Raymond Stewart of Westchester still calls himself a country boy from Brooklyn.

“It’s hard to forget that more than half of the kids I grew up with in Bedford-Stuyvesant ended up in jail or dead,” he said, referring to a particularly rough neighborhood of the borough. “I hungered for something better. I wanted to try my hand at the American dream.”

That quest took him on competitive scholarships from Brooklyn Technical High School to Cornell University, where he majored in economics and public policy. Then Mr. Stewart spent a year at Chase Manhattan Bank before obtaining an M.B.A. from Columbia University.

His quest for the American dream finally took him to Westchester.

Why Westchester?

“I was a black kid who grew up amidst the lights and noise of the city,” Mr. Stewart said. “My section of Brooklyn, though, was like some remote area, far, far away from the places like Westchester where the wealthy and powerful lived. I promised myself as a kid that when I succeeded in whatever I would do in life, I would live with my family in Westchester.”

Westchester also suits him because his business is based in Briarcliff Manor. In 1992, he formed Rasara Strategies, one of a handful of black owned money management companies. Mr. Stewart invests exclusively in small- and middle-market banking and financial companies.

He manages some $210 million in four separate portfolios. The largest of these has 50 stocks, and the smallest 20. His average annual return has been 16% to 17%. In the last eight years, he has generated a compound interest of 230% for his investors, all of them high-net-worth individuals. In the same period, the S&P 500 index rose 80%.

So what’s the secret?

“No secret,” Mr. Stewart said with a smile, almost as if he expected that question. “It’s just doing your homework right.”

Homework for him means looking at the performance of small- to medium size banking institutions around America. Keeping in mind the advice of his former employer and mentor, Warren Marcus – a well-known investor – Mr. Stewart decided from the start that he would concentrate on those institutions because the big investment houses seemed to have ignored them, for the most part.

The larger investment houses weren’t necessarily discriminating against banking institutions. They largely viewed the sector as cyclical and therefore unstable for steady investment. The sector was also highly sensitive to the Federal Reserve’s actions on rates. Their caution was limned by the fact that America is widely perceived to have a surfeit of banks. Japan, for example, has barely 20.

The traditional investment houses also saw a growing number of mergers in banking – sometimes 300 a year. Only 10 years ago, there were more than 15,000 banks; now there are 8,900. Mr. Stewart expects, in the next decade, the current number will be whittled down by a third.

“But those banks will hold assets of $30 trillion by 2010,” he said, noting that Americans have deposited $17 trillion in bank accounts.

“I focus on small- and mid-cap bank stocks because they tend to have little institutional following. Within that universe, you can find profitable banks with varying reliance on net interest revenues from loan spreads.”

“The possibility that such small- or mid-sized banks will be acquired adds to their stocks’ upside potential,” Mr. Stewart said, quoting from a recently published review of the banking sector.

He isn’t fazed by the fact that in the first six months of this year, his portfolio has declined by 2.4%. Indeed, Mr. Stewart said that he’s rarely fazed by anything.

And what explains that?

“I’m one of those guys who believe that business is war – conflicts, confrontations, downturns are inevitable,” Mr. Stewart, a student of Japanese sword fighting, said. “I believe in ultimate victory. Discipline with faith leads to business victories. After all, I did manage to bring myself out of Bed-Stuy.”