US bank stocks underperform broader markets in June

US bank stocks made gains in June but fell short of the broader markets' strong performance.

The 211 banks in an S&P Global Market Intelligence analysis had a median total return of 4.2% in June, trailing the S&P 500's 5.1% return. The median price-to-adjusted tangible book value (TBV) for the 211 banks increased to 135.1% as of June 30 from 128.1% at May 30.

Several of the least expensive banks in the analysis were among the top market performers. Notably, Citigroup Inc. had the fourth-strongest monthly return at 13.0%. As of June 30, it was no longer in the bottom-20 valuation group and notched a 92.4% price-to-adjusted TBV.

S&P Global Market Intelligence analyzed US banks trading on the Nasdaq, NYSE or NYSE American with total assets of more than $3 billion. The analysis excludes banks in the mutual holding company ownership structure and other operating subsidiaries.

Adjusted tangible book value is calculated as the sum of tangible common equity, loss reserves and unrealized gain or loss from held-to-maturity securities, tax-adjusted at the 21% corporate rate, less nonperforming assets and loans 90 or more days past due but still accruing interest, divided by common shares outstanding.

Least expensive banks

Dallas-based First Foundation Inc. was the cheapest bank in the analysis by price-to-adjusted TBV for the sixth month in a row. Its valuation was 46.3% as of June 30 and would have been higher if preferred shares from a capital raise in July 2024 were converted to common stock. Such a conversion would have lowered the bank's basic TBV to $9.42 from $11.77 at March 31, according to an April 30 investor presentation.

First Foundation recorded net income of $6.9 million for the first quarter following net losses for the previous two quarters. The bank's net interest margin has gone up for four consecutive quarters and management is projecting continued expansion. A return to profitability and a smaller balance sheet translated into First Foundation's capital ratios increasing across the board on a quarter-over-quarter basis.

Three analysts, formerly at Wedbush Securities, joined Jefferies this year and initiated coverage on a basket of US banks, including First Foundation at "buy." The analysts also started covering Bethesda, Maryland-based Eagle Bancorp Inc. — ranked No. 2 by lowest price-to-adjusted TBV — with a "hold" rating, and No. 17 Los Angeles-based Banc of California Inc. with a "buy" recommendation.

The No. 10 bank by lowest valuation, Hope Bancorp Inc., repositioned its securities portfolio in June. In a Form 8-K filing, the Los Angeles-based bank estimated an earnback period for the repositioning of "approximately three years."

McLean, Virginia-based Primis Financial Corp., the 14th-cheapest bank, expects to record a gain from the proposed sale of a portion of its stake in Panacea Financial Holdings Inc. With a total return of 14.6% in June, Primis was the third-best market performer in the analysis.

Hicksville, New York-based Flagstar Financial Inc., ranked No. 15 by lowest price-to-adjusted TBV, was the weakest market performer, returning negative 7.9% in June. Shares were under pressure over concerns about the New York City mayoral election impacting the bank's multifamily loan portfolio.

– Read some of the day's top news and insights from S&P Global Market Intelligence. – Set email alerts for future Data Dispatch articles. – Access S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of June 30, 2025.

Most expensive banks

Abilene, Texas-based First Financial Bankshares Inc. was the most expensive bank in the analysis for the second consecutive month. Its price-to-adjusted TBV as of June 30 was 366.1%, up from 358.7% at May 30.

Dewitt, New York-based Community Financial System Inc. had the second-highest valuation at 345.5%. One of its subsidiaries, Community Bank NA, announced the acquisition of seven branches in the Greater Lehigh Valley, Pennsylvania, region from Santander Bank NA on June 25.

Some of the most expensive banks are taking advantage of their strong currencies to grow through acquisition. Kalispell, Montana-based Glacier Bancorp Inc., the No. 19 bank by highest valuation, announced a Texas deal last month after completing a Pacific Northwest deal at the end of April. The 15th most expensive bank, Kansas City, Missouri-based Commerce Bancshares Inc., agreed to acquire Fort Myers, Florida-based FineMark Holdings Inc. on June 16; the deal expands Commerce's branch network into new states and bolsters its wealth management business.

Other highly valued banks are also considering M&A activity. Newark, Ohio-based Park National Corp. has been evaluating merger candidates to vault over the $10 billion asset threshold. With Wells Fargo & Co.'s asset cap finally removed, the No. 18 bank on the list could seek growth in a number of different business lines, including wealth management.