With an aim to enhance shareholders’ value, CBTX, Inc. (CBTX - Free Report) announced the reinstatement of its share repurchase program. The buyback plan was suspended in March in the wake of business disruptions caused by the coronavirus pandemic.
Per the program, management is authorized to repurchase up to $40 million worth of shares through September. This plan was announced in July 2019. As of Jun 30, 2020, CBTX had 1.65 million shares remaining under the buyback authority.
Also, CBTX announced a new buyback authorization. Under this, the company will repurchase up to $40 million worth of shares once the current authorization expires. The new plan is set to expire on Sep 30, 2021.
Repurchases under both the programs can be executed either through the open market or privately-negotiated transactions, depending on the market conditions and other factors.
Additionally, CBTX regularly pays quarterly dividend. The last dividend of 10 cents per share was paid out on Jul 15 to shareholders of record as on Jul 1. Considering last day’s closing price of $15.19, CBTX’s dividend yield currently stands at 2.63%. Earlier in March 2019, the bank had announced dividend hike of 50%.
Given a robust liquidity position and a lower debt-equity ratio compared with its peers, the company is expected to sustain its capital deployment activities. Hence, through consistent dividend payments and buybacks, the company is likely to continue enhancing shareholder value.
Shares of CBTX have lost 46.1% over the past year compared with the industry’s 30.6% fall.
Currently, CBTX carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar to CBTX, several small and mid-sized banks had suspended share repurchases in mid-March following the virus outbreak to maintain strong liquidity position. Some of these include Hilltop Holdings Inc. (HTH - Free Report) , Hancock Whitney Corp (HWC - Free Report) and Washington Federal (WAFD - Free Report) . While these banks are yet to resume buyback, we believe this is likely to happen soon as the operating backdrop is gradually turning around.
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