financial services equity analyst interview

I’m a performance analyst for a small trust company and an l 3 candidate. I have an interview on Friday for an analyst position covering thrifts and regional banks. Can anyone direct me to any articles about valuation and covering these companies? I have checked out some reports. Thanks.

If you don’t mind me asking, what city is this in?

portland, maine

Oh, thx. I have a friend who just interviewed for a financial services analyst position covering regional banks and thrifts. But it was in a different location. Good luck.

Only two words you need to know to get the job: “short everything”.

totally disagree. Some banks (specifically small regional banks with solid and growing loan portfolios) are getting crushed from all the industry downgrades (S&P and Goldman were the most recent). They’re now trading at huge valuation discounts. Now I’m not saying that today is the best time to get into some of these, but I think some will show tremendous gains over the next 18-months, even if their loan portfolios remain stagnant. I mean, I’ve seen some companies drop 50%+ that have no (or very very little) exposure to sub-prime or construction loans. Valuation expansion alone will drive up prices of some of these, particularly as all the fear in the market subsides–even a bit. I think its important to note, I’m not talking about risky companies like Lehman. I’m talking about small regionals in states ike Texas that haven’t been as affected by the real estate crisis and are benefitting from oil and commodity (to a lesser extent) price increases. Just my opinion though.

Disagree. Investment banks offloaded a lot of MBS exposure to somebody. They didn’t offload it to 7-11 stores. The best regional bank shorts are actually in states like Texas right now.

You realize MBS exposure at many smaller regional banks is a very very low percentage of interest income. Sure some banks took on too much but many of the smaller guys didn’t. It’s all about loan type/quality at these places. So what you saying, its time to jump into Cali & Fla regionals… places where more and more loan write-downs are almost guaranteed to happen in the coming weeks?



I hope they remembered to lock jlx177’s windows.

farley013 Wrote: ------------------------------------------------------- > Only two words you need to know to get the job: > “short everything”. he he, that’s funny! However, for the job, it’s probably best to suggest a pairs trade: X will do better than Y. The sector isn’t all that great right now, so you try to neutralize the sector effect. At least with a pairs trade, you are advocating going long on something; and most sell side shops are biased towards going long. And on the buy side, you may have shorting constraints.

I suppose that if they start punching holes in your credibility you could go with the obvious: “Moi credibility, dude what about the CEOs and CFOs of some of these joints, they don’t even freaken know how much debt or down right crap is sitting on their books”. Willy

jlx177, If you don’t mind me asking, do you work in ER covering the banking industry?

I’m venturing to guess not anymore if he was recommending bullishness on regional banks.

FHN reported today and was up 25%. I think for buyers with longer-term time horizons, there are some attractive buys. Not all these regional banks will go the way of IndyMac.

If you re-read my previous post I never said I was bullish on regional banks. However, I did say that I think there will be some great opportunities to invest in the sector in the coming months. Is today the time to buy, probably not. Is it time to start getting prepared to buy a select few names, definitely. I do not cover the banking sector in ER but I’ve been tracking regional banking stocks for a while (doing all the stuff a banking analyst would do). For example, one bank I’ve been watching/analyzing has seen its share price cut in half over the past 6-weeks–all due to sector downgrades, bad news at larger firms (Indymac is an example). Now this bank has no exposure to sub-prime, wrote-off all its non-performing construction loans (back in 2007). and operates in a relatively stable part of the country. The company is basically sitting on a portfolio of high quality of commercial loans (and has great proactive management). To boot, it’s 1Q 2008 numbers were well above consensus expectations. Now this company, with a stable loan portfolio, solid management, a logical growth strategy which it is implementing (I think loan will come mostly from acquisitions over the next year, not writing new loans), and operates in a geography that’s held up quite well, has seen its price drop like a rock and is now trading at unbelievably low valuation multiples (historical lows across the board). So, yes, I think this company has potential to really outperform over the next 18-months. Will it go lower first, maybe. Will price appreciation and valuation expansion occur in the next 18-months, after the sector stabilizes a bit, I think so. I also think there are a number of companies like this around the country. Of course, finding them is obviously the biggest challege. Of course this is just my opinion. And it’s important to note I am a value guy through and through (sometimes I even consider myself a deep value investor).