Regional Bank Investments
Basswood Capital Expands Stakes Across Regional Banks Amid Major Institutional Shifts
Anonymous
Key Points
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An insider at Banc of California, Olivia I. Lindsay, sold 6,000 shares at an average price of $19.50, leaving her with 32,842 shares (a 15.45% drop in ownership) as disclosed in an SEC filing.
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Old National Bancorp declared a quarterly dividend of $0.145 per share, payable on Sept. 15 to shareholders of record as of Sept. 5, providing a cash return alongside Basswood's new stake.
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BlackRock Inc. added a new stake in MVBF (MVB Financial) during the second quarter, with the position valued at about $30.15 million, complementing Basswood’s reported 257,731-share purchase in MVBF.
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Wellington Management Group LLP raised its MVBF holdings by 56.5% in the third quarter, bringing the stake to 1,782,385 shares worth roughly $44.67 million after an additional purchase of 643,551 shares in the last quarter.
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FB Financial: Basswood bought 33,216 FB Financial shares in the second quarter (about $1.84 million). EverSource Wealth Advisors LLC also boosted its FB Financial stake by 1,152.2% in Q2 to 864 shares, and FB Financial paid a quarterly dividend of $0.21 per share on Aug. 25.
Basswood Capital Management deepened its bet on regional banks in the second quarter, acquiring new stakes across five mid-cap lenders with holdings ranging from $7.5 million to $46 million. The hedge fund purchased 576,403 shares of Banc of California, 1,780,471 shares of Old National Bancorp, 257,731 shares of MVB Financial, 33,216 shares of FB Financial, and 123,266 shares of First Bancorp, according to WatchlistNews. The activity reflects a broader institutional push into community-focused lenders, with major players like BlackRock and Wellington Management also expanding their positions.
The new investments came alongside mixed insider signals. Olivia I. Lindsay, Banc of California's Chief Risk Officer, sold 6,000 shares at $19.50 per share in August, cutting her stake by 15.45%, WatchlistNews reported. Meanwhile, Old National Bancorp declared a $0.145 per share quarterly dividend payable September 15, and FB Financial paid a $0.21 per share dividend on August 25, offering cash returns to new shareholders.
Basswood Deploys Across Five Regional Lenders
Basswood Capital's second quarter purchases signaled aggressive positioning in the regional banking sector. The largest position was Old National Bancorp, where Basswood acquired 1,780,471 shares valued at $46.11 million, WatchlistNews stated. Banc of California received the second-largest investment at roughly $11.78 million for 576,403 shares. MVB Financial, FB Financial, and First Bancorp rounded out the slate, with Basswood spending $7.48 million on 257,731 MVB Financial shares and $1.84 million on FB Financial shares.
The fund's sizing strategy spread capital across multiple mid-cap lenders rather than concentrating in one bank. This approach mirrors Basswood's historical posture as an activist-style value investor in financial services. The timing aligned with broader institutional momentum, as other major asset managers entered or expanded positions in the same banks during the same period.
Major Institutions Follow With Their Own Bank Purchases
Basswood was not alone in deploying capital into regional banks. BlackRock initiated a new $30.15 million stake in MVB Financial during Q2, complementing Basswood's acquisition in the same lender, WatchlistNews noted. Wellington Management Group later boosted its MVB Financial position by 56.5% in the third quarter, purchasing an additional 643,551 shares to reach 1,782,385 shares valued at $44.67 million.
EverSource Wealth Advisors made an even more aggressive move in FB Financial, expanding its stake by 1,152.2% in Q2 to reach 864 shares. The convergence of buying by Basswood, BlackRock, and Wellington suggests institutional confidence in a broader recovery or consolidation cycle among mid-size community banks despite sector headwinds.
Insider Selling Clouds Outlook at Banc of California
Not everyone at Banc of California shared the enthusiasm of outside investors. On August 4, Chief Risk Officer Olivia I. Lindsay sold 6,000 shares at $19.50 per share, pocketing $117,000 and reducing her direct ownership by 15.45% to 32,842 shares, WatchlistNews disclosed. The sale occurred as Banc of California reported trailing 12-month net losses of $52.3 million, signaling operational stress.
Lindsay's exit contrasts sharply with Basswood's entrance, raising questions about internal confidence versus external optimism. While hedge funds view distressed regional banks as deep-value recovery plays, a top executive's liquidation suggests management may harbor different views about near-term prospects and risk management priorities.
Dividend Payments Cushion New Positions Against Volatility
Basswood and other new shareholders face immediate cash returns via dividends. Old National Bancorp set its quarterly dividend at $0.145 per share, payable September 15 to holders of record on September 5, WatchlistNews reported. FB Financial distributed $0.21 per share on August 25. These payouts provide interim income while Basswood awaits asset appreciation or potential consolidation activity among mid-cap lenders.
Dividend yields offer a buffer against downside volatility, particularly important given sector uncertainty surrounding net interest margins and deposit stability. For Basswood, the combination of deep-value entry points and steady cash distributions supports its activist-style thesis that regional banks trade below intrinsic worth.
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