chris lets get right to you first these earnings stories yes theyre coming in week yes we knew that they would when were talking about deposit flights in the wake of sbb at the end of the day is this something that as jamie diamond warned could reverse by the end of the year what were seeing now thanks for having me overseeing this quarter is really a confirmation that that earnings have peaked we talked about this at the beginning of the year as a risk to the banks so overall the level of profitability is coming down you know we cut estimates into the quarter by about 11 percent our numbers are coming down again and really theyre not expensive stocks but when youre cutting estimates by definition that is the risk of a value trap so we have to be pretty careful in terms of finding exposure to the banks all right herman hop on in here before we get to the nitty gritty of some of the names that did report your take on the reversal by the end of the year yeah thats right things do seem to be stabilizing from a deposit standpoint the first quarters numbers that show about 2 3 percent decline in deposits on average but the hope is that things sort of stabilized from here i would also say that the contagion fears that that that occurred after the failures of sbb and signature are really put to bed now and its just more of an earnings story that that chris mentioned earlier all right so heres the part we get to on the nitty gritty chris i know you follow comerica to take our cma here shares down about two point seven percent they came out with their earnings youve got a price target of about fifty seven dollars a share well hear about trading at forty five right now whats the bull case for comerica sure i mean the bull case is this is a high quality midcap bank thats trading at discounted valuation stocks around one point to one point three times tangible book the earnings stream the company spent a lot of time over the last five or six years trying to smooth out the earnings stream from rates theyre doing that but really what theyre what theyre faced with right now is deposit you know this started in the back half of last year they were pretty conservative in raising deposit raising so theres a bit of a catch up with their funding costs and so what youre seeing is margins are rolling over estimates are coming down and again inexpensive stock but really without a catalyst herman your thoughts on comerica just how dire is their exposure to the sbb story to the signature story yes they do have some exposure to technology and life sciences but its a much smaller portion of their overall deposit franchise i would say that deposit decline in the first quarter of about 9 percent did surprise some folks so thats something that theyll need to address and rebuild their deposit base going forward and herman lets stick with you here i want to ask some of the other banks reporting after the bell outside of the deposit fought flight or the total amount of deposits which again could move by the end of the year in terms of instilling confidence in some of these regional banks how do they do that yeah you can just point to the stability of the overall balance sheet the banks arent really touching the discount window or the bank term funding program so those all points of the fact that the liquidity issues that were initially feared from the failures has really receded and the banks have the ability and flexibility to really manage their deposits and their balance sheets despite some continued attrition all right chris in our last minute here i want to ask about the stocks themselves here when were looking at the actual price action they are extremely weak so cheap that the people who would want to buy at a discount this kind of feels like the opportunity to do it when youre looking at their price to book ratios for example what will it take for these stocks to no longer from a valuation perspective look at this inexpensive right so you know my 20 years at kbw youve had two or three spots to buy the group youve had the 0 8 0 9 bottom in march you had the covid bottom in 2020 and what were debating now is whether this is that third moment i think its a little early i think were only five weeks removed from the ecb collapse you still need resolution on first republic for example but really the lack of a catalyst these are late cycle stocks so valuation cac can support the stocks but in terms of relative outperformance the banks are probably going to struggle a bit perhaps not a ton of downside but also not a ton of upside nearterm