Bank of Granite reverses course on stock split to shareholders
Bank of Granite Corp. said Tuesday that it will not issue a stock split to shareholders, reversing course on a pledge it made two weeks ago.
The Granite Falls-based bank, which has been rocked in recent months by troubled real estate loans, said Sept. 23 that it needed to suspend its quarterly, 13-cent dividend to shareholders in order to save money.
To compensate shareholders, the bank had also announced a 5-for-4 stock split, which meant that shareholders would get one additional share for every four they already held.
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But on Tuesday, the bank said in a one-paragraph news release that its board had “decided not to pursue” the previously announced stock split “in light of current market conditions for financial stocks and the best interest of Bank of Granite Corporation shareholders.”
Bank of Granite lost $3.36 million in the second quarter. Almost three-quarters of its charge-offs, or loans the bank doesn't expect to collect on, were related to real estate.
Chief executive Scott Anderson has said the bank has been hurt by a forlorn housing market, not poor underwriting standards.