13 Best Performing Bank Stocks So Far In 2025

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1. Flagstar Financial, Inc. (NYSE:FLG)

Year-to-Date Performance: 39.94%

Number of Hedge Fund Holders: N/A

Flagstar Financial, Inc. (NYSE:FLG) is a bank holding company for Flagstar Bank, one of the largest regional banks in the United States. Headquartered in Hicksville, New York, the company operates more than 400 Flagstar Bank branches. It has a significant presence in the Northeast and Midwest and also has locations in high-growth markets in the Southeast and West Coast. Additionally, to serve the needs of high-net-worth individuals and businesses, the Flagstar Bank has private banking teams in more than 10 cities in the metropolitan New York City region and on the West Coast. Flagstar Financial, Inc. (NYSE:FLG) ranks among the best-performing stocks in the banking sector.

The company is focused on becoming a top-tier regional bank and as a result, it is undergoing a significant transformation. In 2024, Flagstar Financial, Inc. (NYSE:FLG) strengthened its capital position with a $1.05 billion capital infusion and the sale of several non-core businesses. In November 2024, the company announced the completion of the sale of its residential mortgage servicing and third-party origination business to Mr. Cooper Group for approximately $1.3 billion in cash. This transaction is expected to improve Flagstar Financial, Inc.’s (NYSE:FLG) CET1 capital ratio by 60 basis points. This move is part of a broader strategy of simplifying the business model and transforming Flagstar Financial, Inc. (NYSE:FLG) into a regional bank that specializes in Retail Banking, Commercial and Private Banking, and Commercial Real Estate lending.

Overall, FLG ranks first among the 13 best-performing bank stocks so far in 2025. While we acknowledge the potential of bank stocks, our conviction lies in the belief that some 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 FLG 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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