With its stock underperforming since the middle of November, FSGBank’s parent company, First Security Group, received a notice from Nasdaq earlier this month that it was not in compliance with a rule requiring a minimum bid price of $1 per share.
Leaders of the Chattanooga-based company received the notice that its stock had closed below $1 per share for more than 30 consecutive days, threatening its position on the Nasdaq Global Select Market. In a document filed to the Securities and Exchange Commission, FSG said the notice would not have an immediate effect on the listing or trading of the stock through Nasdaq.
The company was given until June 29 for its stock to close at or above $1 per share for 10 consecutive days.
Tuesday, after a period of 10 consecutive days trading at least 10 cents above $1, the company received a notice from Nasdaq that it once again was in compliance with marketplace rules.
“There’s no question that our stock price was definitely tied to our financial results,” said Gene Coffman Jr., president and chief operating officer of FSGBank. “We’ve had some difficult years back to back due to the economic downturn and the high level of lending that we did in the real estate development arena. That played significantly into the fact that our stock prices had gone down.”
Tuesday, FSG’s stock closed at $1 a share, down 19 cents. A year ago, it closed at $2.38 per share.
Chip Lusk, chief financial officer for the bank, said the initial Nasdaq notice was no surprise. Since Nov. 17, the stock had traded no higher than 90 cents a share, bottoming out at 55 cents several times in December.
Coffman said a shareholder approval to issue up to $50 million worth of common stock at a discount to market value that expired on Dec. 31 has helped push up stock prices so far this year.
“We felt that that expiration had a little bit to do with shareholders being a little more positive,” he said.
Coffman said the company is looking at its “entire operation, cost controls and transitioning into a different type of lending.” He said changes in 2011 will include relocation and closing of several branches and the possibility of consolidating some locations.
“We’re going to continue to have some difficult years as we work through our loan issues and the problem credits we have,” he said.
Brittany Cofer is a business reporter who has been with the Chattanooga Times Free Press since January 2010. She previously worked as a general assignment Metro reporter. In the Business department, she covers banking, retail, tourism, consumer issues and green issues. Brittany is from Conyers, Ga., and spent two years at Kennesaw State University in Kennesaw, Ga., before transferring to the University of Georgia. She graduated from the university’s Grady College of Journalism in December ...