Bank stocks have been close to abysmal thus far in 2016, but investors looking for the best of the bunch should seek out Bank of America (BAC) , Citigroup (C) , Independent Bank (INDB) and PacWest Bancorp (PACW) , said Ryan Kelley for the Hennessy Large Cap (HLFNX) and Small Cap (HSFNX) Financial Funds.

Shares of Bank of America are down 6.5% year to date and Kelley sees lots of cost repositioning ahead, as well as a rising dividend. He also said the stock is cheap trading at 13 times its trailing 12 months earnings and below book value.

"Bank of America will do much better in a rising rate environment and should also be able to take advantage of Wells Fargo's (WFC) problems," said Kelley.

The Hennessy Large Cap Financial Fund is down 6.5% thus far in 2016, according to Morningstar. The $28 million fund has returned an average of 1.4% annually over the past three years, putting it the 79th percentile in Morningstar's financial category.

On the large cap side, Kelley is also bullish on Citigroup, down 9% year to date, calling it the cheapest of the group at 10 times earnings. Kelley said the bank is earnings challenged in the current environment, but it has the opportunity for cost restructuring.

On the small cap side, Kelley is a fan of Independent Bank, up 14% thus far in 2016, deeming it a well-run, mid-size traditional bank playing in lucrative markets in Massachusetts.

"Independent has an attractive geography with loyal customers and higher average profitability," said Kelley.

The Hennessy Small Cap Financial Fund is up 4.7% thus far in 2016, according to Morningstar. The $153 million fund has returned an average of 7.5% annually over the past three years, outpacing 71% of its rivals in Morningstar's financial category.

Finally, Kelley is a fan of PacWest Bancorp, a California-based commercial bank which is down less than 1% year-to-date.

"PacWest is attractively valued given growth potential and last year's acquisition of Square 1 Financial, a private equity focused bank," said Kelley.

My colleague Jeremy LaKosh of Real Money likes one more banking name: BB&T Corp (BBT) . Click here to see why, as well as to sign up for a free 14-day trial of Real Money, TheStreet's premium site for active traders.

Citigroup and Wells Fargo are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells C or WFC? Learn more now.

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