The banking sector is roaring back to life so far in 2025 as the economy has been stronger than what most analysts have expected. Banks are also shedding their conservative reputations and are starting to take more risks and spend on growth, especially as most companies are experimenting with AI.
Plus, this is coinciding with a worldwide rate cut cycle as central banks in most countries ease monetary policy. Analysts are also bullish and have raised their price targets, whereas many retail and institutional investors are buying back in.
The bank stocks benefiting the most from this are likely to be the strongest, so let’s take a look at 15 that have gained the most so far this year.
A close-up of a hand depositing a check into a bank ATM.
Methodology
For this article, I screened the top-performing bank stocks year-to-date. Stocks that I have covered recently will be excluded from this list.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? 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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
15. Citizens & Northern Corp (NASDAQ:CZNC)
Number of Hedge Fund Holders In Q3 2024: 4
Citizens & Northern Corp (NASDAQ:CZNC) is a bank holding company that operates through its subsidiary called Citizens & Northern Bank.
The stock is up notably so far in 2025 after its strong Q4 2024 earnings beat and dividend announcement. The company’s EPS came in at $0.53 vs. an estimate of $0.45. Net income came in at $8.2 million vs $4.3 million in the year-ago quarter.
Moreover, it declared a dividend of $0.28 per share (quarterly) payable on February 14, 2025.
CZNC stock is up 18.87% year-to-date.
14. The Bancorp Inc (NASDAQ:TBBK)
Number of Hedge Fund Holders In Q3 2024: 28
The Bancorp Inc (NASDAQ:TBBK) is a financial holding company for The Bancorp Bank.
The stock is up markedly so far in 2025 after blowout Q4 2024 earnings and a 2025 guidance hike. It reported 41% EPS growth, with Q4 net income surging to $55.9 million.
Gross dollar volume grew 19% and prepaid/debit card spending hit $39.7 billion in Q4. Loan growth was at 14% and RoE outpaced regional bank peers at 28%.
Its 2025 guidance affords EPS at $5.25, which implies some 22% year-over-year growth, excluding $150 million in planned share buybacks. The fintech segment also saw a 29% fee growth.
The consensus price target of $67.67 implies 8.16% upside.
TBBK stock is up 18.87% year-to-date.
13. SmartFinancial Inc (NYSE:SMBK)
Number of Hedge Fund Holders In Q3 2024: 9
SmartFinancial Inc (NYSE:SMBK) is a regional bank holding company for SmartBank.
The stock is up so much this year due to a strong Q4 2024 earnings beat and optimistic guidance for 2025. This drove up the stock the most this year.
Net income rose 55% year-over-year to $9.6 million and loan growth accelerated 20% sequentially and 13% year-over-year.
It also hiked its quarterly cash dividend with a 16.6% payout ratio.
The consensus price target of $30.70 implies 16.6% downside.
SMBK stock is up 19.12% year-to-date.
12. Customers Bancorp Inc (NYSE:CUBI)
Number of Hedge Fund Holders In Q3 2024: 22
Customers Bancorp Inc (NYSE:CUBI) is a bank holding company for Customers Bank.
The stock is up solidly so far this year due to core earnings of $1.36 per share, which beat estimates by $0.12, along with 19% annualized loan growth. It also saw a 20% surge in non-interest-bearing deposits.
Net margin also improved, and total deposits grew 5.2% in 2024, with average cost of deposits falling to 3.07%
Institutional investors responded to Customers Bank’s 12.0% CET1 ratio and $9.1 billion liquidity buffer by hiking their price targets.
The consensus price target of $64 implies 9.95% upside.
CUBI stock is up 19.49% year-to-date.
11. Origin Bancorp Inc (NYSE:OBK)
Number of Hedge Fund Holders In Q3 2024: 15
Origin Bancorp Inc (NYSE:OBK) is a bank holding company for Origin Bank.
The stock has delivered solid gains so far this year due to its strategic “Optimize Origin” initiative. It plans to drive $21 million in annual pre-tax earnings by consolidating branches and optimizing its balance sheet. Its ROAA target is >1% by Q4 2025.
In addition, the dividend commitment is strong here. OBK declared a $0.15/share quarterly dividend (1.50% yield) on January 22, 2025. The payout ratio is at 24%
The consensus price target of $43.4 implies 8.57% upside.
OBK stock is up 20.1% year-to-date.
10. Bank OZK (NASDAQ:OZK)
Number of Hedge Fund Holders In Q3 2024: 27
Bank OZK (NASDAQ:OZK) is a regional bank.
OZK stock is up so much year-to-date due to record-breaking Q4 2024 earnings. It jumped 10.06% in a single day after it posted its results.
EPS of $1.56 surpassed the consensus estimate of $1.44, along with full-year net income growth of 4% year-over-year to $700.27 million. Total loans also rose to $29.97 billion, up from $26.12 billion in 2023. Revenue is up 1.2% year-over-year to $412.3 million.
Bank OZK raised its quarterly common stock dividend by 2.44% to $0.42 per share. The payout ratio is at 26%.
The consensus price target of $50 implies 5.7% downside.
OZK stock is up 20.26% year-to-date.
9. C&F Financial Corp (NASDAQ:CFFI)
Number of Hedge Fund Holders In Q3 2024: 6
C&F Financial Corp (NASDAQ:CFFI) is a bank holding company that operates through its subsidiaries.
It has risen notably so far in 2025 due to net income rising to $6 million in Q4 2024. It was driven by loans growing 14.1% year-over-year, and a 32.8% growth in mortgage originations to $130.4 million. Deposits grew 5.1%, with the net interest margin stable at 4.13%.
The company also has a good dividend yield, with $0.44 per share in quarterly dividends.
Regardless, it is sensitive to interest rates and net charge-offs rose to 2.62% of loans in 2024.
CFFI stock is up 21.66% year-to-date.
8. First Business Financial Services Inc (NASDAQ:FBIZ)
Number of Hedge Fund Holders In Q3 2024: 5
First Business Financial Services Inc (NASDAQ:FBIZ) is a bank holding company for First Business Bank.
The stock is up markedly so far in 2025 due to record Q4 2024 earnings and optimistic guidance for 2025. It reported Q4 2024 net income of $14.4 million, which is up 47.5% year-over-year.
Plus, adjusted EPS came in at $1.43, with management reaffirming targets for 10% annual revenue and balance sheet growth in 2025.
It raised its quarterly dividend by 16% to $0.29/share (2.25% yield). Private Wealth assets under management surged 16.6% YoY to $3.4 billion.
The consensus price target of $58.75 implies 4.26% upside.
FBIZ stock is up 21.73% year-to-date.
7. Guaranty Bancshares Inc (NYSE:GNTY)
Number of Hedge Fund Holders In Q3 2024: 4
Guaranty Bancshares Inc (NYSE:GNTY) is a regional bank holding company that operates through its subsidiary called Guaranty Bank & Trust, N.A.
It is up significantly so far in 2025 due to a strong Q4 2024 earnings beat, with net income surging 70% year-over-year to $10 million. This exceeded analyst estimates by 42.6%. Revenue also rose 10.1% year-over-year to $31.9 million.
Net interest margin expanded to 3.54% as nonperforming assets fell to 0.16% of total assets. That said, net loans declined by $5 million in Q4 2024.
The consensus price target of $37.33 implies 11.88% downside.
GNTY stock is up 22.37% year-to-date.
6. Meridian Corp (NASDAQ:MRBK)
Number of Hedge Fund Holders In Q3 2024: 6
Meridian Corp (NASDAQ:MRBK) is a holding company for Meridian Bank.
The stock is up significantly so far in 2025 after strong Q4 2024 earnings beat analyst estimates. Net income rose 18.1% to $5.6 million and diluted EPS came in at $0.49 vs $0.35 consensus estimates.
Moreover, commercial loans rose 12% year-over-year to $34.8 million in Q4. Meridian also declared a quarterly dividend of $0.125/share (annualized $0.50, 2.99% yield). This marked a 34.48% payout ratio, sustainable given its $16.3 million in net income in 2024.
The consensus price target of $16 implies 5.04% downside.
MRBK stock is up 22.9% year-to-date.
5. Franklin Financial Services Corp (NASDAQ:FRAF)
Number of Hedge Fund Holders In Q3 2024: 2
Franklin Financial Services Corp (NASDAQ:FRAF) is a bank holding company for F&M Trust.
The stock is up so much so far in 2025 due to a strategic portfolio restructuring despite a Q4 loss. The most significant catalyst came from the January 28, 2025, Q4 2024 earnings report, where FRAF sold $46.7 million in low-yield securities to reposition its portfolio for higher returns.
It caused a $3.4 million after-tax loss, many think this is a forward-looking move to improve net interest margins. Net income rose to $11.1 million for 2024.
It also declared a $0.32/share quarterly dividend for Q1 2025.
FRAF stock is up 23.08% year-to-date.
4. FinWise Bancorp (NASDAQ:FINW)
Number of Hedge Fund Holders In Q3 2024: 1
FinWise Bancorp (NASDAQ:FINW) is a bank holding company that provides API-driven banking and payments for fintech partners.
The stock has surged so far in 2025 due to strong Q4 2024 and full-year results. Its loan originations hit $5 billion in 2024.
Net income also reached $12.7 million for 2024 with a tangible book value per share rising to $13.15, up 7.1% year-over-year. Management now projects a $50 million to $100 million expansion in credit-enhanced products by the end of 2025.
The consensus price target of $21.67 implies 9.7% upside.
FINW stock is up 23.59% year-to-date.
3. Onity Group Inc (NYSE:ONIT)
Number of Hedge Fund Holders In Q3 2024: 7
Onity Group Inc (NYSE:ONIT) is a financial services company.
It is up significantly so far in 2025 as investors anticipate strong Q4 2024 earnings. Analysts are forecasting EPS to increase 62.5% year-over-year to $2.34. Recent filings also show $18 billion in total servicing additions and $8 billion in sub-servicing growth.
Plus, a partnership with Rithm Capital was extended to February 2025. The broader banking industry has also been doing well, so it is likely that it has also had an impact.
The consensus price target of $42.5 implies 8.31% upside.
ONIT stock is up 28.2% year-to-date.
2. Better Home & Finance Holding Co (NASDAQ:BETR)
Number of Hedge Fund Holders In Q3 2024: 6
Better Home & Finance Holding Co (NASDAQ:BETR) is a financial platform that mostly specializes in real estate and mortgage products.
The stock has delivered solid gains so far in 2025 as the company’s board approved a stock buyback program worth $25 million authorized through December 31, 2025. In comparison, the company’s market cap is $177 million, so it’s certainly a huge positive catalyst for shareholders here.
The stock rose sharply the day after the announcement.
Moreover, it has also increased its “One-Day Mortgage” significantly in the past few quarters. AI automation also cut per-loan operational costs in 2024.
BETR stock is up 31.28% year-to-date.
1. Nu Holdings (NYSE:NU)
Number of Hedge Fund Holders In Q3 2024: 54
Nu Holdings (NYSE:NU) is a digital banking company.
It is up sharply so far in 2025 after it announced plans to move its legal domicile from the Cayman Islands to the U.K. The company aims to streamline its international growth strategy and expand into the U.S. market.
The company’s CEO David Vélez thinks it will make the company more flexible legally and increase investor appeal. The latter has turned out to be true so far, especially as analysts have started raising price targets and institutional investors are buying more.
The consensus price target of $15.63 implies 13.68% upside.
NU stock is up 33.1% year-to-date.
While we acknowledge the potential of NU as an investment, 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 NU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
