RICHMOND, Ind. - Richmond Mutual Bancorporation, Inc. (NASDAQ: RMBI), the parent company of First Bank (NASDAQ:FRBA) Richmond, has announced an extension to its current stock repurchase program. The initiative, previously set to expire on June 6, 2024, will now continue until June 6, 2025. As of May 15, the company reported that 723,195 shares are still available for repurchase under the program, which has already seen 782,840 shares bought back at a total cost of $8.8 million.
Garry Kleer, Chairman, President, and CEO of Richmond Mutual, stated that the extension reflects the board's confidence in the company's future. He cited the perceived undervaluation of the company's common stock and affirmed the solid financial condition of the company, highlighting its strong liquidity, capital position, and high-quality loan and lease portfolio, despite ongoing challenges in the banking sector.
In conjunction with the program's extension, the Board has authorized a trading plan with Keefe, Bruyette & Woods, Inc., following Rule 10b5-1 of the Exchange Act. This plan is designed to allow stock repurchases during periods when they might otherwise be restricted due to securities laws or self-imposed trading blackouts. Keefe, Bruyette & Woods, Inc. will have the authority to repurchase shares on behalf of the company, adhering to set prices, terms, and limitations, including compliance with Rule 10b-18.
The specifics of the repurchase program, such as timing, number, and value of shares, will depend on various factors, including market conditions and alternative investment opportunities. The program does not commit the company to buy a particular number of shares and can be modified or discontinued at any time.
InvestingPro Insights
Richmond Mutual Bancorporation, Inc. (NASDAQ: RMBI) has shown a proactive approach to managing its stock value through its extended repurchase program. An InvestingPro Tip suggests that the company's management has been aggressively buying back shares, indicating a strong belief in the intrinsic value of the company. Additionally, the company has been profitable over the last twelve months, a reassuring sign for investors considering the company's financial health.
However, despite its profitability, another InvestingPro Tip points out that Richmond Mutual suffers from weak gross profit margins, which could be a concern for investors looking for long-term sustainability. Investors looking for a deeper dive into RMBI's financials can find more InvestingPro Tips at https://www.investing.com/pro/RMBI, with an additional 24 tips available to guide their investment decisions.
From a data perspective, the company's Market Cap stands at $116.21 million, with a P/E Ratio of 13.22, which slightly adjusts to 12.98 when looking at the last twelve months as of Q1 2024. The PEG Ratio for the same period is -0.49, indicating potential concerns over future earnings growth relative to the current P/E ratio. Yet, the Price/Book ratio is 0.88, which could suggest that the stock is undervalued compared to the company's book value.
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