Larger U.S. banks outperformed peers with smaller market capitalizations in May.
The median monthly total return for the 20 largest banks by May 29 market capitalization in the S&P Global Market Intelligence analysis was 2.7%. Thirteen of those companies had a positive return, led by Santa Clara, Calif.-based SVB Financial Group at 11.2% and Houston-based Prosperity Bancshares Inc. at 9.1%.
In contrast, the remaining 300 companies with a market capitalization below $5 billion had a median return of negative 2.7%. The market performance was worse for companies with a sub-$100 million market capitalization: a monthly return of negative 5.6%.
Three of the banks most exposed to the restaurant sector are Houston-based Cadence Bancorp., Cincinnati-based First Financial Bancorp. and Rosemont, Ill.-based Wintrust Financial Corp.
Cadence Bancorp and Wintrust Financial have consistently traded below the industry median in terms of price-to-adjusted tangible book value during the last year. As of May 29, Cadence was priced at 50.3% of ATBV, which was the sixth-lowest ratio in the S&P Global Market Intelligence analysis.
On the other hand, First Financial trades at an industry premium, although that gap has narrowed considerably this year. At the end of 2019, First Financial's P/ATBV was 49 percentage points higher than the industry median. Five months later, the premium was down to 4 percentage points.
Click here to see S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of May 29, 2020.
Berkshire Hills Bancorp Inc.'s negative 36.5% monthly total return was the worst among all banks in the S&P Global Market Intelligence analysis. The Boston-based bank entered the bottom 25 valuation list with a May 29 P/ATBV of 47.1%. Berkshire Hills Bancorp reported a net loss of $20 million in the first quarter.
Six other banks entered the bottom 25 valuation list: Westfield, Mass.-based Western New England Bancorp; Martinsville, Va.-based Carter Bank & Trust; Los Angeles-based OP Bancorp; Paoli, Pa.-based Malvern Bancorp Inc.; Columbus, Ga.-based Synovus Financial Corp.; and Amesbury, Mass.-based Provident Bancorp Inc., which completed a second-stage mutual bank conversion in October 2019.
Several banks exited the bottom 25 list: New York-based Metropolitan Bank Holding Corp.; Oswego, N.Y.-based Pathfinder Bancorp Inc.; Providence, R.I.-based Citizens Financial Group Inc.; Burr Ridge, Ill.-based BankFinancial Corp.; Asheville, N.C.-based HomeTrust Bancshares Inc.; Gulfport, Miss.-based Hancock Whitney Corp.; and Port Angeles, Wash.-based First Northwest Bancorp.