With the Fed hinting at higher rates for longer and long term yields reshaping borrowing costs, the gap between banks that rely on net interest income and those that struggle with tighter conditions can widen quickly. That creates both potential openings and risks for investors who follow U.S. regional and national banks. This article walks through three stocks exposed to this macro story and explains how the latest policy signals could matter for each one.

The three banks covered below are just a sample from this theme, and the full filter surfaced 8 more U.S. listed regional and national banks with similarly clear stories around net interest income, return on equity and dividends. If you want to identify and analyze your own highest conviction ideas from this group, head straight to the U.S. Banks Benefiting from Higher-for-Longer Interest Rates screener.

Farmers National Banc (FMNB)

Farmers National Banc is a regional bank holding company that combines traditional commercial and consumer banking with trust, retirement consulting, insurance and wealth management. This naturally links it to the higher for longer rates theme through its net interest income. Most of its revenue comes from the core Bank segment at about $162 million, with a further $41 million from unallocated other revenues and roughly $16 million from its trust and retirement consulting operations. The company has a market cap of about $934 million.

Farmers National Banc gives investors a clear way to gain exposure to higher for longer interest rates because its core banking engine is heavily tied to net interest income, and recent results indicate that this has supported solid earnings and a higher dividend. At the same time, rising net charge offs and a history of shareholder dilution mean credit quality and capital decisions remain important considerations, especially if policy tightening from a more hawkish Fed has a greater impact. The stock now sits inside an S&P regional bank index, which can support liquidity and visibility as the rate story develops. For investors willing to weigh those risks, the mix of income, earnings momentum and rate sensitivity makes this a story that may warrant closer monitoring.

Farmers National Banc’s earnings engine and dividend story may look straightforward, yet the real question is how resilient it is if credit costs keep edging higher. Get the full picture in the 4 key rewards and 2 important warning signs (1 is major!)

Bank of N.T. Butterfield & Son (NTB)

Bank of N.T. Butterfield & Son sits neatly in the higher for longer rates theme because its business is built around community, commercial and private banking, where lending and deposit spreads drive much of the story. Almost all of its revenue, about US$625 million, comes from the core Banking segment, which gives very direct exposure to net interest income dynamics, and the company has a market cap of roughly US$2.3b.

For investors tracking how higher long term yields might influence bank earnings, Bank of N.T. Butterfield & Son offers an interesting mix. Net interest income has been supported by growth in interest earning assets, while fee income from wealth and trust services helps balance the cycle. At the same time, a higher bad loans ratio and relatively low loan loss reserves leave the stock more exposed if credit conditions tighten, especially in its island economies. In addition, a 3.37% dividend yield and an earnings profile that analysts describe as high quality result in a bank that fits the screener’s focus on stronger fundamentals but still demands close attention to credit risk and deposit stability.

Bank of N.T. Butterfield & Son combines interest income strength with fee-based support, which can obscure where the real pressure points sit. Get the full story in the 5 key rewards and 3 important warning signs

Arrow Financial (AROW)

Arrow Financial is a long established regional bank holding company based in Glens Falls, New York, with a business built around everyday commercial and consumer banking. It earns all of its roughly $170 million in revenue from Community Banking activities. This means loan and deposit spreads and net interest margins are central to its story in a higher for longer rate setting. The company has a market cap of about $709 million.

Arrow Financial brings together a rate sensitive banking model and a steady income angle, with net interest income of around $72 million for the first half of 2026 and a 3.14% dividend yield. Recent results show improving profitability and high quality earnings, which helps support the screener’s focus on healthier fundamentals as markets weigh tougher Fed talk and higher long term yields. At the same time, investors need to weigh a P/E that is above the wider U.S. banks group and some recent insider selling, alongside modest loan charge offs and ongoing acquisition integration work. The full picture reveals how much room there may be for further earnings strength if higher rates persist and whether the recent recovery is enough to justify the current valuation.

Arrow Financial’s improving profitability and above group P/E suggest that the story may be evolving faster than the market appreciates. See how the 4 key rewards and 1 important warning sign could reshape your view of its next chapter.

Seeking Fresh Alternatives Before They Fly?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.