Bank Insider Buys Up March 8-10, 13: Watch Insiders This Week
- Last week bank stock prices plummeted ~16%. The big drop prompted me to write two grim articles.
- While dark clouds are on the bank horizon, a silver lining may be developing. Or maybe I am just looking for good cheer.
- 73 bank insiders bought their banks' shares last Wednesday to Friday. Nine more buys posted as of noon March 13. Sixteen buys $100,000+. Biggest # insider buys since September 2020.
- Here is a run-down of the banks showing insider buys March 8-10 plus buys through 1 pm on March 13.
- I will be closely monitoring bank insider activity this week. This article also includes headline thoughts on four banks of particular interest to me.
Having written two grim articles this past Saturday, I need some good news.
Maybe I have some. Or maybe I am just looking for silver linings around dark clouds.
I pay close attention to bank insider sales and buys. My study of insider trades shows that buying patterns should be monitored.
For example, there have been two times during the past decade when insider buying got so brisk that it prompted me to act.
The first was in February 2016 when the world (once again) seemed to be coming to an end (the problem then was Brexit and oil/natural gas prices). Bank stocks got creamed. Two big buys caught my attention. The first was Jamie Dimon buying $25 million in shares of JPMorgan Chase & Co. (JPM) and the other being a $1 million purchase of Cullen/Frost Bankers, Inc. (CFR) by the retiring CEO of the bank. I saw both as clear "Buy" signals and jumped on board. I still hold shares bought then.
The second time was September 2020. Insider bank buys exploded. Those buys coincided with bank lows. How prescient were those buyers of bank stocks in September 2020? The SPDR S&P Bank ETF (KBE) popped a whopping 71% from 8/31/2020 to 9/30/2021. Not bad.
While any one individual bank insider share purchase or sale can be meaningless, major trends can be revealing. I want to know about bank insider confidence at this time when storm clouds seem thick.
Source and Methodology
I go to openinsider.com almost every day. The first tab I usually check is "Financials Industry/Depository Institutions." I look for two things. First, what's the big picture trend? Second, are there any really big (>$250,000) buys by highly informed insiders. As a rule of thumb, I view CFO and CEO buys as the most important to watch. History indicates that buys by CFO and CEOs, especially if material (like real skin in the game) can be a buy signal.
March 8th to 10th, 13th as of 1 PM
Since September 2020, insider buying has been tepid and haphazard.
For the first time in more than two years I saw a meaningful pop in insider buying during the last three days of last week. The buys correspond to the 15% average decline in bank stock prices as well as the awful news from the West Coast.
The first table below shows the most recent buys for bank insiders from March 8 - 10 as well as buys posted on Monday, the 13th as of 1 pm. The second table shows bank insiders buys by just CFOs, CEO, and Board Chairs. I added buys from March 7 to this list.
Table 1: Bank Insider Buys
|Ticker||Company Name||Price||Qty.||Owned||Chg. Own.||Value|
|ALRS)||Alerus Financial Corp||$18.94||789||37,530||2%||$14,941|
|AROW)||Arrow Financial Corp||$27.57||1,000||46,329||2%||$27,566|
|ASRV)||Ameriserv Financial Inc||$3.86||1,500||118,488||1%||$5,789|
|AX)||Axos Financial, Inc.||$37.80||1,320||69,542||2%||$49,896|
|BPRN)||Princeton Bancorp, Inc.||$33.78||1,296||620,724||0%||$43,777|
|BRKL)||Brookline Bancorp Inc||$11.59||25,000||193,662||15%||$289,819|
|BRKL)||Brookline Bancorp Inc||$12.14||10,000||168,662||6%||$121,384|
|BWFG)||Bankwell Financial Group, Inc.||$27.50||30,000||80,108||60%||$825,000|
|BYFC)||Broadway Financial Corp||$1.18||7,500||74,833||11%||$8,848|
|OTCQB:CBKM)||Consumers Bancorp Inc||$18.15||1,200||18,848||7%||$21,785|
|OTCQB:CBKM)||Consumers Bancorp Inc||$18.50||500||56,160||1%||$9,250|
|CCNE)||Cnb Financial Corp/pa||$23.47||64||30,527||0%||$1,493|
|CCNE)||Cnb Financial Corp/pa||$23.47||42||6,210||1%||$996|
|CNOB)||Connectone Bancorp, Inc.||$20.95||10,000||316,568||3%||$209,490|
|CTBI)||Community Trust Bancorp Inc||$40.06||500||48,752||1%||$20,030|
|CUBI)||Customers Bancorp, Inc.||$11.00||45,450||1,681,616||3%||$499,950|
|CVBF)||Cvb Financial Corp||$21.60||1,000||90,128||1%||$21,597|
|CVBF)||Cvb Financial Corp||$21.49||1,000||79,271||1%||$21,486|
|CVBF)||Cvb Financial Corp||$21.18||1,000||122,463||1%||$21,180|
|CVBF)||Cvb Financial Corp||$21.00||1,000||27,000||4%||$21,000|
|CVBF)||Cvb Financial Corp||$20.76||1,000||41,392||2%||$20,760|
|OTCQX:ENBP)||Enb Financial Corp||$16.19||500||2,526||25%||$8,095|
|EQBK)||Equity Bancshares Inc||$27.82||2,500||35,451||8%||$69,560|
|EQBK)||Equity Bancshares Inc||$27.70||2,000||41,522||5%||$55,400|
|FCNCA)||First Citizens Bancshares Inc||$678.80||73||1,119||7%||$49,552|
|FFIN)||First Financial Bankshares Inc||$35.46||3,000||11,000||38%||$106,366|
|FFIN)||First Financial Bankshares Inc||$34.43||2,000||976,557||0%||$68,860|
|FFIN)||First Financial Bankshares Inc||$33.83||850||94,108||1%||$28,756|
|OTCQX:FMBM)||F&m Bank Corp||$22.33||725||7,693||10%||$16,188|
|FMNB)||Farmers National Banc Corp||$12.79||2,000||24,597||9%||$25,580|
|FNWB)||First Northwest Bancorp||$13.88||1,000||30,091||3%||$13,880|
|FRAF)||Franklin Financial Services Corp||$32.50||3||9,493||0%||$98|
|FRST)||Primis Financial Corp.||$10.22||1,900||35,009||6%||$19,421|
|FRST)||Primis Financial Corp.||$11.44||1,255||7,371||21%||$14,357|
|GBCI)||Glacier Bancorp, Inc.||$40.21||5,000||86,574||6%||$201,063|
|GBCI)||Glacier Bancorp, Inc.||$38.74||2,578||102,299||3%||$99,861|
|GBCI)||Glacier Bancorp, Inc.||$39.19||2,500||101,181||3%||$97,975|
|HWBK)||Hawthorn Bancshares, Inc.||$24.97||830||830||New||$20,725|
|OTCQX:JUVF)||Juniata Valley Financial Corp||$16.00||348||3,192||12%||$5,568|
|OTCQX:JUVF)||Juniata Valley Financial Corp||$15.50||100||45,696||0%||$1,550|
|KRNY)||Kearny Financial Corp.||$8.90||4,500||116,521||4%||$40,031|
|LARK)||Landmark Bancorp Inc||$22.30||3,294||210,154||2%||$73,471|
|LKFN)||Lakeland Financial Corp||$64.68||10,000||202,298||5%||$646,759|
|MCB)||Metropolitan Bank Holding Corp.||$24.20||20,517||373,345||6%||$496,423|
|MCB)||Metropolitan Bank Holding Corp.||$21.63||2,300||24,215||10%||$49,748|
|MCB)||Metropolitan Bank Holding Corp.||$14.98||2,000||13,668||17%||$29,960|
|MCB)||Metropolitan Bank Holding Corp.||$22.24||1,000||15,143||7%||$22,240|
|MCB)||Metropolitan Bank Holding Corp.||$21.22||1,000||27,057||4%||$21,220|
|MPB)||Mid Penn Bancorp Inc||$29.40||1,000||52,047||2%||$29,400|
|MSBI)||Midland States Bancorp, Inc.||$23.42||521||353,734||0%||$12,203|
|MVBF)||Mvb Financial Corp||$25.73||5,000||42,834||13%||$128,650|
|MVBF)||Mvb Financial Corp||$25.41||984||984||New||$25,003|
|NECB)||Northeast Community Bancorp, Inc||$15.48||4,000||24,493||20%||$61,930|
|NKSH)||National Bankshares Inc||$40.98||160||6,410||3%||$6,557|
|NWBI)||Northwest Bancshares, Inc.||$12.75||1,959||55,502||4%||$24,972|
|PDLB)||Ponce Financial Group, Inc.||$8.23||5,000||353,831||1%||$41,169|
|PDLB)||Ponce Financial Group, Inc.||$8.58||4,700||342,324||1%||$40,326|
|PDLB)||Ponce Financial Group, Inc.||$8.16||613||1,919||47%||$5,000|
|PEBO)||Peoples Bancorp Inc||$28.53||2,100||21,101||11%||$59,913|
|OTC:PFBX)||Peoples Financial Corp /ms/||$14.00||5,000||534,087||1%||$70,000|
|PFS)||Provident Financial Services Inc||$20.62||1,500||112,664||1%||$30,929|
|QCRH)||Qcr Holdings Inc||$46.30||10,000||38,795||35%||$462,993|
|QCRH)||Qcr Holdings Inc||$47.49||1,000||8,241||14%||$47,490|
|QCRH)||Qcr Holdings Inc||$45.98||600||5,574||12%||$27,588|
|SFST)||Southern First Bancshares Inc||$38.21||1,000||7,800||15%||$38,210|
|SMBC)||Southern Missouri Bancorp, Inc.||$42.78||2,495||275,924||1%||$106,736|
|SMMF)||Summit Financial Group, Inc.||$22.85||5,289||13,585||64%||$120,854|
|TCBX)||Third Coast Bancshares, Inc.||$16.87||2,900||12,892||29%||$48,914|
|THFF)||First Financial Corp||$40.18||1,500||7,500||25%||$60,272|
|THFF)||First Financial Corp||$40.87||40||945||4%||$1,635|
|TRST)||Trustco Bank Corp N Y||$35.06||713||29,798||2%||$24,998|
|UNTY)||Unity Bancorp Inc||$25.29||2,150||25,078||9%||$54,383|
|VLY)||Valley National Bancorp||$10.99||100||100||New||$1,099|
|WAFD)||Washington Federal Inc||$31.10||3,500||51,879||7%||$108,850|
Table 2: Insider Buys by CFOs, CEOs, COBs
|(FCNCA)||COB, CEO, 10%||$722.51||1020||664,443|
I will keep an eye on bank insider trades this week. With the quarter coming to an end on March 31, I expect insider trades will slow as the SEC imposes blackout rules on trading when earnings announcements are imminent.
Certain trades in the tables above seem most interesting for follow-up.
First, the Raleigh, North Carolina-based First Citizens trades March 7 to 10 came after four other buys by the bank's CEO/COB and CFO in January and February. For those who know the bank, you know that the Holding family controls it. Smart people. Great CFO.
I find it intriguing that insiders at Southern California's Citizens Business Bank (CVBF) are stepping up and buying shares at ~$21.50 after hitting a $28+ high last year. However, the buys are pretty small in the scheme of things. I owned the bank for several years but sold in 2018 at about the same price the bank is today. As I recall, I rotated out of CVBF because I found greater long-term value in owning Stock Yards Bancorp, Inc. (SYBT) shares. Readers of my recent "Finding Buffett Banks" article may recall that CVBF was among the banks I mentioned.
Also noted in the "Buffett Banks" article was First Financial headquartered in Abilene, Texas. March 10 close: $32.88. Insiders there have been buyers the past six months. I count six trades this year (price range $34.08 - $37.95) and six last October (range $36.80 - $37.99). I noticed this trend last month and started nibbling on the shares for the first time. The new CFO has significant banking experience. She is a fantastic add to a bank that is perennially one of the most profitable banks in the US. I especially like seeing the new CFO step-up three different times to buy 11,000 shares in the open market (~$400,000). For all too long I avoided FFIN shares because of nosebleed valuations. Expect to hear more from me on this one in the future.
Disclosure: I am adding to my position in FFIN today.
The biggest buy comes out of SouthState Bank (SSB). I do not know this bank as well as I should. It is based in Winter Haven, FL (home of Publix Supermarket). It was known as Centerstate until it bought a South Carolina bank a few years ago and kept the bank's name. As a serial acquirer, it has not been on my radar. But after the $1 million buy, I will dig in and see what might be motivating the SSB director to make such an aggressive move. This same director acquired another $500,000 in shares in December ($78.94/share).
The last insider buy I will mention is Arrow Financial. I wrote about this small upper state New York bank in September 2021. This low-Beta investment has not worked as planned. Share buybacks have been anemic. And until the March 10 insider buy, insiders have been frequent sellers of a small number of shares over the past six months. Late last year I began selling shares and continued to do so into last week. My current position is miniscule and will likely move to zero soon. Do not get me wrong, this is a very well-managed bank, however, its bread-and-butter loan product is auto lending. This kind of lending gets no respect today by investors. My sense is that AROW will bump along just fine, but I like holding some cash and FFIN for now instead of AROW shares.
Final Thoughts and Observations
I mentioned the "Buffett Banks" article earlier. That article identified 16 small banks that share some number of the six criteria Buffett applied to the bank he owned from 1969-1980. Please know that I do not find all these banks equally attractive. I am still analyzing the banks with the goal of writing up the five I like best for long-term holds. Last week when the SPDR® S&P Regional Banking ETF (KRE) was down -16%, the 16 banks referenced in article were down on average -7.8%. None were down during the week more than KRE. The two worst performers of the 16 banks, no surprise, were the two whose balance sheets are likely to be hurt most by rising interest rates.
I expect bank stocks will be under considerable pressure over the next six weeks. There is just too much uncertainty. Q1 earnings calls should be spicey.
The pop in insider buys over the past four trading days is a silver lining against dark clouds of uncertainty.
I will keep a close eye on insider activity this week.
Appreciate your comments, ideas, and suggestions.
Investors need to do their own research before buying bank stocks. The data presented in this analysis is correct to the best of my judgment, but investors should do their own independent analysis to confirm.
Investors are prudent to quantify their appetite for bank risk given this sector's history for volatility. My in-house cap is 6-10% of equity holdings. The actual weighting is dependent on market conditions. In addition, I recommend investors diversify bank holdings across a minimum of ten banks. These banks should encompass different strategies/customer segments, asset classes, and geographies. As a rule, I prefer owning High Quality banks with a long history of generating returns in excess of cost of capital.
This article was written by
Analyst’s Disclosure: I/we have a beneficial long position in the shares of FFIN, AROW, CFR, SYBT, JPM either through stock ownership, options, or other derivatives. 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.
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