Bank of Granite Stock soars on rumor of sale
The stock price of a small community bank based in Granite Falls, just north of Hickory, has more than tripled in the last two weeks. Investors speculate a merger could be in the works for Bank of Granite. WFAE's Julie Rose reports: The last six months have been a roller-coaster ride for Bank of Granite. In September federal regulators warned the bank was in grave danger because so many of its loans were going bad. Blame high unemployment and crumbling real estate values in Caldwell and Catawba counties. Then, in November, Bank of Granite was put on notice that it could be de-listed from NASDAQ if its stock price didn't improve. So, investors have worried the federal government might force Bank of Granite to be swallowed by a stronger bank. "Then the value of the equity would go to zero," says UNC Charlotte banking professor Tony Plath. Investors would be much better off if the bank negotiates a sale on its own, says Plath. There's a rumor Bank of Granite's trying to do that right now, and that's why investors are in such a frenzy. "The stock first started to move on Wednesday and it's still sustaining that upward momentum and the volume today is rising even more rapidly," says Plath. "That would tend to give credibility to the rumors. So in all probability, in all likelihood, there is a transaction that's at least being negotiated." Bank of Granite CEO Scott Anderson had no comment on the stock price. But Plath says if a deal isn't announced soon, the stock's price should level back out. Bank of Granite shares had languished at about $.50 since early November. Yesterday and today, the price has been closer to $2.