Nasdaq may boot area bank
The parent of Solvang-based Los Padres Bank, the third-largest banking firm in the Tri-Counties with 13 branches, faces potential removal from the Nasdaq exchange if the firm doesn’t boost its stock price.
Harrington West Financial Group, a $1.1 billion-asset firm and the holding company for Los Padres, said in a release Nov. 2 that Nasdaq officials are threatening to remove its stock from the exchange because its market capitalization has been below $5 million for 30 straight trading days. A company’s market capitalization is its per-share price times the number of shares held by the public.
Boosting the market cap will be tough because about 47 percent of Harrington West’s shares aren’t included in the calculation, the firm said. Harrington West has until Jan. 25 to fix the problem and can escape potential delisting by posting a market cap of more than $5 million for 10 trading days.
Harrington West stock closed down 14 percent at 58 cents on Nov. 2, yielding a market capitalization of $4.27 million. The company said it’s evaluating other ways to keep its stock listed “including alternatives beyond regaining compliance” with Nasdaq.
In October, Harrington West faced a cease and desist order from federal regulators mandating that the bank raise more capital. Harrington West agreed to raise its level of core capital to 4 percent and risk-based capital to 8 percent of assets by Nov. 6 with a further boost to 8 percent and 12 percent respectively by Dec. 31.
To help meet those requirements, Harrington West is selling a division with branches near Kansas City to an Arkansas banking company. Harrington said the deal, which is slated to close Nov. 6, will raise $4.1 million in capital and satisfy regulators’ first round of capital requirements.
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