3 Cheap Small-Cap Banks for Dividend Growth Investors

Core Insights - The financial sector, particularly small-cap banks like Unity Bancorp, Plumas Bancorp, and Community Trust Bancorp, is experiencing significant growth driven by healthy consumer conditions, improving commercial volumes, and sustained high interest rates [1][2] Group 1: Financial Performance - All three banks reported solid quarterly results for 2024, with revenue and earnings growth, particularly Community Trust Bancorp, which saw a 15% increase in net investment income [3][5] - Analysts forecast robust growth for 2025, with Plumas Bancorp expected to lead with a 15% revenue increase and margin expansion [5] Group 2: Market Conditions - The Federal Reserve is unlikely to cut interest rates significantly, maintaining elevated rates that support net investment income [2] - Economic conditions, including a healthy labor market and consumer trends, are expected to drive increased consumer and business activity [2] Group 3: Stock Performance and Analyst Sentiment - Stock prices for these banks are on the rise, with Community Trust Bancorp currently priced at $53.99, Unity Bancorp at$45.40, and Plumas Bancorp at $46.60, reflecting positive market sentiment [3][6][8] - Analyst coverage is limited but generally bullish, with price targets indicating potential mid-single to mid-teen percentage increases in 2025 [8][9] Group 4: Institutional Activity - Institutional ownership of these stocks ranges from 40% to 60%, with a bullish buying trend observed in 2024 and continued positive activity into Q3 2025 [9]