Furthering a massive stock repurchase program, Michigan National Corp. said it will buy back up to $25 million worth of additional common shares.
The $9.2 billion-asset banking company, based in Farmington Hills, completed a $175 million repurchase program earlier this month, reclaiming 2.17 million common shares and warrants for an additional 294,847 shares.
This program was conducted as a dutch auction, with investors submitting prices at which they would be willing to sell.
The latest campaign was unveiled late Monday, with directors authorizing the repurchase of up to $25 million worth of stock and warrants "in open-market or privately negotiated transactions from time to time, depending on market conditions."
The banking company's stock fell by 37.5 cents on Tuesday, closing at $75.75 per share.
The repurchases are part of a crisis-driven overhaul that has entailed sales of operations in California and Texas and a cost-cutting campaign that will eliminate 1,000 jobs.
Michigan National said it was considering a dividend increase and a stock split in January.
Fred Cummings, a banking analyst with McDonald & Co., said he anticipated a dividend hike of at least 10%, or an annual 20 cents per share.
He estimated the bank still would be somewhat overcapitalized follwing this latest repurchase, saying more buybacks are possible.
Robert Mylod, Michigan National's chairman and chief executive, said the company's "prospects for increasing earnings per share, return on equity, and dividend growth are strong as a result of our recent restructuring efforts."
