As much as I love dividend stocks, it’s important to note that I don’t love all dividend stocks; and you shouldn’t either. There are certainly some dividend stocks to avoid out there.

Dividends are great. They are quarterly (or sometimes monthly) payouts to investors as a reward for holding a stock. Retirement investors love dividends because it provides an extra revenue stream.

Younger investors crave dividends because it helps you grow your position faster if you reinvest your returns.

So it takes a lot for me to hold my nose regarding dividend stocks, but each of these names in the banking sector falls into that unfortunate category.

Regional banks are going through a rough time, in particular these days with the failures of SVB Financial Group’s (OTCMKTS:SIVBQ) Silicon Valley Bank and Signature Bank (OTCMKTS:SBNY).

Regional banks tend to have more uninsured deposits and don’t have the same rules and oversight as bigger banks.

The bottom line is appreciate dividends but you can find them in more attractive companies than these banking stocks with poor dividends.

Essa Bancorp (ESSA)

Essa Bancorp (NASDAQ:ESSA) is a Pennsylvania-based regional bank that operates 21 branches primarily in the eastern part of the state, including Allentown, Scranton/Wilkes-Barre and the Poconos. As of late last year, the company claimed assets of $1.86 billion.

The stock fell hard so far this year, dropping 24% on higher-than-average volume – like other names on this list. Investor fear of regional banks is taking a toll.

But does the dividend make it worth the risk? The dividend yield is roughly 3.7%, which seems nice. But that’s also a reflection of the recent drop in the stock price.

There’s too much volatility and risk in the banking sector to make Essa a worthwhile buy right now. ESSA stock has a “C” rating in the Portfolio Grader.

Pathward Financial (CASH)

Based in Sioux Falls, South Dakota, Pathward Financial (NASDAQ:CASH) is a regional bank chain in Iowa and South Dakota that gained some national prominence during the Covid-19 pandemic.

Known at the time as MetaBank, the U.S. government contracted the company to distribute $600 debit cards to Americans as part of the second wave of coronavirus economic stimulus payments.

The company rebranded as Pathward Financial last year, but that has done no favors for the stock price.

CASH stock is down 32% from its 2021 peak, including a more than 7% drop in the last three months. Piper Sandler recently lowered the company’s price target from $63 to $59.

The dividend is minuscule, coming in at less than 0.5%. CASH stock has a “C” rating in the Portfolio Grader.

First Financial Northwest (FFNW)

First Financial Northwest (NASDAQ:FFNW) is a regional bank based in Renton, Washington, with 15 branches around Seattle and the Puget Sound region. It offers personal, business and investment banking products.

The small bank is seeing significant losses in stock price this year as investors take a more cautious approach to regional banks. FFNW stock is down 21% in 2023, and by 28% in the last 12 months.

With a market cap of only $100 million, FFNW deals with some pretty small numbers. Quarterly earnings for Q1 included $3.2 million, or 35 cents per share, compared to $3.9 million and EPS of 43 cents in the previous quarter.

The bank offers a 4.5% dividend yield, which is tempting. But there’s too much uncertainty in regional banks to convince me that FFNW is a good bet. The bank stock gets a “D” rating in the Portfolio Grader.

First Northwest Bancorp (FNWB)

Sticking for a moment in the Northwest, First Northwest Bancorp (NASDAQ:FNWB) is headquartered in Port Angeles, Washington, and has 12 branches and four other locations in Washington. The company is slightly larger than FFNW, with a market capitalization of $110 million.

Besides its physical branches, First Northwest is working to expand into the digital payments space by partnering with fintech companies to partner with banking-as-a-service and marketplace lending opportunities.

This year, however, FNWB stock has been painful to hold. The stock is down 43% in the last year and nearly 20% in 2023 on weakness in the regional bank space.

FNWB stock offers a small dividend of 7 cents per share. It tends to increase by a penny per share each year. But because of the depressed stock price, you still get a more than 2% yield.

FNWB stock gets a “D” rating in the Portfolio Grader.

Five Star Bancorp (FSBC)

Five Star Bancorp (NASDAQ:FSBC) is a regional bank headquartered in northern California. Northern California is a hazardous place to be a regional bank because of the number of tech startups in that part of the country.

Tech stocks had a challenging year and it was uninsured deposits at Silicon Valley Bank that led to that institution’s failure.

So, it’s not surprising that FSBC stock fell hard earlier this year as the Silicon Valley and Signature news rocked the market. Five Star Bancorp stock is down 28% so far this year.

With only seven branches and a loan production office, Five Star could be seen as risky if you’re worried about regional bank stocks. The company’s guidance at its next earnings report, scheduled for April 25, will be telling.

While it boasts a dividend yield of 3%, FSBC stock has a “D” rating in the Portfolio Grader.

FS Bancorp (FSBW)

FS Bancorp (NASDAQ:FSBW) also does business in Washington state, with 27 branches under the name 1st Security Bank, and total assets of $2.6 million.

And it’s growing. The company earlier this year completed the purchase of seven branch locations in Washington and Oregon from Columbia State Bank.

Unfortunately for investors, such growth hasn’t translated into the stock price, which is depressed like other regional bank stocks. FS Bancorp stock dropped more than 12% this year and is down roughly 20% from its high.

Earnings for the fourth quarter of $31.4 million were down slightly on a year-over-year basis from a year ago. A bright spot is the dividend yield of 3.4%, but that’s not enough to give FSBW stock more than a “C” grade in the Portfolio Grader.

Greene County Bancorp (GCBC)

Greene County Bancorp (NASDAQ:GCBC) cares for customers in upstate New York. The company, which maintains 17 offices, recently completed a 2-for-1 stock split authorized in February after the stock price jumped by 38% in a year.

But since then, its been a struggle for GCBC shareholders. The stock is down 25% since the split was announced.

GCBC stock looks fine. It reported a record income of $16.2 million for the first half of the company’s fiscal 2023 (ending Dec. 31, 2022). Its dividend yield is modest, at 1.3%.

Greene County Bancorp is a regional bank stock worth watching, but it should be avoided for now – at least until sentiment on regional bank stocks changes. It currently has a “C” rating in the Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.