The Best and Worst Performing Big Banks Post-Banking Crisis

Around a year ago, U.S. banks encountered a significant crisis, marking one of the most severe financial challenges since the Great Recession approximately 15 years prior. This crisis led to the dissolution and sale of three major regional banks, triggering a ripple effect across the banking industry.

The crisis commenced on March 10, 2023, with the collapse of Silicon Valley Bank, ranked as the 16th-largest bank in the nation. Subsequently, Signature Bank of New York, the 29th-largest U.S. bank, and First Republic Bank, ranked 14th, also faced closure within the following month.

However, it was Silvergate Bank’s liquidation announcement on March 8, 2023, following the collapse of cryptocurrency exchange FTX, that catalyzed a domino effect, intensifying the crisis across the regional banking sector.

Concerns regarding the safety of funds and the solvency of banks emerged among customers, prompting government intervention to stabilize the situation. Large banks injected billions of dollars into the Federal Deposit Insurance Corp.’s Deposit Insurance Fund to restore confidence.

Despite efforts to stabilize, most bank stocks, including those of large banks with ample liquidity, experienced significant declines. One year later, although the industry has regained stability, many banks continue to face challenges.

Here’s a rundown of the top-performing and worst-performing big bank stocks over the past 12 months:

Top Performers:

While the average big bank has seen a downturn since the crisis began, a few standout performers have emerged. First Citizens BancShares (NASDAQ: FCNCA) has notably surged by approximately 127% since March 8, 2023, becoming a clear winner. With its acquisition of Silicon Valley Bank’s assets, First Citizens doubled in size, boasting $214 billion in assets as of December 31. JPMorgan Chase (NYSE: JPM) follows closely as the second-best performer, with its stock price rising by about 40% since March 8, 2023. JPMorgan Chase, the largest U.S. bank, capitalized on the crisis by acquiring assets from the failed First Republic Bank, enhancing its private banking business significantly.

Worst Performers:

Conversely, some banks faced more significant challenges post-crisis. Truist Financial (NYSE: TFC) stands out as the worst performer, experiencing a 13% decline since March 8, 2023, attributed to deposit outflows and deteriorating credit quality. State Street (NYSE: STT) follows as the second-worst performer, with its stock price dropping by 11.6% since the crisis began. Despite challenges, State Street remains optimistic about future prospects, anticipating higher fee revenue and lower expense growth in 2024.

In summary, while First Citizens emerges as a top pick for investment, JPMorgan Chase remains a stable long-term option. State Street also shows potential for upside at its current valuation, although additional research is advised before making investment decisions.