First National warned over NASDAQ price

First National Bancshares, the holding company, announced on New Year’s Eve that the NASDAQ Capital Market notified the company of the delisting notice.

The exchange said First National was in violation of the market’s requirement to maintain a bid price of $1 over 30 consecutive days. The per-share price fell below a dollar on Nov. 12 and has not risen above the minimum since.

First National closed at 67 cents on Dec. 31. It hit a 52-week low of 47 cents Dec. 28.

First National has until June 28 to regain compliance by recording a closing bid price of $1 for 10 consecutive trading days.

In announcing the delisting warning, the company said one of its 2010 goals was to establish “a higher bid price for its common share. The company believes that its growing strength and stability will become more apparent in 2010 and will be reflected in the bid price of its common shares.”

The stock-price warning was the second, albeit separate, delisting action taken by NASDAQ. In November, the exchange said First National’s stockholder equity for its Global Market fell below the minimum of $10 million. The company accepted an offer to be listed on the smaller Capital Market.

First National’s share value has been dragged down by the company’s inability, so far, to raise sufficient capital to bring it into line with regulator’s requirements for having sufficient resources to withstand continuing losses on loans.

On April 27, the U.S. Treasury’s Office of Comptroller of the Currency gave First National until Aug. 25 to raise its Tier 1 capital to at least 11 percent of assets to qualify as “well capitalized.” Since that time, First National’s capital position worsened, falling below “adequately capitalized” levels.

Granted more time, First National resubmitted an amended plan for raising cash to the OCC, but no public information was available regarding that submission as of the turn of the year.

Although the board of directors got permission in late July from shareholders to raise capital through a public offering of common stock, it has not made such an offer, which would require regulatory approval.

In a privately placed sale Aug. 25, the board of directors collectively purchased $550,500 in common shares at $1 apiece, but those proceeds were used to give a signing bonus to its new chief executive officer, J. Barry Mason.

In another unresolved and delayed issue, First National announced in August it had agreement in principle with Nexity Bank of Birmingham, Ala., to be released from default on a loan of $9.5 million from Nexity to help finance the purchase of Carolina National’s four Columbia bank offices for $54 million in stock and cash.

At the time the agreement was announced, First National said, formal approval “would clear the way for First National to take actions to improve its capital.”

But as of the end of the year, the agreement had not been executed. Although First Federal had regulatory approval, Nexity’s first-line regulator, the Alabama Banking Department, apparently still has not approved the deal.

Nexity also is under orders to raise capital to buffer losses and, like First National, has a zero rating by Bauerfinancial Inc., a Florida-based bank rating firm.

First National posted losses of $79 million through September 2009 on top of a loss of $45 million in 2008. First National Bank of the South has 13 offices in Spartanburg, Greenville, Columbia, Charleston and Fort Mill/Tega Cay.

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