Investment Process

The Hovde GroupOur Approach

Our investments take a variety of forms but are principally focused on the following: minority investments in firms that need incremental capital to work through transition periods and/or to capitalize on growth opportunities either through organic growth or strategic acquisitions.

We look for franchises and management teams who can benefit from our expertise as advisors and successful record of generating value. We are able to act responsively and fund investments quickly, with a high degree of confidentiality.

We are well known in the financial community for our ability to close transactions in a very short timeframe and for our success in advising businesses on how to grow their franchise and maximize value.

Investment Objective

Our investment objective is to seek long-term capital appreciation by investing primarily in the equity securities of private and publicly traded banks and thrifts.

We seek to achieve this objective by:

  • investing in both private and public companies in the bank sector which we believe offer attractive valuation metrics and above average growth opportunities through experienced and motivated management, geographic advantages or high return on equity business models;
  • applying our experience in community banking, including start-ups, community bank stock offerings, valuations and mergers and acquisitions;
  • partnering with companies that can significantly scale their business through add-on acquisitions and strategic repositioning of their business; and
  • diversifying our investments effectively across geographic markets and market capitalizations;

Our team employs a sector-specific, value and deep value, long strategy and evaluates companies utilizing a combination top-down and bottom-up approach.

Investment Criteria

We are focused on high quality franchises that can benefit from an active partnership with us, and where management has a meaningful financial participation going forward, and understands the expertise that we have to offer to assist them in creating greater franchise value for the future of their enterprise. Our portfolio companies generally exhibit the following characteristics.

  • Excellent management teams with meaning management/board investment
  • In-market experience preferred with significant previous banking experience
  • History of excellent credit quality and core profitability
  • The Hovde GroupAbove average population growth and income in market
  • Diversified business environment & product mix
  • Consolidation trends/valuations and acquisition or consolidation opportunities in market
  • Defensible market position
  • Fundamentally strong business plans
  • Diversified lending portfolio
  • Strong credit underwriting policies and controls
  • Strong core deposit base and generation capabilities
  • Solid fee based products and services

Investment Size

The size of investments generally ranges between $500,000 to $5,000,000 and does not generally exceed 9.9% of the total capital of the bank or holding company. We have a long-term investment horizon and look to support strong management teams and community banks through their growth cycle.

 

* The information on this website does not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will only be offered privately to accredited investors by means of delivery of a confidential private placement memorandum and other constituent offering documents, and only to residents of those states in which such offering is permitted to be made.