Why Buy Bank Stocks Now? And the Three Tickers You Should Add to Your Portfolio

Banks are currently trading at about a 50% PE multiple of the historical average multiple with a discount to the S&P 500 PE above 50%. Ever wonder why your local banks get gobbled up by the big banks? Because scale matters. Banks below $1 billion in assets are starting to feel a sense of emergency as margins are thin and competition is intense. They need to find a profitable niche that allows for high returns in equity and assets or sell their bank. Buying smaller banks and taking out costs (as much as 30% or more) and raising the ROA on acquired assets is still the best way to grow EPS for bank executives worried about how they'll grow. Shareholders in these small banks - that's us - often see big profits when takeovers are announced. Thanks to Covid and inflation, there is pent-up M&A demand on the part of both sellers and buyers. In this presentation, Tim Melvin will show you his three rules for evaluating small banks as potential takeover targets, his strategy, and even a few names and tickers to consider adding to your portfolio.