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Banks trading at lowest price-to-adjusted TBV in January '18

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Banks trading at lowest price-to-adjusted TBV in January '18

Five companies entered S&P Global Market Intelligence's monthly list of the 25 banks and thrifts with the lowest price-to-adjusted tangible book value ratios at the end of January.

Brooklyn, N.Y.-based Dime Community Bancshares Inc. came in at No. 20 after its share price dropped 9.3% for the month, pushing its ratio to 133.0% as of Jan. 31, down from 145.3% as of Dec. 29. The bank’s stock fell more than 7% on Jan. 26 after it reported earnings after market close the previous day.

During the bank's Jan. 25 earnings call, President and CEO Kenneth Mahon spoke about Dime's ongoing efforts to decrease commercial real estate concentration and focus on liquidity. Mahon said that he strives to have a business model similar to New York-based Signature Bank, with its focus on relationship banking.

The other entrants to the list were Princeton, N.J.-based Bank of Princeton; Woodbridge, N.J.-based Northfield Bancorp Inc.; Topeka, Kan.-based Capitol Federal Financial Inc.; and Franklin, Tenn.-based Franklin Financial Network Inc. Following the release of its fourth-quarter earnings report on Jan. 24, Franklin Financial was downgraded by stock analysts at Compass Point and Raymond James over margin compression. The bank's stock lost 5.4% in January.

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The five companies to exit the list this month were Puerto Rico-based Popular Inc.; Wyomissing, Pa.-based Customers Bancorp Inc.; Yorktown Heights, N.Y.-based PCSB Financial Corp.; Knoxville, Tenn.-based SmartFinancial Inc. and Burr Ridge, Ill.-based BankFinancial Corp.

Johnston, Pa.-based AmeriServ Financial Inc. returned to the top of the list for the first time since last April, with a ratio of 84.5% at Jan. 31. Puerto Rico-based OFG Bancorp dropped to second, after its stock returned 21.3% for the month.

As of Jan. 31, the industry traded at a median 202.1% of adjusted tangible book value, compared to 198.3% at the end of 2017.

S&P Global Market Intelligence analyzed operating U.S. banks and thrifts trading on the Nasdaq, NYSE or NYSE MKT, and with total assets of greater than $1 billion for the most recent quarter available. Public mutual holding companies as well as holding companies with failed banking units are excluded from the analysis. Adjusted tangible book value is calculated as the sum of tangible common equity and loan loss reserves less nonperforming assets and loans 90 days past due but still accruing interest over common shares outstanding.

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