First National delisted

By Dick Hughes  

JULY 16, 2010 6:30 a.m. (0)

First National Bancshares, its problems mounting, has lost its listing on NASDAQ for failure to get its stock price above a dollar for 10 consecutive trading days over a six-month period.

The Spartanburg holding company for First National Bank of the South was delisted by the exchange as of Thursday.

That action pushed First National onto what is called the “pink sheet” on the over-the-counter market, where trading primarily is in penny stocks and small cap companies.  Trading is thinner, more costly and less transparent than on NASDAQ, NYSE and other public exchanges.

When NASDAQ notified First National Dec. 29 that it had six months to get its stock above a dollar for 10 consecutive days, the company said a higher bid price was one of its goals and that the bank’s “growing strength and ability will become more apparent in 2010 and will be reflected in the bid price of its common shares.”

First National closed at or above $1 three days in January and two days in April but was unable to sustain those brief runs.  On June 29, NASDAQ informed the bank that its stock “will cease to be listed on the NASDAQ Capital Market as of the opening of business on July 8, 2010.”

The company also said an application is being made to have the stock quoted on the OTC Bulletin Board. First National noted that from its initial funding in 2000 it was traded on the OTC Bulletin Board through Oct. 31, 2005.

Since April 2008, First National has been under tight regulatory control of the Office of Comptroller of the Currency, which placed the bank under a consent order to raise capital to well-capitalized level.  The bank’s capital has declined since then, reaching the critical level in March.

The bank has been unsuccessful to date in raising cash investments to get its capital anywhere near what the feds demand, and its independent auditor has questioned the bank’s ability to stay in business without an infusion of funds.

Adding to its troubles, First National defaulted once again on a loan payment to Nexity Bank of Birmingham, which holds stock of First National Bank of the South as collateral.

Nexity agreed to accept $3.5 million to settle the $9.7-million loan, but First National has missed two deadlines to make that discounted payment.   First National said it is negotiating with Nexity on another extension.

First National lost $44.8 million in 2008, $43.7 million in 2009 and $5.3 million in the first quarter of 2010.

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