Alpha Buying: Bank Insiders Are Quietly Loading Up — Here's Where

Insiders began showing back up last week. A little bit of selling pressure, combined with the fact that insider windows were reopening for companies that already reported earnings, caused some executives and directors to open their checkbook and buy shares of the companies they help oversee.

Leading the charge were bankers and bank board members. 8 of the 32 companies that saw six figure purchases in the last week were banks.

Let me save most of you some time so you can get back to trading the same stocks everyone else is and searching for that elusive magic pattern that locks in a 90%-win rate with triple digit gains.

These are all small banks. Unless you live in their market area you have probably never heard of them.

They do not have investment banks.

They do not trade foreign currencies or fixed income.

They will probably not be mentioned on the CNBC today and the Instant Exprts of the Internet could not find them on a map but are pretty sure they are on the brink of failure because of commercial real estate and the fact that all of their deposits will go to stablecoin issuers any minute now.

These are the rock-solid small banks that are the backbone of small business and the American economy.

Thanks to a much friendlier regulatory environment and a less ridiculously strict M&A environment, the upside potential for these small banks is higher than it has bene in several years.

The bankers and directors of these 8 banks certainly think so.

CVB Financial (Ticker: CVBF) operates as the holding company for Citizens Business Bank, distinguishing itself through a specialized focus on agricultural lending in California’s Central Valley. Founded in 1981 by George A. Borba, the institution has built a franchise around serving wholesale dairy operations, cattle feeders, livestock raisers, and farmers—a niche that provides both stability and cyclical exposure to commodity prices.

The bank’s recent quarterly performance demonstrates operational consistency, with core earnings per share of $0.37 exceeding consensus estimates of $0.34. Perhaps most notably for income-focused investors, CVB has maintained an extraordinary track record of 143 consecutive quarterly dividend payments, currently yielding approximately 4.3%. This dividend consistency reflects the inherent stability of their agricultural customer base and conservative underwriting practices.

CVB’s geographic concentration in California provides exposure to one of the nation’s most productive agricultural regions, though this also creates vulnerability to drought conditions, regulatory changes affecting agriculture, and commodity price volatility. The institution’s long operational history and specialized expertise in agricultural lending create meaningful barriers to entry into their core markets.

George Borba JR, the vice-chairman and a local diary farmer and rancher, recently opened up his wallet to by almost $1 million worth of stock.

John Marshall Bancorp (JMSB) operates eight strategically located branches across the Washington D.C. metropolitan area, including prime locations in Alexandria, Arlington, Loudoun, Reston, Tysons, and Rockville. This geographic footprint provides exposure to one of America’s wealthiest and most economically stable metropolitan markets, supported by federal government employment, defense contracting, and technology sectors.

The institution has experienced significant financial headwinds, with 2023 revenue declining 46% to $38.80 million and earnings dropping 84% to $5.14 million. These metrics suggest either asset quality challenges, margin compression, or potential one-time charges that warrant careful analysis. Despite recent performance issues, the bank’s market positioning in the affluent D.C. suburbs provides a valuable franchise with significant barriers to entry given regulatory restrictions on new bank charters.

With the stock trading right around book value and the CFO and director Michale Garcia, a local contractor, both made large purchases of the stock.

PCB Bancorp (Ticker: PCB) has carved out a distinctive niche serving Korean-American and other minority communities across multiple geographic markets. Operating branches in Los Angeles and Orange counties, Carrollton and Dallas, Texas, and locations in New Jersey and New York, the institution leverages cultural expertise and language capabilities to serve underbanked communities.

The bank’s 2024 financial performance showed revenue declining 3% to $96.31 million with earnings falling 18.6% to $24.93 million, indicating margin pressure and potentially elevated credit costs. However, the institution maintains active capital management through stock repurchases and continues paying quarterly dividends, suggesting management confidence in the underlying franchise.

PCB share currently trades at book value and less than 10 times earnings.

Two directors were buying stock last week.

Don Rhee, the owner of Active USA, a Los Angeles-based apparel manufacturer, purchased $201,000 worth of stock in the bank.

Sang Young Lee, the current Chairman of he Board and a founder of the bank, invested an additional $390,000.

Shore Bancshares (SHBI) represents one of the most compelling growth stories in this analysis, with 2024 revenue increasing 53% to $196.96 million and earnings surging 291% to $43.89 million. Founded in 1876 and based in Easton, Maryland, this institution has transformed itself through strategic acquisitions and organic growth initiatives.

Operating over 40 branches across the Mid-Atlantic region, Shore Bancshares has successfully executed a regional expansion strategy while maintaining community banking relationships. The dramatic earnings growth likely reflects both acquisition synergies and improved operational efficiency, though investors should analyze whether this growth rate is sustainable.

Analyst consensus supports the growth narrative, with a “Buy” rating and 12-month price target of $20.00 representing 37% upside potential. The institution’s long operating history combined with recent transformation suggests a mature franchise adapting successfully to modern banking dynamics.

Director Michael Adams, the owner of a commercial real estate company, recently spent $150,000, adding to his stake in the bank.

With the stock trading for less than 10 times earnings and under book value, Mr. Adams appears to have made a bargain purchase.

Merchants Bancorp (Ticker: MBIN) operates a unique business model combining traditional community banking with specialized segments including multi-family mortgage banking, mortgage warehousing, and government-sponsored enterprise lending. This diversification provides multiple revenue streams and reduces dependence on traditional spread banking.

The multi-family mortgage banking segment originates and services government-sponsored mortgages, including bridge financing for multi-family housing projects and healthcare facility financing. This specialty lending creates higher-margin opportunities while serving essential housing and healthcare infrastructure needs. The mortgage warehousing segment provides funding to non-depository financial institutions, generating fee income with limited credit risk.

Financial performance has been strong, with 2024 revenue increasing 24% to $646.45 million and earnings growing 16% to $283.65 million. Analyst consensus reflects this momentum with a “Buy” rating and price target of $47.17, suggesting 45% upside potential. The diversified business model provides both growth opportunities and complexity that requires sophisticated management capabilities.

The stock is currently trading below book value with a PE ratio of less than 7.

Both the CFO and Chief Operating Officer have been buying stock in the open market recently.

SouthState Corporation (Ticker: SSB) operates as one of the larger regional banks in this analysis, with $1.70 billion in 2024 revenue and a footprint spanning Florida, Texas, the Carolinas, Georgia, Colorado, Alabama, and Virginia. Originally founded as First Financial Holdings in 1933, the institution has grown through strategic acquisitions while maintaining community banking relationships.

The bank’s scale provides operational efficiencies and diversified revenue streams across multiple state economies. 2024 financial performance showed solid growth with revenue increasing 4.7% and earnings growing 8.2% to $534.78 million. This consistent performance across a large geographic footprint demonstrates effective risk management and operational execution.

Analyst sentiment is particularly positive, with 11 analysts providing a “Strong Buy” consensus rating and average price target of $117.40 representing 19% upside potential. The institution’s size and diversification provide stability while maintaining growth opportunities through market share gains and acquisition possibilities.

Two directors made large purchases of stock in the open market recently.

G. Stacey Smith, a hedge fund manager and private equity investor, purchased shares worth $230,000.

Janet Froetshcer, President of the J.B and M.K. Pritzker Family Foundation, scooped up over $324,000 worth of additional shares.

First Business Financial Services (Ticker: FBIZ) focuses on commercial banking for small and medium-sized businesses, business owners, executives, and high-net-worth individuals across Wisconsin, Kansas, and Missouri. The institution emphasizes relationship banking with specialized services including asset-based lending, equipment financing, SBA lending, and treasury management solutions.

The bank’s commercial focus creates opportunities for higher-margin lending and fee-based services. Wealth management services for business owners provide additional revenue streams and deepen customer relationships. 2024 financial results demonstrated solid execution with revenue growing 6.6% to $144.63 million and earnings increasing 20% to $42.34 million.

Director Ralph Kauten, the owner of a manufacturer of pneumatic door operators and biotech executive, bought an additional 478,000 worth of stock last week.

The stock is trading at 1.1 times book value with a PE ratio of just 8. 

Red River Bancshares (Ticker: RRBI) operates 28 banking centers throughout Louisiana plus a loan and deposit production office in New Orleans, providing concentrated exposure to the Louisiana economy. This geographic focus creates deep market knowledge and community relationships while also concentrating risk in a single state economy dependent on energy, agriculture, and tourism.

The stock is currently trading right around book value and 10 times earnings. Director Teddy Ray Price, an owner of long-term care facilities in the region, recently bought $229,000 worth of stock in the open market.