For the second time in a year, Bank of Granite Corp. is facing a potential delisting from the Nasdaq Stock Market.
The bank, based in Granite Falls, has its mortgage operation and a branch on Jonestown Road in Winston-Salem.
The bank said yesterday that it received notice Wednesday from Nasdaq that because the bid price on its stock has been below $1 a share for 30 consecutive business days, it “no longer complies with the minimum bid price requirement for continued listing.”
The bank’s share price gained 2 cents yesterday to close at 67 cents.
“The company is considering actions that it may take in response to this notification in order to regain compliance with the continued listing requirements, but no decisions about a response have been made at this time,” the bank said in a statement.
Scott Anderson, the bank’s chief executive, declined further comment.
Bank of Granite went through a similar stretch from Oct. 1, 2009, through Jan. 12, 2010, with the share price hitting a 52-week low of 40 cents on Dec. 18.
As in the previous case, Nasdaq gives the bank a 180-day grace period — until March 21 this time — to regain compliance. That means the minimum bid price must be at or exceed $1 for at least 10 consecutive business days.
“While being delisted from Nasdaq would obviously not be good, the stock would likely still be quoted and traded, most likely on the OTC Bulletin Board,” said Buddy Howard, an analyst with Equity Research Services in Raleigh.
“The real key is what happens to the company from a more fundamental, operating standpoint.”
In both instances, the share-price declines are the result of investors losing confidence in the bank’s ability to manage and resolve a portfolio of delinquent real-estate loans.
On Aug. 6, the bank reported a $7.5 million loss for the second quarter compared with a $9.3 million loss in the first quarter. The bank’s provision for loan losses nearly doubled to $8.5 million from a year ago, though it was down from $12.1 million in the first quarter.
Analysts have said that if the bank is unable to stop the bleeding in its loan portfolio, it could wind up being bought in a traditional deal or being taken over in a deal brokered by the FDIC.
rcraver@wsjournal.com
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