Now that most of the financial giants have reported their second quarter earnings, 24/7 Wall St. wanted to pay close attention to the bargain bin that may still attract the value investors. As it turns out, there are 7 big banks still trading under their stated book value per share.
It may be no surprise for many investors that Bank of America Corp. (NYSE: BAC) and Citigroup, Inc. (NYSE: C) were on the list, but there are 5 other key banks trading at a discount to book value. On a regional basis this number would have been far greater had the smaller regional and community banks been included. These are the banks, that are actual retail banks with depositors and the minimum market cap was $2 billion in order to keep small and illiquid banks from being included.
Regions Financial Corporation (NYSE: RF) and First Niagara Financial Group Inc. (NASDAQ: FNFG) both remain priced at a discount to its stated book value, followed by the following banks: Zions Bancorporation (NASDAQ: ZION); Susquehanna Bancshares, Inc. (NASDAQ: SUSQ); and Hancock Holding Company (NASDAQ: HBHC).
24/7 Wall St. has decided to run a brief analysis and show financial data on each of these banks. We included the market caps and the current share price versus book value per share. Also included were other financial data, dividends, some analyst upside (or downside) target prices, and color on what is holding the values down. One of these banks is actually about to have its buyout close, which might make some wonder if other book value discounts are attractive to value investors.
Bank of America Corp. (NYSE: BAC) is too large—by total deposits, balance sheet, and with its $186 billion market cap—to be acquired. Still, the $17.75 share price of late compares to book value per share of $21.91 stated and $15.02 tangible. The ongoing reviews have been an issue, and there has been a recent executive shuffle as the bank wants to be better positioned to negotiate with regulators.
Shares of Bank of America were down 0.8% at $17.75 late on Monday. BofA has a consensus analyst price target of $19.03 and a 52-week trading range of $14.84 to $18.48. BofA’s dividend yield of 1.1% is still very restricted under its Federal Reserve reviews, but the bank has been buying back stock.
Citigroup, Inc. (NYSE: C) has a market cap of $175 billion. Even if its large base of assets and deposits were not too big to be acquired, it still has so many foreign operations in so many businesses around the world that it might be too complicated for another bank to acquire. Citigroup shares were down 0.9% at $58.19 on Monday, against a 52-week trading range of $46.60 to $60.95 and versus a consensus analyst price target of $64.80.
While Citi’s dividend is a paltry 0.3% yield, it has finally gotten out from under its Fed review and is expected to keep raising that dividend ahead. Citi’s book values per share were $68.28 on a stated basis and $59.18 on a tangible basis as of June 30.
Regions Financial Corporation (NYSE: RF) was just trading at $10.42 with a market cap of almost $14 billion. It screens out as trading at 0.88 times its stated book value, but the tangible book value per share was last shown as being $8.37 per share.
Regions said that its latest ending loans were up 5% to $80 billion, while its average deposit balances were up 4% to $97 billion. Regions has a network of roughly 2,000 ATMs and nearly 1,700 banking offices in the following states: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, and Virginia.
Regions talked about higher loan balances and an increase in non-interest income helping out in the quarter. Its stock has a 52-week range of $8.59 to $10.87, a consensus analyst price target of $11.26, and a dividend yield of 2.3%.
Zions Bancorporation (NASDAQ: ZION) was just trading at $31.00 with a $6.3 billion market cap. Its stated book value per common share was $32.03 and tangible book value per common share was $26.95 at the end of the second quarter. Zions has a 52-week trading range of $23.72 to $33.03 and a consensus analyst price target of $34.19. The company has a dividend yield of 0.8% due to it having more restrictions than other banks.
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