Worcester Business Journal

wbjournal.com | September 16, 2019 | Worcester Business Journal 15 B A N K I N G & F I N A N C E F O C U S SMALL BUSINESSES THRIVE AT WEBSTER FIVE Visit web5.com/business or call 800.696.9401 to learn more. As a business lender with Webster Five, I realize that running a small business requires hard work, dedication, and time. Webster Five is a community bank, with a team that is committed to providing customized lending solutions with quick approvals that can help a small business make capital improvements, increase workforce, or purchase inventory, equipment, or real estate. In addition to being able to provide traditional loan products to our small business customers, Webster Five is also a Preferred Lending partner with the Small Business Administration (SBA). We recently received recognition as the Massachusetts SBA Lender of the Quarter out of over 120 banks in the state participating in the program. Over the past few years, I have provided a wide range of loans to numerous small businesses. Recently, I worked with a local landscaper to finance $25,000 worth of upgrades to modernize their equipment in advance of our harsh New England winters. I also provided financing to a medical practice looking to open a new office. In addition, I have worked with many other businesses looking to expand operations through the purchase of other businesses. That is why I know I'll be able to work closely with your business to find the loan that best serves your needs. Webster Five's ability to provide financing to local small businesses shows our commitment to enriching our communities by supporting business development in Central Massachusetts. We have all the financial tools, resources, and services businesses need to meet challenges head-on. Robert Totaro Assistant Vice President 800.696.9401 Member FDIC Member DIF NMLS #523049 WEBSTER • DUDLEY • OXFORD • AUBURN • WORCESTER • SHREWSBURY *2019 is through first two quarters. Sources: S&P Dow Jones Indices, Securities and Exchange Commission Central Mass stock buybacks Of Central Massachusetts' five largest public companies, four have increased buybacks of their own stock since a 2017 federal corporate tax change. All numbers in millions. Company 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* for American Progress conference in Washington last June, Jackson advo- cated for regulatory changes including limiting the ability for executives to cash out using buybacks. A national spike Despite those debates, buybacks have soared since federal tax reform was approved late in 2017, lowering tax burdens for corporations from 35% to 21% and freeing up money for a range of uses – including buybacks. Beyond that, companies had another incentive to spend: what the Tax Policy Center calls the liberation of $3 billion in overseas profits. Before the tax overhaul, many of the largest American companies le profits overseas to avoid taxes. But with the new tax plan allowing companies to use that money for buybacks or dividends for the first time, the Tax Policy Center said, companies are now doing so. Buybacks jumped by 55% in 2018 compared to the prior year, hitting $811 billion, according to Goldman Sachs. Goldman projected in April for buybacks to rise even further this year to $940 billion. Companies may have bought back so much stock they're now pulling back fairly significantly, Silverblatt said – not to pre-2017 levels but less than last year. Aer each quarter in 2018 set a record for total buyback costs, first-quarter buybacks this year fell by nearly 8%, according to S&P Dow Jones Indices. With nearly all second-quar- ter buybacks reported, that number is expected to fall by another 18%, down to around $167 billion. Silverblatt doesn't expect a significant further drop but more like a new nor- mal of around $170 billion a quarter,. e largest public companies in Central Massachusetts have already au- thorized more repurchases in the years ahead. In January, Waters approved $4 billion over a two-year stretch. "As long as you see cash on corporate balance sheets," Ng said, "they will buy back shares." Billions spent in Central Mass. Buybacks among the largest public companies in Central Massachusetts have soared since 2017. Waters spent $1.3 billion on buy- backs last year, with the company making clear in its annual report the benefit of doing so: a 34-cent-per-share earnings boost. Waters said it bought back stock to return capital to share- holders while staying flexible to redirect investment elsewhere. Waters has also directed money elsewhere, spokesman Jeff Tarmy said, including research and development, whose budget has jumped 40% in five years, and in acquisitions, which in- clude $30-million for an Indiana firm's mass spectometry technology last year. Framingham retailer TJX Cos. – which has spent more than $3 billion on buybacks in the year and a half since federal tax reform – has portrayed its program similarly to Waters, saying in its annual report its earnings-per-share would have been adversely affected if it didn't purchase shares. It has also raised dividends, with 2019 marking its 23rd straight year with such increases. e retailer said in a statement its strong financial returns and cash gener- ation have allowed it an ability to both return cash to shareholders and invest in the growth of the business. e compa- ny is planning more than $1.1 billion in capital investment this year. Oxford laser manufacturer IPG said in a statement its $216 million in repurchases since 2017 have been done as part of an anti-dilutive program following the issuing of shares for com- pensation to employees and directors. Higher spending on buybacks in 2018 allowed the company to fully offset the so-called dilution effect of issuing stock to employees and directors, IPG said. Marlborough medical device manu- facturer Hologic said its $491 million of buybacks since 2017 were made to cover employee tax withholding obligations under its equity incentive plans. ere's one notable exception to the buyback spike locally: Boston Scientific. e Marlborough medical device maker hasn't reported any buybacks since 2014, according to S&P Dow Jones Indices. Instead, Boston Scientific has been on a buying spree. e company's acquisitions this year alone include a $4.2-billion purchase of BTG, a British cancer and vascular dis- ease device firm, and $465-million for Vertiflex, a California biotech making a device to treat patients with lumbar spinal stenosis. Boston Scientific Corp. $0 $493 $600 $500 $125 $0 $0 $0 $0 $0 Hologic Inc. $4 $12 $8 $14 $11 $17 $268 $218 $437 $54 IPG Photonics Corp. $0 $1 $0 $0 $0 $0 $9 $40 $176 $6 TJX Cos. $846 $1,321 $1,345 $1,471 $1,651 $1,828 $1,725 $1,664 $2,423 $700 Waters Corp. $296 $371 $296 $302 $338 $335 $326 $333 $1,315 $1,330 W

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