The 5% Plus Small Bank Club !
Summary
- These bank's all yield around or over 5% today.
- Many are around or under Tangible book value today.
- Many have strong asset quality and great franchises.
- Many have been around 100 or more years.
- Many will be sold at 50% more than today's prices.
Some of our favorite small banks are still trading near new lows each week as this market rips higher, with many bubbles. We are sticking to our lane and loading the past few weeks on these names as long-term core holdings with huge yields in a zero rate world. It is really that simple just make sure you buy on down days like today as there have been a few big pops the last month but it never lasts. The market thinks rates are going lower and they might, but these banks will return 8%-14% for the next ten years anyway.
A few names we bought heavy are, CHMG under $25 all-day long oldest bank in NY with a 5% yield. Huge trust division and insiders always buy and so does the bank so far under Tangible book it is insanely cheap.
WSBC mini powerhouse 6.5% yield. Under $20 all day long.
FBSS near-perfect asset quality 4.55% yield. Under $14 all day long.
WASH mini powerhouse, huge mortgage division, and nice money management business. Under $30 all day long.
Get these all today and sleep well.
Douglas Hughes
7/20/2020.
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