Big U.S. banks are “definitely out of the woods,” but smaller community banks are still facing difficulty, said Dick Bove, financial strategist at Rochdale Securities.
Bove said big banks that are more oriented toward capital markets, trading and investment banking are "doing quite well." But traditional banks that take deposits or fund real estate "are going to be facing a couple of difficult quarters."
(Watch the video for more Bove insights.)
“The big banks do not need the FDIC guarantees any longer,” Bove told CNBC. “The markets have changed dramatically in a positive fashion.”
In the meantime, Bove said he expects the FDIC to step up and take over more weak banks. He predicted community banks would decline by 150 to 200 by year-end.
“At the present time, we’re looking at big banks having diversified revenue streams—and those diversified revenue streams are beginning to kick in, so that you should have some surprisingly strong profits from the big banks [rather] than the little ones,” he said.
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