Beyond the Hype: Two Regional Banks Poised for Growth, One Faces Headwinds

For investors, growth is the lifeblood of a portfolio. Yet, as history has shown—from the dot-com bust to the pandemic-era volatility—chasing unsustainable growth can lead to significant losses. The key lies in identifying businesses built for the long haul.

At StockStory, our analysis focuses on uncovering companies with durable competitive advantages and resilient business models. In the often-overlooked regional banking sector, we see divergent paths. Here are two institutions where the growth story appears intact, and one where the road ahead may be bumpier.

Old National Bancorp (NASDAQ: ONB): A Midwest Pillar with Momentum

With a history stretching back to 1834, Old National Bancorp has deep roots in the Midwest. The bank provides a full suite of commercial and consumer banking, wealth management, and treasury services. It reported a solid one-year revenue growth of 33.4%.

Our Take: Trading at approximately 1x forward price-to-book value (around $24.40 per share), ONB presents a valuation in line with its book value. Its established regional presence and consistent execution in a stable economic footprint make it a candidate for steady, long-term growth, particularly if the Midwest economy remains resilient.

The Bancorp (NASDAQ: TBBK): Powering the Fintech Revolution

While not a household name, The Bancorp is a critical backbone for many fintech apps and prepaid card programs. This specialty model, providing banking-as-a-service to innovators, fueled a impressive 34.6% year-over-year revenue increase.

Our Take: Priced near $68.53, or 3.5x forward P/B, the market is assigning a premium for TBBK's high-growth niche. The risk lies in its concentrated exposure to the fintech sector, which can be volatile. However, its role as an enabler in a structural shift toward digital finance offers compelling growth potential.

Renasant (NYSE: RNST): A Valuation Question Mark

Founded in 1904, Renasant operates across the Southeastern U.S., offering banking, insurance, and wealth management. Despite posting strong revenue growth of 49.4%, its stock trades at a discount of about 0.9x forward P/B (near $38.05).

Our Take: The discounted valuation suggests market skepticism. While the Southeast is a growing region, investors may be concerned about net interest margin pressure or competitive dynamics. The growth is notable, but the low multiple implies perceived risks that warrant deeper due diligence.

Broader Context: The regional banking landscape is at a crossroads. While benefiting from higher interest rates, these institutions now face the dual challenge of potential rate cuts and increased regulatory scrutiny following the 2023 banking turmoil. Stock selection is paramount.

"Diversification remains the only free lunch in investing," says Michael R. Chen, a portfolio manager at Horizon Advisors. "These analyses are useful, but placing a concentrated bet on any single sector, especially financials in this rate cycle, requires immense conviction."

Offering a sharper critique, Sarah J. Klein, financial blogger at 'The Skeptical Investor', comments: "This feels like digging for gold in a played-out mine. Why champion regional banks when their fundamental model—net interest income—is under threat? The 49% growth at Renasant looks great until you ask about credit quality and future margins. This is rear-view mirror analysis."

Taking a more optimistic view, David Park, a small-business owner and retail investor, notes: "As a customer of a local bank, I see their value firsthand. They're not just numbers on a screen. ONB and TBBK seem to have real niches. In a shaky market, sometimes the boring, essential businesses are the ones that quietly compound."

For investors seeking a broader portfolio foundation, focusing on a curated list of high-quality companies across sectors can mitigate risk. Historical performance, while not indicative of future results, shows that a disciplined approach to quality can pay off over time.