Southcoast’s upbeat profit report leads to trading halt in Mount Pleasant bank’s stock
All eyes at Southcoast Community Bank were fixed on the parent company’s stock Thursday afternoon, as regulators briefly halted trading in the shares after an abrupt price spike.
The action heated up around 1:48 p.m., when the Mount Pleasant-based lender reported its first quarterly profit since the last three months of 2010.
Within a minute the stock price skyrocketed 32 percent on heavy demand.
“Earnings will do that,” quipped L. Wayne Pearson, Southcoast’s chairman and chief executive officer.
Nasdaq officials quickly intervened. They shut down trading in Southcoast Financial Corp. because the exchange’s so-called circuit breaker rule had kicked in.
“The theory behind the circuit breaker rule is that when the price dramatically changes ... they want to make sure the market has a chance to stabilize,” Pearson said.
Trading resumed and volume soared to a record high for Southcoast by the time the U.S. markets closed at 4 p.m. In all 170,869 shares of the company changed hands, compared to about 5,300 during a typical session.
The stock closed at $2.24, up 78 cents, or 53 percent higher than Wednesday. At one point, shares climbed to $2.67.
Pearson said he’s not aware of any other local publicly traded company that has triggered the circuit breaker rule. Nasdaq officials told him that an unidentified “aggressive buyer” began amassing shares at 1:49 p.m. and quickly drove the price up.
”They started selling it off. Then another group came in, and someone else took their position at end of the day,” Pearson said.
The rapid-fire buying and selling apparently was fueled by Southcoast’s latest earnings report. The bank owner said it posted a $1.24 million profit for the first three months of the year. It booked a $579,000 loss for the same period of 2011.
Southcoast noted it had to set aside far less income to cover possible loan losses during the past quarter: $100,000 compared to more than $1.1 million a year ago.
“I think were seeing improvements in all categories of the bank’s operations,” Pearson said. “Significant for us is that we’re seeing non-performing assets stabilize and start to come down.”
Contact John P. McDermott at 937-5572