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An Alternative to Zombie Banks: 10 Regional Banks With Significant Insider Buying

By: Kapitall
Posted: 8/26/2011 6:16:00 PM
Referenced Stocks: BBNK;CBKN;CNBC;CPF;HBOS;HEOP;MBRG;PNBK;TIBB;WBS

(List compiled by Danny Guttridge and Eben Esterhuizen, CFA)

So much has been written about the troubles at large financial institutions, but what about the smaller, regional banks?

While everyone seems to be in a rush to dump financial stocks, many of these seemingly stable banks have been (unfairly) grouped together with the troubles at larger, more complex financial institutions.

This extreme pessimism that has dragged down the rest of the financial sector may have created opportunities for long-term investors willing to invest in "old-school" banks with a regional exposure.

To help you get ideas, we collected data on insider buying, and identified a list of regional banks that have seen significant insider buying over the last six months.

Of course, insiders know more about their businesses than anyone else.

So if they are using their own cash to buy the shares of their employers, you better pay close attention. 

Use this list as a starting point for your own analysis. 

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The list has been sorted by the relative size of insider buying over the last six months.

1. Bridge Capital Holdings (BBNK): Regional bank in the Pacific region. Market cap of $150.90M. Net insider purchases over the last six months at 1.08M shares, which is 14.72% of the company's 7.36M share float. Relatively low correlation to the market (beta = 0.58), which may be appealing to risk averse investors. The stock has gained 12.11% over the last year.

2. Patriot National Bancorp Inc. (PNBK): Regional bank in the Northeast. Market cap of $73.65M. Net insider purchases over the last six months at 141.09K shares, which is 6.16% of the company's 2.29M share float. The stock is currently stuck in a downtrend, trading -6.46% below its SMA20, -5.97% below its SMA50, and -9.68% below its SMA200.

3. Center Bancorp Inc. (CNBC): Regional bank in the Northeast. Market cap of $149.87M. Net insider purchases over the last six months at 474.58K shares, which is 3.93% of the company's 12.09M share float. The stock is a short squeeze candidate, with a short float at 5.43% (equivalent to 13.47 days of average volume). The stock has gained 29.21% over the last year.

4. Webster Financial Corp. (WBS): Regional bank in the Northeast. Market cap of $1.41B. Net insider purchases over the last six months at 2.05M shares, which is 2.85% of the company's 72.09M share float. The stock is a short squeeze candidate, with a short float at 5.93% (equivalent to 7.89 days of average volume).

5. Central Pacific Financial Corp. (CPF): Regional bank in the Pacific region. Market cap of $496.29M. Net insider purchases over the last six months at 515.50K shares, which is 2.33% of the company's 22.14M share float.

6. TIB Financial Corp. (TIBB): Regional bank in the mid-Atlantic region. Market cap of $144.49M. Net insider purchases over the last six months at 8.98K shares, which is 1.35% of the company's 667.14K share float.

7. Heritage Financial Group (HBOS): Regional bank in the mid-Atlantic region. Market cap of $100.13M. Net insider purchases over the last six months at 57.0K shares, which is 0.99% of the company's 5.76M share float.

8. Capital Bank Corporation (CBKN): Regional bank in the mid-Atlantic region. Market cap of $228.23M. Net insider purchases over the last six months at 99.65K shares, which is 0.71% of the company's 13.97M share float. Relatively low correlation to the market (beta = 0.67), which may be appealing to risk averse investors. The stock has gained 61.21% over the last year.

9. Middleburg Financial Corporation (MBRG): Regional bank in the mid-Atlantic region. Market cap of $106.05M. Net insider purchases over the last six months at 35.65K shares, which is 0.69% of the company's 5.15M share float. The stock has gained 10.18% over the last year.

10. Heritage Oaks Bancorp (HEOP): Regional bank in the Pacific region. Market cap of $82.26M. Net insider purchases over the last six months at 100.50K shares, which is 0.65% of the company's 15.36M share float. The stock has performed poorly over the last month, losing 11.35%.