Stephens’ slate of Best Ideas for financials in 2026 leans heavily toward regional banks and specialty finance companies. The brokerage argues that for these names, firm-level execution, balance-sheet repositioning and favorable valuations provide more support for future returns than reliance on a clear macroeconomic path.
At the center of Stephens’ recommendations is an emphasis on firms where improving profitability metrics, easing funding costs and concrete self-help initiatives are visible. These attributes, the firm says, should help the chosen companies surpass their respective peer groups across the cycle.
NBT Bancorp
NBT Bancorp is presented as a quality regional bank that currently trades at a valuation discount. Stephens highlights the potential for margin expansion and operating leverage to drive results. The brokerage points to expected benefits from declining deposit costs, steady growth in fee-related income and rising returns on assets. NBT is also noted for maintaining solid credit quality and capital levels, which Stephens views as affording flexibility for shareholder returns and potential mergers and acquisitions optionality.
First Bancorp
First Bancorp is described as offering leveraged exposure to faster-growing Southeastern markets. Stephens underscores improving loan growth and an expanding net interest margin as core forces behind the pick. The bank’s strong deposit franchise, excess capital and disciplined expense management are cited as supports for profitability that could outpace peers, with a trajectory for return on assets that is expected to improve as balance-sheet repricing continues to play out.
Fifth Third Bancorp
Fifth Third is Stephens’ super-regional name among its Best Ideas. The brokerage frames the bank’s recent acquisition of Comerica as a catalyst for scale benefits and earnings accretion. The combined platform is said to broaden Fifth Third’s geographic footprint and middle-market lending capabilities. Stephens expects that continued management execution and balance-sheet flexibility will help the bank generate peer-leading returns on capital over the medium term.
Simmons First National
Simmons First National is characterized as a self-help story. Stephens highlights ongoing cost actions, balance-sheet restructuring and a normalization in credit as the main levers for improved profitability. With the bank not relying heavily on aggressive loan growth, the earnings outlook is framed around margin expansion and operating discipline, supporting a gradual improvement in return on assets through 2026.
FinWise Bancorp
FinWise Bancorp is presented as a fintech-focused bank entering an inflection in its earnings profile after a multi-year investment phase. Stephens expects operating leverage to emerge as new banking-as-a-service products scale, and notes that revenue diversification should improve. The brokerage views the stock’s valuation as attractive relative to peers while execution risks diminish.
Upbound Group
Upbound Group is Stephens’ specialty finance pick. The firm sees a disconnect between the company’s current valuation and its cash-generation capability. Although investor sentiment has been pressured by leverage concerns following recent acquisitions, Stephens expects deleveraging, stable core operations and optionality around portfolio actions to unlock value over the coming year.
Overall, Stephens’ selections favor banks and specialty finance firms where company-specific actions and balance-sheet positioning are viewed as the dominant drivers of returns, rather than reliance on a more predictable macroeconomic backdrop.