The parent company of The Provident Bank, rebranded last year as BankProv, has adopted a new stock repurchase program, one of several local banks planning to repurchase shares this year.
The Amesbury-based bank said in a statement that it plans to repurchase up to 1.4 million shares, representing approximately 7.5 percent of the current outstanding shares and the approximate number of shares authorized to be issued under the company’s 2020 equity incentive plan.
Massachusetts regulations restrict stock repurchases during the first three years following the completion of a stock offering except to fund stock benefit plans, the bank said in the statement. Repurchases are also allowed for no more than 5 percent of outstanding shares if compelling and valid business reasons are established with the Massachusetts Commissioner of Banks.
Provident Bancorp completed the second step of its conversion from a mutual to stock bank in October 2019. The bank also received a non-objection from the Federal Reserve Bank of Boston for the repurchase plan.
The bank in October had previously announced plans to buy back 1 million shares. The bank completed those repurchases last month at an average price of $11.11, according to an SEC 8-K filing.
Many stock banks last year opted not to implement share repurchase programs after the start of the pandemic, and federal regulators restricted large U.S. banks from buybacks. The restrictions on large banks were lifted in December.
Other banks that have announced stock buybacks in 2021 include Cambridge Trust Co., East Boston Savings Bank.
Brookline Bancorp, which owns both Brookline Bank and Bank Rhode Island, had planned a stock repurchase program of up to $10 million in 2020, an amount that was increased to $20 million in early March before the program was suspended on March 24. The board in October authorized the program to resume, resulting in more than 1.7 million shares repurchased at a weighted average price of $11.66, according to SEC filings.
Brookline Bancorp began another stock repurchase program of up to $10 million on Feb. 1 that will run through the end of 2021.
Cambridge Trust Co.’s parent company announced yesterday in a SEC filing that it would begin a stock repurchase program to acquire up to 5 percent of the shares of its common stock through March 15, 2022.
Last month East Boston Savings Bank’s parent company, Meridian Bancorp, announced it had adopted a new stock repurchase program for up to 1 million shares, approximately 1.9 percent of its outstanding common stock.
“Consistent with our commitment to enhancing stockholder value, our Board of Directors approved this stock repurchase program and 25 percent increase in our dividend, to an annualized rate of $0.40 per share, based on our expected earnings trends and continued strength of our asset quality,” East Boston Savings Bank’s Chairman, President and CEO Richard J. Gavegnano said in a statement last month.
