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Columbia Financial (CLBK) Stock Up 2.6% on New Buyback Plan

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Columbia Financial, Inc. CLBK has announced a new share repurchase plan. The board of directors has approved the repurchase of up to 5 million shares or roughly 4.6% of CLBK’s current outstanding shares. The plan has no expiry date.

CLBK’s new share repurchase plan was adopted after receiving the non-objection from the Federal Reserve Bank of Philadelphia. Following this favorable development, shares of Columbia Financial gained 2.6% on the last day’s trading.

The new repurchase plan will be effective following the completion of Columbia Financial’s previous buyback program, which was announced this February. Under this plan, the company was authorized to repurchase 5 million shares. As of Nov 30, 2021, 1.2 million shares remained to be repurchased under the authorization.

Thomas J. Kemly, President and CEO of Columbia Financial, said: “I am happy to announce our new repurchase program. The repurchase of shares of our common stock at attractive prices is a prudent way to deploy excess capital and increase shareholder value.”

Additionally, Columbia Financial has been actively pursuing growth through strategic acquisitions. Earlier this month, the company inked a stock deal to acquire New Jersey-based RSI Bank. On a pro forma basis, the deal (expected to close in the second quarter of 2022) is expected to be 2.6% accretive to Columbia Financial’s net income in 2023, while it will be 4.1% dilutive to 2023 earnings per share.

Other than this, on Dec 1, Columbia Financial concluded the Freehold Bank acquisition, which was announced in June 2021. These, along with other similar deals, are expected to keep supporting the company’s financials.

Supported by its earnings strength and solid balance sheet, Columbia Financial is expected to continue with efficient capital deployment activities in the future. Through this, it will keep enhancing shareholder value. However, the low-interest rate environment is a major concern.

Over the past three months, shares of United Community Banks have rallied 12.5% against the decline of 3.8% for the industry it belongs to.

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

Other Banks That Took Similar Action

Over the past couple of months, several banks have rewarded shareholders with new share-repurchase programs. Some of these are Washington Trust Bancorp, Inc. WASH, United Community Banks, Inc. UCBI and Merchants Bancorp MBIN.

Washington Trust’s board of directors has approved the repurchase of about 5% of the outstanding common stock or 850,000 shares. WASH’s new buyback plan expires on Dec 31, 2022.

As of Oct 31, 2021, Washington Trust had nearly 17.3 million shares outstanding.

United Community Banks’ board of directors has approved the repurchase of up to $50 million of UCBI’s outstanding shares. The plan will expire on Dec 31, 2022.

The new repurchase plan replaces the previous one, which authorized United Community Banks to buy back up to $50 million shares till Dec 31, 2021.

Merchants Bancorp’s board of directors has approved to renew and increase the company’s share repurchase program of up to $75 million. The share buyback plan will expire on Dec 31, 2023.

Apart from this, the company announced a three-for-two stock split. MBIN’s shareholders of record as of Jan 3, 2022, will be eligible to receive one additional share for every two shares they own of the company’s common stock.


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United Community Banks, Inc. (UCBI) : Free Stock Analysis Report

Washington Trust Bancorp, Inc. (WASH) : Free Stock Analysis Report

Merchants Bancorp (MBIN) : Free Stock Analysis Report

Columbia Financial (CLBK) : Free Stock Analysis Report

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