Independent Bank Corporation Announces the Adoption of Its 2024 Share Repurchase Plan

Rhea-AI Summary

Independent Bank Corporation (NASDAQ: IBCP) authorizes a 2024 share repurchase plan to buy back up to 1,100,000 shares, representing approximately 5% of its common stock. The plan will last through December 31, 2024, and the company intends to fund any repurchases from cash on hand. The 2023 share repurchase plan will expire on December 31, 2023.

Insights

Financial Analyst

Independent Bank Corporation's announcement of a new share repurchase plan is a strategic financial decision that directly affects shareholder value and the company's capital structure. The authorization to buy back up to 1,100,000 shares, about 5% of its common stock, signals confidence in the company's intrinsic value and financial health. Share repurchases typically indicate that management believes the stock is undervalued and that repurchasing shares will yield a higher return than alternative investments.

From a financial perspective, this move could be accretive to earnings per share (EPS) as it reduces the number of shares outstanding, potentially increasing the stock price if all other factors remain constant. However, the plan's flexibility, including the lack of an obligation to repurchase a specific number of shares and the ability to suspend the program, indicates a cautious approach that takes into account market conditions and regulatory requirements.

Analyzing the past repurchase performance where the company acquired 298,601 shares at an average price of $17.27 per share provides an insight into management's execution of share repurchases. The funding of repurchases from cash on hand suggests a solid liquidity position, which is reassuring for stakeholders. Investors should monitor the company's financial performance and market conditions to understand the impact of these repurchases on the company's future growth and financial stability.

Industry Analyst

Share buyback programs are common in the banking industry, particularly among community banks like Independent Bank Corporation, as a way to manage capital efficiently and return value to shareholders. The allocation of capital to share repurchases rather than dividends or reinvestment in the business can reflect on the company's strategy and growth opportunities. In this case, the decision to repurchase shares might suggest a limited scope for high-return investments or a strategic move to optimize the company's equity base and improve financial ratios such as return on equity (ROE).

Investors and analysts should consider the impact of this program in the context of the broader banking sector and economic environment. In periods of economic uncertainty, share repurchases can be a conservative method to deploy excess capital, while in times of economic growth, they might be seen as a missed opportunity for expansion. The repurchase program's potential influence on the stock's liquidity and volatility should also be considered, as reducing the number of shares available for trading can affect the market dynamics.

GRAND RAPIDS, Mich., Dec. 19, 2023 (GLOBE NEWSWIRE) -- Independent Bank Corporation (NASDAQ: IBCP), the holding company of Independent Bank, a Michigan-based community bank, announced that its Board of Directors authorized a 2024 share repurchase plan on December 19, 2023. Under the terms of the 2024 share repurchase plan, the Company is authorized to buy back up to 1,100,000 shares, representing approximately 5% of its common stock. The 2024 share repurchase plan is authorized to last through December 31, 2024.

The Company intends to accomplish 2024 share repurchases through open market transactions, though the Company could accomplish repurchases through other means, such as privately negotiated transactions. The timing and amount of any share repurchases will depend on a variety of factors, including, among others, securities law restrictions, the trading price of the Company's common stock, regulatory requirements, potential alternative uses for capital, and the Company's financial performance. The 2024 share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion. The Company expects to fund any repurchases from cash on hand.

The Company’s 2023 share repurchase plan will expire on December 31, 2023. Through December 19, 2023, the Company had repurchased 298,601 shares of its common stock at an average price (including commissions) of $17.27 per share.

About Independent Bank Corporation

Independent Bank Corporation (NASDAQ: IBCP) is a Michigan-based bank holding company with total assets of approximately $5.2 billion. Founded as First National Bank of Ionia in 1864, Independent Bank Corporation operates a branch network across Michigan's Lower Peninsula through one state-chartered bank subsidiary. This subsidiary (Independent Bank) provides a full range of financial services, including commercial banking, mortgage lending, investments, insurance and title services. Independent Bank Corporation is committed to providing exceptional personal service and value to its customers, stockholders and the communities it serves.

For more information, please visit our Web site at: IndependentBank.com.

Contact:

William B. Kessel, President and CEO, 616.447.3933 Gavin A. Mohr, Chief Financial Officer, 616.447.3929

FAQ

What did Independent Bank Corporation (NASDAQ: IBCP) announce on December 19, 2023?

Independent Bank Corporation announced the authorization of a 2024 share repurchase plan to buy back up to 1,100,000 shares, representing approximately 5% of its common stock.

How will the 2024 share repurchase plan be funded?

The company expects to fund any repurchases from cash on hand.

What is the expiration date of the 2023 share repurchase plan?

The 2023 share repurchase plan will expire on December 31, 2023.