US banks end October with lowest month-end valuation since May

As US banks disclosed myriad credit issues in third-quarter earnings reports, valuations fell to a five-month low.

In an S&P Global Market Intelligence analysis, the median price-to-adjusted tangible book value (TBV) for the banking industry was 131.2% as of Oct. 31, down from 141.9% at Sept. 30, marking the lowest month-end valuation since 128.1% at May 30. For the 207 banks in the analysis, the median total return in October was negative 3.6%, underperforming the S&P US BMI Banks index's 1.1% decline and the S&P 500's 2.3% gain.

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

Several of the least expensive banks by price-to-adjusted TBV, including First Internet Bancorp, Eagle Bancorp Inc. and Amerant Bancorp Inc., ranked first, second and 13th, respectively, experienced credit deterioration in the third quarter. Each of those banks posted a double-digit percentage loss in October.

Following a negative 20.9% total return in October, which was the weakest market performance in the analysis, First Internet became the least expensive bank with a price-to-adjusted TBV of 42.7% at the end of October. The bank reported a $41.6 million net loss in the third quarter, which included a $37.8 million pretax loss from the previously announced sale of performing single-tenant lease financing loans.

On First Internet's Oct. 23 earnings conference call, Chairman and CEO David Becker said, "During the quarter, we also took decisive and aggressive action to address credit issues in the small business lending and franchise finance portfolios. We recognized a $34.8 million provision for credit losses, which included $21 million of net charge-offs, additional specific reserves and a significant increase to the allowance for credit losses related to the small business lending."

Becker said the credit problems were limited to small business and franchise finance. He added, "Credit quality across the remainder of our lending vertical is sterling, reflecting the strength and stability of our broader portfolio."

Eagle Bancorp, based in Bethesda, Maryland, was the only other bank in the analysis that ended October trading at less than half of adjusted TBV. The bank reported a net loss of $67.5 million in the third quarter, following a $69.8 million loss in the second quarter. Net charge-offs soared to $140.8 million, up $56.9 million sequentially and $135.5 million year over year, as the bank continues to resolve issues in its office portfolio.

Eagle Bancorp also announced the resignation of Chief Credit Officer Kevin Geoghegan, effective Dec. 31, and the retirement of President and CEO Susan Riel by the end of 2026.

Unlike First Internet and Eagle Bancorp, Amerant Bancorp, based in Coral Gables, Florida, was profitable in the third quarter. Its problem asset levels rose significantly from June 30, prompting speculation about the bank's future as an independent entity.

Dallas-based First Foundation Inc., which had been the least expensive bank in the analysis for nine consecutive months, dropped to the third valuation rank. On Oct. 27, the bank announced a sale to Denver-based FirstSun Capital Bancorp, which was the 14th least expensive bank as of Oct. 31. In an investor presentation, FirstSun estimated the deal would be 14.3% dilutive to TBV on a GAAP basis, translating to an earnback period of 3.3 years. On a cash basis, the projection was 7% TBV accretion. FirstSun plans to quickly restructure First Foundation's balance sheet.

– 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 Oct. 31, 2025.

Most expensive banks

Despite a negative 12.7% total return in October, which was the 11th-worst market performance in the analysis, The Bancorp Inc. remained the highest-valued bank for the fourth consecutive month. Its price-to-adjusted TBV was 422.2% as of Oct. 31, down 16 percentage points from Sept. 30, but 98 percentage points higher than any other bank in the analysis.

The Bancorp has recorded a return on average tangible common equity in excess of 20% for 12 consecutive quarters, including 26.89% in the third quarter of 2025. Based on available data, four other banks among the 20 most-expensive banks exceeded the 20% hurdle last quarter: Pathward Financial Inc., ranked second and reducing its consumer finance portfolio; Community Financial System Inc., ranked fifth and based in Dewitt, New York; City Holding Co., ranked ninth and based in Charleston, West Virginia; and Nicolet Bankshares Inc., ranked 20th and based in Green Bay, Wisconsin.

JPMorgan Chase & Co., the fourth-most expensive bank, is growing investment banking revenue, similar to other bulge bracket firms. The bank beat the Visible Alpha investment banking revenue estimate by 3.4% in the third quarter. Equity research analysts raised the company's investment banking fee estimate for 2026 by 2.3% between Oct. 13, the day before JPMorgan's earnings release, and Oct. 21.

First Financial Bankshares Inc., based in Abilene, Texas, ranked sixth by valuation, and Birmingham, Alabama-based ServisFirst Bancshares Inc., ranked 14th, were two of the most expensive banks that grappled with credit quality issues in the third quarter. First Financial's annualized ratio of net charge-offs to average loans rose 104 basis points sequentially to 1.08%, mostly due to a commercial borrower suspected of fraud. At ServisFirst, nonperforming assets more than doubled quarter over quarter, driven by eight loans with a multifamily developer and rehabilitator.

Park National Corp., ranked 17th, and Nicolet Bancshares announced bank acquisitions in October. Newark, Ohio-based Park National is entering Tennessee with the purchase of First Citizens Bancshares Inc. Nicolet Bankshares is leveraging its strong financial position to buy MidWestOne Financial Group Inc., based in Iowa City, Iowa.

Wells Fargo & Co., ranked 12th, added 4.1% to its asset base in the third quarter, representing the highest sequential growth rate since the fourth quarter of 2008, when it acquired Wachovia Corp. After the regulatory removal of the bank's asset cap in June, Wells Fargo has raised its target for return on tangible common equity.

Glacier Bancorp Inc., ranked 18th, may be seeking additional growth opportunities. The Kalispell, Montana-based bank filed a mixed shelf registration statement on Oct. 30. Glacier Bancorp completed two bank acquisitions this year: Addison, Texas-based Guaranty Bancshares Inc. on Oct. 1 and Idaho Falls, Idaho-based Bank of Idaho Holding Co. on April 30.