Johannes Salim, CFA
CFA, long/short equity, hedge fund manager

Signature Bank: Fantastic Story To Own

Having risen by average 30% over past 12 months, small and mid-cap banking stocks (those below US$ 10 bn market cap, a total of 20 stocks I track), as a group, outperformed S&P 500 by a hefty 1,000 bps. Some investors attribute the group's outperformance to "rate trade" argument, meaning that bank stock prices have discounted expectation of higher Fed fund rate (positive for NIM) while in reality, higher Fed fund rate won't be happening probably until 2H15. In other words, this camp thinks that too much optimism has been in the price. Instead of getting caught up with rate trade argument for small and mid-cap banking stocks, I found that, from bottom-up perspective, Signature Bank (NASDAQ:SBNY) is

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