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Eagle Bancorp (EGBN) Reinstates Share-Repurchase Program

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Eagle Bancorp, Inc. (EGBN - Free Report) recently announced the reinstatement of its share-repurchase program. The buyback plan was suspended in the first quarter of 2020 in the wake of business disruptions caused by the coronavirus pandemic.

Per the program, management is authorized to repurchase up to 5% of outstanding shares through Dec 31, 2020. This plan was announced in December 2019.

In the first quarter, the company repurchased 1.2 million shares at an average cost of $37.31 per share, reflecting about 72% of authorized shares. As of Jun 30, 2020, Eagle Bancorp had 0.46 million shares remaining under the buyback authority.

The company resumed paying regular dividends from June 2019 after a long gap of 11 years. Eagle Bancorp has been paying a quarterly dividend of 22 cents per share, which represents a significant hike from the six cents paid in July 2008. Considering last day’s closing price of $26.30, the company’s dividend yield currently stands at 3.3%.

As of Jun 30, Eagle Bancorp had a total debt of $599.1 million, significantly higher than the cash and cash equivalents balance of $12.20 million. Nevertheless, it’s times-interest-earned of 13 and debt-equity ratio of 18.4% compares favorably with the industry average of 6.2 and 46.3%, respectively, reflects the company’s earnings strength. Thus, the company is likely to sustain its capital deployments and continue enhancing shareholder value.

Shares of this Zacks Rank #3 (Hold) have declined 38.5% over the past year compared with the 32.7% depreciation of the industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar to Eagle Bancorp, several small- and mid-sized banks 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 buybacks, we believe this is likely to happen soon as the operating backdrop is gradually turning around.

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