Bank stocks may be out of favor on Wall Street, but officers and directors at Alabama's SouthTrust Corp. think otherwise.
They snapped up about 60,000 shares of their own company last fall as banking equities overall were mired in a bear market.
The level of insider buying at the Birmingham institution was extensive, even for a bank that has long encouraged such activity.
"The people at SouthTrust have always been great believers in owning their own stock," said Peter W. Tuz, a banking analyst at Morgan Keegan & Co., Memphis.
Insider purchases and sales of shares are closely watched for hints of future performance by some money managers, who view such moves as indications of a company's prospects from its own management.
"Recently we've seen some estimate trimmings on SouthTrust due to net interest margin pressures," said Robert Gabele, president of CDA/InvestNet, which tracks insider buying and selling.
"The shares, which dropped to their current $18 level late last year, may have discounted these concerns, however," he said in reviewing the purchases, which are gleaned from required filings with the Securities and Exchange Commission.
At SouthTrust, the buying spree was led by a pair of outside directors, T.W. Mitchell and Bill L. Harbert, and by executive vice president William R. Cranford.
Mr. Mitchell, a construction company executive, bought 20,000 shares in December in the open market at an average price of $17.375 per share.
Notably, Mr. Mitchell was a steady seller of shares from mid-1991 to mid-1993, when bank stocks were market leaders in price gains. He sold 196,000 shares in that period.
Mr. Harbert, also a construction company executive, and Mr. Cranford bought 20,000 shares each in the market at an average price of $17.50 per share.
Another director, W. Kendrick Upchurch, bought 1,000 shares in the market last November for $18.625 apiece.
In addition, executive vice presidents James W. Rainer Jr. and Frederick W. Murray Jr. exercised options and held on to over 3,000 shares each.
Mr. Tuz said insider ownership at SouthTrust is a healthy 6% of shares outstanding. At other Alabama banks, comparable levels are 12% at the smaller Compass Bancshares, Birmingham; 4% at Regions Financial Corp., Montgomery; and 2.8% at AmSouth Corp., Birmingham.
"I view 6% as a very good number," said Mr. Tuz. Securities analysts see insider ownership as a sign of strength because it amounts to a personal stake in a company by its managers.
SouthTrust, he said, has an impressive long-term track record of profitability, with a 11% compound rate of earnings growth in recent years.
A spokeswoman at SouthTrust said some of the recent activity could be related to some stock sales by the company's president and chief operating officer, Roy W. Gilbert Jr., who is stepping down.
SouthTrust's largest inside shareholder, according to its 1994 proxy statement, is its chairman and chief executive officer, Wallace D. Malone Jr. As of last Jan. 31, he owned 1,450,401 shares, or 1.8% of the stock outstanding.
Another outside director, William C. Hulsey, owned 936,865 shares, or 1.17% Mr. Harbert owned 604,125 shares, or 0.75%; Mr. Mitchell 548,494 shares, or 0.68%; and Mr. Gilbert 365,042 shares, or 0.38%.