Bank Activism Has Limits Despite What CNBC Wants You to Think

What they're getting right, what you need to know, and who could be next

The word “activist” conjures up a $5,000 suit, slicked-back hair, and a young Gordon Gekko lecturing management on their sins against capitalism. “The point is, ladies and gentlemen, that greed - for lack of a better word - is good. Greed is right. Greed works. Greed, in all its forms - greed for life, for money, for love, knowledge - has marked the upward surge of mankind”. And lately, even the sleepy, stodgy, and spreadsheet-laden world of bank stocks has its own crusader, threatening to “shame” 65-year-old executives like they’re kids at recess.

As a bank investor, I’ve been asked a few times what I think about it. So I took some time to dig in: the strategy, its many limits, which banks are targets, and how this all might play out.

The firm making activist waves is HoldCo Asset Management out of Ft. Lauderdale, managing about $2.4 billion. I don’t know the team personally, but CNBC gave them the “bad boys of banking” treatment, fingers clasped, stern expressions, the classic “we’re judging you” pose. It’s the kind of PR spread you only get when Wall Street wants to make someone look menacing enough to be interesting, I kind of respect it.

As of Q2, HoldCo’s biggest stakes were roughly $104 million in COLB (2.1% of shares), $102 million in FIBK (3.4%), and $78 million in EBC (2.4%). Together, that’s nearly 30% of Fund V which is $1 billion. Their strategy’s clear: take non-controlling stakes, fire warning shots, and push management to get smarter or sell. I respect the vision for the ends, but differ on the means personally.

Zooming out, keep in mind that for the fund to work, though, they can’t bother with tiny banks. Why? Because the 15–30% pop from a sale isn’t enough on sub-$500 million market cap, $10 or $20 million positions if they want to hit return targets. They need bigger wins, like a 20% pop on a $100 million block to move the needle on $1 billion in the fund. And also, activists are the opposite of PE shops, more house flippers than homeowners, looking to spark change, grab a premium, and move on. Ironically their biggest threat, a proxy fight, is actually the messiest. It slows down the takeout, it costs the banks upwards at $500,000 to $1 million, and the only real winner ends up being the white collar lawyers in suits.

And in the banking space, it’s not an easy game. For every management team that caves, there are five that dig in their heels.

The playbook is fairly straightforward: find laggards, apply pressure, and demand discipline. But not every case makes sense. Take FIBK, not especially undervalued (I’ll show you this below), yet HoldCo pushed for a “no dilutive M&A” pledge management had basically already made. Maybe they just wanted the public promise, maybe they wanted a faster turnaround, but either way, activists need speed.

So what do I actually think of the activist bank investor strategy?

There are three big lessons for banks, bankers, and investors. First, the opportunity set is smaller than people think. Second, premiums and discounts usually have clear reasons. And third, there’s a “return on hassle” factor that makes me admire activists like I admire big wave surfers. It looks cool, but I’m not expert and I can promise you I can find a lot more ways to get my kicks in than harass C-suites. Plus, life’s too short to pick fights for fun, though watching someone else do it can be entertaining.

Let’s start with the obvious limit to the opportunity. There are only about 400 liquid public banks in the U.S., and roughly 90-95 above $500 million market cap. For a $1 billion fund, a meaningful position means putting at least $50 million into a name. The Bank Holding Company act said that the Federal Reseve presumes that you have a “controlling influence” even without board seats if you are at or above 10%. This means they can classify you as a Bank Holding Company and make your life regulatory hell, demand a passivity commitment, or even block you or compel diversiture. So practically speaking you can see how activists in banking can’t do whatever they want. You can’t just waltz in and start a coup. And for the larger publics or even smaller names, doing tender offers to acquire shares fast, require big premiums, and that sucks alpha out of an already tight trade. So they’re constrained.

Now, here’s where it gets interesting. The table below ranks the 95 largest banks with positive 2026 ROTCE projections. The idea: higher future returns should mean higher price-to-tangible book multiples.

The regression line slopes cleanly upward, more ROTCE, higher P/TBV. Activists target the outliers below that line, the ones under-earning their worth. I look and I see a big grouping of potential targets.

But the chart only tells part of the story. Some banks deserve to trade below that line, and others trade above it for very good reasons. Here is the same data but now digging into the numbers in table form, this is the good part.