The Acquirers Podcast Tim Melvin on Community Banks and Small Caps in Europe, Hong Kong and Japan | S07 E42
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Nov 27, 2025 Tim Melvin, an investor and author focused on community banks and small-cap value investing, shares fascinating insights. He discusses his emphasis on community banks, highlighting key metrics like equity-to-assets and low non-performing assets. Tim critiques past regulatory failures revealed by the Silicon Valley Bank collapse, and emphasizes the resilience of small banks. He finds compelling investment opportunities in undervalued stocks across Europe and Asia, particularly in Hong Kong and Japan, while advocating for a valuation-focused approach to investing.
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Prioritise Capital And Bad Loan Metrics
- Check a community bank's capital and non-performing assets before investing.
- Sell if equity-to-assets are low or NPAs exceed about 2% as Tim Melvin recommends.
Buy Banks Below Tangible Book
- Use price-to-tangible-book as a primary valuation for small banks.
- Buy when a good bank trades materially below tangible book (e.g., ~85%) to capture outsized returns.
SVB: Duration Risk Plus Uninsured Deposits
- Silicon Valley Bank failed from long-dated low-coupon bonds and a large uninsured deposit base.
- Regulators also dropped the ball, making it a regulatory crisis rather than a pure banking model failure.