Shares of Associated Banc-Corp (ASBC) gained 1.2% since it announced a common stock repurchase authorization of up to $120 million on Tuesday. This adds to its previous authorization of the same amount announced in Jul 2013.
In the current quarter, the company has already repurchased common stock worth $39 million from its previous authorization. This has been part of Associated Banc-Corp’s effort to offset the effect of equity grants, which it had undertaken as compensation plans in the recent quarters. After this repurchase, there remain shares worth $56 million under the previous authorization.
Moreover, the company’s board has approved filing of a shelf registration statement with the Securities and Exchange Commission for issuing common stock worth up to $500 million. These proceeds can be used for acquisitions in the future. However, the company does not have any plans to utilize this facility for business expansion in the near term.
In addition to the share repurchase, the company pays dividends to its shareholders on a regular basis. In 2012, Associated increased the dividends twice and in 2013 it increased it once. In the last dividend announcement, it declared a quarterly cash dividend of 9 cents per share. This dividend was paid on Mar 17, 2014, to shareholders of record at the close of business on March 3, 2014.
In 3 out of 4 quarters of 2013, Associated scripted positive earnings surprises. This indicates that the company has the ability to generate fresh cash for enhancing shareholder value. Earnings outlook for Associated for the years 2014 and 2015 is positive. This implies that the company should be able to continue with its capital deployment strategy going forward.
Currently, Associated carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include First Financial Corp. (THFF), First Merchants Corporation (FRME) and Lakeland Financial Corp. (LKFN). All these sport a Zacks Rank #1 (Strong Buy).