When a top-level insider spends hundreds of thousands of dollars on company stock, we usually take a closer look. Top-level insiders tend to have the latest, most-up-to-date information on their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large purchase from a top-level insider at Metropolitan Bank Holding Corp (MCB:US), which owns Metropolitan Commercial Bank. This bank – which is known as ‘The Entrepreneurial Bank’ – provides a broad range of business, commercial and personal banking products and services to small and middle-market businesses, public entities and affluent individuals in the New York metropolitan area. The company is listed on the New York Stock Exchange and currently has a market capitalization of $833 million.
Metropolitan Bank Holding Corp: Insider Buying
Our data shows that on 20 September, Metropolitan’s President and CEO Mark DeFazio purchased 3,333 shares at a price of $75 per share. This purchase was through a $150 million public offering of common stock. The transaction cost the insider $250,000.
It’s worth noting that DeFazio wasn’t the only insider to participate in the public offering. Board member David Gold also bought 1,000 shares, spending $75,000 on stock.
Both Mr. DeFazio and Mr. Gold are likely to have a good understanding of the company and the stock. Mr. DeFazio is a founding member of Metropolitan Commercial Bank and has served as the Bank’s President since its inception in 1999. He was elevated to the additional role of Chief Executive Officer in 2002. Under his leadership, the bank has grown its assets significantly.
Meanwhile, Mr. Gold is a partner at Advisiry Partners Group LLC, a consulting firm that provides strategic and capital markets advisory services to senior management of publicly-held companies. Prior to this, he was Senior Equity Analyst at a small-cap equity research boutique for nearly two decades.
These two buys represent the largest amount of insider buying within a quarter at Metropolitan for several years. Our Insider Model views the purchases from these two insiders as very bullish.
Profiting from the Fintech Boom
Metropolitan Bank Holding Corp posted a good set of Q2 results in July.
For the quarter, revenues amounted to $43.1 million, up 20.4% from the prior year quarter, while earnings per share came in at $1.55, up 20.2% from the prior year quarter. Book value per share was $42.92 per share, up 14.2%, while annualized return on average equity was 15.0%. The group advised that asset quality remains strong and that there were no charge offs in the second quarter.
In the Q2 results, Mr. DeFazio noted that the bank is benefitting from the growth of the FinTech industry. “Our Global Payments Group continues to pave the way for the transformation of MCB that allows us to simultaneously be a high performing commercial bank and a critical financial infrastructure partner to FinTechs. Our Global Payments Group, with revenue growth and stable, non-interest-bearing deposits, continues to be a meaningful source of liquidity. As our FinTech partners continue to gain market share, MCB is well positioned to benefit from this vertical’s low acquisition cost of deposits,” he commented.
In light of these results, we see the insider buying here as a bullish indicator.