QCR Holdings, Inc. ( QCRH Quick Quote QCRH - Free Report) has announced plans to resume repurchase of shares. The buyback plan, initially authorized on Feb 13, 2020, still has 699,068 shares outstanding.
On account of coronavirus-induced mayhem, the company had suspended share repurchases under the program since Mar 16, 2020.
The timing and amount of QCR Holdings’ common stock that are repurchased under this program will be gauged by management, based on its appraisal of market factors and other conditions. Such repurchases are likely to be carried out either via open market operations or privately-negotiated transactions.
“This share repurchase program reflects the Company’s commitment to enhancing value for our shareholders,” said Larry J. Helling, Chief Executive Officer. “The plan provides us with another tool to best allocate capital. We continue to deliver strong financial performance, and reinstating this program gives us the opportunity to buy back shares and build long-term value.”
QCR Holdings has a solid balance sheet. As of Mar 31, the company had a total debt of $188.6 million, higher than the cash and cash equivalents balance of $78.8 million. However, at the end of second-quarter 2020, QCR Holdings’ total debt to total capital of 23% improved sequentially and was lower than the industry average of 33.7%. Thus, given the strong balance sheet, the company will likely be able to sustain the current level of capital-deployment activities.
Moreover, the company’s return on equity (ROE) supports its growth potential. Its ROE currently stands at 11.92%, higher than the industry average of 11.36%. This shows that it is more efficient than its peers in utilizing shareholders’ funds.
Similar Moves by Other Banks
Over the past few months, several banks have announced new share-repurchase programs. Some of these are
The Bank of ( Princeton BPRN Quick Quote BPRN - Free Report) , Amerant Bancorp Inc. ( AMTB Quick Quote AMTB - Free Report) and Cathay General Bancorp ( CATY Quick Quote CATY - Free Report) .
Bank of Princeton’s board of directors authorized repurchase of 339,788 shares worth up to $10.4 million this year. Amerant Bancorp announced a new share repurchase program authorizing $40 million worth of its Class B common stock. Further, Cathay General Bancorp’s board of directors has authorized the buyback of up to $75 million worth of shares, with no expiration date.
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