Banks play a critical role in the financial system, providing everything from commercial loans to wealth management and payment processing services. Still, investors are uneasy as banks face challenges from credit quality concerns and potential regulatory changes. These doubts have caused the industry to lag recently as banking stocks have collectively shed 7.4% over the past six months. This performance was discouraging since the S&P 500 returned 1.7%.

Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. With that said, here is one bank stock poised to generate sustainable market-beating returns and two we’re steering clear of.

Two BankStocks to Sell:

Veritex Holdings (VBTX)

Market Cap: $1.30 billion

Founded during the 2009 financial crisis when many banks were failing, Veritex Holdings (NASDAQGM:VBTX) operates Veritex Community Bank, providing commercial and retail banking services to small and medium-sized businesses and professionals in Texas.

Why Are We Wary of VBTX?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 1.7% annually over the last two years
2. Estimated net interest income growth of 2.6% for the next 12 months implies demand will slow from its four-year trend
3. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable

At $23.60 per share, Veritex Holdings trades at 0.8x forward P/B. To fully understand why you should be careful with VBTX, check out our full research report (it’s free).

Apollo Commercial Real Estate Finance (ARI)

Market Cap: $1.35 billion

Launched during the aftermath of the 2008 financial crisis to capitalize on disruption in commercial real estate lending, Apollo Commercial Real Estate Finance (NYSE: ARI) is a real estate investment trust that originates and invests in commercial mortgage loans and other real estate debt.

Why Do We Steer Clear of ARI?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.2% annually over the last two years
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 29.2% annually, worse than its revenue
3. Products and services are facing significant credit quality challenges during this cycle as tangible book value per share has declined by 3% annually over the last five years

Apollo Commercial Real Estate Finance’s stock price of $9.71 implies a valuation ratio of 0.8x forward P/B. Read our free research report to see why you should think twice about including ARI in your portfolio.

One Bank Stock to Buy:

Amalgamated Financial (AMAL)

Market Cap: $904.2 million

Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.

Why Is AMAL a Top Pick?

1. Impressive 12.6% annual net interest income growth over the last four years indicates it’s winning market share this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 8.8% outpaced its revenue gains
3. Annual tangible book value per share growth of 9.9% over the last five years was superb and indicates its capital strength increased during this cycle

Amalgamated Financial is trading at $29.56 per share, or 1.1x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today