National Bank Holdings in Greenwood Village, Colo., plans to repurchase as much as $100 million of its common stock.
The $5 billion-asset company said in a press release that it will buy stock priced at $19.60 to $22.50 a share in a modified Dutch auction offering that runs through July 31. The companys stock price was $20.67 on Thursday, the last day of trading before the offering was announced.
If fully exercised, the company could buy back nearly 15% of its outstanding stock.
The move would "significantly enhance shareholder value," the release said. National Bank will still have enough capital to pursue acquisitions. At March 31, the companys tangible common equity ratio was 14.1%. Banks often target a ratio of 8% to 9%.
National Bank was one of a handful of companies founded in the wake of the 2008 financial crisis with the intent of rolling up failed and deeply troubled banks. With nearly a $1 billion in equity, National Bank bought three failed banks and one open bank in 2010 and 2011, cobbling together a franchise that has branches in Colorado, Kansas, Missouri and Texas.
As the market healed and sellers showed a preference for stock deals, companies like National Bank have been at a disadvantage in M&A. Given the amount of equity they have, its stock, as a multiple of tangible book value, tends to be low. For instance, National Bank trades at about 110% of its tangible book value.
The company in 2013 bought back a sizable amount of its shares at a discount from institutional investors with the hope that fewer shares would make its stock more valuable. The stock traded at about 110% of tangible book value then, too.
National Bank returned to acquisitions in January, agreeing to buy the $135 million-asset Pine River Bank in Bayfield, Colo. for $14 million in cash. That deal is expected to close this quarter.
Keefe, Bruyette & Woods is the dealer manager and information agent for the offering.
Robert Barba contributed to this report.