Investors bid up bank stocks following President-elect Donald Trump's victory in the 2024 presidential election. The rally was immediate and widespread as the market expects less severe government regulation starting in 2025, including a more supportive regime for approving mergers and acquisitions.

The median total return in November for the 211 banks in a S&P Global Market Intelligence analysis was 13.4%, surpassing the S&P 500's 5.9% return. All of the banks in the analysis recorded positive total returns in October, ranging from 1.5% at Martinsville, Virginia-based Carter Bankshares Inc. to 33.1% at Hammond, Louisiana-based First Guaranty Bancshares Inc. Each of the top 50 banks by market capitalization had a double-digit percentage return at the end of November.

The median price to adjusted tangible book value (TBV) for the banks in the analysis was 155.1% as of Nov. 29, up from 138.8% at Oct. 31 and representing the peak month-end valuation in 2024. The prior year-to-date high was 152.1% at the end of July.

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.

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

Even with a monthly return of 31.2%, which was second-best in the analysis, Seattle-based HomeStreet Inc. was far and away the cheapest bank by price to adjusted TBV for the second consecutive month. Its valuation at Nov. 29 was 42.6%, up from 32.5% a month earlier but 19 percentage points lower than any other bank in the analysis.

In January, HomeStreet initially signed a definitive agreement to sell to Denver-based FirstSun Capital Bancorp. However, the banks called off the acquisition Nov. 18 after regulators rejected the deal. The termination allows HomeStreet to solicit other potential acquirers.

Dallas-based First Foundation Inc. retained the second-lowest valuation, ending November at 61.7% of adjusted TBV after an 18.1% monthly return. This valuation would be higher if the preferred shares from First Foundation's capital raise in July were converted to common shares. According to a Form 8-K filing, the conversion would have lowered the bank's basic TBV at Sept. 30 to $9.50 from $13.79.

On Nov. 22, First Foundation announced Thomas Shafer as its new CEO. Shafer previously was co-president of commercial banking and senior executive vice president at Huntington Bancshares Inc., which he joined following that company's acquisition of TCF Financial Corp. in 2021.

Piper Sandler analyst Matthew Clark praised the hire, writing in a Nov. 22 research note, "We view Tom's appointment as a net positive for the shares since we believe the turnaround process could accelerate and make [First Foundation] a potential sale candidate sooner than previously anticipated given Mr. Shafer's track record."

The seventh-cheapest bank, Flagstar Financial Inc., was another sector outperformer, with an 18.3% return in November. As of Sept. 30, the Hicksville, New York-based bank was the second-largest multifamily lender by balance-sheet loans and had the second-highest multifamily delinquency ratio among banks with at least a 25% concentration.

Two of the least expensive banks, both based in New York, filed mixed-shelf offerings in November. Flushing Financial Corp., ranked ninth, could offer up to $400 million of securities, and 17th-ranked Financial Institutions Inc. could offer as much as $200 million.

– Access S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of Nov. 29, 2024. – Read some of the day's top news and insights from S&P Global Market Intelligence. – Set email alerts for future Data Dispatch articles.

Most expensive banks

Dallas-based Triumph Financial Inc. extended its lead as the bank with the most valuable currency. Its price to adjusted TBV jumped to 486.5% at the end of November from 401.5% at Oct. 31. Its advantage over the second-most expensive bank rose to 56 percentage points from 7 percentage points.

Andrew Terrell, an analyst at Stephens, initiated coverage of the sixth-ranked bank by highest valuation, Bank of Hawaii Corp., with an "overweight" rating and a $90 price target. The Honolulu-based bank closed trading Nov. 29 at $78.98.