3 US Bank Stocks With Earnings Growth In A Higher Rate Outlook

With Bank of America now expecting the Federal Reserve to lift rates by 75 basis points in 2026, interest rate risk is back on the radar for US bank stocks. Higher borrowing costs can reshape funding, loan demand, and equity valuations, which can help some stocks and hurt others. This article looks at how that setup might affect selected US banking companies in the current screener and what that could mean for your portfolio decisions. Three stocks that appear positively exposed to this hawkish Fed outlook will be revealed, providing starting points for further research.

Overview: FB Financial is a regional bank holding company for FirstBank, offering a wide range of commercial and consumer banking, mortgage, and related financial services to retail customers, small businesses, and corporate clients across its branch network and digital channels in the United States.

Operations: FB Financial generates about US$557.7m of revenue, with roughly US$500.5m from Banking and US$57.1m from Mortgage activities, all in the United States.

Market Cap: US$2.77b

FB Financial sits at the intersection of rising US rates and improving fundamentals, which is why the Bank of America outlook on 2026 hikes matters here. The bank reports high quality earnings and solid recent results, with Q1 2026 net interest income of US$146.0m and net income of US$57.5m, while keeping annualized net charge offs at 0.11%. Analyst forecasts indicate earnings growth of about 30% per year and active capital return via a US$175m buyback authorization, which add another layer of interest. The trade off is a P/E above peer banks and a track record of muted 5 year revenue and EPS growth, so the key question is whether the current playbook and higher rate backdrop are enough to justify that premium.

FB Financial’s earnings engine and premium P/E are pulling in the same direction, but the real tension is whether that growth story holds up under closer scrutiny, so review the analyst forecasts for FB Financial to see what the market might be missing.

Overview: FirstSun Capital Bancorp is the holding company for Sunflower Bank, providing commercial and consumer banking, mortgage, wealth management, and treasury services to small and mid sized businesses and households across Texas, Kansas, Colorado, New Mexico, Arizona, California, and Washington.

Operations: FirstSun Capital Bancorp generates about US$403.97m of revenue, with roughly US$324.62m from Banking, US$83.17m from Mortgage Operations and a small Corporate loss, all from customers in the United States.

Market Cap: US$1.69b

FirstSun Capital Bancorp gives you exposure to growing Sun Belt and West Coast markets. Bank of America expects higher US rates in 2026, which could support bank earnings but also test funding costs and credit quality. Analysts currently expect strong revenue and earnings growth and see upside to fair value, yet the stock trades on a premium P/E and carries rising credit costs, higher net charge offs, and recent shareholder dilution. The company also has an expanded but relatively new board after the First Foundation merger. Overall, this is a bank with clear growth ambitions and a richer valuation, but also governance and asset quality questions that investors may want to examine closely before deciding how it fits into their US bank exposure.

FirstSun Capital Bancorp’s growth ambitions and richer P/E look exciting, but the real story sits in how those plans intersect with asset quality and governance. Review the 4 key rewards and 1 important major warning sign.

Overview: Live Oak Bancshares is a US-based bank holding company for Live Oak Bank that focuses on lending and deposit services for small businesses, while also offering wealth management, renewable energy financing, and venture-style investment advisory services to fintech focused funds.

Operations: Live Oak Bancshares generates about US$512.2m of revenue from its small business banking platform in the United States.

Market Cap: US$1.77b

Live Oak Bancshares stands out for its tech focused small business banking model and long track record in government guaranteed lending. This supports fee income and can limit credit losses. That positioning could look more interesting if Bank of America is right about a higher rate path that supports net interest margins. Strong recent earnings momentum, rising net interest income, and double digit revenue and earnings forecasts point to a business that is still scaling. However, there are real trade offs, including elevated bad loans at 4.2%, a relatively low 38% allowance, and a history of net interest margin pressure. Add in regular insider selling and ongoing tech investment needs, and Live Oak is a stock where investors may want to look closely at both the upside case and the credit and valuation risks that come with it.

Live Oak Bancshares appears to be a rapidly scaling small business lender whose fee income and focus on government guarantees could be masking a very different risk reward profile. To explore this further, walk through the 3 key rewards and 3 important warning signs

The three banks covered here are only a small sample, and the full US Bank Stocks screener surfaces 25 more US banking companies with equally interesting stories that could fit very different portfolio goals. Use Simply Wall St to identify, filter, and analyze the specific catalysts and narratives that matter most to you so you can focus on the opportunities in this sector that best match your convictions.

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Seeking Fresh Alternatives Beyond Bank Stocks?

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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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