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M&T Bank (MTB) Reinstates Its $800M Stock Repurchase Program
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M&T Bank Corporation (MTB - Free Report) recently announced that its board of directors has re-authorized its stock repurchase program, which was suspended in 2021 until the closing of the People's United Financial acquisition. The buyback allows up to $800 million of shares of common stock repurchases.
The original program was announced in January 2021. However, the company did not make any share repurchase in 2021 due to its pending merger with People's United. The repurchases will take place in the open market or through privately negotiated transactions.
The halt of the repurchases led to an increase in the company’s capital base, increasing its Common Equity Tier 1 capital ratio from 10.0% as of Dec 31, 2020 to 11.4% as of Dec 31, 2021. The current capital level of the company is sufficient to aid its loan demands and complete its pending merger with People's United. This leaves the company with ample excess capital to return to its shareholders through share repurchases.
M&T Bank’s merger with People’s United was announced in February 2021 for an all-stock deal worth $7.6 billion. The company announced an extension of the merger agreement’s deadline to Jun 1, 2022 from the initial timeline of Feb 21, 2022, as the deal awaits the green light from the Federal Reserve.
Share buybacks aside, the company has been regularly paying dividends. In November 2021, M&T Bank hiked its quarterly dividend by 9% to $1.20 per share. The company’s dividend yield of 2.63% compares favorably with the industry’s yield of 2.49%. This yield represents a steady income and an attractive income stream for income investors.
M&T Bank’s organic growth, aided by rising loans and deposits, as well as inorganic growth efforts, will bolster its revenues. Further, a sound liquidity position and a strong balance sheet are expected to continue supporting capital deployment activities. Through this, it will keep enhancing shareholder value.
Over the past six months, shares of MTB have gained 31.6% compared with 4.9% growth of the industry it belongs to.
Over the past couple of months, several finance companies have rewarded shareholders with new share-repurchase programs. Some of these are KKR & Co. Inc. (K(KR - Free Report) and Ally Financial Inc. (ALLY - Free Report) .
KKR has increased share repurchase amount to $500 million, per its 8K filing in December 2021. The company anticipates that the program will remain effective until the entire approved amount gets spent. The buyback program has no expiration date.
Other than repurchases of common stock, the buyback program will be utilized to retire equity awards granted per KKR’s equity incentive plans representing the right to receive common stock.
Ally Financial’s board of directors has approved the repurchase of $2 million of the outstanding stock in January 2022. ALLY’s new buyback plan expires on Dec 31, 2022.
In 2021, Ally Financial completed a $2 billion share repurchase program.
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M&T Bank (MTB) Reinstates Its $800M Stock Repurchase Program
M&T Bank Corporation (MTB - Free Report) recently announced that its board of directors has re-authorized its stock repurchase program, which was suspended in 2021 until the closing of the People's United Financial acquisition. The buyback allows up to $800 million of shares of common stock repurchases.
The original program was announced in January 2021. However, the company did not make any share repurchase in 2021 due to its pending merger with People's United. The repurchases will take place in the open market or through privately negotiated transactions.
The halt of the repurchases led to an increase in the company’s capital base, increasing its Common Equity Tier 1 capital ratio from 10.0% as of Dec 31, 2020 to 11.4% as of Dec 31, 2021. The current capital level of the company is sufficient to aid its loan demands and complete its pending merger with People's United. This leaves the company with ample excess capital to return to its shareholders through share repurchases.
M&T Bank’s merger with People’s United was announced in February 2021 for an all-stock deal worth $7.6 billion. The company announced an extension of the merger agreement’s deadline to Jun 1, 2022 from the initial timeline of Feb 21, 2022, as the deal awaits the green light from the Federal Reserve.
Share buybacks aside, the company has been regularly paying dividends. In November 2021, M&T Bank hiked its quarterly dividend by 9% to $1.20 per share. The company’s dividend yield of 2.63% compares favorably with the industry’s yield of 2.49%. This yield represents a steady income and an attractive income stream for income investors.
M&T Bank’s organic growth, aided by rising loans and deposits, as well as inorganic growth efforts, will bolster its revenues. Further, a sound liquidity position and a strong balance sheet are expected to continue supporting capital deployment activities. Through this, it will keep enhancing shareholder value.
Over the past six months, shares of MTB have gained 31.6% compared with 4.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
M&T Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Other Finance Stocks That Took Similar Steps
Over the past couple of months, several finance companies have rewarded shareholders with new share-repurchase programs. Some of these are KKR & Co. Inc. (K(KR - Free Report) and Ally Financial Inc. (ALLY - Free Report) .
KKR has increased share repurchase amount to $500 million, per its 8K filing in December 2021. The company anticipates that the program will remain effective until the entire approved amount gets spent. The buyback program has no expiration date.
Other than repurchases of common stock, the buyback program will be utilized to retire equity awards granted per KKR’s equity incentive plans representing the right to receive common stock.
Ally Financial’s board of directors has approved the repurchase of $2 million of the outstanding stock in January 2022. ALLY’s new buyback plan expires on Dec 31, 2022.
In 2021, Ally Financial completed a $2 billion share repurchase program.