U.S. banking stocks underperformed the broader U.S. stock market in August as inversions in the yield curve, global trade tensions and other economic uncertainties sparked worries of an impending recession.
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While the S&P 500 returned negative 1.6% from July 31 to Aug. 30, the market-cap weighted SNL U.S. Bank and Thrift index fell 7.5%. The median total return in August for the banks and thrifts in this S&P Global Market Intelligence analysis was negative 6.5%.
Among U.S. banks, a pair of Los Angeles-based institutions catering to Korean Americans saw significant underperformance during the month.
Hanmi Financial Corp. was one of the worst performers, down 15.7% in August. The bank was not able to file its second quarter Form 10-Q on time with the Securities and Exchange Commission because it is evaluating how to categorize a construction and business credit relationship and investigating "a possible internal control deficiency primarily relating to construction lending."

Another Los Angeles-based bank with a Korean-American focus, Hope Bancorp Inc., declined 9.1%. Hope Bancorp subsidiary Bank of Hope is one of the largest U.S. banks with a significant commercial real estate concentration.
On the other hand, Hanmi and Hope peer PCB Bancorp was down just 0.4%.
For the past year, all three banks have traded at a substantial discount to the industry median in terms of price-to-adjusted tangible book value.

For the broader U.S. banking group, several banks entered the bottom 25 list in August: Little Rock, Ark.-based Bank OZK; Hanmi Financial; Burr Ridge, Ill.-based BankFinancial Corp.; Helena, Mont.-based Eagle Bancorp Montana Inc.; Los Angeles-based OP Bancorp; and Philadelphia-based Republic First Bancorp Inc.
Meanwhile, six banks exited the list: Stroudsburg, Pa.-based ESSA Bancorp Inc.; Louisville, Ky.-based Limestone Bancorp Inc.; Franklin, Tenn.-based Franklin Financial Network Inc.; Seattle-based HomeStreet Inc.; Manitowoc, Wis.-based County Bancorp Inc.; and Hamilton, N.J.-based First Bank.
Click here to see S&P Global Market Intelligence's calculations for price-to-adjusted tangible book value as of Aug. 30, 2019.

