Highlight of Business Operations:
The Company maintains a liquid portfolio of both assets and liabilities and attempts to mitigate the risk inherent in changing rates in this manner. Cash, interest bearing deposits in banks, federal funds sold and investments classified as available for sale totaled $97.9 million at June 30, 2011 compared to $129.1 million as of December 31, 2010. To provide liquidity for current ongoing and unanticipated needs, the Company maintains a portfolio of marketable investment securities, and structures and monitors the flow of funds from these securities and from maturing loans. Additionally, the Company has maintained a high level of funds in overnight investments over the past year which are readily available to meet cash flow needs. The Company maintains the ability to borrow from the Federal Home Loan Bank of Atlanta up to ten percent of the Bank’s assets ($103.2 million at June 30, 2011) and up to $23.6 million from the FRB Discount Window, which represented discounted collateral values available based on loans pledged. At June 30, 2011, the Bank had lendable collateral value of $68.8 million pledged at the FHLB of Atlanta and, therefore, the entire $103.2 million was not available to borrow from at June 30, 2011. At June 30, 2011, the Company had borrowed $62.5 million from the FHLB and based on collateral discounting criteria used by the FHLB of Atlanta, had availability of $677.0 thousand at June 30, 2011. The Company had no borrowings from the FRB discount window outstanding at June 30, 2011. As of June 30, 2011, the Bank is classified as critically undercapitalized under banking regulations. As a critically undercapitalized bank, federal banking regulations prohibit us from originating or renewing brokered deposits and also restrict the interest rates that we can offer on our deposits. The Bank’s brokered deposits maturing during the next six and twelve months total $13.4 million and $92.6 million, respectively. Based on available asset liquidity of approximately $85.4 million (which excludes available for sale securities, the majority of which were pledged for public deposits) at June 30, 2011, in conjunction with the Bank’s ability to generate funding through the internet deposit market, management believes adequate liquidity exists to fund brokered deposits maturing during the next year. Gathering internet deposits utilizing a deposit listing service has been a primary source of liquidity over the past 6 months, increasing $100.2 million since December 31, 2010. If our
On May 9, 2011, we received notification from The Nasdaq Stock Market that we were not in compliance with Nasdaq’s continued listing rule 5450(a)(1) because the closing bid price for a share of our common stock was below $1.00 for 30 consecutive trading days. In order to regain compliance with the minimum bid price rule, the closing stock price of a share of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days prior to November 7, 2011. Additionally, on May 17, 2011, we received notification from Nasdaq that we were not incompliance with Nasdaq’s continued listing rule 5450(b)(1)(C) because the market value of our common stock was below the minimum market value of publicly held shares of $5,000,000 for the last 30 consecutive business days. In order to regain compliance with the market value rule, the market value of publicly held shares of our common stock must meet or exceed $5,000,000 for at least ten consecutive business days prior to November 14, 2011.
If we are unable to regain compliance with the $1.00 minimum bid requirement prior to November 7, 2011 and the market value requirement prior to November 14, 2011, Nasdaq will provide us with written notification that our common stock will be delisted from the Nasdaq Global Select Market. At that time, we may appeal the delisting determination, or, alternatively, we may apply to transfer our common stock to the Nasdaq Capital Market provided that we satisfy the Nasdaq Capital Market’s requirements for initial listing, other than the $1.00 minimum bid price requirement (i.e., we will have to satisfy the market value requirement). In the event of such a transfer, we will be afforded an additional 180 calendar days to comply with the $1.00 minimum bid price requirement while listed on the Nasdaq Capital Market. No assurance can be given that we will be eligible for the additional 180-day compliance period or, even if eligible, that we will regain compliance during any additional compliance period. Read full..
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