Cornerstone Bancorp: A Double Boost for Shareholders

Cornerstone Bancorp, Inc. (OTC Pink: CNBP) has recently announced two significant initiatives that are set to benefit shareholders: a special dividend and a share repurchase program. These moves demonstrate the company's commitment to returning value to its investors while maintaining a strong financial position.



Special Dividend: A Cash Windfall for Shareholders

On January 13, 2025, Cornerstone Bancorp declared a special dividend of $2.50 per share, payable on February 5, 2025, to shareholders of record as of January 31, 2025. This dividend represents a 25% payout of unaudited 2024 earnings, indicating the company's strong financial performance and confidence in its future prospects. For shareholders, this special dividend serves as a cash windfall, providing an immediate return on their investment.



Share Repurchase Program: Enhancing Shareholder Value

In addition to the special dividend, Cornerstone Bancorp's Board of Directors authorized a share repurchase program up to 30,000 shares of the Company's issued and outstanding common stock during 2025. This program allows the Company to purchase shares on a discretionary basis through open market purchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The repurchase program has no expiration date and does not require the purchase of any minimum number of shares, giving the Company flexibility to adjust its capital structure as needed.

The share repurchase program can benefit shareholders in several ways:

1. Increased Earnings per Share (EPS): By reducing the number of outstanding shares, the share repurchase program can increase EPS for remaining shareholders. This is because the company's earnings are spread over fewer shares, leading to a higher EPS.
2. Signal of Confidence: The share repurchase program can be seen as a vote of confidence in the company's future prospects. It indicates that the company's management believes that the current stock price is undervalued, as they are willing to buy back their own shares.
3. Potential Capital Appreciation: If the company's stock price increases after the repurchase program, shareholders may benefit from capital appreciation. The repurchase program can help to reduce the supply of shares in the market, potentially driving up the stock price.

Cornerstone Bancorp: A Strong Financial Position

Cornerstone Bancorp's decision to declare a special dividend and authorize a share repurchase program demonstrates the company's strong financial position and commitment to returning value to shareholders. By considering its capital requirements and the current banking environment, Cornerstone Bancorp has shown that it can effectively manage its capital structure while returning value to shareholders.

In conclusion, Cornerstone Bancorp's recent announcements of a special dividend and a share repurchase program are positive developments for shareholders. These initiatives demonstrate the company's commitment to returning value to investors while maintaining a strong financial position. As Cornerstone Bancorp continues to execute on its strategic plan, shareholders can expect to see further benefits from these initiatives in the coming months and years.