HOLDCO ASSET MANAGEMENT ISSUES RESEARCH PRESENTATION IDENTIFYING FAILURES BY THE FEDERAL RESERVE

The fifth largest bank in the country (by deposits) – U.S. Bancorp, an undeniably systemically important bank that carries a national deposit footprint spanning a majority of states – has been allowed by the Federal Reserve to hold shockingly low amounts of capital relative to assets

U.S. Bancorp – which was one of a select group of "Category III" banks in 2019 that benefitted from the Federal Reserve's decision to reverse mandatory inclusion of "available-for-sale" unrealized losses in regulatory capital – will now soon likely become a "Category II" bank which is, under existing rules, required to include these unrealized losses in capital

If U.S. Bancorp's Common Equity Tier 1 ratio was hypothetically adjusted today to reflect the inclusion of "available-for-sale" unrealized losses in regulatory capital, its resulting Common Equity Tier 1 ratio would fall below the Fed's own mandated CET1 capital requirement of 7% and it would rank as having one of the lowest such ratios of large and small traded banks

Even U.S. Bancorp's stated Common Equity Tier 1 ratio (which presently excludes unrealized securities losses) ranks very low when compared to large and small traded banks

Until the five largest banks in the U.S. (by deposits) are safe and sound, the U.S. banking system will not be safe and sound

This unsavory predicament casts a black mark on the Federal Reserve, the relationship between regulators and lobbyists, and the U.S. banking system at large

FORT LAUDERDALE, Fla., April 17, 2023 /PRNewswire/ -- On April 17, 2023, HoldCo Asset Management, L.P. ("HoldCo"), a Florida-based investment firm managing approximately $1.2 billion in regulatory assets under management, issued a research presentation entitled "The Unsafest and Unsoundest of them All: U.S. Bancorp (ticker: USB)." In the presentation, HoldCo lays out its case that the Federal Reserve has improperly enabled one of the largest banks in the country, U.S. Bancorp (ticker: USB), to hold shockingly low amounts of capital relative to assets and HoldCo's belief that this mistake will likely be appropriately resolved in the near future. In the presentation, HoldCo also utilizes the stringent regulatory requirements imposed by the Federal Reserve on Wells Fargo & Company (ticker: WFC) as a foil to illustrate the lack thereof with respect to its treatment of U.S. Bancorp.

The presentation may be found at the following link:

http://www.holdcoam.com/wp-content/uploads/Presentation.pdf

In the presentation, HoldCo disclosed that it owns common stock of Wells Fargo & Company and holds a short position in U.S. Bancorp through selling short and purchasing put options relating to U.S. Bancorp common stock, and consequently has an economic interest in the price of these securities.

About HoldCo Asset Management, L.P.

HoldCo Asset Management, L.P. is an investment adviser located in Fort Lauderdale, Florida. HoldCo was founded by Vik Ghei and Misha Zaitzeff. HoldCo currently has approximately $1.2 billion of regulatory assets under management.  

Disclaimer

As of the publication date of this report, a fund managed by HoldCo has a short position in U.S. Bancorp through selling short and purchasing put options relating to U.S. Bancorp's common stock, and a long position in Wells Fargo & Co. relating to its ownership of common stock. Taken as a whole, HoldCo holds a directionally short position in U.S. Bancorp that will profit if the price of U.S. Bancorp's common stock declines. HoldCo may change its views about its investment positions in U.S. Bancorp or Wells Fargo & Co. at any time, for any reason or no reason, and at any time may change the form or substance of any of its related or unrelated investment positions. If it does so, it will not be under obligation to inform anyone and does not intend to do so unless required by law.

All content in this press release and referenced presentation represent the opinions of HoldCo and are for discussion and general information purposes only. HoldCo has obtained all information herein from publicly available sources, and such information is presented "as is," without warranty of any kind whether express or implied. All data and other information are not warranted as to completeness or accuracy and reflect HoldCo's views as of this date, all of which are accordingly subject to change without notice.

 This document is not intended to be, nor should it be construed as, a marketing or solicitation vehicle for HoldCo or any fund managed by HoldCo, and it is not investment advice, an investment recommendation, or an offer to buy or sell or the solicitation of an offer to buy or sell any securities, including without limitation any interests in a fund managed by and/or associated with HoldCo. Any offer or solicitation may only be made pursuant to a private placement memorandum, agreement of limited partnership, or similar or related documents, which will only be provided to qualified offerees and should be reviewed carefully and in their entirety by any such offerees prior to making or considering a decision to invest in any HoldCo managed fund.

The information contained in this document may include, or incorporate by reference, forward-looking statements, which would include any statements that are not statements of historical fact. These forward-looking statements may turn out to be wrong and can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors. There can be no assurance that forward-looking statements will materialize or that actual results will not be materially different than those presented.

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SOURCE HoldCo Asset Management