Home BancSharesInc.'s price to tangible book value ratio stood at 358.78% at the endof March — the highest among U.S. banks, according to an analysis by S&P GlobalMarket Intelligence.
The Conway, Ark.-based bank completeda whole-bank deal and a branch acquisition in 2015 and continues to seek expansionopportunities, both through organic growth and through M&A.
"As we have demonstrated, acquisitions can be immediatelyaccretive to earnings, tangible book value and book value, and provide improvedoperating leverage," Home BancShares Chairman John Allison and President andCEO Randy Sims wrote in the bank's 2015 annualreport. "We believe there are a number of attractive communitybanks that will allow us to continue to expand in our existing markets. As a partof our long-term strategy, we continue to seek partners that enhance our abilityto enter new markets, attract quality banking talent and grow our market share.With that said, our plan is to only consider opportunities that provide increasedreturn to our shareholders."
Home BancShares' PTBV ratio had been cruising above 400% as recentlyas November 2015, before falling significantly as global stock markets took a tumbleat the beginning of 2016. During an earningscall in January, Allison was hopeful that the company will soon finda couple of deals, but said "it certainly makes it more difficult as we'veseen the beating that companies have taken in the market."
To qualify for this analysis, a bank or thrift had to be tradedon the Nasdaq, NYSE or NYSE MKT. Public mutual holding companies were not included.
Another Arkansas-based bank, Bank of the Ozarks Inc., came in at No. 5 on the list ofbanks with the highest PTBV ratios. The company announced three bankacquisitions in 2015, two of which are currently pending. Once the acquisitionsof Community & Southern HoldingsInc. and C1 FinancialInc. are complete, Bank of the Ozarks will surpass $10 billion in assetsfor the first time.
During the company's fourth-quarter 2015 , COO and Chief Banking OfficerTyler Vance said Bank of the Ozarks will continue looking for acquisitions. "[W]ebelieve an active and disciplined M&A strategy will allow us to continue tocreate significant additional shareholder value," Vance said.
U.S. Bancorp,the largest bank on the top 25 list, was priced below the median price-to-last 12months EPS multiple for the banking industry at the end of March. Vice Chairmanand CFO Kathy Rogers said during a conferencein February that the company will remain on the lookout for deals along the linesof its recent credit cardportfolio acquisitions. However, she said big-bank deals are probably not inthe cards.
"As you know, we have been talking for quite some time,well before the consent order,that our appetite for a large bank deal is very slim right now just given the overhangof some of the regulatory concerns. And until we get to the point that we feel moreconfident that the due diligence around that will not result in more punitive outcomesin a particularly large bank deal we're probably going to shy away from that,"Rogers said. "But we are very much still in the market for the deals that wehave been doing."
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