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 (NASDAQ: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