Magazine article American Banker

First Bank Plans to Repurchase Common Shares

Magazine article American Banker

First Bank Plans to Repurchase Common Shares

Article excerpt

First Bank System Inc. said it planned to repurchase up to $25 million of its own common shares, the latest sign of the Minneapolis company's return to financial health.

The company said it might buy about 890,000 shares, less than 1% of those outstanding, from time to time in the open market or through negotiated transactions.

The shares may be used for issuance under First Bank's employee stock purchase or dividend reinvestment plans.

First Bank's share price, which marked time last year, perked up on the announcement, which was made after the close of trading on Monday.

The stock was up 25 cents, to $27.875, late Tuesday. Most bank stocks were down on the day.

"This was a very capital-short institution just two years ago," said Michael Milunovich of Robert W. Baird & Co., Milwaukee. "It shows how far they've come that they can now afford to buy back shares and have the market view them positively."

"They have carried out the most disciplined and effective restructuring program of any bank in the country," said Christoph Kotowski of Oppenheimer & Co.

Analysts credited the turn-around to John F. Grundhofer, who will mark the second anniversary of his hiring as First Bank's chairman, president, and chief executive officer on Jan. 31.

First Bank has had nearly two years of steady gains in profitability, productivity, and balance-sheet health; though earnings for 1992 are expected to be modest because of accounting changes and recently completed mergers.

$2.55 Earnings Projected

Mr. …

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