Arlington, Va.-based fund manager EJF Capital LLC more than tripled its stake in Las Vegas-based digital lender Axos Financial Inc. and significantly raised bets in Phoenix-based Western Alliance Bancorp. and in Santa Ana, Calif.-based Banc of California Inc. in the third 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.
From an initial $1.3 million stake in the second quarter, EJF Capital bumped up its holding in Axos Financial to $4.2 million in the third quarter. The financial holding company is now EJF Capital's ninth-biggest holding, according to the fund manager's latest Form 13F filing.
Axos reported strong financial results in the most recent quarter, with net income of $82.6 million, up 41.5% from $58.4 million in the year-ago quarter, and earnings per share of $1.38, up 42.3% year over year from 97 cents.
EJF Capital also infused more funds into Western Alliance and Banc of California, raising its holdings by 88% and 75.3%, respectively, from the preceding quarter.
Western Alliance rose against the tide amid a liquidity crunch that followed a slew of bank failures earlier this year and now expects strong loan and deposit growth in 2024. Banc of California is in a reverse merger deal with PacWest Bancorp, where the combined company will operate under the Banc of California brand.
EJF Capital also initiated a stake in PacWest Bancorp in the third quarter.
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Jackson Financial still biggest holding
EJF Capital's total holdings grew to $225.9 million as of Sept. 30, from $215.4 million in the second quarter.
Its top 20 holdings were still mostly banks, although annuity underwriter Jackson Financial Inc. remains EJF Capital's biggest holding as of Sept. 30, followed by artificial intelligence-powered financial technology company Pagaya Technologies Ltd.
Banc of California was EJF Capital's third-biggest holding in the most recent quarter, bumping New York-based Metropolitan Bank Holding Corp. to fourth place.
EJF Capital made seven entries in the third quarter, all of which were banks.
The biggest entry was Moorefield, W.Va.-based Summit Financial Group Inc., the holding company for Summit Community Bank Inc., with an initial stake of $2.8 million.
Summit Financial is in an all-stock merger of equals deal worth $372 million with Alexandria, Va.-based Burke & Herbert Financial Services Corp.
Pittsburgh-based F.N.B. Corp. and Memphis, Tenn.-based First Horizon Corp. were the next-biggest entries, with initial stakes of $2.5 million each.
The other entries were Irvine, Calif.-based Pacific Premier Bancorp Inc., Denver-based Heartland Financial USA Inc., PacWest Bancorp and Oklahoma City-based Bank7 Corp.
EJF Capital made 11 exits in the third quarter — six banks and one each in the financial technology, commercial and professional services, information technology, energy and transportation sectors.
The exits were Tupelo, Miss.-based Cadence Bank; Los Angeles-based PCB Bancorp; Buffalo, NY-based M&T Bank Corp.; Greenville, SC-based Southern First Bancshares Inc.; Detroit-based Ally Financial Inc.; human resources firm TriNet Group Inc.; Wichita, Kan.-based Equity Bancshares Inc.; Boston-based Eastern Bankshares Inc.; cloud-based data platform Snowflake Inc.; oil and natural gas company Diamondback Energy Inc.; and transportation company Delta Air Lines Inc.