The Bank Doomers Are Back - My Crystal Ball Says They're Going to Be Wrong ... Again.

The bank doomers are out again and you can feel it in the air, that quiet hum before earnings season when everyone starts whispering about credit risk, duration, and the next shoe to drop. But this isn’t another AI-fed recap of headlines, this is tomorrow’s news today. A real forward look and an attempt to skate where the puck is going.

If you work at a bank, invest in them, short them, or just like making money when others panic, this one’s for you.

With Comerica getting taken out by Fifth Third at roughly 170% of TBV for an estimated 11% 2026 ROTCE, the signal is clear. Banks are getting interesting again. And as that deal hit the tape yesterday, all eyes should turn to the sector heading into earnings despite the horrendous price action yesterday.

Here’s where it gets interesting though. The forward multiple for the KRX, the regional bank index hedge funds love to short, doesn’t make much sense. You have to remember that KRX/KRE is the market’s favorite proxy for doom, full of cheap options and easy narratives, and always crowded on the short side. The running joke on the Street is that it can only be traded, never owned.

But beneath that cynicism something’s changed; prices are rising, fundamentals for regional banks have turned, earnings power is quietly building, and estimates have 2026 EPS growth in the low to mid teens. Yet despite all this, the market still values the group at just 11x forward earnings which is fairly pathetic. Maybe capital’s been hypnotized by AI promises and semiconductor dreams. Maybe investors still think a credit event is waiting around the corner. Maybe regional banks are going to forever be the Rodney Dangerfield of sectors (they can’t get no respect). But no matter what, the sector is underappreciated and depressed … at least for now.