The Top 50 Growth Banks in the US, The Top 50 TBVPS Growers, Some Over/Under Valued Names, and Future Bank Alpha

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When it comes to investing in banks, there’s an undeniable truth: the numbers tell the story. Not just any numbers, but the ones that whisper secrets of growth, resilience, and long-term compounding—the holy trinity of banking metrics: revenue per share, earnings per share (EPS), and tangible book value (TBV) per share. And to be fair these drivers are not just true of banks, but true of any industry. You want a management team with a track record of creating shareholder value by driving the three pillars of performance: RPS, EPS, & TBVPS. You want them to respect & understand risk as well, but without the three pillars your company won’t go anywhere.

Last week I put out the analysis of the biggest banks. And this week is the analysis for the rest, covering banks north of $250 million in market cap (as many as possible). While we strive for perfection, remember that no dataset is perfect. Some inputs for select banks may be missing and remember—this is a backward-looking exercise. And also remember, I rolled forward this analysis to include LTM data over the selected time periods (aka Q3 2024 to Q3 2023 is the 1-year trailing). So, take the past, and channel your inner Wayne Gretzky and skate where the puck is going, not where it’s been.

Is Bigger Better?

First a question, is bigger better in banks? Yes it is right now.

Today, larger banks command a substantial premium over smaller ones:

• Banks with over $25 billion in assets trade at a 175% premium to TBV.

• Banks with less than $1 billion in assets trade at just over 100% of TBV.

On forward price-to-earnings (P/E) multiples, the story is similar:

• Smaller banks often trade at 12-13x forward earnings, while their larger peers fetch 13-15x forward earnings.

Why? Larger banks typically benefit from better profitability metrics, economies of scale, and broader diversification. They also attract institutional capital, which adds liquidity and drives higher valuations.

But here’s the rub: bigger isn’t always better over the long-haul.

Yes, larger banks enjoy advantages:

• Operational Efficiency: Bigger banks spread fixed costs over a larger asset base. This is the simplest and most powerful reason bigger can be better.

• Diversified Revenue Streams: They profit from fee income, wealth management, corporate banking, and/or investment banking.

• Technology: The budgets of larger banks often dwarf those of smaller competitors, enabling superior digital platforms & greater spend on human capital or marketing.

But don’t let the glow of size blind you to opportunity. Smaller banks, while less profitable on average, can offer agility, community focus, and niche dominance that larger institutions can’t replicate.

A Recipe for Alpha

This analysis is unbelievably important because it unlocks a rare and powerful insight: the ability to identify small, undervalued banks that have already proven they can grow the metrics that matter—revenue, earnings, and tangible book value per share. These are the banks quietly laying the groundwork to become tomorrow’s superstars. They may not have the scale or visibility of their larger peers today, but they possess the traits of greatness: disciplined growth, operational focus, and the grit to thrive. Spotting these gems early isn’t just a strategy—it’s the essence of transformational investing. With the right patience and perspective, these diamonds in the rough could deliver compounding returns that rival the giants of the industry.

The Top 50 Growth Banks in the United States

The top 50 banks in this analysis are scored by capturing their compound annual growth rates (CAGR) for revenue per share (RPS), earnings per share (EPS), and tangible book value per share (TBVPS) over trailing periods of 1, 3, 5, and 7 years. This time weighted methodology provides a good view of each bank’s ability to sustain growth across core metrics over various time horizons (even though it’s mostly been rates up). You’ll notice some are tied because the scoring is meant to do very good broadly, not nitpick.

To make the scoring actionable, the data is color-coded on the valuation and ROTCE side for clarity. Banks in the top 25th percentile for expensiveness, based on price-to-tangible book (P/TBV) and price-to-trailing earnings, are marked in red, indicating areas where valuations are rich. Conversely, banks in the bottom 25th percentile on these same metrics are marked in green, signaling potential undervaluation and opportunities for investors seeking growth at a reasonable price. The same color logic applies to price-to-forward earnings, though forward estimates are not available for all banks. Also, go-forward return on tangible common equity (ROTCE), where applicable, is also color-coded, with green highlighting the highest projected ROTCE.

So, the holy grail would be to find a top grower, trading cheaply, with high future ROTCE.

I’m going to make a judgement call here and spare you all the raw data (the 12 CAGRs) and just show them ranked with the valuations, this will make it easier to have this data be actionable. Premium subscribers can request the full list and as always, can chat for both real time picks and thoughts on the durability of ROTCEs. I have to admit, I am seeing things fairly clearly in the fins/banking space right now as evidenced by the past 5-6 picks.

And again remember, this data includes he past 7 years including the numbers all the way up to Q3 2024. EPS & RPS were done using LTM for each interval and TBVPS was at period end.

Enjoy …