"Bank stocks are getting extremely cheap," my friend Andrew told me over breakfast yesterday.

"But the big banks are about to get a whole lot cheaper."

Andrew should know. He's the CFO of a publicly traded bank. He knows how banks work... He's the one who decides what the bank does with its money. He explained how it's feast or famine now in the banking business... It's feast if you're a small bank, like his. And it's famine if you're a big bank.

Andrew is so optimistic about small banks, he's just invested a chunk of his own savings in shares of tiny regional banks.

But he won't touch the big banks like Citibank.

He says beyond the problems you already know about, the big banks have two more crises ahead of them –commercial real estate loans and credit cards. Let's take a look at both...

When it comes to commercial real estate, banks are about to get hit with defaults here... You see, when a big bank makes a huge construction loan, it gets two years worth of interest payments in advance. Well, for many of those loans made at the top of the market, those two years are coming up.

As Andrew explained, this could mean trouble... The big construction loan might have been made to build a shopping center to serve a new neighborhood... The problem is, that new neighborhood was either never built or it didn't sell well. Therefore the shopping center was either never built or it has no tenants. Now, there's a real chance the developer will walk away from the construction loan.

Andrew figures big banks are in big trouble with their credit cards, too...

That's because homeowners got used to taking a line of credit out on their home – a home-equity line. But once the real estate market turned, instead of cutting back on spending, homeowners turned to their credit cards.

Andrew told me the big banks moved too slowly here... It took 'em a while to realize what was happening. Now they've pulled in those lines of credit. But Andrew thinks they were a few months too late.

So beyond the liquidity crisis... beyond the subprime crisis... beyond the housing crisis... the big banks have two more crises coming: commercial real estate loans and credit cards.

The opportunity here is in the tiny banks instead.

Andrew says the big banks have tightened up their lending standards so much, they'll hardly make a loan. So Andrew, with his smaller banks, can make "slam dunk" loans all day... like jumbo loans to people with excellent credit and big down payments.

While it's a worst-of-all-worlds environment for the big banks, the high-quality small banks – ones that simply stick to taking deposits and making safe loans – are in an ideal situation...

The small banks have less competition (mortgage lenders have disappeared and big banks aren't taking their customers). Now they can charge higher interest rates – and make bigger profits.

According to my banking insider, Andrew, it's time to avoid the big bank stocks... and back up the truck on the little ones that simply take deposits and make safe local loans.So is it time to buy bank stocks?

Good investing,

Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.