Stellar Bancorp (STEL) Rises 2% on Repurchase Plan Expansion
Stellar Bancorp, Inc. STEL shares have gained 2% following the announcement of the expansion and extension of its existing share repurchase program. Under the program, the board of directors of this Houston, TX-based bank has authorized the repurchase of up to an aggregate of $60 million of the company’s common stock through May 31, 2024.
The original share repurchase program was announced back in September 2022, which authorized the company to repurchase up to $40 million of its common stock through Sep 30, 2023. However, it did not repurchase any shares during the three months ended Mar 31, 2023.
In addition to the share repurchase program, Stellar Bancorp also has a history of paying quarterly dividends. Along with the expansion of the share repurchase plan, it has announced a quarterly cash dividend of 13 cents per share of common stock. It will be paid on Jun 30, 2023, to shareholders of record as of the close of business on Jun 15, 2023.
STEL increased its dividend two times in the last five years. The company had sequentially hiked its dividend on Mar 17, 2021, by 30% to 13 cents per share. Based on the increased rate, the annual dividend comes to 52 cents per share. This results in an annualized dividend yield of 2.20%, considering STEL’s last day’s closing price of $23.62. The yield is not only attractive for investors but also represents a steady income stream.
As of Mar 31, 2023, Stellar Bancorp had total cash and cash equivalents of $263.3 million, higher than the borrowed fund of $238.9 million. Also, its times-interest-earned ratio of 11 increased sequentially, indicating that the company has sufficient liquidity to meet its debt obligations and will be able to continue its capital deployment activities, thereby enhancing shareholder value.
Over the past six months, shares of STEL have lost 29.5% compared with the industry’’s decline of 20.7%. The company currently carries a Zacks Rank #4 (Sell).
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Enhanced Capital Deployment Activities by Other Banks
Stock Yards Bancorp, Inc. SYBT announced the extension of its stock-repurchase plan. The company’s board of directors has approved the extension by two years to May 22, 2025. The plan was previously extended in May 2021.
Implemented on May 22, 2019, the plan was authorized to repurchase one million shares. To date, SYBT has repurchased around 259,000 shares at an average cost of $35.41 per share. It has approximately 741,000 shares remaining under the authorized share-repurchase plan.
Civista Bancshares, Inc. CIVB announced a new share repurchase program. Based in Sandusky, OH, CIVB was authorized to buy back up to an aggregate of $13.5 million of its outstanding shares. The plan will expire on May 2, 2024.
This new repurchase plan of CIVB replaced the previous authorization (announced in August 2022) to buy back $13.5 million shares. It repurchased $7.4 million worth of shares under that plan, which expired on May 9.
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