Shareholders of First Mariner Bancorp gave the thumbs up during a special meeting Friday to measures that will allow the struggling company to move forward on a plan to raise up to $20 million through a stock offering, which is critical to the company's survival.
The parent of 1st Mariner Bank, Baltimore's largest independent bank, has been operating under regulatory pressure to boost capital. It plans to do so by selling additional shares to existing shareholders, but needed their approval first to raise the amount of common shares. The company warned shareholders that if they didn't approve the necessary measures to conduct a stock offering, First Mariner might be forced to find a merger partner or liquidate.
Friday morning, shareholders by a wide margin authorized the board to increase the amount of commons shares from 20 million to 75 million, said Dennis Finnegan, executive vice president. The next step will be to set the price of the shares for the offering to existing shareholders, he said.
Shareholders also gave the board the authority to conduct a reverse stock split if needed, Finnegan said.
Reverse stock splits can boost a company's stock price by reducing the number of outstanding shares. First Mariner sought the authority to conduct a reverse stock split if it needed to do so to stay listed on the Nasdaq Stock Market. First Mariner late last year was under threat of being delisted because of the steep drop in its stock price. The company announced last week that it no longer faced delisting.
The company's stock price shortly before 11 a.m. was up about 15 cents to $1.49 per share.