Posts Tagged ‘Morgan Chase’

Keep Your Eye on the Little Guy

Monday, March 24th, 2008

With the current upheaval in the capital markets and the news that Citigroup, Merrill Lynch and Morgan Stanley have written off $70 billion in loans, it is interesting to note a whole cadre of financial institutions that are doing gangbusters.  According to an article in the 2/19/08 USA Today by Matt Krantz, smaller banks which avoided the enticement of lowering underwriting standards and issuing subprime loans, are on average, only 6% off their 52 week high.  Most of these names are unfamiliar — Danvers, First Merchants and Oriental Financial.  As the heavily leveraged buyers retrench and the access to bridge loans and mezzanine financing pulls back, could we see a number of well capitalized small cap financial institutions step in to fill the void in the commercial real estate investment market?