RICHMOND MUTUAL BANCORPORATION, INC. ANNOUNCES EXTENSION OF STOCK REPURCHASE PROGRAM
Richmond Mutual Bancorporation (NASDAQ: RMBI) announced an extension of its stock repurchase program, originally set to expire on June 6, 2024, to June 6, 2025. As of May 15, 2024, 723,195 shares remain available for repurchase.
Since the program's inception, the company has repurchased 782,840 shares, costing $8.8 million. The Board also authorized a Rule 10b5-1 trading plan with Keefe, Bruyette & Woods to facilitate stock repurchases during blackout periods. The plan will be subject to market conditions and pricing constraints.
CEO Garry Kleer emphasized the Board's confidence in the company's future, citing strong liquidity, capital position, and a high-quality loan and lease portfolio despite current industry uncertainties.
- Extension of stock repurchase program to June 6, 2025, showing long-term commitment.
- 723,195 shares still available for purchase, indicating ongoing buyback potential.
- Repurchased 782,840 shares since inception, costing $8.8 million, reflecting significant investment in stock buybacks.
- Board's confidence in company's future and stock undervaluation.
- Strong liquidity and capital position.
- High-quality loan and lease portfolio.
- Authorization of a Rule 10b5-1 trading plan for flexibility in share repurchasing.
- Continued turbulence and uncertainty in the banking sector.
- No obligation for specific number of share repurchases, which could lead to inconsistent buyback activities.
- Potential market and operational risks affecting the repurchase program's effectiveness.
Insights
The extension of the stock repurchase program by Richmond Mutual Bancorporation, Inc. signals confidence in the company's financial health and future prospects. Stock repurchases are often perceived positively by investors as they can reduce the number of outstanding shares, thereby potentially increasing the earnings per share (EPS) and boosting share prices.
However, investors should consider the opportunity cost of these repurchases. The company has already spent
The Rule 10b5-1 plan facilitates the repurchase during blackout periods, ensuring the company can continue to buy back shares efficiently. This underscores the company's strategic approach to managing its stock repurchase program amidst regulatory constraints.
For a retail investor, it is important to monitor the impact of these repurchases on the company's financial statements, particularly the balance sheet and income statement, to gauge the actual benefits of this program.
From a market perspective, the announcement to extend the repurchase program reflects the company's commitment to bolstering shareholder value. Stock repurchase programs are typically aimed at signaling to the market that the company's stock is undervalued. This can create positive sentiment among investors and potentially attract new investments.
Considering the broader economic uncertainties within the banking sector, this move can also be interpreted as a defensive strategy to stabilize the company's stock price. For the retail investor, recognizing the timing and reasoning behind such repurchase programs is essential. It is critical to understand whether this action is aimed purely at boosting short-term stock prices or is part of a longer-term strategic plan to enhance overall company value.
Furthermore, the engagement with Keefe, Bruyette & Woods, Inc. under the Rule 10b5-1 plan ensures that the repurchases are managed professionally and within regulatory guidelines, which adds a layer of transparency and trustworthiness to the program.
Garry Kleer, the Company's Chairman, President and Chief Executive Officer, commented, "The Board's decision to extend our existing stock repurchase program underscores our collective confidence in the future of the Company, particularly considering what we perceive to be an undervaluation of our common stock. Despite the continued turbulence and uncertainty in the banking sector, the Company's financial condition and operations remain solid given our strong liquidity and capital position, our community-based deposit franchise and our high-quality loan and lease portfolio."
The Board also authorized management to enter into a trading plan with Keefe, Bruyette & Woods, Inc. in accordance with Rule 10b5-1 of the Exchange Act, to facilitate repurchases of its common stock pursuant to the above-mentioned stock repurchase program (the "Rule 10b5-1 plan"). The Rule 10b5-1 plan allows the Company to repurchase shares at times when they might otherwise be prevented from doing so by securities laws or because of self-imposed trading blackout periods. Under the Rule 10b5-1 plan, Keefe, Bruyette & Woods, Inc. will have the authority, subject to the prices, terms and limitations set forth in the Rule 10b5-1 plan, including compliance with Rule 10b-18 of the Exchange Act, to repurchase shares on the Company's behalf.
The actual timing, number and value of shares repurchased under the stock repurchase program will depend on a number of factors, including constraints specified in any Rule 10b5-1 plan, price, general business and market conditions, and alternative investment opportunities. The share repurchase program does not obligate the Company to acquire any specific number of shares in any period, and may be expanded, extended, modified or discontinued at any time.
About Richmond Mutual Bancorporation, Inc.
Richmond Mutual Bancorporation, Inc., headquartered in
Forward-Looking Statements
Statements in this press release that are not historical facts may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to Richmond Mutual Bancorporation, Inc.'s (the "Company") financial condition, results of operations, plans, objectives, future performance or business and ability to continue paying dividends. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words or phrases "may," "believe," "will," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "plans," "potential," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, but the absence of these words does not mean that a statement is not forward-looking. By their nature, forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks include the future earnings and capital levels of First Bank Richmond, which could affect the ability of the Company to pay dividends in accordance with its dividend policies, general economic conditions as well as those within our industry, and numerous other factors identified in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and other reports filed with or furnished to the Securities and Exchange Commission – which are available at www.firstbankrichmond.com in the "Investor Relations" section and on the SEC's website at www.sec.gov.
The Company does not undertake - and specifically declines any obligation - to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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SOURCE Richmond Mutual Bancorporation, Inc.
FAQ
What is the new expiration date for Richmond Mutual Bancorporation's stock repurchase program?
How many shares are available for repurchase under RMBI's current program?
How many shares has Richmond Mutual Bancorporation repurchased since the program's inception?
What is the total cost of shares repurchased by RMBI so far?
What is the purpose of the Rule 10b5-1 trading plan authorized by RMBI?
