Norfolk-based Heritage Bankshares Inc., the parent company of Heritage Bank, is asking the Securities and Exchange Commission to deregister its common stock to avoid the costs of being a publicly traded company.
“The company’s decision to deregister was made by our board after careful consideration of the advantages and disadvantages of being a public company, particularly in light of our size and the high costs and demands on management’s time associated with our ongoing compliance with SEC and Sarbanes Oxley reporting requirements,“ Michael S. Ives, the president and CEO of Heritage Bankshares, said in a statement.
Heritage said the move would reduce legal, accounting and administrative costs.
The company’s common stock has been traded on the OTCQB exchange. Deregistration should take effect 90 days from the date of the SEC filing.
The company noted that Jumpstart Our Business Startups Act (“JOBS Act”) enacted by Congress earlier this year amends the Securities Exchange Act of 1934 to allow banks and bank holding companies with fewer than 1,200 shareholders to their deregister securities. Heritage currently has about 825 shareholders.
After deregistration takes effect, the company will no longer be subject to the SEC’s periodic reporting requirements but will file a Form 10-K for its fiscal year ending Dec. 31 on or before March 31, 2013.
The holding company and the bank will continue to comply with the financial reporting requirements of the Federal Reserve and other regulatory agencies,
Heritage expects its common stock will continue to be quoted on over-the-counter markets such as the OTC Markets Group and the OTC Bulletin Board after deregistration if market makers agree to make a market in the stock.
The company added, however, that it couldn’t guarantee that a trading market in the company’s common stock will be maintained.
Heritage also announced that it has extended through March 31 its share repurchase program. The program allows the company to buy up to 116,000 shares, or approximately 5 percent of its outstanding common stock.
To date, the company has repurchased 30,000 shares under the program.
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