3 Banks With Recent Intensive Insider Buying

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 |  Includes: BOTJ, CNOB, COB
by: Markus Aarnio

The financial sector has been the best-performing group over the recent one-month period with a gain of 8.0%.

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In this article I will feature three financial sector stocks that have seen 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 increase their holdings by more than 10%.

1. FNB United Corp. (FNBN) operates as the bank holding company for CommunityOne Bank, N.A. and Bank of Granite, which provide consumer, wealth management, mortgage, and business banking services to individual and business customers in North Carolina.

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Insider buying by insider (last 30 days)

  • Neil Machovec purchased 5,869 shares on May 8 and currently controls 9,309 shares or less than 0.1% of the company. Neil Machovec is Chief Credit Officer.
  • Chandler Martin purchased 10,000 shares on May 9 and currently holds 19,375 shares or less than 0.1% of the company. Chandler Martin serves as a director of the company.
  • Brian Simpson purchased 8,000 shares on May 8-10 and currently holds 54,634 shares or 0.3% of the company. Brian Simpson is Chief Executive Officer of the company.
  • Robert Reid purchased 6,400 shares on May 8-9 and currently holds 51,910 shares or 0.2% of the company. Robert Reid is President of the company.
  • Beth DeSimone purchased 5,300 shares on May 8 and currently holds 23,269 shares or 0.1% of the company. Beth DeSimone is Executive Vice President, General Counsel and Secretary of the company.
  • Angus McBryde purchased 8,038 shares on May 8 and currently holds 33,137 shares or 0.2% of the company. Angus McBryde serves as Treasurer for the company.
  • Gregory Murphy purchased 5,646 shares on May 8 and currently holds 35,626 shares or 0.2% of the company. Gregory Murphy serves as Chief Workout Officer for the company.
  • David Nielsen purchased 10,000 shares on May 8 and currently holds 54,776 shares or 0.3% of the company. David Nielsen serves as Chief Financial Officer for the company.

Insider buying by calendar month

Here is a table of FNB United's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2013 59,253 0
April 2013 0 0
March 2013 0 0
February 2013 0 0
January 2013 0 0
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The month of May has seen all of the insider buying this year.

Financials

The company reported the first-quarter financial results on May 6 with the following highlights:

Net loss $4.6 million
Book value $4.12 per share
Tangible book value $3.58 per share
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Competition

FNB United's competitors include First Bancorp (NASDAQ:FBNC), NewBridge Bancorp (NASDAQ:NBBC) and The PNC Financial Services Group (NYSE:PNC). Here is a table comparing these companies.

Company FNBN FBNC NBBC PNC Industry Average (Regional - Mid-Atlantic Banks)
Market Cap: 157.58M 274.58M 122.96M 36.42B 13.35M
Employees: 629 810 408 50,942 N/A
Qtrly Rev Growth (yoy): 0.36 0.76 0.20 0.04 0.00
Revenue: 74.85M 68.91M 33.19M 14.69B 9.81M
Operating Margin: -0.03 -0.38 -0.68 0.27 0.21
Net Income: -33.74M -17.42M -24.95M 2.99B N/A
EPS: -1.57 -0.99 -1.48 5.63 0.62
P/E: N/A N/A N/A 12.24 11.32
PEG (5 yr expected): N/A 1.76 1.89 1.32 N/A
P/S: 2.09 3.96 3.73 2.47 1.36
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FNB United's P/S ratio is lower than its direct competitors' but higher than the industry average.

My analysis

There have been eighth different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The company has a book value of $4.12 per share, which could be a good entry point for the stock.

2. Bank of the James Financial Group (NASDAQ:BOTJ) operates as the holding company for Bank of the James that provides retail and commercial banking services in Virginia.

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Insider buying by insider (last 30 days)

  • Robert Chapman purchased 1,000 shares on April 29 - May 9 and currently holds 94,016 shares or 2.8% of the company. Robert Chapman is President and Chief Executive Officer.
  • Julie Doyle purchased 900 shares on April 29 - May 6 and currently holds 1,076 shares or less than 0.1% of the company. Julie Doyle serves as a director of the company.
  • John Alford purchased 500 shares on April 30 and currently holds 7,222 shares or 0.2% of the company. John Alford serves as a director of the company.
  • Thomas Pettyjohn's wife purchased 300 shares on April 30. Thomas Pettyjohn currently controls 15,905 shares or 0.5% of the company. Thomas Pettyjohn is the Chairman of the Board of Bank of the James Financial Group.
  • Michael Syrek purchased 1,000 shares on April 29 and currently controls 5,000 shares or 0.1% of the company. Michael Syrek is Executive Vice President and Senior Loan Officer.

Insider buying by calendar month

Here is a table of Bank of the James' insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2013 650 0
April 2013 3,050 0
March 2013 0 0
February 2013 0 0
January 2013 1,000 0
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There have been 4,700 shares purchased and zero shares sold this year.

Financials

The company reported the first-quarter financial results on April 26 with the following highlights:

Net income $0.8 million
Book value $8.94 per share
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Competition

Bank of the James Financial Group's peer group consists of the following: Atlantic BancGroup (ATBC), Cardinal Bankshares Corporation (OTCPK:CDBK), Community Bank of Parkersburg (CBWV), Exchange Bankshares (OTCPK:EXCH), First Capital Bancorp (NASDAQ:FCVA), First National Bankshares Corp. (OTCPK:FBSW), OptimumBank Holdings (NASDAQ:OPHC), United Financial Banking Companies (OTCQB:UFBC), Village Bank and Trust Financial Corp. (NASDAQ:VBFC). Here is a table comparing these companies.

Company BOTJ Peer Average
P/E 10.13 12.06
P/B (%) 88.37 74.77
Dividend Yield (%) 0.00 0.52
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Bank of the James is trading below the peer average P/E ratio.

My analysis

There have been five different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The stock is trading at a P/E ratio of 10.13 and the company has a book value of $8.94 per share. I believe the stock could be a good pick below the book value.

3. ConnectOne Bancorp (NASDAQ:CNOB) is a community-based, full-service New Jersey-chartered commercial bank that was founded in 2005.

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Insider buying by insider (last 30 days)

  • Frank Baier purchased 2,000 shares on May 9 and currently holds 21,720 shares or 0.4% of the company. Frank Baier serves as a director of the company.
  • Steven Goldman purchased 5,500 shares on May 3 and currently holds 31,042 shares or 0.6% of the company. Steven Goldman has served as Director of ConnectOne Bancorp and North Jersey Community Bank since 2011.
  • Frank Sorrentino purchased 3,660 shares on April 30 and currently controls 137,601 shares or 2.8% of the company. Frank Sorrentino is Chairman & CEO of the company.

Insider buying by calendar month

Here is a table of ConnectOne's insider trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
May 2013 7,500 0
April 2013 3,660 0
March 2013 0 0
February 2013 20,415 0
January 2013 0 0
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There have been 31,575 shares purchased and zero shares sold this year.

Financials

The company reported the first-quarter financial results on April 26 with the following highlights:

Net income $2.3 million
Tangible book value $24.33 per share
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Competition

ConnectOne's peer group consists of the following: Bay Commercial Bank (OTCQB:BCML), Community Financial Shares (OTCPK:CFIS), DCB Financial Corp (OTCPK:DCBF), Fauquier Bankshares (NASDAQ:FBSS), FNB Bancorp (OTCQB:FNBG), Frederick County Bancorp (OTCPK:FCBI), Patriot National Bancorp (NASDAQ:PNBK), West Suburban Bancorp (OTCPK:WNRP). Here is a table comparing these companies.

Company CNOB Peer Average
P/E 11.36 18.17
P/B (%) 119.71 119.61
Dividend Yield (%) 0.00 1.19
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ConnectOne is trading below the peer average P/E ratio.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There is one analyst buy rating, zero neutral ratings and zero sell ratings, with an average target price of $34.00. The stock is trading at a P/E ratio of 11.38 and a forward P/E ratio of 12.04. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.