Investors have an opportunity to profit from two recent bank initial public offerings as the quiet periods for their stocks come to a close.
The IPO quiet periods for FB Financial(FBK) - Get Report and NT Butterfield(NTB) - Get Report will expire on Oct. 10. When these quiet periods end, the IPO underwriters for these stocks will be allowed to release detailed reports about the companies.
Because these two banks have had strong debuts, good fundamentals and strong underwriters, the release of these reports likely will boost shares and provide investors with an opportunity to profit from the short-term upward swing.
We wrote about FB Financial and NT Butterfield last month, and the fundamentals for both banks remain strong.
Bank of N.T. Butterfield & Son is a Bermuda-based full-service bank with more than 1,000 employees. The bank also has offices in the Bahamas, the Cayman Islands, Guernsey, Switzerland and the U.K.
N.T. Butterfield offers a wide range of services, including wealth management and commercial credit products in addition to traditional banking services such as savings accounts. N.T. Butterfield also offers payroll services, private banking, commercial credit products, and treasury and money market services.
As of June 30, the bank reported that it had $11 billion in assets, $3.9 billion in net loans and $10.1 billion in deposits. It also had $4.8 billion in assets under management and $101.3 billion in assets under trust administration.
N.T. Butterfield's performance has been steady since the firm's IPO, which priced at $23.50 on Sept. 16.
The company's IPO was underwritten by an impressive list of firms including Citigroup, Goldman Sachs and Sandler O'Neill & Partners.
FB Financial has a much more regional focus. FB Financial is a holding company for FirstBank, which offers commercial- and consumer-banking services to businesses and individuals at 45 full-service branches Alabama, Georgia and Tennessee.
The bank provides interest-bearing depository products and services, and commercial-lending products that include working capital lines of credit, equipment loans, owner-occupied and non-owner-occupied real estate construction loans, cash flow loans and real estate term loans to small- and medium-sized businesses, according to filings with the Securities and Exchange Commission.
FB Financial's investment division offers access to equities, tax-exempt municipal bonds, mutual funds, bonds, money management services, annuities and life insurance products.
For the first half this year, FB Financial boasted a 20.6% increase in revenue and a 33.5% increase in net income from a year earlier.
FB Financial shares have advanced since the firm's IPO, which priced at $19 on Sept. 23.
The company had an impressive roster of underwriters including J.P. Morgan Securities, Keefe Bruyette & Woods, Raymond James & Associates, Sandler O'Neill & Partners and Stephens.
Both N.T. Butterfield and FB Financial are attractive long opportunities ahead of the expiration of their IPO quiet periods. By getting long, investors can profit from the upward momentum that is likely to result from the release of detailed company reports from key underwriters.
These reports will likely be positive, and investors will be able to profit from the short-term pop. Establish a position in both banks ahead of the IPO quiet period expirations on Oct. 10, and sell shares of both after the reports are released on Oct. 11.
This article is commentary by an independent contributor. At the time of publication, the author owned NTB and FBK.