In this article, we will look at the 10 Worst Performing Bank Stocks in 2024.
Banking Sector Trends for 2025
On December 12, 2024, Goldman Sachs global investment research managing director & senior analyst Alex Blostein joined Yahoo Finance to discuss the top trends for the banking sector heading into 2025. Goldman Sachs had held financial conferences with banking executives before Alex Blostein appeared for this interview, thus his analysis of the sector brings in the perspective of industry experts.
Blostein noted that they have hosted more than 100 executives from the industry ranging from bankers to brokers and asset managers. The key takeaway from the perspective of all the experts points towards optimism around the economy and some data points support this optimism. He noted that the pent-up capital market activity seems to be translating to more actionable steps, therefore the capital markets and the merger and acquisition activity are likely to accelerate materially in 2025. Another theme that Blostein noted is that all sub-sectors around private markets are feeling healthy and the years of concentration around private credit have started to broaden into private equity. Blostein further mentioned that from his talks with banking executives, it seems that real estate has also started to get a little better than it was previously. He also emphasized that one of the key themes for the industry is the large amount of capital sitting at the sidelines. Blostein estimates there is around $7 trillion of capital sitting as money market fund, which has now started to make its way into the market, initially through fixed income, but may extend to equities. Therefore all of these themes advocate for a bullish financial sector in 2025.
While talking about what the positive change for the sector will look like, Blostein noted two areas that people keep under the spotlight the capital market and M&A. On the M&A front, the sector is running around 10% to 15% below cyclical averages. This means that the markets have gone up considerably, which presents an upside of 15% to 30% for M&A volumes over the next couple of years. On the other hand, the equity capital markets in 2024 were running around 30% to 40% below the 2021 peak levels. This topped with the pent-up demand from the clients puts the private market and equity firms to return some of the capital back through M&A and equity capital market routes. Therefore the overall economic condition plus the themes discussed above makes a bullish case for the financial and banking sector.
With that let’s take a look at the 10 worst performing bank stocks in 2024.
A banker closely examining a document while seated at his desk.
Our Methodology
To curate the list of 10 worst-performing bank stocks in 2024, we used the Finviz stock screener. Using the screener we aggregated a list of bank stocks both diversified and regional banks that have fallen by at least 15% over the past year. Next, we checked the performance of each stock and ranked the stocks in descending order of their 1-year performance. We have also added the number of hedge funds holding each stock sourced from Insider Monkey’s Q3 2024 database. Please note that the data was collected on February 11, 2025.
Why do we care about what hedge funds do? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Performing Bank Stocks in 2024
10. MainStreet Bancshares Inc. (NASDAQ:MNSB)
Price: $16.49
Number of Hedge Fund Holders: 6
1-Year Price Performance: -14.69%
MainStreet Bancshares Inc. (NASDAQ:MNSB) is the holding company that owns MainStreet Bank. This bank provides a variety of financial services to individuals, small and medium-sized businesses, and professionals. It provides banking services, loans, cash management, and digital banking services.
The bank faced a mixed year in 2024. It achieved significant core deposit growth, adding $187 million in core deposits throughout 2024. On the other hand, a complete write-down of intangible assets negatively impacted financial performance, reducing earnings per share significantly. As a result, it reported a loss of $1.60 per share for fiscal year 2024 due to negative returns on average assets and equity. On the bright side, MainStreet Bancshares Inc. (NASDAQ:MNSB) has been focusing on reducing non-performing assets, during the year it reduced non-performing assets by 62%, bringing the balance down to $21.7 million. Looking ahead, the bank aims for low-single-digit loan growth while focusing on reducing non-performing assets and funding costs further. It is one of the worst-performing bank stocks in 2024.
9. Banco Santander (Brasil) S.A. (NYSE:BSBR)
Price: $4.59
Number of Hedge Fund Holders: 7
1-Year Price Performance: -20.73%
Banco Santander (Brasil) S.A. (NYSE:BSBR) is the subsidiary of the international bank Banco Santander. It is a major bank in Brazil with key services in Retail and Wholesale banking. While the bank acts as a comprehensive financial partner for both personal and business needs, it also provides additional services including asset management, securities brokerage, insurance brokerage, and pension plan services.
The bank has been focused on a customer-centric policy to become a primary bank for its clients in Brazil. However, the broader market conditions have proved to be significant headwinds for Banco Santander (Brasil) S.A. (NYSE:BSBR) as the stock has fallen more than 20% over the past 12 months. On February 11, Mario Pierry analyst at Bank of America Securities reiterated a Hold rating on the stock with a price target of $4.90. Pierry noted that the bank’s focus on secured credit products and high-credit-score clients can result in softer loan growth in the future as the strategy prioritizes quality over quantity. In addition, he also expects higher Selic rates, which are projected to increase further in 2025. This could negatively affect the net interest income by reducing the loan demand.
That being said, Banco Santander (Brasil) S.A. (NYSE:BSBR) showed some growth during the fiscal fourth quarter of 2024. The bank expanded its loan portfolio by 6.2% year-over-year and reduced the recurring cost of risk by 0.5 percentage points thereby leading its Net Interest Income higher by 16% during the same time. Although the stock was held by 7 hedge funds in Q3 2024, it still ranks as the 9th worst-performing bank stock in 2024.
8. HomeStreet, Inc. (NASDAQ:HMST)
Price: $10.33
Number of Hedge Fund Holders: 12
1-Year Price Performance: -21.08%
HomeStreet, Inc. (NASDAQ:HMST) provides commercial, retail, and mortgage banking services to individuals and businesses. The bank also offers loans for commercial properties, multifamily housing, construction projects, and land development. It operates on the West Coast of the United States and in Hawaii.
The bank has been facing significant challenges due to its alleviated commercial real estate loan. Over the past two years HomeStreet, Inc. (NASDAQ:HMST) has missed EPS expectations 6 times and revenue expectations 7 times, resulting in the stock price falling by around 21% during the past 12 months. On January 31, Keefe Bruyette lowered its price target on the stock from $12.5 to $12, while keeping its Market performance rating on the stock. The firm believes the latest fiscal fourth-quarter results in 2024 were noisy.
Considering the high commercial real estate loan portfolio of the bank, management during the quarter implemented a strategic sale of $990 in multifamily loans. The sale was conducted at a discount of 8.54%, thereby adding some financial stability for the bank. Management noted that the proceeds from the sale will be used to pay off expensive debt including Federal Home Loan Bank which has a higher interest average. HomeStreet, Inc. (NASDAQ:HMST) is confident to return to profitability by the first half of 2025 due to the strategic repositioning of its balance sheet. It is one of the worst-performing bank stocks in 2024.
7. Midland States Bancorp, Inc. (NASDAQ:MSBI)
Price: $19.60
Number of Hedge Fund Holders: 11
1-Year Price Performance: -22.90%
Midland States Bancorp, Inc. (NASDAQ:MSBI) is a financial holding company that operates through mainly two segments Banking and Wealth management. The Banking segment of the company provides financial services including loans for commercial purposes, business financing, deposit accounts, merchant services, and other related services. Moreover, Wealth management is managed by Midland Wealth Management, which offers Trustee and custodial services, Investment management, Financial planning, and Retirement plan consultation. The bank is headquartered in Effingham, IL.
On January 28, DA Davidson lowered their price target on the stock from $27 to $21, while keeping their Neutral rating on the stock. The firm noted that the fiscal fourth quarter results present a potential catalyst for streamlined core results in the future. However, the bank needs adept credit execution with limited backsliding. The firm is also concerned about the bank’s overall lower net interest income, higher expenses, and persistent credit challenges.
During the fiscal fourth quarter of 2024, Midland States Bancorp, Inc. (NASDAQ:MSBI) reported net losses available to common shareholders of $54.8 million, or $2.52 per diluted share. Management noted its deteriorating credit quality issues are within the non-core consumer loans, Specialty Finance Group, and Midland Equipment Financing line of businesses. It has taken significant steps to address its credit quality issues. For instance, the company sold an $87.1 million LendingPoint portfolio, recognizing losses of $17.3 million. Moreover, it is also committed to selling a $371.7 million Greensky portfolio with associated losses of $33.4 million. Management has also tightened credit standards and will not originate new construction loans in the Specialty Finance Group. It is one of the worst-performing bank stocks in 2024.
6. Banco Bradesco S.A. (NYSE:BBD)
Price: $2.11
Number of Hedge Fund Holders: 22
1-Year Price Performance: -23.27%
Banco Bradesco S.A. (NYSE:BBD) together with its subsidiaries provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two main segments Banking and Insurance. The Banking segment provides, checking accounts, savings accounts, loans, and credit card services.
The stock has been down 23% over the past 12 months, however, the fiscal fourth quarter of 2024 highlighted growth across several financial indicators. The bank reported a net income of BRL 5.4 billion during the quarter, marking a 37% year-over-year increase, with full-year net income reaching BRL 19.6 billion, up by 20%. Management of Banco Bradesco S.A. (NYSE:BBD) attributed growth in net income to its strong loan portfolio. The loan portfolio exceeded BRL 980 billion, growing by approximately 12% year-over-year, with significant growth in micro, small, and medium enterprises (MSMEs).
The bank is also focusing on improving its digital presence during the fourth quarter; nearly all transactions (99%) occurred through digital channels, enhancing efficiency and customer experience. Management also noted about closing some of its physical branches to allocate more funds for its digital endeavor. It is one of the worst-performing bank stocks in 2024.
5. First Northwest Bancorp (NASDAQ:FNWB)
Price: $10.80
Number of Hedge Fund Holders: 5
1-Year Price Performance: -23.78%
First Northwest Bancorp (NASDAQ:FNWB) is a bank holding company and a financial holding company that operates primarily through its subsidiary, First Fed Bank. It provides a range of banking services including commercial and consumer banking. Moreover, as a financial holding company it also engages in non-banking financial activities such as investment advisory services. The bank has over 16 locations throughout Washington state.
First Northwest Bancorp (NASDAQ:FNWB) has faced challenges in recent quarters due to elevated non-performing charges (NCOs) related to previously flagged loans and write-downs associated with FinTech equity investments. The company experienced an increase in nonperforming loans, which were $19.5 million as of March 31, 2024, and rose to $30.5 million by December 31, 2024. These increases were primarily due to specific commercial business loans and real estate-related issues. On February 3, Piper Sandler increased the price target for First Northwest Bancorp (NASDAQ:FNWB) from $11 to $12 while keeping a Neutral rating on the stock. The firm noted that the increase in non-performing loans can negatively impact the credit and profitability of the bank. However, Piper Sandler is optimistic that asset quality issues will moderate over time, potentially leading to better financial performance for the bank. It is one of the worst-performing bank stocks in 2024.
4. Glen Burnie Bancorp (NASDAQ:GLBZ)
Price: $4.85
Number of Hedge Fund Holders: NA
1-Year Price Performance: -25.95%
Glen Burnie Bancorp (NASDAQ:GLBZ) is a bank holding company that owns The Bank of Glen Burnie, a commercial bank operating in Maryland. The Bank provides a range of financial services, including commercial and retail banking, real estate financing, commercial lending, and automobile loans.
The company faced challenges due to changes in interest rates over recent years. During the fiscal fourth quarter of 2024, the company reported a net loss of $39,000, in contrast to a net income of $167,000 in the same period last year. Despite the losses, the management was able to grow loans by $28.9 million year-over-year. However, the net interest income decreased by 9.84% compared to $12.1 million last year. This decrease was primarily due to a significant increase in interest expenses. Moreover, the management has also suspended the quarterly dividend payments to shareholders and plans to strategically invest in opportunities for long-term growth. Management aims for organic loan and deposit growth while maintaining strong capital levels and conservative lending policies. It is one of the worst-performing bank stocks in 2024.
3. Summit State Bank (NASDAQ:SSBI)
Price: $7.40
Number of Hedge Fund Holders: 1
1-Year Price Performance: -28.16%
Summit State Bank (NASDAQ:SSBI) operates as a community bank that provides various financial services to individuals and businesses in Sonoma County, California. It offers different types of accounts like checking, savings, money market, and time deposits where customers can keep their money. The bank also provides loans for businesses, individuals, and non-profit organizations. It also supports local communities through volunteer programs and financial support to nonprofits.
Summit State Bank (NASDAQ:SSBI) has been facing significant credit losses which has led to a decrease of 28% in its price performance over the past 12 months. During the fiscal fourth quarter of 2024 reported a net loss of $6.6 million, compared to a net income of $1.9 million in the same period in 2023. The loss was mainly due to provisions for credit losses of around $6.65 million and a one-time non-cash goodwill impairment charge of $4.12 million.
To manage the losses the management has aggressively pursued solutions for non-performing loans, reducing them by $9.16 million in Q4 2024, and is expecting further reductions by $18.19 million in H1 2025 through loan payoffs from collateral sales. It is one of the worst-performing bank stocks in 2024.
2. First Foundation Inc. (NYSE:FFWM)
Price: $5.26
Number of Hedge Fund Holders: 20
1-Year Price Performance: -35.93%
First Foundation Inc. (NYSE:FFWM) is a financial services company that provides a wide range of banking and wealth management services to individuals, businesses, and organizations. Its offerings include personal banking, business banking, and private wealth management, which cover areas like investments, trust services, insurance, and philanthropy.
The company has faced challenges due to its credit losses and high concentration of commercial real estate loans. On February 3, Piper Sandler lowered the price target on the bank from $7 to $6. The firm has also lowered its 2025 EPS estimates from 35 cents to 22 cents, mainly due to weaker net interest income, lower fee income, and higher expenses including credit costs. Management of First Foundation Inc. (NYSE:FFWM) sold $489 million in multifamily loans during the fiscal fourth quarter of 2024 to reduce its commercial real estate loan concentration. However, its CRE concentration remains high with $1.4 billion in loans, which the company plans to sell in the future. It is one of the worst-performing bank stocks in 2024.
1. SHF Holdings, Inc. (NASDAQ:SHFS)
Price: $0.43
Number of Hedge Fund Holders: 3
1-Year Price Performance: -56.14%
SHF Holdings, Inc. (NASDAQ:SHFS) is a company that specializes in providing financial and banking services to businesses in the cannabis industry. The company enables cannabis-related businesses to access traditional banking services like checking accounts and loans through partner banks. It also assists in sourcing and managing loans specifically for cannabis businesses, which often face challenges accessing credit from traditional banks due to legal complexities.
SHF Holdings, Inc. (NASDAQ:SHFS) has been facing some headwinds due to the slowdown in the cannabis industry. The increased pricing pressure on the industry along with pricing pressures and increased competition due to new state legalizations has been a consistent challenge. However, regardless of this, the company posted a positive fiscal third quarter of 2024. It grew its net income by 147% year-over-year to $354,000 from a net loss of $748,000 in Q3 2023. Moreover, the loan interest income also grew by 48% during the same time. Management expects continued growth driven by increasing legalization at state levels. It is one of the worst-performing bank stocks in 2024 as it has fallen by over 56% over the past 12 months.
While we acknowledge the potential of SHF Holdings, Inc. (NASDAQ:SHFS) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SHFS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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