In this piece, I have compared the fundamentals of PacWest Bancorp (PACW) and FS Bancorp, Inc. (FSBW) and found that FSBW holds better upside potential. Before discussing why I am bullish on FSBW, let’s discuss what’s happening in the banking space.
The banking sector has faced several headwinds since March, leading to the failure of three large banks. The lack of investors’ confidence in banking stocks following the bank failures led to a broad-based selloff in the regional banking industry. Despite assurances by the financial regulators, concerns over the banking system's stability remained due to rising interest rates, deposit flight, and exposure to commercial real estate.
