Even as financial stocks rebound, many banks, especially smaller ones, have remained in a defensive posture of buying back shares to boost shareholder value.

The six interest rate hikes by the Federal Reserve since last June have put pressure on banks' valuation and prompted many bankers, who thought their shares were being unjustly penalized, to buy them back. Buybacks, which reduce the number of shares in circulation and improve the stock's per-share value, "are a bullish sign for a company's future and a positive signal for investors," said Mark Fitzgibbon, a managing director of research at Sandler O'Neill & Partners.

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