Executive Summary

 
This report highlights 24 publicly traded banks based in Delaware, Maryland, Northern Virginia with assets between $500 million and $15.0 billion. We believe banks in this size range are large enough to operate efficiently and small enough to deliver personalized services. These stocks typically trade “under the radar screen” – they are not widely followed by brokerages or institutional investors for several reasons, including relatively low market caps and little trading volume.
 
COVID-19 impacts all economic activity and nearly every aspect of life throughout the nation, including our highlighted area. We believe that the pandemic effects – even after the virus is tamed - will heighten the divide between “haves” and “have nots” and hasten the evolution and/or demise of industries and companies already struggling to compete effectively in the technology-driven 21st Century. Community banks are part of this “survival of the fittest” challenge and must actively consider strategies such as expanding niche-focused businesses and fintech applications; and/or pursuing M&A at full throttle in order to thrive. PNC FIG Advisory believes consolidation activity will accelerate once COVID-19 is better controlled and credit can be more confidently measured.
 

Highlights:

  • Maryland, Delaware, Northern Virginia (NOVA), and Washington, D.C. - the subjects of this Industry Report - are home to approximately 70 regulated depository institutions, of which 34 are publicly traded banks and thrifts. Our definition of NOVA includes Alexandria, Arlington, Fairfax, Fauquier and Loudoun counties.
  • Key performance ratios and valuation metrics of 24 community banks in our featured region are highlighted herein using September 2020 quarter data. The selected banks have total assets between $500 million and $15 billion.
  • We believe the Washington-Baltimore corridor merits further consolidation and there will be far more deals in 2021, assuming credit quality can be assessed with confidence.

For more information, please visit pnc.com/fig or contact PNC FIG Advisory by calling 1-610-351-1633.

FOR AN IN-DEPTH LOOK
Flying Under the Radar: Small and Micro-Cap Banks in D.C., DE, MD, and VA