Dozens of small, publicly traded community banks have delisted their stocks from major exchanges in recent years to lower their compliance costs, but the parent of a small Maryland bank is going in the opposite direction.
AmericasBank Corp. stock began trading on Nasdaq March 13, after the $73 million-asset company netted $11 million in its second public offering in two years. Its stock had been trading on Nasdaq’s bulletin board since its first public offering, in March 2004.
Mark H. Anders, the president and chief executive of the company and its namesake bank subsidiary, said that though the move to Nasdaq would increase reporting costs but raise the company’s profile.
“We chose to go on the Nasdaq rather than the bulletin board because you get much greater exposure to investors who might be interested in the stock,” Mr. Anders said.
AmericasBank has lost money every year since its founding in 1997. In 2001 it reached an agreement with state and federal regulators to improve management oversight.
Mr. Anders, who joined the Towson company in July 2003, said its problems were rooted not in bad loans but in low capital levels. By March 2004 the bank was down to $1.4 million of capital and losing $120,000 a month.
Mr. Anders decided a public stock offering was the best way to raise capital quickly, and that month it sold 2,875,000 shares at $2 each, netting about $5.1 million.
John D. Muncks, a senior lending officer, said, “Up until we raised that capital, we were hanging on by our fingernails.”
With the fresh capital, the bank was able to nearly quadruple its legal lending limit, to $950,000, and hire 14 employees. It is still far from being a top performer, but it has steadily cut losses over the last two years. In the first quarter of 2004 it lost $363,000. Last quarter was its first profitable one; it earned about $8,000. There was more good news that quarter — in October federal regulators announced they had lifted the written agreement.
With the proceeds from its most recent offering, AmericasBank was able to increase its legal lending limit again, this time to $2.4 million.
Many small banks have been fleeing major exchanges since Congress passed the Sarbanes-Oxley Act in 2002. Most have said that their stocks are too thinly traded to justify the added regulatory costs, and they have used reverse stock splits to buy out shareholders.
Arnold Danielson, the chairman and founder of Danielson Associates Inc. in Rockville, Md., said community banks can raise capital a number of ways other than listing on a major exchange.
“There’s no question that this is going against a trend,” Mr. Danielson said of AmericasBank’s move.
He also questioned whether the added exposure would do much for AmericasBank’s stock price.
At midday Tuesday the stock was up about 2% since it began listing on Nasdaq, to $7.30.
“The only thing that produces good stock prices is earnings, not where you trade,” Mr. Danielson said.
Mr. Anders, 51, has a track record of helping to fix underperforming banks.
As the senior vice president and senior credit officer at Bank of Maryland, also in Towson, he worked to resolve asset quality and structural problems before the bank was sold to Mason-Dixon Bancshares of Westminster, Md., in 1995.
Then, as the president and CEO at Sterling Bank and Trust in Baltimore, Mr. Anders overhauled the management team, improved asset quality, and sold the bank in 1999, also to Mason-Dixon. (BB&T Corp. of Winston-Salem, N.C., acquired Mason-Dixon for $257 million later that year.)
