While several of the big Canadian banks are set to report earnings next week, one investor said money managers should be looking for opportunities in U.S. mid-cap and regional banks.

In an interview with BNN Bloomberg on Wednesday, David Chiaverini, managing director of equity research at Wedbush Securities, said American banks are facing a challenging environment right now, with “liquidity being removed from the economy and the banking system by the Fed” and “net interest margins are likely to peak out here, in the first half of the year.”

“So several headwinds on the on the banking industry,” Chiaverini said.

“Now, there are some banks that are, you know, navigating this challenging period better than others, but from a top down approach we think that there are some challenges facing the group.”

He added that the “theme for all of these hot picks is really, they’re defensive growth names.”

He recommended First Republic Bank (FRC), Signature Bank (SBNY) and M&T Bank (MTB) as his three top stocks in the U.S. mid-cap and regional banking space.

Chiaverini, his family members, his firm and his clients do not hold any of the stocks mentioned above.