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US Regional Banks


Uccmal
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Texas banks are going pretty well, they were at the epicenter of the RE problems at the end of the 80's so they have very nice regulations for lending.

 

I own SBSI. Experienced management, well capitalized, good capital allocators, good price, shareholder friendly.

 

BeerBaron

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A good local bank (statewide) is First National Bank of Alaska (FBAK), it is very conservative, has good reserves, family owned, and is only in banking (no insurance company, no investment advisors, etc).  It pays about 5-6% dividend (although this year with extra dividend it paid about 10-12%).

 

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Thanks everyone... Good project during the short days of the season.

 

In Canada, we have no real equivalents except perhaps CWB.

 

How about Laurentian Bank, it much much cheaper then CWB on a PE and PB ratios... and is not going down if RE in Vancouver goes south.

 

BeerBaron

 

 

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Thanks everyone... Good project during the short days of the season.

 

In Canada, we have no real equivalents except perhaps CWB.

 

How about Laurentian Bank, it much much cheaper then CWB on a PE and PB ratios... and is not going down if RE in Vancouver goes south.

 

BeerBaron

 

 

 

 

Ummm...  Because its operations are primarily in Quebec?  Because it's unionized?

 

Sometimes I've done ok by buying the "Quebec discount."  But banque laurentienne?  Not sure.

 

 

SJ

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Another good one to look at is Alaska Pacific Bank (AKPB) especially if you can get a copy of the annual report 3-4 years ago before it tanked.  They did great as long as they stayed in Alaska but then they had excess cash and invested in a bunch of debt "outside" (lower 48 states for non Alaskans).  Had to take huge write offs and only just got their reserves to where they should be (maybe).  This was one of the mutual banks that went public.  For the first couple of years you could have bought it at about 10 and it had a net book value of over 26 per share. Luckily I got out at 25 (thought I was selling 50% of shares and accidentally sold all, which says the old adage, It's better to be lucky than to be smart can be true.  It was one of the banks that had to take TARP funds and to date hasn't paid them back.

 

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If you are looking into Regional Banks - NYB and FNFG should both be at the top of your list. Good dividend yield and impressive performance through the downturn. Being from Minneapolis Area, USB is another solid regional bank, but in my view, not as attractive.

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You can take a look at Wilmington Trust (WL) as the bad bank model. They are being acquired by M&T at large discount to book, based on the amount of bad loans. WT did everything wrong on the banking side. Over 20% of loan book were in construction and development loans, concentrated to a small geographic area, and had large single borrower concentrations.

 

First thing I look at now in the small banks is what years did they grow their loan book, how large is their construction and development book, and do they have retail deposits to match loans. 

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You can take a look at Wilmington Trust (WL) as the bad bank model. They are being acquired by M&T at large discount to book, based on the amount of bad loans. WT did everything wrong on the banking side. Over 20% of loan book were in construction and development loans, concentrated to a small geographic area, and had large single borrower concentrations.

 

First thing I look at now in the small banks is what years did they grow their loan book, how large is their construction and development book, and do they have retail deposits to match loans. 

 

Seems like the smart way of doing it...

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A good local bank (statewide) is First National Bank of Alaska (FBAK), it is very conservative, has good reserves, family owned, and is only in banking (no insurance company, no investment advisors, etc).  It pays about 5-6% dividend (although this year with extra dividend it paid about 10-12%).

 

 

Unfortunately, FBAK shareholders don't sell stupidly. It's one of those super consistent businesses with a steady shareholder base; great once you get in, but tough to find an entry.

 

 

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Unfortunately, FBAK shareholders don't sell stupidly. It's one of those super consistent businesses with a steady shareholder base; great once you get in, but tough to find an entry.

 

As long as you are patient, shares trade every day on Schwab, but put a limit on it or you will buy too high, and stick to limit as sometimes only one or two share will trade and other times 1-200.  As this is an 1850-1950 per share, it doesn't take long to build a position.

Back in the 70's and 80's sometimes it wouldn't trade for weeks, but it has had 2 two for one splits and a couple of the larger shareholder's estates had to liquidate.two

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