Insider Buying Escalated in Regional Banking Companies
The following regional banks are highlighted because they reported multiple insider buys, and they are sold at or below book value. These are their stock prices:
1. NewBridge Bancorp (NBBC)
This week NewBridge reported 8 insiders making buys into the company. The insiders bought a total of 2,994 shares at an average price of $5.91. The total amount for these transaction equaled $17,729. These buys came as the price was sitting at a 52-week high.
What’s good about NewBridge:
- The bank has an equity to asset ratio of 11.4% as of Dec. 31, 2012.
- The nonperforming assets declined to $44.4 million. As a percentage of assets, nonperforming assets declined from 4.10% to 1.56%
- The P/B ratio is sitting at 0.8.
- The share prices have consistently grown since the price hit a low of $1.31 per share in 2009.
Possible concerns with NewBridge:
- The revenue per share has been in decline since 2006.
- The earnings per share have been in the red for four of the past six years.
NewBridge Bancorp is a holding company for NewBridge Bank. NewBridge Bank is a full-service, state-chartered bank headquartered in Greensboro, N.C., with operations in North Carolina and Virginia.
The company released their earnings statement for the first quarter on April 22. The company reported a net income available to common shareholders totaled $4 million compared to $781,000 reported for the same quarter in 2012. The full net income was $4.7 million, an increase of 213% over the first quarter 2012.
Jim Simons currently holds 63,100 shares of NewBridge.
With its shares up 0.85% this morning, NewBridge trades at $5.96.
2. Pacific Continental (PCBK)
This week Pacific Continental reported five insiders making buys into the company. These buys come as the company’s price is close to a two-year high of $11.51.
The five insiders bought a total of 5,415 shares at an average price of $10.49. These insiders spent a combined $56,803 on these buys.
What’s good about Pacific Continental:
- The equity to asset ratio is at a healthy 13.78%.
- Nonperforming assets as a percentage of total assets is at 1.92%
- The dividend yield is close to a three-year high
- The P/B Ratio is at 1.
- The price is nearing a two-year high as it is recovering from a slump that lasted from 2007 to 2011.
Possible concerns with Pacific Continental:
- Revenue has been declining for the past five years.
PCBK data by GuruFocus.com
On April 24, Pacific Continental approved an increase in the regular cash dividend from $0.08 to $0.09 per share. Also, the Board announced a special cash dividend of $0.05 per share.
The company also released its financials for the first quarter of 2013 on April 24. Some of the highlights include: The company completed an acquisition of Century Bank, it achieved a net income of $2.5 million, and they announced that they would be reinstating their stock repurchase plan.
Pacific Continental is a banking system that offers financial services in three main areas in the Pacific Northwest: Seattle, Portland and Eugene. The bank targets the needs of community-based businesses, health care professionals, professional service providers and non-profit organizations.
Jim Simons holds 80,200 shares and Chuck Royce holds 535,697 shares of Pacific Continental.
With its shares up 1.46%, Pacific Continental trades at $11.11.
3. Huntington Bancshares (HBAN)
This week Huntington reported two insiders making buys into the company. These insiders added a total of 12,340 shares at an average price of $6.95 per share. The combined total these insiders spent was $85,687.
What’s good about Huntington:
- The equity to asset ratio is at 22.5%
- Nonperforming assets as a percentage of total assets is at 1.09%.
- The P/B Ratio is at 1.
- Revenues have been increasing for the past three years.
- The net income and EPS have steadily increased since 2009.
Possible concerns with Huntington:
- The revenue per share has decreased for the past five years
- The company is nearing a five-year high P/S Ratio of 2.41.
- They have reported a decrease in their free cash flow for the past several years.
This past week, Huntington Bancshares released their financial information that reported a net income of $151.8 million which is down 1% from the first quarter of 2012 and down 7% from the last quarter. The company also announced a 25% increase in their quarterly cash dividend on common stock to $0.05 per share.
The gurus Steven Cohen, Arnold Schneider, Paul Tudor Jones, Pioneer Investments and Jeremy Grantham all hold stake in Huntington Bancshares. To see the shares they hold, click here.
With its shares up 0.21%, Huntington trades at $7.15.
4. Horizon Bancorp (HBNC)
Horizon Bancorp reported two insider buys on April 23. The insiders bought a total of 5,500 shares at an average price of $19.40 per share. These two buys cost the corporate executives a total of $106,725.
These buys come as the price of the company is nearing a 10-year high.
What’s good about Horizon Bancorp:
- The bank has an equity ratio of 8.63% as of Dec. 31, 2012.
- The nonperforming assets is at 1.09%.
- The operating margin for Horizon is expanding.
- The revenue has grown 10.6% over the past 10 years and 5.9% over the past year.
- The EPS has consistently grown since 2009.
- The P/B Ratio is at 1.
HBNC data by GuruFocus.com
Possible concerns with Horizon:
- The revenue has slowed down in the past year.
- The dividend yield is close to a five-year low.
- The company has issued $52.068 million of debt in the past three years.
Horizon Bancorp is a banking system that covers Northern Indiana and Southern Michigan. The company offers banking, investment and trust services, and provides mortgage — banking services throughout the Midwest.
The company’s first quarter financials reported that the net income was $5.3 million, or $0.58 per diluted share. This is the highest earning quarter in the company’s history. The company also reported that their tangible book value per share rose to $14.64, up from $14.24. Horizon’s non-interest income also rose to $7.5 million up from $5.1 million in the same quarter of 2012.
John Keeley owns 15,000 shares of Horizon Bancorp.
With its shares up 0.03%, Horizon Bancorp trades at $19.19.
5. Norwood Financial (NWFL)
Norwood Financial reported two insider buys occurring on April 22. These two executives purchased a total of 1,268 shares at an average price of $30.20 per share. These buys cost a total of $38,284.
These shares were purchased as the price of Norwood nears a five-year high of $33.25.
What’s good about Norwood:
- Norwood Financial has shown predictable revenue and earnings growth.
- The bank has an equity to asset ratio of 13.36%.
- The price is near a five-year high.
- The net income has steadily increased over the past 10 years.
- The company’s total assets are currently at a 10-year high with 2.09% of those being nonperforming assets.
- The P/B ratio is at 1.1.
NWFL data by GuruFocus.com
Possible concerns with Norwood:
- The operating margin has been in decline for the past five years. The average rate of decline is 3%.
- The dividend yield is close to a three-year low.
Norwood Financial is a holding company for Wayne Bank that operates out of Pennsylvania. The company offers personal and business credit services as well as trust and investment products and real estate settlement services to consumers, businesses, non-profit organizations and municipalities.
There are currently no gurus that hold a stake in the company.
The company currently trades at $31.