Video: Opportunities in Banking; My talk at the Fairfax Shareholder Dinner
I recently had the opportunity to attend and speak at the Fairfax Holdings annual shareholder dinner in Toronto. What started as a small group of Fairfax shareholders meeting in the back of a restaurant to talk about value investing has grown into a large charity dinner that this year hosted 180 investors and investment professionals.
My talk focused on opportunities in bank investments and specifically highlighted two ideas worth further consideration, Eastern Virginia Bankshares (EVBS), and Fifth Third Bancorp (FITB).
The video is on YouTube and can be watched below. The slides are a little hard to see in the video so I've included a link to the PDF version below.
I wanted to get your opinion on Regions Financial. From what I see is that Regions Financial has the lowest debt to equity (lower interest-bearing liabilities) combined with the a lot of excess capital, one of the most stable based on equity to assets, tangible equity to tangible assets, and loans to assets, and the cheapest based on price to book and price to tangible book. Price to book is around 0.75. Granted they do have lower returns, but that is partially due to consolidation costs, debt extinguishment etc.
This is a great question. As I looked at regional banks I went back and forth between Regions and Fifth Third. I have a lot of notes and planned on typing up a post comparing them at some point.
Regions is definitely cheaper, although I'd say Fifth Third's market area is better. I'm surprised Regions hasn't been purchased yet.
Hey Nate,
ReplyDeleteI wanted to get your opinion on Regions Financial. From what I see is that Regions Financial has the lowest debt to equity (lower interest-bearing liabilities) combined with the a lot of excess capital, one of the most stable based on equity to assets, tangible equity to tangible assets, and loans to assets, and the cheapest based on price to book and price to tangible book. Price to book is around 0.75. Granted they do have lower returns, but that is partially due to consolidation costs, debt extinguishment etc.
This is a great question. As I looked at regional banks I went back and forth between Regions and Fifth Third. I have a lot of notes and planned on typing up a post comparing them at some point.
DeleteRegions is definitely cheaper, although I'd say Fifth Third's market area is better. I'm surprised Regions hasn't been purchased yet.
Fairfax has a large stack in Eurobank in Greece, what are your thoughts on this bank?
ReplyDelete