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Zacks Value Investor Highlights: Truist Financial, First Merchants, Valley National, Simmons First National and Prosperity Bancshares
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 24, 2024 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2794441/5-of-the-cheapest-bank-stocks-for-2026
5 of the Cheapest Bank Stocks for 2026
Welcome to Episode #423 of the Value Investor Podcast.
>
(0:30) - Where Should Value Investors Be Looking Right Now?
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With growth stocks still dominating in 2025, value investors are wondering, where do they find good quality value stocks for 2026? Are there any?
There are always industries that are out of favor, such as energy. But the key is to find an out-of-favor industry which also has rising earnings estimates. Value investors still want to see earnings growth.
And if you’re looking for earnings growth, energy is not the place to be.
But there’s a second out-of-favor industry that investors shouldn’t dismiss: the banks.
How to Find Value in a Bank
When looking for cheap banks, investors can’t simply use the price-to-earnings (P/E) ratio. It doesn’t tell the whole picture with banks.
Bank analysts use the price-to-book (P/B) ratio instead. Bank analysts often say that investors should buy a bank when the P/B ratio is 1.0 and sell when it is 2.0.
Tracey ran a screen with the banks and a P/B ratio under 2.0. There were hundreds of “cheap” banks with one bank having a P/B ratio as low as 0.09.
We Love the Big Banks but Hate the Small Banks
I know you’re thinking that JPMorgan Chase and Bank of America have both broken out to new all-time highs in 2025. How can they be “hated” or out of favor?
The mega-cap banks are back in favor but, after the 2025 rallies, they aren’t cheap. JPMorgan Chase now trades with a P/B ratio of 2.4, which is well above the “sell at 2.0” recommendation by bank analysts.
That’s why value investors should look to regional banks and even community banks to find real value.
Wall Street is ignoring this group of stocks. Investors should not.
Truist Financial is one of the bigger banks to make this screen. Headquartered in Charlotte, it’s a top 10 US commercial bank which also does investment banking and wealth management. Truist has a market cap of $56.7 billion.
Earnings are expected to rise 6.5% in 2025 and another 13.2% in 2026. Truist is shareholder friendly and pays a dividend yielding 4.7%.
First Merchants is a central Indiana bank with 111 banking centers in Indiana, Michigan, and Ohio. It has a market cap of $2 billion, so that makes it a small bank.
First Merchants is expected to grow earnings by 11.5% in 2025 and another 7% in 2026. It is a Zacks Rank #2 (Strong Buy) stock.
First Merchants is shareholder friendly and is paying a dividend yielding 4.1%.
Should a Midwest bank like First Merchants be on your short list?
Valley National Bancorp is the holding company of Valley National Bank. Headquartered in New Jersey, Valley National Bancorp has operations in New York, Florida, Alabama, California, and Illinois. It’s a mid-cap bank with a market cap of $5.8 billion.
Earnings for Valley National Bancorp are expected to soar 54.8% this year and another 28.1% in 2026. It has a P/B ratio of just 0.8. That makes it a cheap bank with big growth.
Valley National Bancorp is a Zacks Rank #2 (Buy) stock.
Should a Northeast bank like Valley National Bancorp be on your short list?
Simmons First National was founded in 1903 and is headquartered in Arkansas. Simmons First National is extremely proud that it has returned capital to shareholders through cash dividends for 116 consecutive years. It has a market cap of $2.5 billion, with 220 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas.
Simmons First National’s dividend is now yielding a juicy 4.9%.
Earnings are expected to jump 19.9% this year and another 13.6% next year. Simmons First National is also dirt cheap, with a P/B ratio of 0.75.
Should a Southern bank like Simmons First National be on your short list?
Prosperity Bancshares is headquartered in Houston, TX and has 284 locations in Texas and Oklahoma. It’s a larger bank with a market cap of $6.2 billion.
Earnings are expected to jump 11.2% in 2025 and another 9.3% in 2026. It’s cheap. Prosperity has a P/B ratio of only 0.8.
Prosperity is also shareholder friendly. It pays a dividend currently yielding 3.5%.
Should a Texas bank like Prosperity Bancshares be on your short list?
What Else Should You Know About the Smaller Banks?
Tune into this week’s podcast to find out.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Value Investor Highlights: Truist Financial, First Merchants, Valley National, Simmons First National and Prosperity Bancshares
For Immediate Release
Chicago, IL – November 24, 2024 – Zacks Value Investor is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2794441/5-of-the-cheapest-bank-stocks-for-2026
5 of the Cheapest Bank Stocks for 2026
Welcome to Episode #423 of the Value Investor Podcast.
>
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With growth stocks still dominating in 2025, value investors are wondering, where do they find good quality value stocks for 2026? Are there any?
There are always industries that are out of favor, such as energy. But the key is to find an out-of-favor industry which also has rising earnings estimates. Value investors still want to see earnings growth.
And if you’re looking for earnings growth, energy is not the place to be.
But there’s a second out-of-favor industry that investors shouldn’t dismiss: the banks.
How to Find Value in a Bank
When looking for cheap banks, investors can’t simply use the price-to-earnings (P/E) ratio. It doesn’t tell the whole picture with banks.
Bank analysts use the price-to-book (P/B) ratio instead. Bank analysts often say that investors should buy a bank when the P/B ratio is 1.0 and sell when it is 2.0.
Tracey ran a screen with the banks and a P/B ratio under 2.0. There were hundreds of “cheap” banks with one bank having a P/B ratio as low as 0.09.
We Love the Big Banks but Hate the Small Banks
I know you’re thinking that JPMorgan Chase and Bank of America have both broken out to new all-time highs in 2025. How can they be “hated” or out of favor?
The mega-cap banks are back in favor but, after the 2025 rallies, they aren’t cheap. JPMorgan Chase now trades with a P/B ratio of 2.4, which is well above the “sell at 2.0” recommendation by bank analysts.
That’s why value investors should look to regional banks and even community banks to find real value.
Wall Street is ignoring this group of stocks. Investors should not.
5 of the Cheapest Bank Stocks for 2026
1. Truist Financial Corp. (TFC - Free Report)
Truist Financial is one of the bigger banks to make this screen. Headquartered in Charlotte, it’s a top 10 US commercial bank which also does investment banking and wealth management. Truist has a market cap of $56.7 billion.
Earnings are expected to rise 6.5% in 2025 and another 13.2% in 2026. Truist is shareholder friendly and pays a dividend yielding 4.7%.
Truist is cheap, with a P/B ratio of just 0.95.
Should Truist be on your 2026 short list?
2. First Merchants Corp. (FRME - Free Report)
First Merchants is a central Indiana bank with 111 banking centers in Indiana, Michigan, and Ohio. It has a market cap of $2 billion, so that makes it a small bank.
First Merchants is expected to grow earnings by 11.5% in 2025 and another 7% in 2026. It is a Zacks Rank #2 (Strong Buy) stock.
First Merchants is shareholder friendly and is paying a dividend yielding 4.1%.
Should a Midwest bank like First Merchants be on your short list?
3. Valley National Bancorp (VLY - Free Report)
Valley National Bancorp is the holding company of Valley National Bank. Headquartered in New Jersey, Valley National Bancorp has operations in New York, Florida, Alabama, California, and Illinois. It’s a mid-cap bank with a market cap of $5.8 billion.
Earnings for Valley National Bancorp are expected to soar 54.8% this year and another 28.1% in 2026. It has a P/B ratio of just 0.8. That makes it a cheap bank with big growth.
Valley National Bancorp is a Zacks Rank #2 (Buy) stock.
Should a Northeast bank like Valley National Bancorp be on your short list?
4. Simmons First National Corp. (SFNC - Free Report)
Simmons First National was founded in 1903 and is headquartered in Arkansas. Simmons First National is extremely proud that it has returned capital to shareholders through cash dividends for 116 consecutive years. It has a market cap of $2.5 billion, with 220 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas.
Simmons First National’s dividend is now yielding a juicy 4.9%.
Earnings are expected to jump 19.9% this year and another 13.6% next year. Simmons First National is also dirt cheap, with a P/B ratio of 0.75.
Should a Southern bank like Simmons First National be on your short list?
5. Prosperity Bancshares, Inc. (PB - Free Report)
Prosperity Bancshares is headquartered in Houston, TX and has 284 locations in Texas and Oklahoma. It’s a larger bank with a market cap of $6.2 billion.
Earnings are expected to jump 11.2% in 2025 and another 9.3% in 2026. It’s cheap. Prosperity has a P/B ratio of only 0.8.
Prosperity is also shareholder friendly. It pays a dividend currently yielding 3.5%.
Should a Texas bank like Prosperity Bancshares be on your short list?
What Else Should You Know About the Smaller Banks?
Tune into this week’s podcast to find out.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.