest In

10. Summit Financial Group, Inc. (NASDAQ:SMMF)

Number of Hedge Fund Holders: 4

Summit Financial Group, Inc. (NASDAQ:SMMF) is the financial holding company for Summit Community Bank. It provides community banking and other financial services to individuals and businesses in the Eastern Panhandle, Southern and North Central regions of West Virginia, and the Northern, Shenandoah Valley, and Southwestern regions and Virginia and the Central region of Kentucky. The company is based in Moorefield, West Virginia.

Summit Financial Group, Inc. (NASDAQ:SMMF) is a well-run bank with industry-leading efficiency ratios. The bank is also a proven acquirer with a range of successful acquisitions in the past. Over the past five years, it has acquired $1 billion in total assets, paying about 27% above tangible book value on average. Summit Financial Group, Inc. (NASDAQ:SMMF) has seen its efficiency ration improve significantly over time, from 55% in 2016 to 49% in the third quarter of 2021.

Four hedge funds were long Summit Financial Group, Inc. (NASDAQ:SMMF) in the third quarter, with a total stake value of $10.3 million. Renaissance Technologies was the largest stakeholder in Summit Financial Group, Inc. (NASDAQ:SMMF), holding 225,435 shares worth $6.1 million.

Summit Financial Group, Inc. (NASDAQ:SMMF), like JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Morgan Stanley (NYSE:MS), is a bank stock many institutional investors have recently begun to show an interest in.

9. Stock Yards Bancorp, Inc. (NASDAQ:SYBT)

Number of Hedge Fund Holders: 5

Stock Yards Bancorp, Inc. (NASDAQ:SYBT) is the holding company for Stock Yards Bank & Trust Company. It provides a range of financial services for individuals, corporations, and others in the US. The bank operates through its Commercial Banking and WM&T segments, and it is based in Louisville, Kentucky.

Stock Yards Bancorp, Inc. (NASDAQ:SYBT) is a bank driven by a strong wealth management practice. Its Wealth Management and Trust group has $4.5 billion in assets under management as of this year. The bank is also known for its successful acquisitions, such as its acquisition of Kentucky Bancshares in May 2021, which added $1.3 billion to its assets, $740 million in its loan portfolio, and $1 billion in deposits. In August 2021, Stock Yards Bancorp, Inc. (NASDAQ:SYBT) also announced the acquisition of Commonwealth Bancshares with over $1.2 billion in total assets, $1.1 billion in deposits, and $730 million in the total loan book.

There were five hedge funds long Stock Yards Bancorp, Inc. (NASDAQ:SYBT) in the third quarter, with a total stake value of $2.6 million. In comparison, two funds were long the stock in the previous quarter, with a total stake value of $815,000.

Harding Loevner, an investment management firm, mentioned Stock Yards Bancorp, Inc. (NASDAQ:SYBT) in its second-quarter 2021 investor letter. Here’s what the firm said:

“If Signature, which currently sits around our market cap ceiling, could be the next First Republic, then the Louisville-based bank Stock Yards could be the next Signature. Stock Yards operates in Kentucky, Ohio, and Indiana, smaller markets where local bankers develop knowledge of their communities not easily replicated by national competitors. Stock Yards’ 60 relationship managers live in the neighborhoods where they do business and have spent decades getting to know local companies and their owners, serving them with a high level of personal attention. The result is a bank that has grown at twice the pace of the industry, while earning higher returns.

Like Signature, Stock Yards was able to grow its market share during last year’s pandemic-driven downturn. Working closely within their local communities, its bankers understood how urgently businesses needed the federally funded small business loans offered under the 2020 Payroll Protection Program Flexibility Act. Many banks struggled to process the loans, which, among other things, required close coordination with the federal Small Business Administration. Stock Yards learned the procedures quickly and was able to provide loans when other banks could not. In addition to helping its existing clients during a difficult time, it was able to attract a large number of new clients by agreeing to write the loans on condition that they move their deposit accounts from their old banks to Stock Yards.”

8. TriCo Bancshares (NASDAQ:TCBK)

Number of Hedge Fund Holders: 8

TriCo Bancshares (NASDAQ:TCBK) is the bank holding company for Tri Counties Bank. It provides commercial banking services to individual and corporate customers. The company is based in Chico, California, and accepts demand, savings, and time deposits.

The company is a real estate-focused lender with strong credit underwriting. TriCo Bancshares (NASDAQ:TCBK) also has a strong history of acquisitions, representing its ability to remain financially comfortable. In 2021, the bank reported a net income of $117.7 million, compared to $64.8 million in 2020. TriCo Bancshares (NASDAQ:TCBK) has also improved its efficiency ratio between 2016 and 2021, with the ratio standing at 53% in 2021.

Davis Capital Partners was the largest stakeholder in TriCo Bancshares (NASDAQ:TCBK) in the third quarter, holding one million shares worth $44.7 million. In total, eight hedge funds were long the stock, with a total stake value of $71.9 million.

7. Horizon Bancorp (NASDAQ:HBNC)

Number of Hedge Fund Holders: 11

Horizon Bancorp (NASDAQ:HBNC) is the bank holding company for Horizon Bank. It provides commercial and retail banking services and is based in Michigan City, Indiana. The company also offers commercial, residential, real estate, mortgage warehouse, and consumer loans.

Damon DelMonte, an analyst at Keefe Bruyette, holds a Market Perform rating on Horizon Bancorp (NASDAQ:HBNC) shares as of October 27. The analyst also placed an $18 price target on the stock.

Analysts see Horizon Bancorp (NASDAQ:HBNC) growing through the end of 2023 on the back of moderate loan growth. The company is expected to report earnings of $2.11 per share for 2022, up 6% year-over-year. In 2023, the bank is expected to generate earnings of $2.13 per share. Horizon Bancorp (NASDAQ:HBNC) also regularly changes its quarterly dividend every year. Earnings and dividend estimates for the stock from this November suggest a payout ratio of 32% for 2023.

Horizon Bancorp (NASDAQ:HBNC) was found among the 13F holdings of 11 hedge funds in the third and second quarters, with total stake values of $17.9 million and $19.7 million, respectively.

6. Peoples Bancorp Inc. (NASDAQ:PEBO)

Number of Hedge Fund Holders: 13

Peoples Bancorp Inc. (NASDAQ:PEBO) is the holding company for Peoples Bank, providing commercial and retail banking products and services. The company is based in Marietta, Ohio, and accepts deposit products while also providing commercial and industrial, commercial real estate, construction, finance, residential real estate, and consumer indirect and direct loans, among more.

Hovde Group’s Bryce Rowe holds a Market Perform rating on Peoples Bancorp Inc. (NASDAQ:PEBO) shares as of October 26.

Peoples Bancorp Inc. (NASDAQ:PEBO) is expected to see an increase in its earnings for the full year of 2022, supported by mid-single-digit loan growth. The company’s earnings for 2022 are expected to come in at $3.47 per share, up 60% year-over-year. For 2023, it is expected that Peoples Bancorp Inc. (NASDAQ:PEBO) will further grow its earnings by 2% to $3.45 per share.

Our hedge fund data shows 13 funds long Peoples Bancorp Inc. (NASDAQ:PEBO) in the third quarter, with a total stake value of $20.4 million. Of these funds, Elizabeth Park Capital Management was the largest stakeholder, holding 142,158 shares worth $4.1 million.

Peoples Bancorp Inc. (NASDAQ:PEBO), like JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Morgan Stanley (NYSE:MS), is a banking stock rising in popularity over the past few years.

Click to continue reading and see the 5 Best Small Bank Stocks To Invest In.

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Disclosure: None. 10 Best Small Bank Stocks To Invest In is originally published on Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

Each ChatGPT query, each model update, each robotic breakthrough consumes massive amounts of energy. In fact, AI is already pushing global power grids to the brink.

Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

“AI will run out of electricity by next year.”

As the world chases faster, smarter machines, a hidden crisis is emerging behind the scenes. Power grids are strained. Electricity prices are rising. Utilities are scrambling to expand capacity.

And that’s where the real opportunity lies…

One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. It’s not a chipmaker. It’s not a cloud platform. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike.

As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
  • It’s one of the only global companies capable of executing large-scale, complex EPC (engineering, procurement, and construction) projects across oil, gas, renewable fuels, and industrial infrastructure.
  • It plays a pivotal role in U.S. LNG exportation—a sector about to explode under President Trump’s renewed “America First” energy doctrine.

Trump has made it clear: Europe and U.S. allies must buy American LNG.

And our company sits in the toll booth—collecting fees on every drop exported.

But that’s not all…

As Trump’s proposed tariffs push American manufacturers to bring their operations back home, this company will be first in line to rebuild, retrofit, and reengineer those facilities.

AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

While the world is distracted by flashy AI tickers, a few smart investors are quietly scooping up shares of the one company powering it all from behind the scenes.

AI needs energy. Energy needs infrastructure.

And infrastructure needs a builder with experience, scale, and execution.

This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

While most energy and utility firms are buried under mountains of debt and coughing up hefty interest payments just to appease bondholders…

This company is completely debt-free.

In fact, it’s sitting on a war chest of cash—equal to nearly one-third of its entire market cap.

It also owns a huge equity stake in another red-hot AI play, giving investors indirect exposure to multiple AI growth engines without paying a premium.

And here’s what the smart money has started whispering…

The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

They’re sharing it quietly, away from the cameras, to rooms full of ultra-wealthy clients.

Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

And that’s for a business tied to:

  • The AI infrastructure supercycle
  • The onshoring boom driven by Trump-era tariffs
  • A surge in U.S. LNG exports
  • And a unique footprint in nuclear energy—the future of clean, reliable power

You simply won’t find another AI and energy stock this cheap… with this much upside.

This isn’t a hype stock. It’s not riding on hope.

It’s delivering real cash flows, owns critical infrastructure, and holds stakes in other major growth stories.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

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Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99.

2. Enjoy a month of ad-free browsing, exclusive access to our in-depth report on the Trump tariff and nuclear energy company as well as the revolutionary AI-robotics company, and the upcoming issues of our Premium Readership Newsletter.

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