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Capital Bancorp Inc. (NASDAQ:CBNK), the parent company of Capital Bank, N.A., which has delivered an impressive 54% return over the past year according to InvestingPro data, has announced a new stock repurchase program, as per recent SEC filings. On Monday, the company’s Board of Directors authorized a buyback of up to $15 million worth of its common stock, or approximately 483,559 shares, based on the stock’s closing price as of January 31, 2025.
This new repurchase program, set to expire on February 28, 2026, represents about 4.1% of the company’s issued and outstanding common stock as of the end of January. For the $510 million market cap institution, which trades at a P/E ratio of 14.35x, this buyback program represents a significant capital allocation decision. Capital Bancorp’s move to initiate a new buyback program follows the completion of its previous repurchase plan, which concluded on December 31, 2024, with 543,215 shares bought back.
The company may repurchase shares from time to time on the open market or through privately negotiated transactions, which may include a Rule 10b5-1 plan. The repurchases are subject to market conditions, legal requirements, and other factors. The company has stated that there is no obligation to repurchase any specific number of shares, and the program may be suspended or terminated at any time without prior notice.
The filing indicates that the decision to repurchase shares will be made at the discretion of the company’s management, with consideration for market conditions and legal requirements, including the safe harbor provisions under Rule 10b-18 of the Securities Exchange Act of 1934. Analysts maintain a positive outlook on the stock, with price targets ranging from $35 to $37. InvestingPro subscribers can access additional insights, including 6 more key tips about Capital Bancorp’s performance and prospects.
This financial move by Capital Bancorp is based on the information provided in a press release statement filed with the SEC. The company’s strategic actions reflect its ongoing commitment to managing capital and returning value to its shareholders, evidenced by its track record of raising dividends for four consecutive years. The repurchase program is a common practice among corporations seeking to reduce the number of shares in circulation, potentially increasing the value of remaining shares and providing a return to investors. According to InvestingPro’s Fair Value analysis, the stock is currently trading at fair value, suggesting balanced timing for this capital allocation decision.
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