Bank of America Names U.S. Mid-Cap Bank Stocks as Top Pick

LootboxPhobia · 2026-03-24T07:00:06+00:00

Bank of America is optimistic about multiple mid-size bank stocks, believing that margin expansion, loan growth, and capital return expectations will drive overall performance. Key recommendations include Associated Banc-Corp and Cullen/Frost Bankers, both of which demonstrate strong performance and growth potential.

LootboxPhobia

2026-03-24 07:00:06

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Investing.com – U.S. banks have identified mid-sized bank stocks with the potential to outperform the market, citing profit margin expansion, loan growth momentum, and improved capital return prospects as key drivers for the entire sector.

The rankings highlight institutions adopting diversified growth strategies, from relationship-driven commercial loans to fee income platforms and regional market share expansion.

1. Associated Banc-Corp (ASB) – The preferred U.S. bank is expected to accelerate relationship-driven commercial lending, with new hires contributing about half of the expected loan growth.

Deposit plans and moderate asset sensitivity are expected to support profit margin expansion, while capital accumulation may enable share buybacks later in 2026.

Associated Banc-Corp has received all necessary regulatory approvals to complete its merger with American National Corporation. The company also announced a new $100 million share repurchase plan.

2. Cullen/Frost Bankers (CFR) – The bank is described as a high-quality target with good credit quality and may benefit from fewer rate cuts. Strong market share growth and capital market options are seen as factors supporting earnings resilience.

Cullen/Frost Bankers reported Q4 2025 earnings of $2.56 per share, with revenue of $603.38 million, surpassing analyst expectations. Following the earnings release, TD Cowen and DA Davidson both raised their target prices for the company.

3. East West Bancorp (EWBC) – Loan growth prospects remain at 5-7%, supported by robust commercial channels. Asset-liability positioning and limited credit risk are viewed as key advantages, despite ongoing fee income volatility.

East West Bancorp reported Q4 operating earnings of $2.52 per share, slightly above analyst estimates. The bank’s pre-provision net income for the quarter reached $490.2 million.

4. First BanCorp (FBP) – Profit margin is expected to continue expanding through deposit repricing and securities rollovers. Loan growth is forecasted to be in the mid-single digits, with a focus on the second half, amid stable credit trends.

Recent news shows First BanCorp reported Q4 2025 earnings of $0.55 per share, with revenue of $257.17 million, exceeding analyst forecasts. The company also announced that CFO Orlando Berges will retire in June 2026.

5. FNB Corporation (FNB) – Described as a growth story for the second half, with improving business momentum. Net interest margin expansion is seen as gradual but ongoing, supported by reinvestment and deposit repricing.

Moody’s recently affirmed FNB Corporation’s Baa2 long-term issuer rating and upgraded its outlook from negative to stable.

6. Popular Inc (BPOP) – Strong capital levels and stable profit margin expansion prospects are attracting attention. Puerto Rico exposure provides a supportive macroeconomic backdrop, despite long-term risks from rising oil prices.

Popular Inc. reported Q4 2025 earnings of $3.53 per share, significantly exceeding analyst expectations. The company also received an upgrade from Neutral to Buy by Bank of America Securities.

7. Texas Capital Bancshares (TCBI) – Fee income and capital markets platforms remain key differentiators. Management noted constructive borrower sentiment, although geopolitical risks could delay deal activity.

S&P Global Ratings upgraded Texas Capital Bancshares’ outlook from stable to positive, citing progress in the bank’s strategic plans. Following strong quarterly results, the company also saw target price upgrades from DA Davidson, Stephens, and RBC Capital.

8. UMB Financial (UMBF) – The high single-digit loan growth outlook remains intact, driven by strong production and M&A expansion. Fee income and operating leverage are viewed as key profit drivers.

UMB Financial reported strong Q4 2025 results, with EPS of $3.08 and revenue of $720.9 million, both surpassing analyst estimates.

9. Zions Bancorporation (ZION) – Deposit repricing and securities reinvestment provide sustained profit margin expansion engines. As earnings visibility improves, capital returns are expected to increase.

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