EJF stake in Jackson Financial remains largest; banks otherwise dominate top 20

US banks populated much of EJF Capital LLC's top holdings list in the second quarter as the hedge fund manager held on to failed-bank takers and started buying shares of more depository institutions.

Annuity underwriter Jackson Financial Inc. and artificial intelligence-powered financial technology company Pagaya Technologies Ltd. remained EJF Capital's biggest bets as of mid-2023, the company's latest Form 13F filing showed.

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.

Biggest stock holdings

EJF increased its position in Silicon Valley Bank-taker First Citizens BancShares Inc. by 15.2% in the quarter, bumping it up to the hedge fund's fifth-biggest stock holding as of June 30.

Hicksville, NY-based New York Community Bancorp Inc., whose subsidiary Flagstar Bank NA bought substantially all the deposits and certain loan portfolios of failed Signature Bridge Bank NA, climbed seven positions to the 10th spot in EJF Capital's roster of biggest stock holdings.

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EJF Capital also initiated stakes in Tacoma, Wash.-based Columbia Banking System Inc., which completed a reverse merger with Portland, Ore.-based Umpqua Holdings Corp. in February and moved into Pasadena, Calif.-based East West Bancorp Inc., which ranked atop the list of large US public banks in financial performance in 2022, and in Kansas City, Mo.-based UMB Financial Corp. These three banks were among EJF Capital's top 20 stock holdings as of June 30.

Jackson Financial, which operates in the annuity sector that benefited from the high-interest rate and volatile market environment, was EJF Capital's biggest overall stock holding in the second quarter, despite the asset manager cutting its holdings by 11.1%. EJF Capital owned $40.5 million worth of common shares in the insurance company as of June 30.

AI-powered Pagaya Technologies, which bought EJF Capital's blank-check company in 2022, was the hedge fund's second favorite in the quarter, with a stake worth $22.0 million.

Entries

East West Bancorp was EJF Capital's biggest entry in the second quarter, with a $5.2 million new capital infusion.

Columbia Banking System was second, with $4.8 million in new investments.

UMB Financial was third, with $4.1 million.

EJF Capital's other new stockholdings in the second quarter were Ameris Bancorp, Southern California Bancorp., Western Alliance Bancorp., Axos Financial Inc., Customers Bancorp Inc., Oppenheimer Holdings Inc., Designer Brands Inc. and Fidelis Insurance Holdings Ltd.

Exits

EJF Capital dropped Truist Financial Corp. from its holdings, just a quarter after entering it. The asset manager also fully exited U.S. Bancorp, CrossFirst Bankshares Inc., MVB Financial Corp., Zions Bancorp. NA, Ellington Financial Inc., Pioneer Natural Resources Co., Enterprise Products Partners LP, Latch Inc. and Silvergate Capital Corp.