Regional Bank Preferred Stock

Regional banks have become vulnerable because banks mixed leveraging short term funding with long term investments resulting in investment portfolios sitting on losses that haven’t been market to market and customers (especially those above the $250K FDIC limit) moving out of low yield deposits into higher yield (ie: treasuries). As most of the sector’s share prices have been severely punished, has anyone dug into preferred stock in regional banks that aren’t exposed to the same risk?

I had some success investing in bank preferreds in 2009 after the storm had settled and it was clear which banks would survive. Citi and Bank of America preferred stock was yielding 10%. The common equity was permanently impaired as capital had to be raised, but as the risk of insolvency was removed the preferred stock steadily recovered. I don’t want to miss the same opportunity in regional banks.

I’ve researched Associated Bank (ASB) based in Wisconsin. They didn’t invest in long term treasuries Silicon Valley Bank. They do have a loan portfolio that includes small businesses and office buildings. The credit risk is vulnerable to a recession, but it’s not the same solvency issues making headlines.

The preferred stock ASB-E is available for $15.68 with a coupon of $1.47 and a current yield of 9.4%. If and when the current turmoil fades, ASB-E should easily be priced with a 7% yield leading to capital gains of 34%. High yield with a potential big capital gain.

Are there any other regional banks that didn’t invest in long term treasuries and have had their preferred stock unreasonably discounted?