First Financial Northwest, Inc. (FFNW Quick QuoteFFNW ) recently announced a new share-repurchase plan. The board of directors has approved the repurchase of about 5% of the outstanding common stock or 476,000 shares. The new plan began on Aug 16, and will be effective for the next six months.
The new repurchase plan replaces the previous one that authorized the company to buy back up to 486,000 shares starting Feb 1, 2021, to Aug 13, 2021. Under the program, the bank had repurchased 268,286 shares at an average price of $14.97 per share.
Share buybacks aside, the company has been regularly paying dividends to enhance shareholder value. In fact, it has been annually hiking quarterly dividends since 2017, with the latest hike of 10% announced this March.
On Aug 16, the company announced the third-quarter 2021 common stock dividend of 11 cents per share. The dividend will be paid out on Sep 17 to shareholders on record as of Sep 3, 2021.
Notably, as of Jun 30, 2021, the company had total debt of $120 million, significantly higher than the cash and cash equivalents balance of $7.52 million. Moreover, First Financial has debt/equity ratio of 0.74, which is higher than the industry average of 0.11. Thus, sustainability of the company’s capital deployments seems to be unlikely.
Over the past year, shares of First Financial have gained 79.5%, underperforming 85.5% gain of the industry it belongs to.
Image Source: Zacks Investment Research
Currently, First Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks That Took Similar Action
In recent times, several banks have rewarded shareholders with new share-repurchase programs. Some of these are Civista Bancshares, Inc. (CIVB Quick QuoteCIVB ) , The PNC Financial Services Group, Inc. (PN! C Quick QuotePNC ) and Huntington Bancshares Incorporated (HBAN Quick QuoteHBAN ) .
Civista’s board of directors has authorized the buyback of up to an aggregate $13.5 million of its outstanding shares. The plan will expire on Aug 10, 2022. PNC Financial has announced a new share-repurchase program authorizing $2.9 billion worth of its common stock for the four-quarter period beginning in the third quarter of 2021. Further, Huntington’s board of directors has authorized an $800-million share repurchase for the next four quarters beginning July 2021.