4 Undervalued Regional Banks in the Russell 2000

A look at the banks following the Silicon Valley Bank collapse and of Fed rate actions

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Sep 25, 2023
  • These stocks are below book value.
  • They have lower than usual PE ratios.
  • They are dividend paying.
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These four regional banking stocks are worth looking at for two basic reasons. First, the collapse of Silicon Valley Bank earlier this year, which took the entire sector down. Second, the growing consensus that the Federal Reserve may keep rates a bit higher for a bit longer. The expectation that this may be the case has already had its effect on the prices of these smaller, lesser-known names.

Ameris Bancorp

Ameris Bancorp (ABCB, Financial), headquartered in Atlanta, has a market capitalization of $2.62 billion. The Nasdaq-traded company has been in business since 1971 and was first publicly traded as ABC Bancorp in 1994. The bank now has more than 200 locations, mostly in the South and the mid-Atlantic regions.

The stock is trading at a 20% discount to its book value with a price-earnings ratio of 8.80, much lower than the Shiller price-earnings for the S&P 500 (now at 29.82). Earnings this year are off by 14.98%. Over the past five years, they show growth of 20.31%. Ameris Bancorp offers investors a dividend of 1.61%.

Atlantic Union Bankshares

Atlantic Union Bankshares Corp. (AUB, Financial) is based in Richmond, Virginia and has a market capitalization of $2.15 billion. The bank recently announced its acquisition of American National Bank and Trust Company of Danville, Virginia. Analysts at Stephens just initiated coverage of Atlantic Union with an overweight rating and price target of $36.

The price-earnings ratio for this New York Stock Exchange-listed security sits at 10.35 with a forward price-earnings ratio of 9.05. Shares are available for purchase at 89% of book value. Earnings over the past five years show growth of 12.26%. This year’s earnings are off by 2.05%. Atlantic Union pays a 4.28% dividend.

Pacific Premier Bancorp

Pacific Premier Bancorp Inc. (PPBI, Financial) has a market capitalization of $2.09 billion and total assets of $21 billion. From its corporate headquarters in Irvine, California, the bank has been doing business since 1983. Along with operations throughout the Golden State, the company has locations in Nevada, Arizona and Washington.

Shares in the regional bank are now trading at a 26% discount to book value with a price-earnings ratio of 7.80. This year’s earnings are off by 21.69%. The past five years' earnings per share show growth of 13.81%. The Nasdaq stock is relatively lightly traded with average daily volume of 451,000 shares. Pacific Premier Bancorp offers a 6.05% dividend yield.

Simmons First National

Simmons First National Corp. (SFNC, Financial) is Nasdaq-traded and based in Pine Bluff, Arkansas, where the company was founded in 1903. The company now operates 200 locations across six states. Over the last two years, Simmons has acquired Landmark Community Bank of Collierville, Tennessee, Triumph Bank of Memphis and Spirit of Texas Bank of Conroe, Texas.

The stock has a price-earnings ratio of 7.96 and trades at 63% of its book value. Over the past five years, earnings growth for the company has increased by 9.14%. This year’s earnings are down by 34.86%. Long-term debt amounts to about half of shareholder equity. Simmons First National pays a dividend of 4.80%.

Disclaimer: This is not investment advice. It is for educational purposes only.


I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure