After years of trading at the steepest discount in the broader market — dead last among all major sectors — the banking industry is finally positioned to narrow that gap, according to KBW CEO Tom Michaud. Michaud said in the latest Street Talk podcast that the best fundamental environment in years, historic levels of excess capital, a once-in-a-generation change in the regulatory environment and rebounding M&A activity should support stronger valuations for regional banks in 2026.