Spekulatius

USB is an example of what happened. revenues went up ~40% in 10 years, share count down 20% ,earnings from $3/share to $5/share yet shares trade lower than they did in 2012. Just one example as there are many others. Maybe Mr Market is correct, but at some point, something has to give. And yes @LearningMachine is correct, that USB needs to rebuild their equity base that was reduced by the MUFG acquisition.

That's meaningless. Many energy co's destroyed value from 2015-2020. A lot of them went bankrupt as well, others diluted. If you look at those that did not dilute like XOM, they do indeed trade higher than in 2016.

I looked at it briefly, but felt that it's too risky to put much into it. I definitely wished i bought some around $8. it does not look like a bank that regulators would just shut down though. ZION, FITB and KEY are similar play , but in a bit better shape and I think they should be fine. They may be good candidates for "ambulance chasing".

With their deposits, banks either do loans (their primary purpose) or buy bonds (MBS or treasuries). With securities I mean income securities (treasuries, MBS). Intentionally or not, the banks sucked up a lot of them in 2021, basically doing what the Fed has been doing with quantitative easing. They won't buy more of those long dated debt securities now and likely just run off the ones that they own as they amortize (MBS) or come due.

It really depends on the trajectory of the share prices. I always say that everything in my portfolio is for sale at any time for the right price. So if regional bank prices bounce back quickly by let's say 25%, I would likely sell. I do think we are looking at more long term issue, so my guess is that it's not going to be a quick trade. In any case, i wanted to create a thread to put the knowledge / input that posters here in one place. Generally speaking, I only buy bank stocks if there is a crisis of some sort and that seems to be the case right now. it's only then when the questions about balance sheet and quality of loans come up. The share price swings associated with these changes in sentiment can be huge, so there is a significant opportunity to make some real money.

Most E&P / energy companies have disconnected from the weak pricing of WTI recently, which is not something that will continue indefinitely.

I agree- the banking crash equals quantitative tightening. The banks are the main transmission mechanisms for credit and all of them collectively will increase the liquidity on their balance sheet somewhat. That means less security purchases and more importantly less lending.

The banking crash is basically quantitative tightening. Banks are one of the main transmission for the Fed because they lend to Main Street. Banks collectively will probably increase the liquidity on their balance sheet, which means they buy less securities and lend less. Thats basically monetary tightening. Now we have banking stocks crashing in Europe as well, caused by CS of course.

Consistent growth in the area they operate in is good, but the last thing you want to own is a bank in a real estate bubble. For a smaller bank,growth in the area isn’t the most important factor , it matter more how tough and smart competition is. I would rather own a bank in a slow and steady growing area than one growing in leaps and bounds. I have heard the name Seacost before and it might have been a bit after the GFC. I recall management being very promotional and also happy to make acquisitions which did not alway seem to pan out. I stopped tracking them back then, but they still seem to like acqusitions.

@Dalal.Holdings Thanks for the summary, i was aware of the insurance transaction. It is interesting that the insurance brokerage business is worth a substantial part of TFC market cap. I followed TFC when they were BBT for a while and never really liked management too much as I think they overpromised and underdelivered. That said, the shares seemed habe taken quite a beating for a bank with this quality and particular the demographic tailwind in their operating area.

@CorpRaider I felt the MTM losses were underreported at that time, but it’s now that it got everyone’s attention, it should not be the sole focus. I think the possibility to pledge securities with the Fed goes a long way to alleviate bank runs. If we indeed get more bank runs, I expect the limits on deposit insurance to get raised, because I think the Fed will do everything to protect banking from a meltdown because it would cause a meltdown of the economy with unthinkable consequences. As far as an ownership is concerned, I own (and added recently) to USB and started positions in TFC and PNC. I do think that PNC has better management than TFC, but TFC is nicely positioned in the sunbelt, which gives them an organic growth advantage. I believe the super- regionals should be able to handle any crisis just as well as the mega banks. One of my biggest concerns related to macro is commercial real estate, especially office and to a lesser degree retail. Smaller banks, but also larger banks have heavy exposure to real estate lending and the interest rate changes are going to lead to lower valuations here.

I think you can’t look at the asset side of a bank in isolation without looking at the liability side. The issue with mark to market aside, the simple fact remains that banks make more money at higher interest rates than with ZIRP, because NIM tends to go up, up to a certain point. That said, the deposit run is a risk, but we are not exactly in unchartered water with 4% interest rates either. Personally, I like the super- regional banks better than the merge banks with an investment bank attached (JPM, BAC , C) but I do think that at least JPM achieves some synergies having both, the rest I am not so sure about.

Who is black? I got to get myself tested.

This is the thread to discuss US regional bank stocks. The SIVB and Signature bank failure has caused a decline in regional bank stocks that I think is a buying opportunity. Let’s discuss.

I don’t think so. This would be quite a statement actually. I don't recall them putting out hard numbers on housing valuation.

So what fucks the poor (however you define it) more? a) 5% unemployment and 2 % inflation or b) 5% inflation and 2% unemployment? Quite frankly, it is not clear to me. I think the middle class is fucked more by b).

I think WFC is just too kneecapped plus their online banking still sucks. I would rather go with regionals like PNC or TFC or USB (bought a bit of all three today). I just don’t think it has much of a chance to perform very well.

I sold $CATY for a quick flip. Sad to let here go, but bought other banks stocks from the proceeds. ($PNC, $TFC, more $USB). I think the super regionals and perhaps BAC is the way to invest, or gamble in stuff like $WAL

5% unemployment and 2% inflation is better than 5% inflation and 2% unemployment. There I said it.

New position in $LUV (starting out small). Edit - bought starters in regional bank stocks $PNC and $TFC

The same could be said for any other bank. CATY clients are chinese individuals and small business. They have established relationships with most customers. I don’t even think that 1.86% criticized assets is all that high given their focus on small business operating in urban centers. Most of their loans are floating rate, so further interest rate rises should not hurt so much even if they have to raise deposit interest rates (which they started doing). I do think that their deposit Beta moved closer to one, so further rises interest rates won’t do them much good.

I am sure the new CEO has a great time on his first day on the job.

The Fed may have asked JPM nicely. I think JPM will end up owning them.

SBNY wasn’t technically insolvent. They had losses from treasuries of about ~$2.5B, if I see this correctly, with $6.4B in equity. They had issues with liquidity (mostly large business accounts that are uninsured) and a taint from their crypto involvement that lead to a bank run. They have a liquidity problem, not a solvency problem. There are a lot of banks that can fail as well now, after SBNY fails. What we are seeing here are large scale viral nature bank runs. Game stop time for banks.

The failure of Signature Bank ($SBNY ) is scarier from a bank investors perspective than SVIB’s. SBNY had issues, but they weren’t insolvent even accounting for losses in their security portfolio. it was simply the liquidity shortfall from bank run that did them in. The bank run was caused by reputational damage from crypto and liquidity strain because crypto deposits were leaving, then came the know können on effect from SIVB. This wasn’t a bad bank per say, it neither was SIVB.