3 Bank Stocks to Buy in July

Nobody -- and I mean nobody -- likes high interest rates. The average rate for a 30-year fixed mortgage is 6.55%, which is a huge difference from just five years ago, when rates were under 3%. And they don't appear to be headed down anytime soon.

But for investors, you can find a silver lining in bank stocks. That's because, while interest rates cause some pain for consumers, they can provide extra profits to banks and other lending institutions.

Banks make a portion of their money from the spread between what they pay depositors and what they earn by lending that money to consumers and businesses. When interest rates are up, as they are now, banks can charge more for mortgages, credit cards, vehicle loans, and commercial loans. That potentially means more net income for the bank and greater profits when banks report quarterly earnings.

Three interesting bank stocks to consider in July's high-interest rate environment are Bank of America (NYSE: BAC), PNC Financial Services (NYSE: PNC), and SoFi Technologies (NASDAQ: SOFI).

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Bank of America: The big bank

Bank of America is one of the biggest banks in the U.S., with more than 3,600 banking locations and 15,000 ATMs. The bank offers consumer, business, and wealth management services -- all divisions that saw solid growth in the second quarter. Every division recorded double-digit net income growth, CEO Brian Moynihan said.

Bank of America reported that it added 160,000 net new checking accounts, opened 1 million new credit card accounts, and its customer investment and wealth management balances rose 12% from a year ago to $4.9 trillion.

Revenue in the second quarter was $31.6 billion, up 15.3% from a year ago. Net income of $9.1 billion was up 26.4%, and earnings per share improved from $0.84 to $1.21.

Bank of America is one of the best big bank stocks you can buy, and its dividend of 1.8% contributes to a total return of 12.5% so far this year.

PNC Financial Services Group: The regional bank

PNC is still considered a regional bank, but if it keeps expanding, the market may need to reconsider that designation. The Pittsburgh-based company has a broad reach -- it has locations coast-to-coast, operating 2,300 branches. In January, PNC completed its $4.1 billion acquisition of FirstBank, which allowed it to add nearly 100 branches in Arizona and Colorado as it seeks to gain a larger foothold in the western U.S.

Second-quarter earnings showed revenue of $6.87 billion, up from $5.66 billion a year ago. Net income was $2.05 billion, up from $1.64 billion, and earnings per share were $4.81 versus $3.85 a year ago.

The dividend yield is currently 3.2%, helping push the stock to a 22.8% overall gain in 2026.

SoFi Technologies: Down, but not out

SoFi stock is down more than 30% so far this year, having taken a solid beating when management chose not to increase guidance in its first-quarter earnings report. But it has a compelling story.

SoFi is a different kind of bank, operating as an online-only institution while also providing personal loans, mortgages, investments, and credit card services. Its customers also have access to more than 55,000 ATMs at no charge.

SoFi still hasn't issued its Q2 results -- that won't happen until July 29. But in the first quarter, SoFi reported more-than-solid results, with revenue of $1.1 billion, up 43% from a year ago, net income of $155.7 million, up 134%, and earnings per share doubling from $0.06 to $0.12 per share.

If SoFi has another solid quarter and, this time, raises guidance, SoFi stock will be poised to close the month on a high note.

Bank of America is an advertising partner of Motley Fool Money. Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.