NASB – Banking on a Return to Normalcy

February 5, 2014

Banks are sometimes difficult to get a handle on; the Citigroup 10-K for fiscal year 2007 was over 200 pages long and you could have read every word of it and not found a line reading “Oh, by the way, we’re doomed.” But not every bank is a too-big-to-fail megabank that dabbles in derivatives; the vast majority, by number if not by total assets, are regional banks that go about the ordinary, everyday business of taking in deposits, lending money, and selling those loans to a securitization entity (sorry, some things do change).

NASB Inc. is such a bank, and is worth looking at. It combined a conservative style with a high return on assets, and last year managed a negative provision for loan losses (which is a rare and impressive feat). Now that the taper is on and things are slowly returning to normal, it can reverse its deleveraging plan and get back to the good old days. And in 2007 they might not even have been doomed.

For my full thoughts on the matter, visit

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