Shareholders of First Mariner Bancorp approved a measure at a special meeting Friday that will allow the struggling bank holding company to move forward with a plan to raise up to $20 million through a stock offering, which is critical to its survival.
The parent of 1st Mariner Bank, Baltimore's largest independent bank, has been operating for several months under regulatory pressure to boost capital. The company plans to do so by selling additional shares to existing shareholders but first needed their approval to raise the amount of common shares.
The company had warned shareholders if they didn't approve this measure necessary to conduct the stock offering, the bank might be forced to find a merger partner or liquidate.
Shareholders by a wide margin authorized the board to increase the amount of common shares from 20 million to 75 million, said Dennis Finnegan, executive vice president at First Mariner. The next step will be to set the price of the shares for the offering to existing shareholders, he said.
Shareholders also gave the board the authority to conduct a reverse stock split if needed, Finnegan said.
Reverse stock splits can boost a company's share price by reducing the number of outstanding shares. First Mariner sought the authority to conduct a reverse stock split if it needed to do so to keep its listing on the Nasdaq Stock Market. Late last year, First Mariner was under threat of being delisted because of a steep drop in its stock price. The company announced last week that it no longer faced delisting.
The company's stock price Friday rose about 7 cents and closed at $1.41 per share.
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