OBT

Orange County Bancorp ($OBT) Director Signals Confidence with $150K Purchase Following Public Offering

06/07/2025 14:01

Orange County Bancorp ($OBT) director Jon Schiller made a significant insider purchase on June 4, acquiring 6,451 shares at $23.25 per share for approximately $150,000, marking the only substantial insider buying amid months of executive selling activity. Schiller's purchase came at exactly the same price as the company's public offering of 1.72 million shares announced June 3. This bold insider buying following a 6.7% stock decline after the offering announcement sends a strong signal that management views current price levels as undervalued. The purchase includes restricted stock units that vest 100% on February 20, 2026, demonstrating long-term confidence in the bank's prospects. Orange County Bancorp, established in 1892 and headquartered in Middletown, New York, operates as a regional bank serving Orange, Westchester, Rockland, and Bronx counties. With approximately 225 employees, the bank provides commercial and consumer banking services to small businesses, middle-market enterprises, local municipalities, and individual customers through deposit products, loans, and wealth management services under the Orange Wealth Management brand. This contrasts sharply with recent selling activity by executives including EVP Michael Coulter, EVP Gregory Sousa, and Officer Joseph Ruhl, who sold between $20,000 to $60,000 worth of shares in recent months. $OBT's recent financial performance demonstrates solid growth momentum. Q1 2025 revenue reached $27.8 million, up 3.2% year-over-year, while net interest margin (NIM) improved to 3.95%, representing a 31 basis point increase and 8.5% growth from Q1 2024. Total deposits grew to $2.3 billion, increasing by $128.3 million (6.0%), and total loans reached $1.9 billion, up $38.5 million (2.1%). Net income of $8.7 million exceeded analyst estimates by approximately 15%. Despite challenges facing the regional banking sector, $OBT maintains differentiated strengths with a robust profit margin of 27.06% and operating margin of 42.07%. The bank's return on assets (ROA) of 1.09% and return on equity (ROE) of 14.76% exceed industry averages, while a beta of 0.51 indicates lower volatility and a stable dividend yield of 2.14% appeals to conservative investors. On May 12, Hovde Group initiated coverage with an 'outperform' rating and $30.50 price target, representing approximately 18% upside potential from current levels. Hovde highlighted $OBT's strong fundamentals, valuable core deposits, and growth opportunities in the Hudson Valley region as key investment themes. All brokerages covering $OBT currently rate the stock as 'buy' or higher, reflecting consistent positive analyst sentiment. The $40 million raised through the recent public offering will be deployed for regulatory capital enhancement, strategic investments, and potential acquisitions. The company's January reorganization to strengthen wealth management services and March promotion of two officers represents a strategic shift toward diversifying fee-based revenue streams beyond traditional banking products. These initiatives position $OBT for sustainable growth while maintaining prudent capital management. Current valuation metrics appear attractive, with a price-to-earnings ratio of 10.05x and price-to-book ratio of 1.58x trading at reasonable levels compared to regional bank averages. Despite a market capitalization of $267 million placing it among smaller regional banks, insider ownership of 13% and institutional ownership of 40% demonstrate well-aligned interests between management and investors. The recovery in New York's Hudson Valley real estate market and increasing small business lending demand present significant growth opportunities for $OBT. Despite Federal Reserve policy changes, the bank's improving net interest margin trend continues, providing positive momentum for profitability. The stable growth in commercial real estate and construction loan portfolios positions the bank to benefit directly from regional economic revitalization. While short-term technical adjustments related to public offering absorption are expected, Schiller's substantial purchase signals strong support at current price levels. Medium to long-term prospects include wealth management expansion and regional market share growth, with potential for significant returns if Hovde Group's price target is achieved.

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