Two Bank Stocks I’m Actually Looking At

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Right, so the S&P 500 is doing its usual thing – pretending it hasn’t forgotten 2022. Everything feels…expensive. Which, naturally, makes me look for the things that aren’t. It’s a bit like dating, really. You ignore the shiny, obvious choices and focus on the slightly dented ones with potential. And honestly? I’ve found a couple of banks that are currently whispering sweet nothings of value to my portfolio. Don’t judge. I’m a professional.

Ally: The One That’s Actually Doing Something Different

Let’s start with Ally Financial (ALLY +0.59%). They spun out of General Motors after the whole financial crisis mess. Smart move, honestly. Let someone else deal with the legacy baggage. They specialize in auto loans – which, let’s be real, is a surprisingly reliable business. Everyone needs a car, even when they’re pretending to be environmentally conscious. They’re the biggest auto lender in the U.S. not attached to a car manufacturer, and also, the largest online-only bank with a hefty $144 billion in retail deposits. Which is…a lot of money. People trust them. Or are just lazy and don’t want to go to a physical branch. Either way, it works for me.

They made a clever decision a few quarters ago to ditch the bits of the business that weren’t really them. Credit cards, for example. Too much hassle. Too many rewards points. They doubled down on auto loans, insurance, and consumer banking. It’s a focused strategy. I like it. It suggests they actually know what they’re doing. Which, in this industry, is a refreshing change.

The numbers are…impressive, actually. They received the most consumer auto applications in their history in 2025. Originated $43.7 billion in loans. And set an all-time high for written insurance premiums. But here’s the kicker: 43% of their borrowers are in the top credit tier. Good money lending to good people. And they’re charging an average interest rate of 9.74% with a charge-off rate of just 1.97%. That gives them a net interest margin of 3.43% – while most banks are scraping by with 2-3%. It’s almost…unfair. Almost.

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And yet, despite all this, Ally trades for just eight times forward earnings and is below book value. It’s like they’re deliberately trying to stay under the radar. Which, frankly, is brilliant. If interest rates start to fall (and let’s be honest, they eventually will), and auto financing picks up, this stock could really take off. I’m watching it closely. Don’t tell anyone.

Capital One: The One I’m Slightly Worried About (But Still Interested In)

Right, so Capital One (COF 0.10%) is down about 12% for the year. Already. It’s January. It’s a bit like dating someone who’s clearly having a bad day. You know it’s going to be…challenging. There are two main reasons for this. First, Trump’s threatening to cap credit card interest rates at 10%. Honestly, it’s a bit of a political game, but it’s spooking investors. Second, they announced they’re acquiring Brex, a fintech company, for $5.15 billion. Investors are skeptical. They always are.

But here’s the thing: that 10% cap is unlikely to happen. It’s just political posturing. And Capital One is actually doing really well. Credit card, auto, and commercial loans are all up. Their net interest margin is a healthy 8.26% – significantly higher than the average big bank. They’re making money. And they’re trading at about 10.6 times forward earnings. Plus, they’re still integrating the Discover merger, which could unlock even more value. It’s a bit of a messy situation, admittedly, but that’s where the opportunity lies. I like a challenge. It keeps things interesting.

So, there you have it. Two banks I’m actually looking at. Don’t get me wrong, there are risks involved. There always are. But sometimes, the best investments are the ones that make you slightly uncomfortable. It means you’re actually thinking. And in this market, that’s a rare and valuable skill. Now, if you’ll excuse me, I need to go do some more research. And maybe have a drink. This whole thing is exhausting.

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2026-01-29 20:52