US banks have been consolidating due to technology, regulatory cost pressures, and the competitive environment. Today <6,000 banks remain, down from over 16,000 in 1990. The fund utilizes a long only event driven strategy with a focus on micro-cap and small-cap U.S. banks. The majority of banks will have market caps less than $1 billion and all will be publicly traded. We seek to identify undervalued securities as going concerns and the most likely target institutions within a 3 year time frame using a fundamental screening process of management, capital, credit quality, and various profitability measures. We focus not only on likely sellers but buyers as well looking to determine the banks best positioned to make acquisitions and their favored geographic regions. The strategy provides diversification benefits and is less correlated to the broader market indexes.
