10 small-cap financial stocks cheaper than $35 based on hedge fund holdings

Freedom Broker, on the request of Oninvest, looked at which small caps in the financial sector were most popular among hedge funds in the fourth quarter. The sample includes 10 companies with market capitalizations below $6 billion during the period. Their stocks trade below $35 a share.

Number of hedge funds holding shares: 74

Hanmi Financial is a U.S. bank holding company. It has grown from a niche lender serving the Korean diaspora into a full-fledged regional bank – Hanmi Bank – focused on small and medium-sized businesses. In 2025, the bank’s net income rose 22% to $76.1 million. Net interest income increased 16.5% to $236.2 million.

Year to date, the company’s shares have gained about 4%. Two Wall Street analysts rate the stock “buy,” and two rate it “hold.” With an average target price of $31.13 per share, the upside is about 11% from the April 17 closing price.

Number of hedge funds holding shares: 69

Green Dot operates without physical branches and offers traditional banking services. In 2025, revenue increased 21% to $2.1 billion. The net loss widened 270% year over year to $98.9 million, driven by restructuring, severance payments, and realized losses on financial asset sales.

Year to date, the stock has declined about 3.2%. One analyst rates the shares “buy,” and two “hold.” The average target price of $16.13 per share implies about 30% upside.

Number of hedge funds holding shares: 68

Capitol Federal Financial operates a network of savings banks under the Capitol Federal Savings Bank brand. It focuses on mortgage lending and retail banking services. In the first quarter of its fiscal 2026, net income rose 31.8% year over year to $20.3 million. Net interest income increased 21.5% to $51.3 million.

Year to date, the company’s shares have gained 13.2%. Two analysts rate the stock “hold.” The average target price of $7.75 per share is in line with the current share price.

Number of hedge funds holding shares: 68

A U.S. regional bank serving businesses and individuals in the Midwest, Horizon has operated since 1873. In September, the bank said it sold approximately $1.7 billion in debt securities, recording a pretax loss of about $299 million. The transaction was part of a large-scale balance sheet restructuring aimed at reducing risk, lowering funding costs, and improving asset yields over time. Net income for the fourth quarter totaled $26.9 million versus a loss of $10.9 million in the fourth quarter of 2024. Net interest income rose 19.5% year over year to $63.5 million.

Shares have gained about 6.2% year to date. Four analysts rate the stock “buy,” and one “hold.” The average target price of $20.8 per share implies 15.5% upside.

Number of hedge funds holding shares: 67

Accel Entertainment operates gaming terminals outside casinos, including in U.S. bars, restaurants, and gas stations. In 2025, revenue increased 8.1% to $1.3 billion. Net income surged 45.3% to $51.3 million. CEO Andy Rubenstein stated that revenue was a record. He added that the company also maintained stable earnings through efficient capital allocation. At the end of 2025, Accel operated more than 4,500 locations and nearly 28,000 gaming terminals.

The stock has gained more than 5% year to date. Six analysts rate the shares “buy,” and one “hold.” The average target price of $15.7 per share implies 30.8% upside.

Number of hedge funds holding shares: 67

Heritage Commerce is a bank holding company that primarily operates through its subsidiary, Heritage Bank of Commerce, providing commercial and personal banking services in California. In December, it announced a merger with Citizens Business Bank in an all-stock deal valued at about $811 million, or $13 per share. The combined entity, expected to be completed in the second quarter, will create one of the leading business banks in California, with about $22 billion in assets, more than 75 offices, and a strong presence in key economic centers across the state.

Total revenue in 2025 rose 15% to $197.5 million, while net income increased 18% to $47.8 million.

Shares have gained 12% year to date. According to MarketWatch data, one analyst rates the stock “buy,” and another “hold.” The average target price of $14.50 per share implies 7.8% upside.

Number of hedge funds holding shares: 66

Kearny Financial is the holding company of Kearny Bank, a small regional lender operating mainly in New Jersey and the New York area. For the second quarter of its fiscal 2026, ended December 31, the company reported a 1% year-over-year decline in net income to $9.4 million. At the same time, net interest margin expanded to 2.14%, up 32 basis points year over year. Pretax, pre-provision net revenue increased 3.9% to $12.3 million.

Shares have gained 9.6% year to date. One analyst rates the stock “hold,” according to MarketWatch data. The average target price of $8.50 per share implies 4.7% upside.

Number of hedge funds holding shares: 65

Independent Bank Corporation, founded more than 160 years ago, operates in Michigan and provides retail and commercial banking services. In 2025, net income increased 2.5% to $68.5 million. Net interest income rose 8.3% to $180 million. Net interest margin expanded to 3.56% versus 3.38% a year earlier.

Shares have gained nearly 7% year to date. All five Wall Street analyst ratings on the stock are “hold.” The average target price of $37 per share implies 6.3% upside.

Number of hedge funds holding shares: 65

The group’s core business is property insurance in U.S. states, particularly in regions exposed to natural disaster risk such as Florida and California.

In 2025, net income increased 217.8% to $195.6 million. Revenue rose 3.7% to $847.3 million. The board decided to extend the suspension of quarterly dividends to focus on strategic growth, while continuing share repurchases under a new buyback program of up to $25 million through the end of 2026.

Year to date, shares have declined 7%. Seeking Alpha named Heritage Insurance among small caps that could benefit from the next phase of AI adoption. Two analysts rate the shares “buy,” and one “hold.” The average target price of $36.50 per share implies about 34% upside.

Number of hedge funds holding shares: 63

Universal Insurance is a property and casualty insurance holding company focused primarily on homeowners insurance in hurricane-prone regions such as Florida. In 2025, revenue increased 5.5% to $1.6 billion. Net income more than tripled to $182.9 million. CEO Stephen J. Donaghy stated that the fourth quarter was “outstanding.” He noted the positive effect of legislative reforms in Florida, saying that new rules tightened litigation standards and allowed insurers to reduce legal costs.

Shares have gained 5.3% year to date. One Wall Street analyst rates the stock “buy,” and one “hold.” The average target price of $40 per share implies about 12.4% upside.