Gerard Cassidy, managing director at RBC Capital Markets, reportedly predicts the rally in bank stocks should continue into 2020 because of a strong economic backdrop, increased merger and acquisition activities, and a supportive regulatory environment.

“Despite slowing its pace earlier this year, the U.S. economy continues to grow in its 11th year of the current cycle and has recently shown signs of recovery. Driven by the improving outlook, the yield curve between 10-year and two-year Treasuries has been steepening since early September,” Barron’s explained.

That’s good news for banks that make money from charging interest on loans, Barron’s said.

Cassidy believes the regulatory environment will remain benign for banks in 2020. “If the Federal Reserve’s rebuke of Wells Fargo in 2018 represents a recent nadir in relations between banks and regulators, we would suggest that the relative ease of the BB&T and SunTrust merger-of-equals provides an encouraging reminder of how quickly fortunes can change,” he wrote in a research note on Friday.

Despite this year’s rally, bank stocks are still trading at relatively cheap valuations.

According to Cassidy, the S&P 500 bank index now trades at 11.8 times forward 12-month earnings and 1.4 times book value. That’s at a deep discount to the 18.4 times and 3.7 times, respectively, of the broader S&P 500.

Here are his recommendations to buy:

1. Bank of America (BAC)
2. Citigroup (C)
3. Comerica (CMA)
4. JPMorgan Chase & Co. (JPM)
5. Huntington Bancshares (HBAN)
6. Investors Bancorp (ISBC)
7. KeyCorp (KEY)
8. M&T Bank (MTB)
9. Morgan Stanley (MS)
10. Northern Trust (NTRS)
11. PNC Financial Services (PNC)
12. Sterling Bancorp (STL)
13. Truist Financial (TFC)
14. Valley National Bancorp (VLY)
15. Western Alliance Bancorporation (WAL)
16. Zions Bancorporation (ZION).

If you aren't convinced yet to buy banking shares, maybe this will help: one of the most respected investing minds of modern times just loves such stocks.

Warren Buffett, also known as the “Oracle of Omaha,” has been scooping up bank shares in the past year, the New York Times reported, offering evidence that the time just may be right for you to be like the 88-year-old chairman and chief executive of Berkshire Hathaway.

Buffett’s Berkshire Hathaway is now among the five biggest shareholders in Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), Goldman Sachs (GS), U.S. Bancorp (USB) and Bank of New York (BK) and owns big stakes in others.

For example, Berkshire owned 950 million shares in BAC as of July 17, according to SEC filings. It had reported 896.2 million shares at the end of March, Reuters explained.