U.S. bank stocks, particularly the large-cap universe, underperformed the broader market in September.
The SNL U.S. Bank and Thrift index lost 5.4% of its value during the month, relative to a negative 3.8% total return for the S&P 500. In the S&P Global Market Intelligence analysis, only three of the 50 largest banks by market capitalization at Sept. 30 — Cincinnati-based Fifth Third Bancorp; Birmingham, Ala.-based Regions Financial Corp.; and Memphis, Tenn.-based First Horizon National Corp. — experienced market gains.
With a negative 15.7% total return in September, Citigroup Inc. was one of the worst market performers in the sector. The stock has traded below its adjusted tangible book value for the last eight months. As of Sept. 30, Citigroup was the 11th-cheapest bank in the analysis by price to adjusted tangible book value.
The other three banks in the "Big 4" — JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. — limited their market percentage losses to single digits. JPMorgan and Bank of America consistently trade at a premium to the industry, while Wells Fargo has traded at a discount all year.
Click here to see S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of Sept. 30.
Four banks entered the bottom-25 valuation list in September: Citigroup; Coral Gables, Fla.-based Amerant Bancorp Inc.; Walnut Creek, Calif.-based BayCom Corp.; and Los Angeles-based Hope Bancorp Inc. All four banks had monthly returns of negative 10% or worse, with Amerant suffering the worst market performance among banks in the analysis.
Both Amerant and Hope Bancorp have substantial commercial retail exposure. As of June 30, Amerant had 19.2% of its gross loans in the commercial real estate retail category, while Hope Bancorp had 17.7% of its gross loans in retail buildings.
Exiting the bottom-25 list were Westfield, Mass.-based Western New England Bancorp Inc.; Costa Mesa, Calif.-based Pacific Mercantile Bancorp; Oswego, N.Y.-based Pathfinder Bancorp Inc.; and Bayonne, N.J.-based BCB Bancorp Inc.