Matthew Resch

Father, husband, entrepreneur, investor, advisor, director, banking industry investment banker

[Matthew Resch @Matt_Resch]

@JeffMarsico Great family pic, Jeff!

[Matthew Resch @Matt_Resch]

Congrats, @HolmesJosh to you and your Ruthless team! Really happy for you but not surprised by your ascending success with the podcast.

[Josh Holmes @HolmesJosh]

So proud to be a part of this.

[Matthew Resch @Matt_Resch]

@carter_houck take care of business tomorrow and we’ll have a friendly family bet on ND vs OSU. Or better yet, we go to the game

[Carter Houck @carter_houck]

When has penn state ever won a game that matters

[Matthew Resch @Matt_Resch]

@Aureliusltd28 3: …. So if a buyer trades at 200% of TBV, they can pay around 180% of TBV as a general rule. Obviously interest rate marks, credit marks, one time deal costs, cost savings, etc., can push the pricing up or down, but this serves as a good guide.

[Matthew Resch @Matt_Resch]

@Aureliusltd28 2: …..acquisition premiums. Given the run up in bank currencies, acquisition multiples are going higher as the market could quickly pivot to a seller’s market. To make earnback math work, a general rule of thumb is that acquirers can pay 90% of where they trade on P/TBV…..

[Matthew Resch @Matt_Resch]

@Aureliusltd28 1: @Aureliusltd28 Pooling accounting(expired in 2001) made it far easier to pay higher multiples back then, among other factors, so I don’t believe we ever come close to the 1998 high watermark. Having said that, there is a direct nexus between buyer currency strength and…..

[Matthew Resch @Matt_Resch]

Right back at you to you and your team. Always a great pleasure to work with and collaborate with #TheKafafianGroup

[Jeff Marsico @JeffMarsico]

Well done @Matt_Resch!

[Matthew Resch @Matt_Resch]

@carter_houck you can keep him! Ha ha!

[Carter Houck @carter_houck]

Can we send Greg Soto back to Philly

[Matthew Resch @Matt_Resch]

All the best for a healthy remaining pregnancy, delivery and baby boy. St Gerard is the patron saint of expectant mothers. Will pray his prayer for you.

[Lauren Seay @LaurenSeay13]

Hi everyone! I won’t be around for awhile as I am on maternity leave starting today. We are anxiously awaiting baby boy’s arrival 🤞 Hope I don’t miss too much exciting bank news!

[Matthew Resch @Matt_Resch]

@Aureliusltd28 I like $WBS @ #2 on that list. I’ve had the pleasure of working w/ that executive team over the years & they have some of the best & brightest working there. Differentiated funding platform (HSA) & diverse business mix. At this valuation, money to be made over next few yrs IMHO

[Matthew Resch @Matt_Resch]

#ChristisRisen Halleluia! Shout it far and wide and spread the Good News!

[Matthew Resch @Matt_Resch]

@Aureliusltd28 Webster is one of my favorite companies. Best in class management team who I’ve had the pleasure to work with over the years. Differentiated deposit mix (HSA) that is extremely valuable. Strong risk mgmt framework and strategically nimble.

[Matthew Resch @Matt_Resch]

I concur @Aureliusltd28 Also still some very good value in community bank, super community bank, and smaller regional sub-debt paper. More senior in the capital stack, and if patient and resourceful, can find 10%+ yields for shorter duration paper.

[Matthew Resch @Matt_Resch]

Getting ready to deploy that capital&acquire the mid-size bank universe ($50BB-$150BB in assets) as soon as deal math works. $COF- $DFS deal is first domino to fall. Will create more SIFIs with $PNC, $TFC, $USB, $COF joining the current group. Mid-sized banks going away w/in 5yrs

[Matthew Resch @Matt_Resch]

The regulatory and supervisory malfeasance of our banking system goes far beyond “human capital issues.” They have to blame it on something other than their own incompetence.

[Matthew Resch @Matt_Resch]

@Aureliusltd28 @TimyanBankAlert @StockJabber I concur as it will be very interesting to see how this play out on the regulatory front. Given the myriad challenges the banking industry faces (CRE, NIM compression, AOCI, etc.), I’m cautiously optimistic this deal could reignite larger bank M&A. Time will tell.

[Matthew Resch @Matt_Resch]

@JackFarley96 Best interview/content I’ve seen on the current environment for CRE. Well worth the watch. Jack does an amazing job curiously probing to educate his listeners, while Anthony’s candor and knowledge of what is actually happening on the ground is pure educational gold!

[Jack Farley @JackFarley96]

When I interviewed veteran commercial real estate (CRE) investor Anthony Dilweg, I expected him to say that the bearish headlines about CRE & office were overblown.

Instead, he said the headlines weren't bearish enough, & made an analogy to the Titanic hitting the iceberg🚢

This shocking conversation, nearly two hours long, is now released in full.

Here are some of the key claims from Dilweg (who in a former life played quarterback for the Green Bay Packers 🏈) on how he is viewing the CRE world:

- The huge challenges CRE & office will have to contend with are WORSE than what CRE faced during the 2008 Great Financial Crisis

- Office as an asset class is "structurally broken" as remote and hybrid work has caused demand to tank

- As vacancy rates skyrocket, over a billion square feet of office asset class (20% of the asset class in the U.S.) will be obsolete over next 3-5 years

- "Return to office" trend is vastly overstated. The CEOs may say Monday - Friday is stern policy but utilization rates reveal Tuesday-Thursday is the de facto norm

- Banks are "completely overwhelmed" as CRE investors use threat of strategic default (i.e. turning keys back) to aggressively renegotiate their loans. Banks must contend with forbearance, restructuring, and extreme reduction in loan yields (350 basis point declines in loan yields are not unheard of)

- The claim that impairments to office as an asset class are just in major cities (NYC, San Francisco, LA) is an overrated narrative. I say to Dilweg (whose 5.5 million square footage portfolio is located in Southeast U.S.) "so you are not quite in the eye of the storm" (I like to support my guests) and he corrects me and says "No, I am."

- If Fed doesn't drastically cut rates, there will be tremendous pain felt throughout the entire CRE industry

- Some banks are "behaving in an interesting way" and Dilweg speculates that FDIC & OCC might still be operating behind the scenes to prevent more bank failures

- Private credit is on the margin replacing some bank financing, but terms are "very punitive"

As usual, this interview is available on @ForwardGuidance podcast and on " @blockworks
Macro" YouTube channel

Lastly, a big thank you to @MetaMask Portfolio for sponsoring today's episode

Enjoy! 🔥

[Matthew Resch @Matt_Resch]

@richfalkwallace Excellent post. Would very much welcome a copy of the spreadsheet. Thank you.

[Matthew Resch @Matt_Resch]

@Aureliusltd28 @Aureliusltd28 I concur. 1 of the smartest management teams I’ve had the pleasure to work with. Great operators, shareholder friendly, but more importantly, they are high quality individuals. Investing always comes down to people & the FCF management team is at good as it gets.

[Matthew Resch @Matt_Resch]

@JeffMarsico Thanks Jeff. Hope all is well. Let’s catch up soon.

[Matthew Resch @Matt_Resch]

Happy 22nd Wedding Anniversary to the love of my life. Thank you for your love and support! Cheers to 50+ more years of health and bliss! Love you, sunshine!