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The financial sector has been the top performing group in one year performance, with a 29.3% gain during the one year period.

(click to enlarge)

One way to participate in this sector strength is the iShares Dow Jones US Financial Sector (NYSEARCA:IYF) which tracks the index. I believe even better way to participate in this strength is to follow what the insiders are doing. In this article, I will feature three financial sector stocks that have had intensive insider buying during the last 30 days.

Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10 percent.

1. Solera National Bank (OTCQB:SLRK) is a traditional, community, commercial bank with a specialized focus serving the Hispanic market.

Insider buys

  • Michael Quagliano purchased 50,600 shares on December 13-19 and currently holds 423,270 shares or 16.6% of the company.
  • Robert Fenton purchased 5,000 shares on December 14 and currently holds 33,500 shares or 1.3% of the company. Robert Fenton is Co-Founder, EVP, Chief Financial Officer & Chief Operating Officer.
  • Ronald Montoya purchased 10,000 shares on December 13 and currently holds 34,300 shares or 1.3% of the company. Ronald Montoya serves as a director of the company.

Financials

The company reported the third-quarter financial results on October 29 with the following highlights:

Net income$0.1 million
Tangible book value$7.34 per share
Net interest margin2.83%

Peer Analysis

Solera National Bancorp's peer group consists of the following: BOL Bancshares (OTCQB:BOLB), Carolina Alliance Bank (OTCQB:CRLN), Citizens National Bancshares of Bossier (OTCQB:CNBL), Denver Bankshares (OTCQB:DNVB), Focus Business Bank (OTCQB:FCSB), High Country Bancorp (OTCQB:HCBC), Security First Bank (OTCQB:SFRK), T Bancshares (OTCQB:TBNC), Treaty Oak Bancorp (OTCPK:TOAK) and Trinity Bank (OTCQB:TYBT). Here is a table comparing these companies.

CompanySLRKPeer average
P/E42.3110.66
P/B (%)70.3493.20
Dividend Yield (%)01.03

Solera National Bancorp is trading below the peer average P/B ratio.

My analysis

There have been 10 insider buy transactions and there have not been any insider sell transactions this year. The stock is currently trading below the tangible book value of $7.34 per share. I have a bullish bias for the stock below the tangible book value.

2. MVB Financial Corp. (OTCQB:MVBF) operates as the bank holding company for MVB Bank, Inc. that provides community banking services in the Marion, Harrison, Monongalia, Jefferson, and Berkeley Counties of West Virginia.

Insider buys

  • Christopher Pallotta purchased 7,417 shares on December 12-20 and currently holds 53,909 shares or 2.4% of the company. Christopher Pallotta serves as a director of the company.
  • Leonard Nossokoff purchased 2,083 shares on December 20 and currently holds 93,859 shares or 4.2% of the company. Leonard Nossokoff serves as a director of the company.
  • Berniece Collis purchased 2,291 shares on December 20 and currently controls 9,093 shares or 0.4% of the company. Berniece Collis serves as a director of the company.
  • Kelly Nelson purchased 4,166 shares on December 12 and currently holds 21,516 shares or 1.0% of the company. Kelly Nelson serves as a director of the company.
  • Nitesh Patel purchased 20,833 shares on December 13 and currently holds 59,714 shares or 2.7% of the company. Nitesh Patel serves as a director of the company.

Financials

The company reported the third-quarter financial results on November 5 with the following highlights:

Net income$1.0 million
Book value$18.84 per share
Net interest margin3.09%

Outlook

Larry F. Mazza, CEO of MVB Financial, commented on November 5:

"The Federal Reserve's lowering of interest rates is driving a massive refinance boom that could last for another year or two. Our commercial and retail loan growth, along with our organic growth and M&A efforts requires MVB to further raise our capital base. In order to fuel this growth, we are preparing for a capital raise in the $20 -$25 million range."

"We are committed to growth with quality and to never lose sight of what it means to be a true community bank by adhering to a high service level while leveraging the technology expectations ahead. We are committed to organic growth and expanding our footprint in West Virginia while seeking strategic acquisitions that bring true value to our shareholders."

News

MVB Financial announced on December 21 that it had closed its previously announced acquisition of northern Virginia residential mortgage company Potomac Mortgage Group. The purchase price was approximately $19 million in cash and MVB common shares.

Peer Analysis

MVB Financial's peer group consists of the following: Citizens Financial (OTCQB:CIWV), First Century Bankshares (OTCQB:FCBS), First National Bankshares (OTCQB:FBSW), First Sentry Bancshares (OTCQB:FTSB), First West Virginia Bancorp (NYSEMKT:FWV), Highlands Bankshares (OTCQB:HBSI), Mountain-Valley Bancshares (OTC:MTVB) and Ohio Valley Banc Corp. (NASDAQ:OVBC). Here is a table comparing these companies.

CompanyMVBFPeer Average
P/E16.0014.50
P/B (%)124.5276.01
Dividend Yield (%)0.583.19

MVB Financial is trading above the peer average P/E and P/B ratio.

My analysis

There have been eight insider buy transactions and there have not been any insider sell transactions this year. The stock is currently trading above the tangible book value of $18.84 per share. I have a neutral bias for the stock currently based on the peer analysis.

3. DCB Financial Corp (OTCQB:DCBF) operates as the holding company for The Delaware County Bank and Trust Company that provides retail and commercial banking services.

Insider buys

  • Daniel Roberts purchased 2,632 shares on December 19 pursuant to a rights offering. Daniel Roberts currently holds 4,760 shares or less than 0.1% of the company. Daniel Roberts is Senior Vice President, Chief Credit Officer.
  • Charles Moore purchased 10,000 shares on December 19 pursuant to a rights offering. Charles Moore currently holds 16,128 shares or 0.2% of the company. Mr. Moore is the Chief Risk Officer and Executive Vice President.
  • Ronald Seiffert purchased 32,895 shares on December 19 pursuant to a rights offering. Ronald Seiffert currently holds 83,739 shares or 1.2% of the company. Ronald Seiffert serves as a director of the company.
  • Barbara Walters purchased 5,300 shares on December 19 pursuant to a rights offering. Barbara Walters currently holds 7,217 shares or 0.1% of the company. Mrs. Walters is the Senior Vice President of Retail Banking.
  • John Ustaszewski purchased 20,000 shares on December 19 pursuant to a rights offering. John Ustaszewski currently holds 28,109 shares or 0.4% of the company. Mr. Ustaszewski is a Senior Vice President and the Chief Financial Officer of the company.
  • Donald Wolf purchased 20,000 shares on December 19 pursuant to a rights offering. Donald Wolf currently holds 27,684 shares or 0.4% of the company. Donald Wolf serves as a director of the company.
  • Adam Stevenson purchased 7,800 shares on December 19 pursuant to a rights offering. Adam Stevenson currently holds 13,987 shares or 0.2% of the company. Adam Stevenson serves as a director of the company.
  • Mark Shipps purchased 32,895 shares on December 19 pursuant to a rights offering. Mark Shipps currently holds 36,101 shares or 0.5% of the company. Mark Shipps serves as a director of the company.
  • Edward Powers purchased 7,800 shares on December 19 pursuant to a rights offering. Edward Powers currently holds 34,107 shares or 0.5% of the company. Edward Powers serves as a director of the company.
  • Vicki Lewis purchased 26,316 shares on December 19 pursuant to a rights offering. Vicki Lewis currently holds 46,874 shares or 0.7% of the company. Vicki Lewis serves as a director of the company.
  • Gerald Kremer purchased 6,579 shares on December 19 pursuant to a rights offering. Gerald Kremer currently holds 9,523 shares or 0.1% of the company. Gerald Kremer serves as a director of the company.
  • Bart Johnson purchased 26,315 shares on December 19 pursuant to a rights offering. Bart Johnson currently holds 31,318 shares or 0.4% of the company. Bart Johnson serves as a director of the company.

Financials

The company reported the third-quarter financial results on November 14 with the following highlights:

Net income$0.3 million
Cash$48.2 million

The company announced on December 5 the completion of a $13.2 million capital raise.

Competition

DCB Financial's competitors include Camco Financial (CAFI), Fifth Third Bancorp (NASDAQ:FITB) and Huntington Bancshares (NASDAQ:HBAN). Here is a table comparing these companies.

CompanyDCBFCAFIFITBHBANIndustry
Market Cap:16.73M17.59M13.57B5.45B59.08M
Employees:12820520,78911,731435.00
Qtrly Rev Growth (yoy):-0.020.00-0.060.050.08
Revenue:19.37M30.52M6.17B2.62B37.03M
Operating Margin:0.050.260.370.370.32
Net Income:-443.00K2.24M1.45B568.88MN/A
EPS:-0.120.311.560.661.04
P/E:N/A7.679.729.6511.54
PEG (5 yr expected):N/AN/A1.721.711.91
P/S:0.840.552.202.092.17

DCB Financial is trading below the industry average P/S ratio.

My analysis

There have been 46 insider buy transactions and there have not been any insider sell transactions this year. I have a cautiously bullish bias for the stock currently based on the insider trading activity.

Source: 3 Financial Sector Stocks With Recent Intensive Insider Buying