Bank stock prices continue to improve during October but the banking sector remained below broader market gains as measured by the S&P 500. The S&P 500 grew by 4.5% in October 2013 while the SNL Bank Stock index grew only 2.3%. However on a year-over-year basis, the banking sector saw larger gains than the S&P 500.

From a regional perspective, public banks headquartered in the Midwest saw the largest increase in price-to-tangible book multiples, jumping 15% from a 1.24x median tangible book multiple at June 2013 to a 1.42x median tangible book multiple at October 31, 2013 with price to earnings jumping 18% from 11.8x at June 30 2013 to 13.9x at October 2013. The Western region followed with a 14% jump in median tangible book pricing and 17% jump in median price-to-earnings while New England Banks saw a 5% decline in pricing from a median 1.53x of tangible book at June 2013 to 1.45x at October 2013 as median tangible equity levels dipped below 8%. Public Banks in the Southwestern region continue to enjoy premium pricing with median price-to-tangible book multiples edging up from 1.55x at June 2013 to 1.61x at October 2013 which was based on strong tangible capital levels (9.7% median) and strong earnings (1.2% median ROAA) as of September 30, 2013. While the public banks in the Southeast improved significantly over the past year with tangible book multiples jumping from approximately book to a median of 1.36x at October 2013, earnings remain low with a median ROAA of 0.75% on an LTM basis at September 30, 2013 and economic improvement remains sluggish.

For more information on regional bank stock multiples see details below.

More information regarding nationwide M&A activity can be found here.

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