At the end of May, California banks accounted for five of the 10 most expensive bank stocks in the country based on price-to-estimated earnings for 2018.
S&P Global Market Intelligence analyzed profitable U.S. banks and thrifts that appear to be valued more as a multiple of earnings than tangible book value. To be included in this analysis, a company had to report a return on average tangible common equity for the last 12 months above 8% and have at least three analyst EPS estimates available for fiscal 2018. In addition, the bottom 10% of banks and thrifts by price-to-tangible book value were excluded from the analysis.
As of May 31, Abilene, Texas-based First Financial Bankshares Inc. remained the most expensive bank stock, with a price 24.8x its 2018 estimated earnings. Analysts expect First Financial's earnings per share to grow by 24.8% in 2018, slightly lower than the median 27.4% for the industry as a whole. Meanwhile, First Financial's stock has returned 39.9% over the last year, nearly double the industry median of 21.6%.
San Rafael, Calif.-based Westamerica Bancorp. was the second-most expensive stock in the country, with a price-to-estimated earnings of 21.0x as of May 31. Four other California banks — First Republic Bank, SVB Financial Group, Opus Bank and CVB Financial Corp. — were among the top 10 as well.

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