Bank stocks could rise 15% in 3-5 years: Analyst

The big bank theory

The current five-year bull market in stocks from the 2009 low is the second-strongest since World War II, but financial stocks have been significantly lagging. Marty Mosby, banking analyst at Guggenheim Partners, told CNBC on Friday that patient investors could be rewarded, because banks could see an upside of 15 percent over the next three to five years.

"The banks lost over 85 percent of their shareholder value in the financial crisis and the recession. We've only made back a little bit more than half of that," Mosby said in a "Squawk Box" interview. "This will be a much longer recovery in banks—probably a full decade before we get back to the full value."

But continuing economic growth and eventual interest rate increases are factors that are going to be the next catalysts for bank stocks he added—saying he was encouraged by the stronger February jobs report released Friday morning.

(Read more: Heating up: Job creation accelerates in February)

Financials were leaders in the market Friday, as many stocks touched all-time highs including Wells Fargo—a company that Mosby likes. He also favors Citigroup, SunTrust and KeyCorp.

(Disclosure: Guggenheim has investment banking and securities-related service interests in these companies.)

Bank Stocks

"They can definitely benefit as rates go higher." But in the meantime these are undervalued names that, he believes, can "show some improvement over the next year."

The near-zero interest rates engineered by the Federal Reserve designed to spur the economy and jobs have squeezed bank profits.

But a key measure of the health of the banks was at the highest for all of 2013 in the fourth quarter. The Federal Deposit Insurance Corp. said that the average net interest margin—the difference between the yield banks earn on loans and the costs of their investments—was 3.28 percent.

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.