South Plains Financial, Inc. Announces Stock Repurchase Program
South Plains Financial, Inc. (SPFI) announced a $10.0 million stock repurchase program for its common stock, aiming to buy back shares trading below intrinsic value. The program will run until February 21, 2025, or until the allocated funds are used up. Curtis Griffith, the Chairman and CEO, expressed optimism about the company's performance and growth prospects.
The initiation of a $10 million stock repurchase program by South Plains Financial, Inc. is a strategic financial decision that can influence the company's capital structure and signal management's confidence in the intrinsic value of the company's stock. From a financial perspective, this move can be seen as a method to return value to shareholders, potentially leading to an increase in earnings per share (EPS) by reducing the number of outstanding shares. This might be particularly attractive to investors if the repurchase is executed at a price believed to be below the stock's intrinsic value, as suggested by South Plains' CEO.
Moreover, the repurchase program's impact on the company's balance sheet and liquidity should be considered. The allocation of $10 million for stock repurchases represents a decision to use available cash, which could alternatively be used for other corporate purposes such as debt reduction, expansion, or other investment opportunities. The management's choice to prioritize a buyback program implies a belief that investing in their own stock will yield a better return than alternative investments available to the company.
The announcement of a stock repurchase program can serve as a positive signal to the market, often interpreted as a sign that the company's leadership believes the stock is undervalued. This psychological aspect can influence investor sentiment and potentially lead to a short-term increase in the stock price as the market adjusts to the new information. It's important to analyze the historical performance of South Plains' stock and the general market conditions to understand the potential impact of this announcement on the company's market valuation.
Furthermore, the implementation of such a program under the constraints of Rule 10b-18 and the possibility of a Rule 10b5-1 trading plan indicate a structured approach to the buyback, aiming to minimize potential market disruption and comply with regulatory requirements. This suggests a level of prudence in the execution of the program, which could reassure investors about the company's governance practices.
The adherence to Rule 10b-18 and the potential use of a Rule 10b5-1 trading plan in South Plains Financial, Inc.'s stock repurchase program are critical legal considerations. Rule 10b-18 provides a safe harbor for companies, allowing them to repurchase their own stock in the open market without being deemed to manipulate the market, provided certain conditions are met, such as volume, timing, price and manner of the repurchases. The use of a Rule 10b5-1 trading plan enables the company to continue repurchasing its shares even during periods when it may have access to material non-public information, thus avoiding potential insider trading violations.
It is essential for investors to understand these regulations as they provide a framework for the company's repurchase activities and help ensure that the repurchases are conducted in a manner that is fair and transparent to all market participants.
02/26/2024 - 04:10 PM
LUBBOCK, Texas, Feb. 26, 2024 (GLOBE NEWSWIRE) -- South Plains Financial, Inc. (NASDAQ:SPFI) (“South Plains” or the “Company”), today announced that the board of directors of the Company (the “Board”) approved a stock repurchase program for up to $10.0 million of the outstanding shares of the Company’s common stock (the “Stock Repurchase Program”). The Stock Repurchase Program will conclude on February 21, 2025, subject to the earlier termination or extension of the Stock Repurchase Program by the Board or the $10.0 million designated for the Stock Repurchase Program are depleted.
Curtis Griffith, South Plains’ Chairman and Chief Executive Officer, commented, “I am very pleased with the momentum in our business highlighted by our strong full year 2023 financial results combined with the many opportunities that we have in front of us to further grow the Bank. However, we believe that our shares continue to trade below intrinsic value. As a result, our Board has authorized a $10.0 million stock repurchase program to buy back our own stock, which we believe is currently the most compelling acquisition that we can make in today’s market.”
Under the Stock Repurchase Program, the Company may repurchase shares of the Company’s common stock from time to time in open market purchases or privately negotiated transactions. Any open market repurchases will be conducted in accordance with the limitations set forth in Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable legal requirements. Repurchases under the Stock Repurchase Program may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased by the Company when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including the performance of the Company’s stock price, general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company. The Company may, in its discretion, begin or terminate repurchases at any time prior to the Stock Repurchase Program’s expiration, without any prior notice. The Stock Repurchase Program does not obligate the Company to repurchase any particular number or amount of shares of the Company’s common stock.
About South Plains Financial, Inc.
South Plains is the bank holding company for City Bank, a Texas state-chartered bank headquartered in Lubbock, Texas. City Bank is one of the largest independent banks in West Texas and has additional banking operations in the Dallas, El Paso, Greater Houston, the Permian Basin, and College Station, Texas markets, and the Ruidoso, New Mexico market. South Plains provides a wide range of commercial and consumer financial services to small and medium-sized businesses and individuals in its market areas. Its principal business activities include commercial and retail banking, along with investment, trust and mortgage services. Please visit https://www.spfi.bank for more information.
Available Information
The Company routinely posts important information for investors on its web site (under www.spfi.bank and, more specifically, under the News & Events tab at www.spfi.bank/news-events/press-releases ). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.
The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this document.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect South Plains’ current views with respect to future events. Any statements about South Plains’ expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. South Plains cautions that the forward-looking statements in this press release are based largely on South Plains’ expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond South Plains’ control. Factors that could cause such changes include, but are not limited to, the impact on us and our customers of a decline in general economic conditions and any regulatory responses thereto; potential recession in the United States and our market areas; the impacts related to or resulting from recent bank failures and any continuation of the recent uncertainty in the banking industry, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response thereto; increased competition for deposits and related changes in deposit customer behavior; changes in market interest rates; the persistence of the current inflationary environment in the United States and our market areas; the uncertain impacts of ongoing quantitative tightening and current and future monetary policies of the Board of Governors of the Federal Reserve System; the effects of declines in housing prices in the United States and our market areas; increases in unemployment rates in the United States and our market areas; declines in commercial real estate prices; uncertainty regarding United States fiscal debt and budget matters; cyber incidents or other failures, disruptions or breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of cyber attacks; severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events; regulatory considerations; competition and market expansion opportunities; changes in non-interest expenditures or in the anticipated benefits of such expenditures; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learnings; potential increased regulatory requirements and costs related to the transition and physical impacts of climate change; current or future litigation, regulatory examinations or other legal and/or regulatory actions; and changes in applicable laws and regulations. Additional information regarding these risks and uncertainties to which South Plains’ business and future financial performance are subject is contained in South Plains’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of such documents, and other documents South Plains files or furnishes with the SEC from time to time, which are available on the SEC’s website, www.sec.gov . Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements due to additional risks and uncertainties of which South Plains is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results. Due to these and other possible uncertainties and risks, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized and readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Any forward-looking statements presented herein are made only as of the date of this press release, and South Plains does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, new information, the occurrence of unanticipated events, or otherwise, except as required by applicable law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.
Source: South Plains Financial, Inc.
What did South Plains Financial, Inc. (SPFI) announce regarding its stock repurchase program?
South Plains Financial, Inc. (SPFI) announced a $10.0 million stock repurchase program for up to the outstanding shares of the Company’s common stock.
When will the Stock Repurchase Program conclude?
The Stock Repurchase Program will conclude on February 21, 2025, or when the $10.0 million designated for the program is depleted.
Who is the Chairman and CEO of South Plains Financial, Inc. (SPFI)?
Curtis Griffith is the Chairman and CEO of South Plains Financial, Inc. (SPFI).
How will the Company conduct the repurchases under the Stock Repurchase Program?
The Company may repurchase shares from time to time in open market purchases or privately negotiated transactions, following legal requirements and regulations.
What factors will influence the Company's decision to repurchase shares?
Factors such as stock price performance, market conditions, regulatory requirements, fund availability, and other relevant considerations will impact the decision to repurchase shares.
Can the Company start or stop repurchases at any time?
Yes, the Company may, at its discretion, begin or terminate repurchases at any time before the Stock Repurchase Program's expiration, without prior notice.
