The largest US banks dragged on the country's banking market performance in June.
Only two of the 31 US banks with a market capitalization in excess of $5 billion at June 28 — Regions Financial Corp. and Truist Financial Corp. — topped the 2.5% median monthly total return for the 207 banks considered in the S&P Global Market Intelligence analysis. Sixteen of those 31 companies traded down in June, led by Huntington Bancshares Inc.'s negative 4.1% return. The lender lowered its net interest income projection and emerged as a potential winner in the Federal Reserve's stress test last month.
Following the stress test results in late June, some banks quickly announced capital deployment plans. Truist and JPMorgan Chase & Co. authorized share repurchase programs, while Citizens Financial Group Inc. more than doubled its remaining buyback capacity from a February 2023 authorization. Each of the Big 4 US banks, along with PNC Financial Services Group Inc. and Fifth Third Bancorp, announced that they intend to increase quarterly dividend payments.
As banks step up capital distributions to shareholders, growth in adjusted tangible book value (TBV) could be limited. The median price to adjusted TBV for the analysis was 127.8% at the end of June, up from 125.9% at May 31. At the end of 2023, the industry median was 152.4%.
S&P Global Market Intelligence analyzed US banks trading on the Nasdaq, NYSE or NYSE American with total assets of greater than $3 billion. The analysis excludes banks in the mutual holding company ownership structure and other operating subsidiaries.
Held-to-maturity and credit-adjusted TBV is calculated as the sum of tangible common equity, unrealized gain or loss from held-to-maturity securities, tax-adjusted at the 21% corporate rate, and loss reserves, less nonperforming assets and loans 90 or more days past due but still accruing interest, divided by common shares outstanding.
Least expensive banks
Blue Ridge Bankshares Inc. was the cheapest bank in the analysis, trading at 32.9% of adjusted TBV. Its total return was negative 10.0% in June, the second-worst market performance in the analysis. On April 3, the Charlottesville, Va.-based bank completed a $150 million capital raise, and on June 13, it closed an $11.6 million private placement.
Hicksville, NY-based New York Community Bancorp Inc. had the second lowest valuation at 33.6% of adjusted TBV. Its board of directors approved a 1-for-3 reverse stock split last month. New York Community was previously one of the most prolific stock splitters, completing six 3-for-2 splits and three 4-for-3 splits between 1994 and 2004.
The third-cheapest bank, Seattle-based HomeStreet Inc., was the top market performer in the analysis with a 24.9% monthly return. HomeStreet shareholders approved the bank's sale to Denver-based FirstSun Capital Bancorp but voted against change-in-control compensation.
Most expensive banks
Shares in Triumph Financial Inc. surged following the June 17 announcement of its payments network partnership with C.H. Robinson Worldwide Inc. The Dallas-based bank ended June with a 10.0% monthly return, taking the top spot for highest valuation. Triumph's price to adjusted TBV increased to 365.3% from 332.0% at the end of May.
Abilene, Texas-based First Financial Bankshares Inc., which was the highest-valued bank from February through May, dropped to third place.
Honolulu-based Bank of Hawaii Corp., the fifth-most expensive bank, closed a preferred stock offering in June, raising $165 million in gross proceeds.
The No. 11 bank, Carter Bankshares Inc., said that the federal lawsuit involving West Virginia Gov. Jim Justice was voluntarily dismissed "with prejudice." The Martinsville, Va.-based bank appreciated 18.6% in June, the second-best return in the analysis.
 | – Access S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of June 28, 2024 |
