FJ Capital bullish on multiple banks in Q1 2023 despite market swoon

McLean, Va.-based FJ Capital Management LLC added to many of its largest bank positions in the first quarter as stock prices plummeted following the collapse of multiple banks in March.

Overall, the value of FJ Capital's common stock exposure slid 3.2% to $807.6 million as of March 31, down from $834.0 million at the end of 2022, according to the firm's latest Form 13F filing.

By comparison, the S&P US BMI Banks index posted a negative 13.1% return in the first quarter.

This article is part of a series on large institutional investors active in the US financial sector. All institutional investment managers active in the US with over $100 million in investments in Form 13F securities must file quarterly statements detailing their positions.

Bullish on banks

Hattiesburg, Miss.-based First Bancshares Inc. remained FJ's single-largest common stock position at the end of March at $46.5 million. The fund manager increased its shareholdings in the bank by 18.4% during the quarter. First Bancshares closed on its acquisition of Jonesboro, Ga.-based Heritage Southeast Bancorp. Inc. on Jan. 1, which helped push the company's assets to $8.02 billion as of March 31, up from $6.46 billion a quarter earlier.

Asheville, NC-based HomeTrust Bancshares Inc. became FJ's second-largest position at the end of March — up from fifth at year-end 2022 — after FJ increased its position in the bank by 16.0% and HomeTrust's shares eked out a 1.7% gain in the first quarter. HomeTrust was the only bank in FJ's top 20 holdings to end the quarter in the green.

FJ also nearly doubled its shareholdings in Southern Missouri Bancorp Inc., increasing its stake in the company by 84% in the first quarter and making the Missouri-based bank its fourth-largest position overall at $29.3 million.

Evansville, Ind.-based Old National Bancorp shot up the ranks after FJ increased its common stock position in the bank by more than 1,100% in the first quarter, pushing its investment to $24.2 million as of March 31.

– Access an up-to-date summary of FJ Capital Management's common stock investments, or go to FJ Capital's main page on the S&P Capital IQ Pro website and select "Public Holdings Detailed" under "Investments" in the left-hand menu. – Read some of the day's top news and insights from S&P Global Market Intelligence.

New stakes

The hedge fund manager's latest Form 13F filing showed 17 new common stock initiations worth over $1 million as of March 31. Two of its new positions — a $26.8 million investment in Stuart, Fla.-based Seacoast Banking Corp. of Florida and a $20.6 million investment in Tacoma, Wash.-based Columbia Banking System Inc. — became top 20 positions at the end of March.

Million-dollar exits

During the first quarter, FJ exited eight common stock positions that had been worth over $1 million as of Dec. 31, 2022. The firm's two largest exits, both worth over $9 million at year-end, were Limestone Bancorp Inc. and Zions Bancorp. NA.

Marietta, Ohio-based Peoples Bancorp Inc. completed its acquisition of Louisville, Ky.-based Limestone on April 30.

FJ Capital was formed in 2007 by Martin Friedman and Andrew Jose and focuses primarily on "underfollowed" community banks.