As was said in another post, they may simply believe the stock is attractively priced. The buyback may signal just that and nothing more.
Keep in mind the old "earnings multiple" -- by buying back the shares, they should also drive up EPS or earnings per share (less shares outstanding, same earnings). Assuming the Street believes the earnings outlook will stay as previously reported, then the stock price should go up.
The savings to ASBC is simply the 34 cents. It remains with ASBC, it is not in the pocket of a stockholder as it was before ASBC bought it back from him. On ASBC's balance sheet it stays in 'retained earnings', a capital sub-account.
Might not sound like much of a savings, but if they buy back one million shares, we have some 'real money".
So I guess ASBC is either thinking of buying up "something" or declaring a stock dividend ???
Burt,You say "The company saves the expense of the dividend on shares purchased, enhancing capital" Let me get this straight If ASBC buy back shares @ 36.00/share to save a $ .34/share dividend payout !! where's the savings? If I read you right your saying that I'll sell you all my shares @ $ 36.00/share & I'll pay you $.34/share/quarter in return. Where do I sign up for "That" deal ???
If things keep going as they have in the past (div. rates,,Cost of living,,the banking economy, return on investments), I should run out of Your money (Paying the dividends only)in about, what 50 years ?????
I don't think that is what you were trying to say. But it sure came out that way.