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Officials reverse decision to split stock prices
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Published: October 7, 2008
GRANITE FALLS - Current market conditions led the board of directors of the Bank of Granite to reverse a decision to sell a 5-for-4 stock split that was to have been effective Oct. 17.
"The stock price did go down, which made it inappropriate to split the stock prices," said Chief Executive Officer Scott Anderson. Anderson said the decision is not a sign the bank is encountering difficult times.
A 5-for-4 split would give stockholders five shares of stock, but the total amount of value would not change, Anderson said.
Tony Plath, associate professor of finance at the University of North Carolina at Charlotte, said the decision to not go forward with the split stock is in the best interest of the bank and its stockholders.
"With this market, with the stocks as battered as they are, it is the right thing to do," Plath said.
Plath said corporations don't want to see stocks get below $5 per share, as that is the mark of the favorable trading range. While the Bank of Granite had been selling as high as $10 per share earlier this year, it is currently at slightly more than $4 per share.
Bank of Granite operates 22 full-service banking offices in eight North Carolina counties — Burke, Caldwell, Catawba, Forsyth, Iredell, Mecklenburg, Watauga and Wilkes — and a loan production office in Guilford County.
Granite Mortgage, a mortgage banking company headquartered in Winston-Salem, originates home mortgages in Fayetteville, Greensboro / High Point and Salisbury, in addition to Bank of Granite's markets.
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