The financial sector has been one of the most beaten-down portions of the stock market since the COVID-19 pandemic began. So far in 2020, the Financial Select Sector ETF (NYSEMKT:XLF) is still down by 21%, compared with the broad S&P 500 index, which has recouped its earlier loses and is now up by just over 1%. The pandemic has created tremendous uncertainty about consumers' ability to repay their loans and debts, and the record-low interest environment isn't exactly great for bank profits.

That said, there could be serious value to be found now in some bank industry stocks for patient, long-term investors. Here's why U.S. Bancorp (NYSE:USB), Wells Fargo (NYSE:WFC), and Goldman Sachs (NYSE:GS) should be on your radar while the COVID-19 pandemic rages on.

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An incredible institution at a rare discount

When it comes to the big banks, U.S. Bancorp is a best-in-breed standout. Over the past decade, the seventh-largest U.S. bank by assets has consistently produced the best return on equity (ROE) and return on assets (ROA) among its peer group, and it has done a great job of lending responsibly and avoiding risky assets. What's more, it has consistently run one of the most efficient operations in the branch-based banking industry.

The caveat is that investors have had to pay a premium for this quality. For much of the past decade, while it was producing stellar profitability, U.S. Bancorp was also trading for close to double its book value.

USB Price to Book Value Chart

USB Price to Book Value data by YCharts

However, the COVID-19 pandemic hit bank stocks hard, and U.S. Bancorp was hit worse than most. The main reason is that banks are bracing for an expected wave of defaults caused by elevated unemployment. That's a worry common across the sector, but unlike many of its major peers, U.S. Bancorp doesn't have a substantial investment banking operation -- and those tend to do better in turbulent economic times. Even so, U.S. Bancorp's superior asset quality should help keep its losses relatively low, so now could be a rare opportunity to add U.S. Bancorp to your portfolio at a big discount.

After a few difficult years, could this bank turn the corner?

Like U.S. Bancorp, Wells Fargo doesn't have a large investment banking operation, so it too has been hard-hit by the coronavirus pandemic. Unlike U.S. Bancorp, however, Wells Fargo had been underperforming the financial sector for several years, due to its fake accounts scandal and numerous other misbehaviors that led the Federal Reserve to slap it with an unprecedented growth-restricting penalty.

In all, Wells Fargo has lagged the financial sector by a staggering 82 percentage points (total return of -46% versus a gain of 36%) since 2016 and now trades for just 65% of its book value. Just to put this into perspective, prior to its scandals, Wells Fargo was regularly in the same price-to-book-value neighborhood as U.S. Bancorp.

Wells Fargo has generally high asset quality and is highly profitable. If it hadn't added $8.4 billion to its loan loss reserves in the second quarter, the bank would have generated a $6 billion net profit. New CEO Charlie Scharf is doing a great job of helping the bank move on from its troubled recent history, and incoming CFO Mike Santomassimo has a fantastic track record when it comes to expense reduction, which is a major priority for Wells now.

Tons of potential to build the next big consumer bank

Goldman Sachs boasts one of the largest investment banking operations in the world, and its recent results reflect just how well those perform in turbulent economies. In the second quarter, revenue grew by a staggering 41% year over year, fueled by the institution's highest trading revenue in nine years and extremely strong results in both debt and equity underwriting.

However, I'm more excited about the long-term potential of Goldman's consumer banking business. Its Marcus savings and personal loan platform has been a massive success and continues to grow -- Goldman's consumer deposits reached $92 billion in the second quarter, 25% higher than a year ago. And the Apple (NASDAQ:AAPL) Card credit card which is issued by Goldman has been referred to as the most successful credit card product launch ever. Goldman has big plans to keep growing its consumer banking business, and it has the advantage of a well-known brand name with no costly branch infrastructure to worry about.

Despite its excellent investment banking results and the compelling potential of its consumer banking business, Goldman still trades for a roughly 9% discount to its book value, making it a cheap stock with lots of potential to grow.

Don't expect a smooth ride

To be sure, I fully expect bank stocks to give investors a bumpy ride for as long as the pandemic persists, and even beyond that as the scope of this recession becomes clearer. However, these three well-run financial institutions at cheap prices should deliver excellent results for buy-and-hold investors with long time horizons.