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Friday's Bonus Content 3 High-Yield Banks for Investors to Buy on the DipWritten by Thomas Hughes. Published 10/20/2025. 
Key Points - Zions Bancorporation sparked an overblown sell-off in the financial sector, setting itself and the sector up for a rebound.
- Analysts' sentiment is positive, including an upgrade that followed the news that triggered the selling.
- Three regional banks provide high yield to investors and should be on their watchlists for Q4 purchases.
The Financial Sector (NYSEARCA: XLF) recently rattled markets as concerns over loose lending practices resurfaced — but this is not the time to sell bank stocks. The news is concerning, but it does not indicate an imminent meltdown of the regional banking sector; it appears to be a one-off event tied to a single institution that the market is already pricing in. Zions Bancorporation disclosed a $60 million provision and a $50 million write-down that will be reflected in its earnings report. Still, the broader takeaway from banking-sector Q3 reports is that regional banks are generally holding up well. Below are three regional banks that income-oriented investors should keep on their radar. Zions Bancorporation: Upgraded After Write-Down Zions Bancorporation (NASDAQ: ZION)'s $50 million write-down put it at the center of the sector-wide sell-off, but the pullback also creates an attractive entry for high-yield investors after roughly a 13% price correction. The company's balance sheet and cash flow absorbed the write-down, leaving its capital position healthy. The payout ratio on this 3.75% yielding stock is below 35%, and management expects sustainable earnings growth to support the distribution. The stock has a history of annual distribution increases; the distribution's compound annual growth rate (CAGR) is about 5% through 2025, which helps it keep pace with inflation and adds value for income portfolios. The day after the write-down was announced, Robert W. Baird upgraded the stock. The analysts acknowledged the reason for the steep sell-off but viewed it as overdone, setting the stock up for a rebound. They raised their rating to Outperform and set a price target of $65. As of mid-October the consensus view was a Hold, but coverage is increasing and sentiment is firming; the consensus target of $61 implies roughly 30% upside over the next 12 months. The rebound began shortly after the sell-off and was accelerated by Zions' earnings report and guidance update. 
Fifth Third Bancorp: Outperforms in Q3, Rebound Underway Fifth Third Bancorp (NASDAQ: FITB) reported Q3 the day after Zions' announcement, beating both the top and bottom lines and delivering an optimistic outlook. Key points include nearly 8% revenue growth and a fourth consecutive quarter of improving operating leverage. Management is focused on portfolio quality and expense discipline, which is driving leveraged earnings growth and improving prospects for capital returns. The stock yields nearly 4% after the recent price drop, and the distribution represents less than 45% of expected earnings. Fifth Third is expected to raise the dividend at a mid- to high-single-digit pace while also repurchasing shares. Analyst trends for FITB are stronger than for Zions. Coverage and sentiment are improving, and the mid-October consensus implies about 25% upside, with the high-end targets nearly 20% above that. Institutional holders own roughly 85% of the stock and have been net buyers each quarter in 2025, running a roughly 2:1 buying balance for the year. 
U.S. Bancorp: Another Dividend-Paying Gem at a Discount U.S. Bancorp (NYSE: USB) shares fell with the broader financial sector despite solid results. The decline was modest — less than 2% — and the company appears positioned for a longer-term reversal that could gain momentum over the next two quarters. Its Q3 report showed nearly 7% revenue growth, improving fee income and the leverage that brings to earnings. Earnings grew at an 8% leveraged pace, and guidance was constructive. Management expects continued revenue growth, sustained fee income strength and improving earnings leverage in coming quarters. Analyst trends are favorable here as well. MarketBeat tracks 22 analysts on USB, and the consensus is a Moderate Buy — with 63% rating it Buy or better. Price target revisions are positive: the consensus implies about 18% upside, with the high-end target offering roughly 22% more potential. 
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