Cherokee Banking Co. in Canton, Ga., announced Tuesday that it is going private to reduce its legal, accounting, and regulatory costs.
The $152 million-asset company was founded in July 1999 and went public seven months later. In a news release, its chief financial officer, Rick Roberts, said that while the decision to go private was difficult, the board believes it is in the best interests of shareholders. Echoing the comments of many small-bank executives lately, Mr. Roberts said compliance costs have increased since the Sarbanes-Oxley Act of 2002 was passed.
Cherokee would need to reduce its number of shareholders to below 300 to cease filing reports with the Securities and Exchange Commission. To do so, it plans to buy out shareholders with fewer than 1,100 shares at a price of $17.75 a share.
It expects to complete the privatization in the fourth quarter. It would be one of hundreds of small, publicly traded companies - including dozens of community banks - that have gone private since Sarbanes-Oxley was passed.
Volume in Cherokee's stock was heavy on the news that it is going private. Late Tuesday more than 4,700 shares had been traded - nearly 20 times its daily average - and the stock was up 9.7%, from Friday's close.
