New York-based hedge fund manager Basswood Capital Management LLC grew its financial stock holdings to $1.92 billion in the third quarter, up from the second quarter's $1.85 billion, according to the company's latest Form 13F filing.

Ally Financial Inc. and OneMain Holdings Inc. remained Basswood's two largest stakes at the end of September, but the hedge fund manager made changes to its smaller holdings.

Basswood increased its investments in Montebello, N.Y.-based Sterling Bancorp and New York-based Signature Bank by more than 60% during the third quarter, even as both stocks dropped. Sterling became Basswood's sixth-largest holding at $63.6 million as of Sept. 30

Basswood also increased its stake in Wilmington, N.C.-based Live Oak Bancshares Inc. to $31.1 million during the third quarter, up from $2.8 million at the end of June. Basswood now owns 2.89% of Live Oak's outstanding shares.

The hedge fund manager added eight new financial stock investments during the third quarter worth a combined $73.5 million.

Basswood also exited 12 financial stock holdings worth $92.9 million during the third quarter, including a $14.8 million position in Franklin, Tenn.-based Franklin Financial Network Inc. One of the exits, Farmers Capital Bank Corp., was acquired by Wheeling, W.Va.-based WesBanco Inc. on Aug. 20.

Did you enjoy this analysis? Click here to set up real-time alerts for data-driven articles. Click here for a template that allows users to analyze Basswood's financial institution holdings as of Sept. 30, 2018. Click here to view Basswood's current common stock holdings. Company filings including the Form 13F can be found through the filings archive tab on a company's briefing book page.