Regional bank owners grab ‘deal’ stock from SVB turmoil

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(Bloomberg) — Taking advantage of the selloff triggered by the collapse of a Silicon Valley bank, regional bank leaders are dumping shares of their companies’ stock.

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Executives from more than 100 lenders across the US, including PacWest Bancorp, Metropolitan Bank Holding Corp and CVB Financial Corp, spent at least $13.9 million combined, according to data compiled by Bloomberg. Most of the transactions have happened in the last few days.

Bill Ackman of Pershing Square Capital Management described the shares as an “incredible bargain” on Monday, with the KBW Regional Banking Index falling 20% ​​for the month through yesterday’s close.

Many trades were already taking profits as shares of the regional bank edged higher on Tuesday and erased part of earlier gains.

This includes Cullen/Frost Bankers Inc. This included a $1 million investment for Philip D. Green, CEO of U.S., who placed the largest open bet. Green bought 9,500 shares of the Texas-based company for about $106.60, according to a regulatory filing. The stock closed Tuesday at $111.52, up about 4.6% from that price.

Bill Day, a spokesman for Cullen/Frost, said Green’s purchase was meant to show confidence in the firm and as a “sign of support”.

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Irene Oh, chief financial officer of East West Bancorp Inc, bought about $500,000 worth of shares on Monday, according to a filing. The Pasadena, California-based lender issued a statement earlier that day reiterating the strength of its capital and balance sheet.

“The purchase of Irene Oh is a strong signal about the strength of and the quality of our franchise,” Juliana Balika, the firm’s director of investor relations and corporate finance, said in an email. “The selloff in bank stocks created a compelling entry point to buy.”

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tuesday rush

Jay Sidhu, president of Clients Bancorp Inc., acquired nearly $500,000 in the crypto-friendly bank’s stock on Monday, while Chairman Sam Sidhu bought more than $100,000 worth on Tuesday, according to a filing.

“Obviously, we have strong faith in the organization,” Sam Sidhu said over the phone.

Mark DeFazio, CEO of Metropolitan Bank Holding Corp., also purchased approximately $500,000 worth of shares through indirect ownership. Several members of the New York-based lender’s board also made purchases.

“I view these transactions as opportunistic after yesterday’s significant selloff and these purchases also express a vote of confidence in their firms,” ​​Wedbush analyst David Chiaverini said in an email.

Monday’s filing also revealed that Paul Taylor, CEO of PacWest, purchased approximately $500,000 worth of shares on Thursday at an average price of $22.20 per share. The stock closed up 34% at $13.05 on Tuesday after falling on Friday and Monday.

“It’s very rare to see that many insiders make the move,” Bruce Cox, founder of the Harrington Alpha Fund, said by phone. His firm took a long position in PacWest last week amid selloff and increased it on Monday.

The Relative Strength Index for the KBW Bank Index and its regional counterpart flashed their most oversold signal in two decades on Monday.

“Regional bank shares are climbing up as if the ‘all clear’ is a sign,” said Quincy Crosby, financial chief global strategist at LPL. “The question remains whether there are still risks on the balance sheet, especially if depositors continue to demand funds.”

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(Update with comments from officials beginning in eighth paragraph.)

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