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Smaller Banks in the Shadow of Giants

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    Collyn Gilbert of Stifel Nicolaus discusses the health of the small banking sector.

  • Duration 3:02
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Banks are under pressure with sagging real estate portfolio the thicket of new regulations the challenge of trying to survive in the shadow -- -- Not to worry calling Gilbert follows small and mid cap banks for people make -- And that's some buys in this challenging sector you know call and I would have thought that after the meltdown of a -- that big is better but you actually find some nice gyms there in the smaller area.

We do we do -- honestly Dennis I was kind of surprised myself I didn't expect the community bank model to sort of resurrect itself after the financial crisis but there are some banks -- that are actually.

Able to grow share that are not completely bogged down by -- regulatory environment.

And kind of I think there's a window here for them actually grow and grow earnings.

That being fed I don't I don't know how how long window will be opened.

Read I do think there is some opportunity -- Investors look at this smaller banks sector you have a couple things that they should be looking at that make up up banks' holdings give you mentioned that there is up three main things commercial real estate.

Residential mortgages.

And business loans which is particularly important or which are the more challenging areas of those three bullets.

Well the interesting.

As the real estate exposure on the commercial side -- commercial real estate and residential real -- is -- growing up.

The portfolios over the last couple years I think that's gonna really start to slow here is the interest rate environment.

Stays where it is and you're just seeing limited demand I think for real estate properties going forward.

Then the focus is gonna shift more on the commercial -- the traditional business side.

But we really don't -- -- resurrection of that type of growth until the economy starts to turn and it's going to be a -- so okay the smaller banks have been able to benefit -- in this in -- Recent term and I don't know that that's their sustainability to that in the longer term.

OK and let's go to some pics though because despite some of those pressures -- -- -- certificates and well managed firms you've got him in T Bancorp is what are -- three -- go ahead.

Yes seventy that's one of the larger banks that we -- and I think you know that the strength -- he -- it's just a very well run bank I think at this stage of the cycle we're kind of looking at stocks.

And we're looking at businesses and I think that the strength adamant he is certainly business.

It also has a strong currency which I think you know this industry is gonna need to consolidate for sure and I think this is an institution that can be a winner.

Okay NC some after the price -- all right an -- to grow and people's united financial.

Yep people's united -- kind of an Interbank we follow that we like I think there's some diversification of its business with a little bit of a turnaround story.

It's got a great market presence in the greater northeast market.

And I think that the name that that really is gonna kind of put up some good earnings over the next.

Couple years okay and then lastly the typical dispel brand mall or corporation tells us back.

Yes -- mart bank and trust of one of our smaller banks who follow -- in the Philadelphia market.

And I think interesting thing here is expected a very strong wealth management business which is allowing them to see roughly half of their revenues come from the feed based so.

With interest rates as low as they are right now in so many banks under pressure from a spread perspective.

He's got canceled and make some good money and I think.

The Philadelphia market -- a market where they can can consolidate and continue to grow all right speedily gotten there thank you very much Colin Gilbert Steve they'll mail us today thanks.

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