First Mariner shares priced at $1.15 

Posted: 7:27 pm Tue, February 16, 2010
By Danielle Ulman
Daily Record Business Writer

First Mariner Bancorp’s shareholders will have the option to buy shares of its stock at $1.15 each to increase capital levels at its bank, the company said in a preliminary regulatory filing Tuesday.

First Mariner hopes to raise $20 million to meet the bar set by a variety of regulators last year requiring stronger capital levels at 1st Mariner Bank. Shareholders approved the rights offering Friday that the company said was essential to keeping it up and running.

Once registration with the Securities and Exchange Commission becomes effective, shareholders will have the right to purchase 2.6952 shares of stock for each share they held as of Feb. 12. Shares of First Mariner nudged up 2 cents, or 1.42 percent, to close at $1.43 Tuesday.

A purchase date has not been determined and details of the rights offering could change, the filing said. First Mariner did not immediately respond to a request for comment.

If First Mariner does not sell enough shares, the company said it could negotiate standby purchase agreements — deals to buy all of the remaining shares — with institutional investors or wealthy individuals. Shares could also be sold to the public.

First Mariner said if it did not raise at least $20 million, it would violate an agreement made with the Federal Deposit Insurance Corp. and the Maryland Commissioner of Financial Regulation to raise that amount by March 31. First Mariner said it would need to try to raise additional capital or ask for a waiver from regulators if it did not meet the requirements.

“If we were not granted such a waiver… [t]he FDIC or the Commissioner could also direct us to seek a merger partner or possibly place the Bank in receivership,” the company said in its filing. In a receivership scenario, First Mariner would either liquidate or seek bankruptcy protection, and investors could lose everything, the company said.

The company would need to sell nearly 17.4 million shares to raise $20 million.