Monday, February 8, 2016

Harleysville Savings, other banks deregister from SEC

Bank holding companies with fewer than 1,200 stockholders of record are saving money on regulatory expenses and listing shares over the counter, thanks to the federal JOBS Act.

Harleysville Savings, other banks deregister from SEC

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Many are interested in last year’s Jumpstart Our Business Startups Act and how it may make it easier for small businesses to raise capital.

Barely a day goes by that someone isn’t trying to prod me to write about crowdfunding, which would allow small businesses to raise small amounts of money without having to disclose much information to regulators or investors.

But while crowdfunding’s potential gets all the attention, another aspect of the JOBS Act has been having an immediate impact on small community banks: They’re deregistering as reporting companies with the Securities and Exchange Commission and delisting from major stock exchanges.

Why? To save money.

The new rules raised, to at least 1,200 stockholders of record from 300, the threshold for bank holding companies that must register with the SEC.

SNL Financial L.L.C., of Charlottesville, Va., counted 208 publicly traded banks and thrifts with fewer than 1,200 shareholders. As of Dec. 27, 101 had filed to deregister.

One of them is Harleysville Savings Financial Corp., an institution with $802.2 million in assets and six branches in Montgomery County and one in Bucks County.

According to a Dec. 27 filing with the SEC, Harleysville Savings had 760 shareholders of record.

Though that doesn’t sound like a whole lot, consider what a stockholder of record is. For example, the discount brokerage E-Trade would be considered a stockholder of record, and dozens of Harleysville Savings shareholders could hold their shares in an E-Trade account.

Brendan J. McGill, chief financial officer for the 98-year-old savings bank, stressed that the move, which also involved delisting from the Nasdaq as of Dec. 27, isn’t some kind of disappearing act. The bank’s shares are now listed on an over-the-counter market called OTCQB. Go to www.otcmarkets.com and type in the ticker symbol “HARL” for a stock quote.

Harleysville Savings also will continue to file publicly available information quarterly with the Federal Deposit Insurance Corp., McGill said.

The JOBS Act provision will enable the bank to cut its annual regulatory expenses by about $250,000, which McGill said amounts to about 6 cents per share.

 

 

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About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

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