Why These 15 Bank Stocks Are Plunging In 2025

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Bank stocks are at a crossroads this year as we may finally see the Federal Reserve lower interest rates more. The Trump administration’s pressures will compound with the recent lower inflation report and the negative stock market performance, and this could impact banking companies significantly.

Despite the Fed’s “higher for longer” rate posture, inverted yield curves have compressed net interest margins while geopolitical tensions freeze cross-border capital flows. The result has been a bifurcated landscape where universal banks like JPMorgan have thrived on diversification, whereas mono-line lenders have buckled under stress.

The yield curve is no longer inverted, but recent tariff-related shocks and general uncertainty in the economy have brought on even more pain. It’s worth looking into the banks that are the worst caught in these crosscurrents if you’re looking to scoop up some value stocks.

Is William Blair Small-Mid Cap Growth R6 (WSMRX) the Worst Performing Mutual Fund in 2024?

A local business owner signing a loan agreement with a banker.

Methodology

For this article, I screened the worst-performing bank stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

15. Southern First Bancshares Inc (NASDAQ:SFST)

Number of Hedge Fund Holders In Q4 2024: 7

Southern First Bancshares Inc (NASDAQ:SFST) is a bank holding company that operates Southern First Bank.

The stock is down significantly so far in 2025 as Southern First Bancshares announced the resignation of its CRO, William M. Aiken III, effective March 31, 2025. Aiken played a critical role in risk management during his tenure.

Moreover, the company reported a rise in non-performing loans to 0.30% as of the end of 2024, compared to 0.11% in the prior year.

SFST stock is down 18.48% year-to-date.

14. ChoiceOne Financial Services Inc (NASDAQ:COFS)

Number of Hedge Fund Holders In Q4 2024: 6

ChoiceOne Financial Services Inc (NASDAQ:COFS) is a bank holding company for ChoiceOne Bank.

The stock is down significantly so far in 2025 due to the company’s 2024 annual report revealing unrealized losses on securities totaling $116.6 million due to fluctuating interest rates.

ChoiceOne finalized its merger with Fentura Financial Inc. on March 1, 2025. While the merger is expected to enhance market presence and operational efficiency, associated costs have increased noninterest expenses significantly.

Nonperforming loans rose to 0.24% in 2024 from 0.14% in 2023.

The consensus price target of $37 implies 29.74% upside.

COFS stock is down 19.35% year-to-date.

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