Summarizing his strategy, he is looking for:
- Regional Banks: No issues of trading and derivatives
- One in each major region: leading consolidation through acquisitions and mergers. Already in Michigan, Florida and New Jersey, and looking for something in Southern California and Washington/Oregon
- Downside protection: prefers FDIC assisted, but competition is reducing the supply
It is worth pointing out that Sun Bancorp (SNBC) was his first non FDIC assisted transaction. Also worth listening to his comments on Commercial Real Estate:
- CRE down 40% from its peak
- 37% of the regional banks loans
- usually only 5% to 8% equity to assets.
You know what I think: it is a risk but possible to classify, bound and follow its progress.
Disclosure: Long SNBC