Howard Bancorp Inc. plans to launch a stock repurchase program, buying back $7 million of its outstanding shares.
Companies typically buy back their own stock to help boost the stock price, determining that it’s cheap enough to be worth the investment for its shareholders. Repurchased stock is typically extinguished.
“Howard Bancorp remains committed to enhancing long term shareholder value and in this challenging market for bank stocks, we see this program as an additional capital management tool to complement our continued growth, revenue and expense management emphasis,” said Mary Ann Scully, chair and CEO of the Baltimore-based parent of Howard Bank.
Howard Bancorp shares are off about 20 percent since it purchased First Mariner Bank in early 2018.
At Friday’s closing price of $15.17 a share, Howard could buy back more than 460,000 shares. It currently has more than 19 million shares outstanding with a market capitalization of $289 million.
Howard announced Thursday that the Federal Reserve Bank of Richmond had sent a letter saying it did not object to the stock repurchase plan.
The company plans to buy back shares from time to time either in the open market or in private transactions at its discretion. The program will expire in December 2020.