With the Federal Reserve holding interest rates at 3.5% to 3.75% and keeping borrowing costs elevated, the pressure on borrowers and the appeal of higher yields for savers are both in focus. That kind of backdrop can change how investors think about banks and savings institutions that depend on the spread between what they pay on deposits and earn on loans. This article focuses on financial stocks from our Banks & Savings Institutions screener that are particularly exposed to this rate decision and related inflation signals, and will discuss 3 stocks that appear positioned to be positively affected by the latest Fed stance.
TowneBank (TOWN)
Overview: TowneBank is a community focused US bank that offers a broad mix of retail and commercial services, from everyday checking and savings accounts to business loans, mortgages, resort property management, and a full suite of insurance products. It also provides wealth and retirement planning, online and mobile banking, and other financial services to individuals, businesses, and organizations, primarily from its base in Portsmouth, Virginia.
Operations: TowneBank generates most of its roughly US$877.2m in revenue from Banking (US$656.9m), with additional contributions from Insurance (US$102.9m), Resort Property Management (US$59.6m), and Mortgage (US$57.7m), all within the United States.
Market Cap: US$3.3b
TowneBank stands out in a higher rate setting because its traditional deposit and loan model is closely tied to net interest income, which can benefit from a sustained 3.5% to 3.75% Fed funds range while the economy is still described as expanding at a solid pace. The stock combines a 2.95% dividend yield with forecasts for earnings growth and revenue growth, even after a period where earnings declined and a large one off loss and shareholder dilution affected sentiment. Profitability metrics like a 19% net margin and 5.8% ROE have some limitations, yet a seasoned management team, recent board refresh, and inclusion in an S&P bank index indicate a business that some investors may view as resetting for its next chapter.
TowneBank’s reset story, from a large one off loss and dilution to a 2.95% yield and earnings forecasts, is only half the picture. See how the analyst forecasts for TowneBank could change what comes next for shareholders
Simmons First National (SFNC)
Overview: Simmons First National is a regional US bank holding company that, through Simmons Bank, provides everyday banking services, a range of loans, credit cards, investment and insurance products, and treasury management solutions to individuals and businesses across several southern and midwestern states.
Operations: Simmons First National generates its revenue from banking activities within the United States, with reported revenue of about US$110.3m from this market.
Market Cap: US$3.3b
Simmons First National gives you a way to gain exposure to higher rates through a regional bank whose earnings are closely linked to interest income. Management focuses on deposit mix, efficiency, and digital investment. Forecasts point to strong revenue and earnings growth alongside a 3.75% dividend yield. At the same time, the company is working through current losses, dividend coverage pressure, and a history of share price underperformance. Q2 2026 results show solid loan and deposit activity, ongoing cost control, and management confidence in earnings durability. They also highlight competitive deposit pricing and commercial real estate exposure as key watchpoints investors may wish to understand more deeply.
Simmons First National’s earnings story is closely tied to interest income, yet current losses, dividend pressure, and Q2 2026 watchpoints suggest more is going on under the surface. As a result, the analysis report for Simmons First National could be crucial to what happens next for shareholders.
Banc of California (BANC)
Overview: Banc of California is a regional US bank that offers a wide range of deposit accounts, real estate and business loans, electronic payment services, and investment management to small and mid sized businesses, investors, non profits, and high net worth clients across California and select other markets.
Operations: Banc of California generates about US$1.1b in revenue from Commercial Banking in the United States.
Market Cap: US$3.3b
Banc of California provides focused exposure to interest rate dynamics because its commercial banking franchise is geared to net interest income. Recent earnings growth, margin improvement, and an extended buyback sit alongside concerns about deposit competition, insider selling, and a mixed view on net interest income momentum. Analysts highlight merger integration progress, cost control, and share repurchases as key supports for earnings. Critics point to a rich valuation, modest tangible book value growth, and exposure to California commercial real estate. If you are weighing whether recent dividend increases, capital returns, and digital investment justify those trade offs, the full narrative and detailed risk factors around Banc of California could be essential context before making any decision.
Banc of California’s share buybacks, dividend decisions, and merger integration progress point to a story that may be stronger than headline concerns about California real estate risk. The full narrative for Banc of California might reveal what the market is still overlooking.
The stocks covered here are just a starting point, and the full Financials - Banks & Savings Institutions screener surfaces 38 more banks and savings institutions with equally compelling narratives around deposit franchises, lending exposure, and rate sensitivity. Use Simply Wall St to identify and analyze the specific catalysts, financial health profiles, and interest rate stories that align with your own highest conviction ideas across the sector.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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