/biz/ - Business & Finance

>>54043053
I took a look into HIFS last night >>54035322

>>54032341
Upon further inspection. I like this idea. I don't think it's amazing, but it's not a bad hold.

They appear to be well managed and have some competitive advantages. While I think the short term prospects are pretty shit for banks in general, looking out 2-3 years they should be fine.
They don't have significant longterm fixed-rate exposure because the vast majority of their loans consist of commercial real estate on 5 year adjustment intervals. They've been leaning heavily towards commercial over single-family mortgages with their recent loans.
1/3rd of their funds come from the FHLB of Boston, with ability to double that. I view this as both a positive and negative, since they're drawing on this much more in 2022 than previous years and it's a more expensive cost of capital so it's hurting their net interest margin. This is borrowed at the fed funds rate.
My main concern is that they've got customers holding $1.3 bil in short term CDs at an average yield of 2.4%. I assume these customers were going after a reasonably competitive rate at their time of purchase, but it can't compete with current t-bills. Outside of CDs, their other deposits actually shrunk by 7% year over year.