Regional banks saw a huge inflow of investor money in the first quarter, led by insiders who apparently took the opportunity in the sector’s weakness to make their lower-priced moves.
Rocked by the collapse of several U.S. lenders, shares of the country’s regional banks as a group declined in the quarter, as seen in the almost-25% decline in the iShares U.S. Regional Banks ETF (US:IAT) and the 19% decline in the Invesco KBW Regional Banking ETF (US:KBWR).
But it seems like the insiders have a different opinion on the direction of regional banking shares.
Bullish Indicators
For years, academics have considered whether insider trading can predict future stock performance and there is ample evidence to suggest that corporate insiders outperform the market when buying shares in their own companies.
Insiders, such as executives or board members, may buy shares in their own company for various reasons. One of the primary reasons is a belief in the company’s future success and a positive outlook on its growth prospects. Insiders may also buy shares to demonstrate their commitment to the company’s goals, fulfill obligations related to their compensation, or take advantage of undervaluation.
Insider buying can be seen as a bullish indicator for the stock as it signals that those with the most knowledge about the company’s operations and prospects are confident in its future.
The Fintel Net Buyer Count Leaderboard identifies which U.S. stocks have experienced the greatest number of insiders buying shares in the company and ranks them in order from highest to lowest.
The current list is dominated by U.S. regional banking institutions — eight of the top 10 — following the sector’s sharp sell-off amidst the current banking crisis that is unfolding.
Consumers Bancorp, Inc. (CBKM)
The top-ranked company is Consumers Bancorp, Inc. (CBKM), with a market cap of $56 million and 13 net insiders reported buying 0.36% of the stock’s float over the last 90 days. Insiders own a total of 14.5% of CBKM stock. Several insiders have actively been buying shares in CBKM in the last six months as highlighted by the Fintel platform. In March, buying activity ramped up, with the stock trading at its lowest point of the year.
Isabella Bank Corp (ISBA)
Isabella Bank Corp (ISBA) is the second-ranked company, with a market cap of $171 million and 12 insiders that have purchased 0.1% of the float in recent months. Insiders at the Mount Pleasant, Michigan-based lender own about 16% of the outstanding shares in the company. The ISBA stock price has traded against the tide of the banking cohort, rising over the last year. Insiders have purchased shares in the ranges of $21 to $23 per share during the last quarter.
TrustCo Bank Corp NY (TRST)
TrustCo Bank Corp NY (TRST) is the third-ranked company, with a market cap of $607 million and net 11 insider buyers. The insiders have purchased about 0.1% of the float in recent months and own a total of 3.7% of the outstanding shares. The insider trades in TRST have occurred sporadically over the quarter as the bank continues to trade on a cheap 8.1 price-to-earnings ratio with a strong, 4.53% dividend yield.
PacWest Bancorp (PACW)
PacWest Bancorp (PACW) is fourth on the list with a $1.1 billion market cap and 11 net insiders that have bought 0.07% of the float in recent months. Insiders own about 6.3% of the total PACW stock float. All of the insider trades occurred in March in-line with the banking sector sell-off.
Summit Financial Group, Inc. (SMMF)
Summit Financial Group, Inc. (SMMF) ranks in fifth spot with 10 net insiders that have acquired 0.2% of the float in the last 90 days. Insiders in total own about 10% of the float. The SMMF stock insider buying activity has occurred frequently over the last 90 days as SMMF’s share price has proven weak in 2023, giving up gains from the pandemic.
Air Transport Services Group Inc. (ATSG)
The number six spot breaks from the regional banks, with Air Transport Services Group Inc. (ATSG). Data compiled by Fintel shows 10 net insiders have purchased 0.03% of the float recently. Insiders own almost 27% of the ATSG stock float. All of the insider purchases occurred in March during the trading window post Q4 results which pushed shares lower on the weaker-than-expected guidance.
Valley National Bancorp (VLY)
Back to banks for the seventh stock on our list, with Valley National Bancorp (VLY). Its 10 net insiders have purchased 0.04% of the float in recent months. These insiders own about 16.5% of the total float post purchases. Majority of the VLY stock trades occurred in March when the banks share price retreated significantly.
NEWTEK Business Services Corp (NEWT)
The other non-bank among our top 10 is NEWTEK Business Services Corp (NEWT), in the eighth spot with 10 net insiders that have purchased 0.31% of the float in the last 90 days. As a result, insider ownership grew to almost 7% of the total float. The insider trades in the stock have occurred frequently in recent months as shares have continued to decline from highs reached in mid-2021.
BCB Bancorp Inc. (BCBP)
BCB Bancorp Inc. (BCBP) ranks ninth with 10 net insiders buying about 0.13% of the float in recent months. Insiders own about 13% of BCBP stock’s total float and have been primarily buying stock in March, following the banks share price correction.
Metropolitan Bank Holding Corp (MCB)
New York’s Metropolitan Bank Holding Corp (MCB) is the final stock on the list with 10 insiders that have purchased 0.3% of the float recently. MCB’s insiders own about 9.5% of the float now. Fintel journalists recently covered developments about a short-seller attack on MCB which resulted in insiders buying shares on the drop in the short report’s wake.
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
