Regional banks are still recovering from the effects of the March, 2023 collapse of Silicon Valley Bank. Almost all of the stocks in the sector suffered dramatic sell-offs and have yet to climb back to previous highs. Is there value to be found among those financial institutions in the sector that managed to stay alive?
SPDR Regional Banking ETF is the benchmark for the sector, owns 140 stocks, trades with a price-earnings ratio of 8.90 and at 1.07 book value. Here’s the weekly price chart:
First Merchants is based in Muncie, Indiana with a history dating back to 1910. The bank’s market capitalization is $2.04 billion. It’s a Russell 2000 small cap with average daily volume of just 210,ooo shares. The stock trades with a price-earnings ratio of 8.12 at a 2% discount to its book value. The dividend is 3.92%.
The weekly price chart below shows how the company definitely participated in the March/April, 2023 slide and how it found a low near $24 in May, 2022. By December, 2023, First Merchants traded as high as $38 and has dropped from there to the current $34.16.
Independent Bankcorp is headquartered in Rockland, Massachusetts and, outside of Wall Street, goes by the name of “Rockland Trust.” It’s been around since 1907 and the market cap now comes to $2.66 billion. The stock trades at 93% of its book value with a price-earnings ratio of 10.38 and a 3.54% dividend.
With an average daily volume of just 233,000 shares, the Rockland bank is relatively lightly traded.
The weekly price chart shows that Independent peaked in 2021 at $90 and the Silicon Valley bank collapse crisis took it down to $42.50 in the March/April, 2023 period. The stock rallied to $67.50 by December, 2023 and in the new year has sold off to $60.59.
Northeast Community Bank has corporate headquarters in White Plains, New York and a market capitalization of $239 million. The stock can be purchased at a 10% discount from book value with a price-earnings ratio of 5.90. It’s another regional bank that is lightly traded with average daily volume of 61,000 shares.
The weekly price chart shows a steady uptrend from 2021 to the present with a dip during the March/April bad news for the sector. Now trading at $16.84, Northeast is up from the late 2020 low of about $5.50.
Premier Financial is based in Youngstown, Ohio with 75 branches, mostly in the Mid-West. Market cap comes to $794 million. The price-earnings ratio is 6.84 and it trades at 86% of book. The bank offers investors a 5.54% dividend. Average daily volume is a slim 120,000 shares.
The weekly price chart is similar to the others in that the stock has recovered somewhat from the big Silicon Valley Bank failure that hit the entire sector. The low then was just above $13, it came back to almost $25 by December, 2023 and now trades for $22.13.
States courtesy of FinViz.com.