HomeStreet Bank’s parent company has suspended plans to spend about $27 million on stock buybacks, following in the footsteps of the nation’s eight largest banks as lenders turn to cushioning their balance sheets and keeping cash on hand for borrowers during the coronavirus crisis.
Seattle-based HomeStreet said in a securities filing Tuesday it is halting purchases of its own stock with the remaining $17 million of an approved $25 million buyback program, and is withdrawing a request to regulators to authorize an additional $10 million.
HomeStreet’s stock closed Monday at $19.31, down from highs above $33 in February. It had spent $7.9 million buying back stock at an average price of $23.55, according to data in the filing.
“In these uncertain times of rapidly developing economic change as a result of the COVID-19 pandemic, we believe it is prudent to preserve our capital to provide more protection against potential credit losses and provide more support for lending activities that may become crucial to supporting our community,” said Mark Mason, chairman and CEO of HomeStreet, in a statement.
Many companies recently have sworn off stock buybacks despite the current low price of their shares. Some, like Boeing, are positioning for government bailouts. Others, like JPMorgan Chase, Bank of America and the other six major banks in the Financial Services Forum, have framed it as a public service.
“The decision on buybacks is consistent with our collective objective to use our significant capital and liquidity to provide maximum support to individuals, small businesses and the broader economy through lending and other important services,” the Financial Services Forum said March 15. “Each member institution retains the ability to reinstate its buyback program as soon as circumstances warrant.”