Chris Davis on recent bank failures: "it's not systemic"

The model of making a spread on money is about as old as human history.  So the model is durable.  We own banks that are in their second century, even their third century.  So there's enormous resiliency to the model.  And so when you get a panic, I think you have to look for where are the companies that are vulnerable - you have to avoid those because then you're trying to scoop them off the bottom which is risky.  But if you own the companies that in a sense are beneficiaries?  After all, where are those depositors going?  When they leave these smaller regional banks they are fleeing to the big banks.  That's where I think there is enormous safety and you can look at, for example, the balance sheet of Wells Fargo and you can see just how conservative they were in terms of not taking big interest rate risk and at the same time that they've had enormously resilient deposits.  That's a wonderful combination with higher interest rates widening their profitability.  So I think it's very different [from past banking crises] because it's not systemic.  It's really a flight to quality and the fact the big banks are going down so much I think is creating that opportunity.

~ Chris Davis, Davis Fund Advisors, CNBC interview, 2:05 mark, May 2, 2023