Top and Bottom Performers Among Big Banks Post-Crisis

The banking industry faced its most significant crisis in over a decade a year ago, with three major regional banks collapsing and being sold off following the fallout. The turbulence began in March 2023, starting with Silicon Valley Bank’s collapse, followed by Signature Bank of New York and First Republic Bank.

However, Silvergate Bank’s liquidation announcement on March 8, 2023, triggered a chain reaction across the regional banking sector after the collapse of cryptocurrency exchange FTX. This event raised concerns among customers about the safety of their funds and questioned banks’ financial stability. To restore confidence, the federal government intervened, and major banks injected billions into the Federal Deposit Insurance Corp.’s Deposit Insurance Fund.

Despite stabilization in the industry since then, many banks continue to face challenges. Looking at the performance of the top 20 banks since March 8, 2023, most have struggled, with the KBW Nasdaq Bank Index down by approximately 2% since the crisis began.

However, amidst the struggles, a few banks have emerged as winners. First Citizens BancShares saw a remarkable 127% increase in its stock value, benefiting from its acquisition of Silicon Valley Bank’s assets. JPMorgan Chase, the largest U.S. bank, also saw a 40% rise in its stock price after acquiring assets from the failed First Republic Bank.

Other notable performers include Ally Financial, Capital One, and Wells Fargo, each showing gains ranging from 28.5% to 33%. These banks, although relatively cheap, receive neutral ratings from analysts.

On the flip side, some banks faced significant setbacks. Truist Financial saw a 13% decline in its stock value due to challenges with deposit outflows and contracting margins. State Street, primarily a custody bank for institutional investors, experienced an 11.6% decrease in its stock price, attributed to increased expenses and decreased net income.

In conclusion, First Citizens emerges as the top pick, followed by JPMorgan Chase for long-term investment consideration. State Street also presents potential upside, while others warrant further research before making investment decisions.