Greenville-based Palmetto Bancshares Inc. will take steps to be listed on the Nasdaq Stock Market. The 104-year-old institution has never been listed on a public exchange.
By Scott Miller
Published June 30, 2010
Greenville-based Palmetto Bancshares Inc. will take steps to be listed on the Nasdaq Stock Market.
The 104-year-old institution has never been listed on a public exchange.
The move is part of pending stock-purchase agreements with institutional investors, but the bank planned to go public anyway, said CFO Lee Dixon.
The public listing will give shareholders more liquidity and Palmetto Bank the opportunity to pursue future acquisitions, said Dixon, who also serves as COO and chief risk officer.
“In the next two to five years, as we really put our problems behind us and as the market starts to stabilize, we could see more opportunity in the M&A market,” he said, noting that publicly traded stock could be used as compensation in purchase agreements.
Palmetto Bank will begin working with Nasdaq on its application in the coming weeks, Dixon said. Per the stock purchase agreements with investors, Palmetto Bank agreed to list shares on a public exchange within nine months after the close of those private placements.
“We’re very excited about it. It’s clear evidence of our focus toward the future,” Dixon said. “We think it’s a big step in the history of our company.”
Currently, the bank’s stock is traded privately.
Shareholders will vote at an annual meeting Aug. 6 on whether or not to increase the institution’s authorized shares from 25 million to 75 million. If approved, the majority of additional stock will be issued as part of a $100 million stock purchase agreement the bank announced in May. But around 30 million shares would remain available for future use.
“It gives the board flexibility to take advantage of potential opportunities as they come,” Dixon said.
Palmetto Bank has lost a total $47.5 million in the past four fiscal quarters, with each quarter’s losses being lower than the last. The bank’s stress is largely tied to loans on commercial real estate.
Earlier this month, the bank entered into a consent order with the Federal Deposit Insurance Corp. that requires it to take several steps to improve its financial position. Bank President and CEO Sam Erwin previously said many of the requirements of that order have been fulfilled.