I've been looking for the cheapest small banks. As it turns out, small cap bank valuations are not uniform by geography.
Defined as banks with market caps under $2 billion, I compiled data on small banks and shared it below.
The metric is median Price to Tangible Book Value per share. I took this metric for every bank under $2b market cap which for I had fundamental data. Namely: price, TBV per share, and headquarters state (thank you ycharts). Then pored it into tableau, which computed medians by state and placed the data on the map.
Alaska and Hawaii can be found by dragging or zooming out.
- Wyoming has only one bank that met my criteria: Crazy Woman Creek Bancorp Incorporated. Ticker: CRZY.
- Utah and New Mexico also just have one each, but they have just regular, boring, bank names.
- Why is Arkansas the most expensive? I have no idea. Probably has something to do with Wal-Mart. Two of the three banks in Arkansas that meet my criteria trade around 2x book: Simmons First National Corporation (SFNC) and Bear State Financial (BSF).
- Seven of the eleven Alabama banks that made the list trade for less than tangible book, making it the cheapest state. Southern Community Bancshares, Inc trades for 0.4x TBVPS.
- Arizona banks are quite cheap. Three of four trade for less than TBVPS.
- California has the most banks, but Pennsylvania is a close second. Virginia is a distant third.
- What's the deal with Nevada? Ends up there are are only two small banks in NV, and I don't have data on them. Why no data? Did you know that a bank is permitted to suspend filings with the SEC if it has less than 1,200 shareholders of record?
- Some of my TBVPS figures are stale by one quarter (4Q15 vs 1Q16). If you are playing along at home and notice a discrepancy, that is it.