US bank stocks weather April tariff storms

US bank stocks recovered from April's tariff storms, during which they faced one of their worst weeks since 1990.

The potential impact of higher tariffs halted a sector rally ahead of first-quarter earnings reports. Bank stocks crashed April 3, with severe losses spilling over into the next day. The sector followed a broader market trend and traded up for the rest of the month. The 212 banks in a S&P Global Market Intelligence analysis recorded a median total return of negative 3.2% for April, underperforming the S&P 500's 0.7% decline.

Lower stock prices translated to lower valuations. The median price-to-adjusted tangible book value (TBV) for the 212 banks was 126.1% as of April 30, down from 134.6% at March 31 and 140.3% at the end of 2024.

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 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 lowest-valued bank in the analysis by price-to-adjusted TBV for the fourth month in a row. Its valuation was 45.9% at the end of April, and would be higher if preferred shares from a capital raise in July 2024 were converted to common stock. The 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 in the first quarter, following net losses in the previous two quarters. The bank's net interest margin rose for the fourth consecutive quarter, and management is projecting continued expansion. With a return to profitability and a smaller balance sheet, First Foundation's capital ratios increased across the board on a quarter-over-quarter basis.

BCB Bancorp Inc. was the only other bank in the analysis that ended April trading at less than half of adjusted TBV. For the first quarter, the Bayonne, New Jersey-based bank reported an $8.8 million net loss available to common stockholders, including preferred dividends, largely due to spike in the loan loss provision. In its first-quarter earnings release, the bank cited a specific reserve of $13.7 million for a $34.2 million credit in the cannabis sector.

"Although the borrower remains current, the significant deterioration in their financial condition warranted a downgrade to non-accrual status and the establishment of the reserve," Michael Shriner, President and CEO of BCB Bancorp, said in the release.

The third-cheapest bank, Eagle Bancorp Inc., is grappling with asset quality issues in the commercial real estate office and government contractor sectors. The Bethesda, Maryland-based bank, with a valuation at 50.0% of adjusted TBV as of April 30, continued building its reserve for loan losses and eked out a profit of $1.7 million in the first quarter.

Franchise finance and small business loans were stress points again for First Internet Bancorp, the fourth-lowest valued bank. It was the worst market performer in the analysis, with shares plunging 20.8% the day after the first-quarter earnings release and ending the month with a total return of negative 20.6%.

The ninth-lowest bank by valuation, Los Angeles-based RBB Bancorp, announced the retirement of CEO David Morris.

– 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 April 30, 2025.

Most expensive banks

Dewitt, New York-based Community Financial System Inc. traded at the highest price-to-adjusted TBV in the analysis for the third straight month. Its valuation was 343.3% at April 30, down from 391.2% at the end of March.

Community Financial disclosed in its first-quarter earnings report that a $59.7 million sequential decline in the consumer indirect portfolio led to total loans falling $11.2 million, or 0.1%. President and CEO Dimitar Karaivanov, in an April 29 earnings conference call, described indirect auto lending as a "wildcard" given aggressive competition and tariff impacts.

While Citigroup Inc. was the 14th-cheapest bank in the analysis, the other three members of the Big 4 US banks slotted into the upper echelon. JPMorgan Chase & Co. ended April as the ninth-highest valued bank, followed by Bank of America Corp. in 14th and Wells Fargo & Co. in 16th. The four are among the 15 largest banks in the world by total assets.

Investment banking revenue at JPMorgan and Bank of America beat Visible Alpha estimates in the first quarter because of robust activity in debt underwriting. Citigroup topped its total investment bank fee estimate primarily from higher-than-expected advisory fees. Following first-quarter earnings, analysts projected even higher debt underwriting fees for all three banks in 2025 while slashing estimates for equity underwriting. The advisory fee estimates were mixed: down for JPMorgan and Bank of America but up for Citigroup.

Analysts also have been cutting loan growth estimates for most of the largest US banks, including JPMorgan, Citigroup and Wells Fargo. An outlier in the opposite direction is Bank of America; its net loan growth estimate for 2025 increased 84 basis points from March 31 to April 29.