Community / small cap banks

[tnathan]

Piggybacking off the regional bank thread, does anyone have any smaller cap banks that are top picks? 
 

I am looking at SBCF - seacoast. Good growth given Florida location, doesn’t have the asset maturity issue to the extent other banks have, key metrics have expanded over time. Are the loans they are making very risky? Florida real estate makes me concerned but perhaps not nearly as risky as it was in 08.

[Gregmal]

10 minutes ago, tnathan said:

Florida real estate makes me concerned

Why? It’s hands down the strongest real estate market in the country and possibly the only one still comping healthily positive. Would you prefer LA or MN or something?

[tnathan]

Potentially no actual reason. Could be a general feeling that it’s risky left over from 08 era. Clearly the growth has been great recently.

[Gregmal]

Yea. Just asking if there was a reason cuz I’ve kinda been avoiding a lot of stuff that isn’t well located. Or in other words, I’ve been seeking out stuff with the Southern migration tailwind. Of course, now enter recent bank/tech exposure “potential” headwind, but by all accounts the residential side is far and away a bright spot. Would imagine a recession or economic crunch would only further force people to ditch being charitable to high tax states.

[Spekulatius]

6 minutes ago, tnathan said:

Potentially no actual reason. Could be a general feeling that it’s risky left over from 08 era. Clearly the growth has been great recently.

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.