Every time the market starts whispering “banking crisis,” you can count on 2 things: the instant experts will dust off their 2008 headlines, and a few insiders will quietly step in to buy. What we’re seeing today across the regional banking sector isn’t systemic. It’s the fallout from a few bankers and lenders making dumb mistakes.
A couple of sloppy commercial loans, a fraudulent credit facility here and there, and suddenly the narrative becomes that all small banks are teetering on the edge. That’s nonsense. The problems at Zions Bancorp, Western Alliance, and a few others are isolated credit blunders, not evidence of deeper weakness in the financial system. These banks will take their lumps, lessons will be learned, and the rest of the industry will move on, stronger for having watched what happens when underwriting discipline slips.
Meanwhile, the herd is running for the exits, and a few sharp insiders are buying what the market is throwing away.
The Plumbing, Not the Panic
The recent widening of the SOFR-EFFR spread (what some call a “soft-effort” signal) has spooked traders who don’t understand the mechanics of the funding market. Let’s be clear: this is plumbing noise, not systemic stress. It reflects short-term collateral strain and quarter-end liquidity positioning, not a loss of confidence in the banking system.
Banks still have ample access to liquidity. The Standing Repo Facility remains untouched except for brief window dressing. The Fed isn’t seeing stress in discount-window usage. In other words, this isn’t 2019, and it’s certainly not 2008. Credit spreads across investment-grade and high-yield remain tight by historical standards.
Yet regional bank stocks are trading as though we’re 1 bad loan away from another SVB moment. That disconnect between perception and reality is where value is found.
First Financial Corporation (Ticker: THFF): Old-School Discipline
In Indiana, First Financial Corporation (THFF) is the kind of conservative lender that rarely makes headlines, until someone on the board starts buying. Director James McDonald picked up 2,295 shares in mid-October at around $52.25, lifting his holdings above 11,000 shares. That’s not a token gesture. It’s a signal.
THFF has long operated with an old-fashioned approach: low leverage, modest growth, and an emphasis on local relationships over loan production quotas. Its tangible book value continues to climb, non-performing loans remain minimal, and management has navigated rate cycles for decades without reaching for yield.
The stock trades just above tangible book and yields nearly 3.5%, an attractive entry for investors who appreciate stability and insider alignment.
FB Financial (Ticker: FBK): Buying Confidence in the Southeast
Down in Nashville, FB Financial (FBK) tells a similar story. Director Raja Jubran bought over 9,100 shares at roughly $54.68, adding to a string of insider purchases this year. When insiders keep adding in multiple tranches, that’s conviction, not optics.
FBK is well-positioned across Tennessee and the broader Southeast, regions still enjoying healthy economic momentum. Deposits have held steady, the bank’s loan-to-deposit ratio remains conservative, and credit metrics are in line with historical averages. Despite all that, the shares have been punished as part of the broad-brush sell-off.
At roughly 1.2x tangible book and a forward yield near 2.7%, FBK is pricing in far more risk than reality justifies. The people running the bank apparently agree and are putting their own money behind that belief.
Smart Money Amid Dumb Mistakes
Let’s call this what it is: a market overreaction. A few bad headlines about fraud, auto-loan losses, or CRE defaults, and the crowd assumes every regional bank balance sheet is radioactive. That’s not how credit cycles work.
Insiders like McDonald and Jubran are buying because they understand their loan books and their deposit bases. They know where the real risks are and where they aren’t. When the people closest to the credit files and collateral valuations start buying, investors should pay attention.
In previous cycles, similar bouts of fear have produced some of the best bank-stock entry points of the decade. Today’s setup looks no different.
Credit Markets Still Calm
Beyond the equity noise, the credit markets tell a different story. The ICE BofA High-Yield Index Option-Adjusted Spread remains around 340 basis points, barely off summer lows. Investment-grade spreads are stable. Bank senior debt is trading smoothly.
The credit plumbing is fine. This is about perception, not liquidity, not solvency, and certainly not systemic panic.
The Opportunity Ahead
For long-term investors, the lesson is simple: when the headlines scream crisis and insiders start buying, lean into the discomfort. The sector’s current weakness is creating attractive entry points in well-run, conservatively managed regional banks.
Our team continues to monitor insider activity across the space, and so far, it looks a lot like opportunity dressed as fear.
The dumb mistakes are real, but they’re few and fixable. The smart money knows it.
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