Bank won't open soon

Stock offering's failure to raise $5 million delays Pen Mar plan

`We're reorganizing'

September 26, 2001|By Maria Blackburn | Maria Blackburn,SUN STAFF

The sign outside the future home of Pen Mar Community Bank at Clifton Boulevard and Woodward Road in Westminster has proclaimed "Coming Soon" for months.

But the opening of the bank - scheduled for June - has been delayed because its board of directors was unable to locally raise the $5 million it needed through a stock offering.

"At this time the [stock] offer has been terminated," said J. Geoffrey Sturgill Jr. a Gettysburg accountant who is chairman of the board of Pen Mar Bancshares Inc. He did not provide further details.

Hoping to provide personalized banking services to Carroll County customers, a group of area businessmen is working to establish Pen Mar as a community bank, one that would specialize in serving individual customers and small to midsized businesses.

Kevin E. Dayhoff, a member of the bank's board of directors and Westminster's mayor, said that the stock offering raised less than $1 million. The money - plus interest - was returned to investors this summer.

"We're reorganizing," Dayhoff said. "We're going to raise the money from outside the community."

Before the stock offering, the bank's board of directors had raised $1 million to fund the bank. Directors were hopeful that people in the community would provide the rest.

The offering's lack of success, Dayhoff said, was "a lesson in economics."

"Carroll County and Westminster were built on a concentration of capital," he said. "In today's environment, that concentration of capital ... with the old families is not as prevalent as it was in the past."

The 4,500-square-foot brick building that was completed in early summer for the bank's home is privately owned by a group of local investors. It is fully furnished.

Hundreds of community banks and thrifts have opened nationwide in the past five years, many in response to the mergers and acquisitions of small banks by big chains. From 1992 through the third quarter of last year, 880 community banks and thrifts were opened nationally, according to SNL Securities LC, a Charlottesville, Va., research and publishing company.

Dayhoff said the bank could open in six months and stressed that though funding might be generated outside Carroll, the bank's mission would remain local.

"The idea is still the same - to provide a small, community, personally oriented bank for our community," he said.

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