Shares of the corporate parent of Raleigh-based Paragon Bank are likely to be traded over-the-counter by the end of the year.
Paragon Commercial Corp. announced Wednesday that Raymond James has applied to become a market maker in the stock. The privately held bank also said it is in the process of obtaining a ticker symbol for its shares.
Bob Hatley, president and CEO, said shifting to over-the-counter trading will enable anyone to buy shares through a broker, thereby providing the bank’s existing 600 shareholders with greater liquidity and hopefully a better price for their shares when they choose to sell.
Paragon’s share price hasn’t recovered as much as it should have since the recession ended, Hatley said, because the shares are so thinly traded and buying and selling shares isn’t easy. Many sellers end up going to the bank to get a list of potential buyers.
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“Now that we’re doing well as a bank and we have climbed out of the recession, we have to pay particular attention to our shareholders,” Hatley said. He expects the shares to begin trading over-the-counter in the fourth quarter.
The bank recently instituted a 125-for-1 stock split to make the share price more attractive. Shares recently have been selling privately for between $1,100 and $1,200, Hatley said.
Paragon recorded $1.7 million in net income in the first quarter, up from $1 million a year ago, according to information filed with the Federal Deposit Insurance Corp. Paragon has more than $1 billion in assets.
Paragon, which opened its doors in 1999, shortened its name from Paragon Commercial Bank to Paragon Bank in December to stress that it has broadened its focus beyond business customers to include “private banking” for the well-heeled. It has two branches in the Triangle and one in Charlotte.