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CVB Financial (CVBF) Rewards Investors With New Buyback Plan

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CVB Financial Corp. (CVBF - Free Report) has announced a new share repurchase plan. The board of directors has approved the repurchase of up to 10 million shares of CVBF’s outstanding stock. There is no expiration date for this program.

The new repurchase plan replaces the previous one, which authorized CVB Financial to buy back up to 10 million shares. This plan was announced in August 2016. As of Dec 31, 2021, authorization to repurchase 4.1 million shares remained.

Of the total 2022 repurchase authorization, CVB Financial intends an accelerated share repurchase agreement for $70 million worth of shares. Also, the bank will be using “one or more Rule 10b5-1 plans or other appropriate buy-back arrangements.” This might include open market purchases and/or private transactions.

David A. Brager, President and CEO, said, “The approval of this share repurchase program reflects our robust capital position, consistent track record of producing quality earnings, and history of delivering long term value to our shareholders.”

Share buybacks aside, the company has been regularly paying dividends and enhancing shareholder value. Since April 2019, CVB Financial has been paying 18 cents per share as quarterly dividend. Prior to that, the company paid 14 cents per share as quarterly dividend.

Based on last day’s closing price of $22.01, the company’s dividend yield currently stands at 3.27%. The yield is impressive compared with the industry average of 1.98%. This yield is not only attractive for income investors but also represents a steady income stream.

Additionally, CVB Financial is growing through strategic acquisitions. In January, the company concluded the buyout of Suncrest Bank. The stock-and-cash deal worth $204 million was announced last July. The deal, along with several other past ones, will be accretive to CVBF’s earnings and result in cost savings.

Supported by its earnings strength and solid balance sheet, CVB Financial is expected to continue with efficient capital deployment activities. Through this, it will keep enhancing shareholder value.

Over the past three months, shares of CVB Financial have rallied 14.3%, outperforming 6.9% growth of the industry it belongs to.
 

Zacks Investment ResearchImage Source: Zacks Investment Research

Currently, CVB Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Finance Stocks That Took Similar Action

Over the past couple of months, several finance companies have rewarded shareholders with new share-repurchase programs. Some of these are KKR & Co. Inc. (KKR - Free Report) , Ally Financial Inc. (ALLY - Free Report) and Prosperity Bancshares, Inc. (PB - Free Report) .

KKR has increased share repurchase amount to $500 million, per a recent 8K filing. The company anticipates that the program will remain effective until the maximum 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. ALLY’s new buyback plan expires on Dec 31, 2022.

In 2021, Ally Financial completed a $2.0 billion share repurchase program.

Prosperity Bancshares announced that its board of directors has authorized the repurchase of up to 5% or 4.6 million of its outstanding stock. The new plan will be effective till Jan 18, 2023.

In 2021, Prosperity Bancshares repurchased 767,134 shares at an average price of $67.87 per share.