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Post by win1177 on May 5, 2023 13:30:25 GMT
USB, along with other regional banks has sold off big time. But I consider it one of the “stronger” regional banks. To me this looks a little like “throwing the baby out with the bath water”. Selling at roughly book value, etc., it looks undervalued significantly. Do you agree or disagree?
Anyone looking to add to positions in regional banks here? Why or why not?
Win
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Post by Capital on May 5, 2023 13:48:59 GMT
I've been taking a few bites of RF and RF Preferred B for some time.
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Post by johnsmith on May 5, 2023 14:47:34 GMT
USB, along with other regional banks has sold off big time. But I consider it one of the “stronger” regional banks. To me this looks a little like “throwing the baby out with the bath water”. Selling at roughly book value, etc., it looks undervalued significantly. Do you agree or disagree? Anyone looking to add to positions in regional banks here? Why or why not? Win Macrovoices has an interview with Chris Whalen. Chris Whalen is an expert on banking who was very insightful during and after the GFC.
enjoy.
PS: I don't trust banks, so I don't invest in them.
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Post by Mustang on May 5, 2023 16:12:22 GMT
I don't trust banks, so I don't invest in them.
Wow! I heard my great-grandmother's voice when I read that. She was an adult with seven children when the stock market crashed in 1929 taking with it the banks and all of their savings. There was no FDIC insurance. No federal assistance. They had to make it on their own. During the Great Depression one of her daughters died and she took in her grandchildren. Her family pulled together and they made it through but after that she never trusted banks again. |
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Post by win1177 on May 5, 2023 17:42:33 GMT
I don't trust banks, so I don't invest in them.
Wow! I heard my great-grandmother's voice when I read that. She was an adult with seven children when the stock market crashed in 1929 taking with it the banks and all of their savings. There was no FDIC insurance. No federal assistance. They had to make it on their own. During the Great Depression one of her daughters died and she took in her grandchildren. Her family pulled together and they made it through but after that she never trusted banks again. Sounded a lot like my grandmother too! Depression era “survivors”, very distrustful of banks, always insistent on going “in the bank”, didn’t trust “that machine to give me the correct amount of any money” she withdrew. Never did fully trust the banking system! Win |
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Post by Capital on May 5, 2023 17:53:08 GMT
Wow! I heard my great-grandmother's voice when I read that. She was an adult with seven children when the stock market crashed in 1929 taking with it the banks and all of their savings. There was no FDIC insurance. No federal assistance. They had to make it on their own. During the Great Depression one of her daughters died and she took in her grandchildren. Her family pulled together and they made it through but after that she never trusted banks again. Sounded a lot like my grandmother too! Depression era “survivors”, very distrustful of banks, always insistent on going “in the bank”, didn’t trust “that machine to give me the correct amount of any money” she withdrew. Never did fully trust the banking system! Win Sounds a lot like my Grandfather. It was nothing for him to carry $10k in his wallet. After he passed my father, uncles and aunt found $60k hidden in the living room sofa as well as 12 shoe boxes in the bottom of his bedroom closet filled with cash. |
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Post by steadyeddy on May 5, 2023 20:30:05 GMT
I think several factors are in play here: short sellers, unpredictable deposits flight, and exposure to small business & commercial loans, and most importantly cockroach theory - which says you never find just a few cockroaches... there is a bunch out there.
I read somewhere that in 2008 there were 25 bank failures and their common stock wiped out - which in $ is much less than the common stock value of the only 3 bank failures in 2023 - which are also wiped out.
If I were considering a regional bank, I would first look at what their bonds are trading at. For instance, PACW bonds are trading at 50 cents on the dollar.
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Post by FD1000 on May 5, 2023 21:01:08 GMT
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Post by richardsok on May 6, 2023 2:26:27 GMT
FWIW, I'm spotting a good deal of insider buying of regional/mid-level banks. Nothing overwhelming, but pretty continuous throughout the sector.
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Post by yogibearbull on May 6, 2023 10:45:00 GMT
I got some regional bank KRE. IMO, it's price in $30s is good, but there is a risk that it may revisit the pandemic/2020 lows in $20s. On the other hand, if the Treasury/Fed/FDIC come up with a temporary/permanent solution with some deposit insurance reforms, it may bounce sharply. The FDIC has some proposals on the table, www.fdic.gov/news/press-releases/2023/pr23035.html |
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Post by johnsmith on May 8, 2023 10:20:44 GMT
I would like to make it clear - I trust banks to hold my money, up to 250 K because of the friction insurance. I also use banks regularly.
I don’t invest in them.
There are many ways a bank can fail and it’s very hard for an outside investor to know where the problems are.
During the GFC - mortgages, derivatives.
Any bank can fail - CS, SVB,
The latter failed out of the blue!
TBTF - these won’t fail because of implicit government guarantees. If those weren’t there, I can totally see Citi failing. Chase probably would have failed during the London whale derivative blowup.
I like to know where the risks are, and in banks it’s hard for an outsider to know.
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Post by chang on May 8, 2023 11:19:40 GMT
I would like to make it clear - I trust banks to hold my money, up to 250 K because of the friction insurance. I also use banks regularly. I don’t invest in them. There are many ways a bank can fail and it’s very hard for an outside investor to know where the problems are. During the GFC - mortgages, derivatives. Any bank can fail - CS, SVB, The latter failed out of the blue! TBTF - these won’t fail because of implicit government guarantees. If those weren’t there, I can totally see Citi failing. Chase probably would have failed during the London whale derivative blowup.
I like to know where the risks are, and in banks it’s hard for an outsider to know. In fairness, a lot of companies can fail, and it's hard to know where the risks are. Kodak and Polaroid failed when, almost overnight, digital cameras appeared (and then everyone had a camera in their phone). Nokia and Blackberry appeared to own the mobile market, then suddenly they didn't. Sears Roebuck, Borders, Circuit City, Best Buy, Radio Shack, Motorola ... Pan Am, TWA, Swiss Air ... The Sharper Image, Tower Records, HMV ... I could envision eBay, Facebook, or Google disappearing overnight. Whenever two kids in a dorm room can invent a new technology product that makes existing ones obsolete, another two kids in a dorm room can do the same thing. Remember in the mid '80s there was a flurry of activity about "cold fusion" (a.k.a. "tabletop fusion") power? It turned out not to have worked. But if it had, the oil companies would have all gone out of business (except for the ones that bought the rights to the new cold fusion technology). Point taken re banks, but banks are not alone as regards failure risk and opaqueness of risks. Almost every industry has opaque risks. I own some shares of Home Depot, and also some banks, miners, pharmas, and consumer goods companies. I'm hoping that none of these have any remote risk of failure. But you never know. |
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Post by uncleharley on May 8, 2023 11:45:25 GMT
Market conditiona indicate to me that it is a little too early to buy regional banks. But, I do think this is a great time to make a watch list. FWIW, FIBK is interesting, especially if it drops a couple dollars more.
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Post by johnsmith on May 8, 2023 19:11:14 GMT
I understand your point about any business can fail.
In my experience, I can usually make some sense of where the risks are for non-bank businesses and the timeline for failure is long enough that with some due diligence, it's possible to exit without a 100% loss.
Banks are here today, gone tomorrow. The speed is problematic.
yes there might be a competitor to Google, Facebook and they may disappear, it's probably not going to happen overnight as with Signature, SVB, First Republic.
For Non-banks, it's possible to see the failure coming for a little while, allowing an exit with some loss.
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Post by steadyeddy on May 8, 2023 23:22:25 GMT
I understand your point about any business can fail.
In my experience, I can usually make some sense of where the risks are for non-bank businesses and the timeline for failure is long enough that with some due diligence, it's possible to exit without a 100% loss.
Banks are here today, gone tomorrow. The speed is problematic.
yes there might be a competitor to Google, Facebook and they may disappear, it's probably not going to happen overnight as with Signature, SVB, First Republic.
For Non-banks, it's possible to see the failure coming for a little while, allowing an exit with some loss.
To add, the Federal government doesn't step in say "we are taking over," for the other examples chang gave. Either the overnight Fed Funds rate needs to come down or the interest banks pay on deposits needs to go up OR both of them to happen before there is any stability in the current banking crisis. |
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Post by johnsmith on May 8, 2023 23:50:02 GMT
I understand your point about any business can fail.
In my experience, I can usually make some sense of where the risks are for non-bank businesses and the timeline for failure is long enough that with some due diligence, it's possible to exit without a 100% loss.
Banks are here today, gone tomorrow. The speed is problematic.
yes there might be a competitor to Google, Facebook and they may disappear, it's probably not going to happen overnight as with Signature, SVB, First Republic.
For Non-banks, it's possible to see the failure coming for a little while, allowing an exit with some loss.
To add, the Federal government doesn't step in say "we are taking over," for the other examples chang gave. Either the overnight Fed Funds rate needs to come down or the interest banks pay on deposits needs to go up OR both of them to happen before there is any stability in the current banking crisis.
I agree with you.
I think someone knowledgeable, I can't remember who at the moment, says the money market funds are taking the cash coming in using the Fed's REPO facility, which pays a high interest rate, so all the FED has to do is reduce the REPO rate, so that Money Market Funds can't get the 5% - 5.25% rate, let's say it dumps that down to 4%, then the flow from banks to MMF slows down and allows the system time to correct itself. |
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Post by steadyeddy on May 9, 2023 0:01:20 GMT
To add, the Federal government doesn't step in say "we are taking over," for the other examples chang gave. Either the overnight Fed Funds rate needs to come down or the interest banks pay on deposits needs to go up OR both of them to happen before there is any stability in the current banking crisis.
I agree with you.
I think someone knowledgeable, I can't remember who at the moment, says the money market funds are taking the cash coming in using the Fed's REPO facility, which pays a high interest rate, so all the FED has to do is reduce the REPO rate, so that Money Market Funds can't get the 5% - 5.25% rate, let's say it dumps that down to 4%, then the flow from banks to MMF slows down and allows the system time to correct itself. , I believe the repo rate is the same as the Fed Funds rate, which is the overnight interbank lending rate. Unfortunately, the Fed got themselves in a corner with delayed start in dealing with inflation. And the big banks have no desire to raise the payout on deposits because it directly impacts their bottom line. And the crisis with the smaller/regional banks ensures that most deposits go either to large (too-big-to-fail) banks or MM funds. Wall Street talking heads say that the banking crisis is over... they are simply BS'ing coz nothing changed in terms of underlying reasons for the crisis. |
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Post by johntaylor on May 18, 2023 15:56:11 GMT
Just debating whether to nibble:
"The PNC Financial Services Group, Inc., founded in 1852, is a bank holding company headquartered in Pittsburgh, Pennsylvania. The company's mission is to provide clients with the financial tools, resources, and knowledge they need to achieve their goals. PNC operates through a network of over 2,300 branches across 19 states and the District of Columbia."
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Post by yakers on May 19, 2023 15:42:16 GMT
Over the last month or so I have bought KEY a few times and am up (barely!) Have owned this on and off for years. Like the bank, never closed in the great depression. I cannot see the FDIC/Govt letting large regional banks fail
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Post by johntaylor on Jul 22, 2023 14:29:56 GMT
"PNC doubled in size through its acquisition of National City at a rock-bottom price during the financial crisis...Another smart deal came in 2020 when PNC cashed out of its stake in BlackRock, which it had bought in 1995 for $240 million. and exited when its worth was $17 billion...'When you look at a stock like PNC, they have the best management, the best balance sheet, the best execution,' says Giroux. He contrasts that to the situation at First Republic Bank FRC and other regional banks..."
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Post by kathiel on Jul 26, 2023 20:15:29 GMT
I picked up a couple hundred shares of USB back in May. The price was good and the dividend was over 6%.
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Post by steelpony10 on Jul 26, 2023 20:57:18 GMT
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Post by johntaylor on Nov 27, 2023 17:28:17 GMT
"America’s sixth-largest bank, PNC, has announced the closure of 19 more branches nationwide after it closed 203 branches earlier this year. The news comes as major US banks shift toward digital. PNC’s decision is raising fears among customers who prefer traditional banking methods...scheduled closures will mainly impact Pennsylvania but they will also shut down several branches in Illinois, Texas, Alabama, New Jersey, Ohio, Florida, and Indiana..."
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