In this article, we will list the 5 Most Undervalued Bank Stocks to Buy Now. Please visit 10 Most Undervalued Bank Stocks to Buy Now if you’d like to see an extended list and the methodology behind it.
5. Valley National Bancorp (NASDAQ:VLY)
Valley National Bancorp (NASDAQ:VLY) is one of the 10 most undervalued bank stocks to buy now.
The bank’s recent commercial expansion leads us to a highly captivating investment thesis. On April 14, Valley National Bancorp (NASDAQ:VLY) announced the organic expansion of its client-oriented commercial banking services into the city of Phoenix, Arizona. With this development, Valley is now offering its services in six of the top ten most populous Metropolitan Statistical Areas in the United States.
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As per Gino Martocci, the President of Commercial Banking at Valley, expansion into Arizona is a noteworthy step for Valley Bank, which is a part of the strategic vision of Valley when it comes to commercial banking. As Martocci mentions, Arizona’s economy is among the fastest-growing in America, and more than $30 billion in investment comes there every year. This makes Arizona one of the best investment prospects within the banking sphere.
Martocci further explained that the economy of Arizona is attracting companies that are growing quickly and planning for the future. Valley continues to make strategic investments in markets where it can leverage its experience and responsible size to provide differentiated service to its customers and stakeholders.
Valley National Bancorp (NASDAQ:VLY) operates in the banking and financial sector, offering services to businesses and individuals. These include insurance, private banking, management, consulting services, and more. The company also offers niche financial services along with specialized and digital banking solutions.
4. Bank OZK (NASDAQ:OZK)
Bank OZK (NASDAQ:OZK) is one of the 10 most undervalued bank stocks to buy now.
On April 7, Timur Braziler from UBS maintained a Neutral rating for Bank OZK (NASDAQ:OZK) while decreasing the price target from $51 to $48. This downward revision was based on the analyst’s comprehension of significant downside risk. According to Braziler, OZK’s credit costs and overall loan growth trajectories would be profoundly affected by ongoing pressure until the end of fiscal 2027.
Simultaneously, Braziler states that these expected financial challenges are already fully accounted for in the current share prices. Going forward, the bank is expected to deliver double-digit returns in the foreseeable future, as per consensus, making it one of the best undervalued banking stocks.
Given its solid fundamentals and improved business prospects, the bank has been rewarding shareholders with impressive payouts. On April 2, the Bank OZK (NASDAQ:OZK) board declared a quarterly cash dividend of 47 cents per share on its common stock. This was one cent higher compared to the prior quarter.
Bank OZK (NASDAQ:OZK) is an end-to-end state-chartered bank that provides commercial and retail banking solutions. It offers three main services, which include treasury management, wealth and trust management, and deposit services. Additionally, it provides mortgage and financial services to a number of sectors like marine, agriculture, housing, and more.
3. First Merchants Corp. (NASDAQ:FRME)
First Merchants Corp. (NASDAQ:FRME) is one of the 10 most undervalued bank stocks to buy now.
As of the March 16 close, First Merchants Corp. (NASDAQ:FRME) had a moderately bullish consensus sentiment, with Buy ratings from 2 analysts covering the stock. With a median 1-year price target of $46.50, the stock offers more than 16% upside potential, making it one of the best undervalued banking stocks that investors should watch out for.
What is also driving the story for First Merchants Corp. (NASDAQ:FRME) is its commercial partnerships to expand service offerings. On March 31, it reported a collaboration with Spiral. What essentially drove this collaboration is the bank’s primary objective, which is to significantly improve the financial well-being of the many communities it actively serves. By working together, the financial institution hopes to provide the market with cutting-edge and highly customized digital experiences while also effectively expanding and retaining its deposit base at a reasonable cost.
Thanks to this, the average consumer may now easily save to meet their financial objectives through regular digital banking and everyday purchases. Better still, the new ecosystem simultaneously enables these same users to directly support local non-profits and important community causes right as they manage their money.
First Merchants Corp. (NASDAQ:FRME) provides commercial and consumer banking solutions, offering a wide array of services including savings and deposits, mortgages, refinancing, and credit cards. It also offers wealth and investment management services, private banking, brokerage, and fiduciary estate.
2. Banc of California Inc. (NYSE:BANC)
Banc of California Inc. (NYSE:BANC) is one of the 10 most undervalued bank stocks to buy now.
On April 7, Barclays reduced the price target on Banc of California Inc. (NYSE:BANC) from $25 to $23 while reiterating an Overweight rating. Despite the downward price target adjustment, the stock still offers almost 25% upside potential to investors, which supports its bullish investment case.
What essentially drove this valuation adjustment was the broader strategic realignment as part of the first quarter overview. According to Barclays, the overall trends in loan growth and net interest revenue appear to be rather favorable at the moment. Concurrently, the firm states that massive corporate layoffs, rapid disruption from artificial intelligence, and shifting energy prices are all contributing to serious uncertainty.
Despite these underlying uncertainties, Banc of California Inc. (NYSE:BANC) still offers more than 21% upside potential, as per consensus. This makes it one of the distinct names across the broader banking segment during these uncertain times.
Adding to the bullish views is the bank’s capital return strategy for shareholders, which should be another reason for investors to keep a close watch on this undervalued banking stock. On March 23, the Board of Directors of Banc of California Inc. (NASDAQ:BANC) approved an extension of the ongoing stock repurchase plan until March 2027, although it was supposed to expire in March 2026.
Banc of California has repurchased around $217 million worth of its common stock under the stock repurchase program since it was initiated, having repurchased $31 million worth of its common stock during 2026.
Banc of California Inc. (NYSE:BANC) provides treasury and banking management solutions to entrepreneurs, high-net worth individuals, middle-market businesses, non-profit organizations, and more. Its portfolio of services includes mortgages, electronic payment solutions, wire transfers, equipment finance, and treasury management. Other solutions include forex, interest rate swaps, money market accounts, certificates of deposit, and more.
1. Barclays PLC (NYSE:BCS)
Barclays PLC (NYSE:BCS) is one of the 10 most undervalued bank stocks to buy now.
The consensus sentiment around Barclays PLC (NYSE:BCS) leads to a highly optimistic narrative. As of April 16 closing, it received Buy ratings from 18 of the 22 analysts who provided coverage, while the remaining 4 had given Hold calls. With a median 1-year price target of $29.58, it currently offers an upside of almost 26%, which makes it a strong option as an undervalued banking stock.
The bank’s digital upscaling initiatives are also backing the bullish views. On April 14, Fidelity National Information Services Inc. (NYSE:FIS) and Barclays US Consumer Bank officially announced the renewal of their multi-year fundamental banking partnership. This extended arrangement is primarily motivated by the bank’s goal to continue upgrading its broader digital platforms while aggressively increasing its retail deposits as well.
In order to do this, Barclays is actively getting ready to use the FIS Profile service. This platform functions as a cloud-ready core banking platform designed to manage complex multi-currency operations in the background.
Barclays PLC (NYSE:BCS) is a global provider of financial solutions, offering a number of services. These include wholesale and retail banking, investment banking, investment and wealth management, personal and commercial lending, and more. It also offers current and savings accounts, credit cards, and securities dealing.
While we acknowledge the potential of BCS 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 BCS and that has 100x upside potential, check out our report about the cheapest AI stock.
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