Bank executives know their companies better than most investors. So when they stop buying their own stocks, Wall Street pays attention. And right now, financial-sector insiders are keeping their wallets shut, with purchases hitting their lowest level in more than two decades just ahead of big bank earnings.
insiders are sitting this one out
Only 298 financial-sector insiders bought shares of their own companies in Q3, the lowest count in VerityData's records dating back to 2004. That narrowly beat the previous low of 302 buyers in Q3 2024.
The drought stretches across more than 3K financial companies, including banks, insurers, and asset managers. But executives aren't exactly racing to sell, either. Selling activity remained relatively normal, suggesting the bigger story is a lack of buyers.
With 749 sellers against just 298 buyers, the sector's seller-to-buyer ratio reached 2.51 to 1.
Financials stand out for the wrong reason
Financials' seller-to-buyer ratio reached 2.10x its historical average, the highest among major sectors, according to the Kobeissi Letter.
Energy followed at 1.30x, technology at 1.24x, and the broader market at 1.20x. Consumer staples and utilities looked considerably less bearish, at 0.50x and 0.55x, respectively.
The reluctance to buy goes beyond financials. Across the market, insider buying fell 18% in Q3, with buyers dropping from 1.58K to 1.29K. Sellers dipped slightly to 4.38K.
Bank stocks are already feeling the heat
Investors haven't exactly been rewarding financial stocks lately. The KBW Nasdaq Bank Index has fallen more than 13% from its mid-August peak, while financials suffered their worst monthly performance relative to the S&P 500 since 1990.
Deal activity is losing steam, too. Global M&A value dropped from $1.8T in Q2 to $1.23T in Q3. Oura postponed its IPO amid market uncertainty, while Jefferies Financial Group reported weak bond-trading activity.
Truist analyst Brian Foran drew comparisons between financial stocks' relative performance and the dot-com era, invoking the familiar warning that history often rhymes.
Warning sign or just cold feet?
VerityData research chief Ben Silverman sees the buying drought as a sign that executives aren't thrilled about valuations, rather than a warning of collapsing fundamentals. Harvard professor Jesse Fried considers the drop in buying a bearish signal.
University of Michigan professor Nejat Seyhun isn't convinced. He argues that insider activity has a poor track record of predicting financial-stock returns.
And the market isn't sending an entirely bearish message. The KBW bank index remains up 3% in 2026 despite its recent slide, while the S&P 500 gained 1% over the past month.
Some executives are still putting money to work. First Bancorp director Katharine Caldwell Nevin bought 231 shares on Sept. 11, increasing her holdings by nearly 27%.
Investors won't have long to wait for a clearer picture. JPMorgan Chase and Goldman Sachs report Q3 earnings on Oct. 13, followed by Morgan Stanley on Oct. 14. Those results should help show whether insiders' reluctance to buy was justified.
