Nasdaq Warns 1st Mariner's Parent

Banking Firm Is Given Deadline To Raise Capital And Stock Price

December 16, 2009|By Eileen Ambrose | Eileen Ambrose,eileen.ambrose@baltsun.com

The Nasdaq Stock Market has warned First Mariner Bancorp that it failed to meet listing standards and could eventually be dropped from the electronic exchange, the Baltimore bank holding company said Tuesday.

First Mariner Bancorp said Tuesday it received two letters last week from Nasdaq.

Nasdaq told the parent of 1st Mariner Bank, Baltimore's largest independent bank, that it didn't meet the exchange's minimum requirements for market value and stock price.

To trade on the Nasdaq Global Market, First Mariner must maintain a market value of at least $5 million and a $1-per-share stock price for 30 consecutive business days. Nasdaq gave the company deadlines to boost its market value and stock price.

First Mariner and its bank are operating under heavy regulatory supervision. The bank has struggled with problem real estate loans and difficulties in raising capital.

Regulators are requiring the bank to raise its capital ratios to certain levels by the end of June. In a document filed earlier this month with the Securities and Exchange Commission, First Mariner said it intended to raise up to $20 million by giving existing shareholders the right to buy additional stock.

"The Nasdaq delisting letter is pretty routine, but it ups the pressure a little," said banking analyst Bert Ely. "The question is, can they raise the $20 million? That's the real question."

In a statement Tuesday, First Mariner said it will be able to continue on the Nasdaq Global Market if it maintains a market value of at least $5 million for a minimum of 10 business days in a row before March 10. The company also has six months to raise its share price to $1 or more for at least 10 consecutive days before June 8.

First Mariner's stock Tuesday rose about 8 cents to 88 cents per share, pushing its market value up to $5.67 million.

Still, if First Mariner fails to meet these hurdles, the company said, it can apply to transfer its securities to the Nasdaq Capital Market, where the market value minimum is lower. If First Mariner does switch to the Nasdaq Capital Market, the company said, it could also get an extra 180 days to boost its shares to meet the stock price requirement.

First Mariner said the notices from Nasdaq have no impact currently on the shares' listing. But if First Mariner can't get into compliance or cannot switch to the Nasdaq Capital Market, the company would be delisted. First Mariner said it plans to appeal if that happens.

First Mariner also announced Tuesday the completion of the sale of its consumer finance subsidiary, Mariner Finance LLC, for about $10.7 million. The company received $8.9 million in cash at closing and retained a 5 percent stake in the finance company.

The rest of the money, minus certain claims, will be released to First Mariner within 18 months. The cash infusion will help the bank's capital reserves, the company said.

The deal was announced in October, when First Mariner also said the sale would lead to a pre-tax loss of about $10 million for the quarter.

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