Most community banks raise on average $8 million to $12 million total, a consultant said.


By Jenny Kincaid
981-3235
The Roanoke Times


Roanoke's newest community bank is one step closer to becoming an official entity.

HomeTown Bank has raised more than $12 million from 849 investors since its initial stock offering began six weeks ago.

Organizers set a goal of raising between $12 million and $25 million in the public offering, which began last month and will end May 31.

Before a bank can apply to the Bureau of Financial Institutions for a charter, it must raise capital. Shares of HomeTown Bank are $10 each, and a minimum of 100 shares must be purchased.

"It's extraordinary that we have raised well over $12 million in less than six weeks," said Warner Dalhouse, chairman of the board for HomeTown Bank. "That's an eloquent statement about the reception to the idea in the marketplace."

It is unusual for a community bank to raise $12 million in six weeks, said Sam Harris, president of the Meritas Group, a bank consulting firm in Chapel Hill, N.C. Harris conducted a feasibility study for HomeTown Bank.

"It really says there is some strong community support," he said.

Harris said many community banks take as long as two months to raise $8 million in capital, and most raise on average $8 million to $12 million total. Banks may have a second stock offering two or three years later, but that often is expensive, Harris said.

Bill Clark, chief executive officer and president of HomeTown Bank, said money still is coming in for the stock offering. Investors can pay 25 percent of their subscription and pay the remaining 75 percent before the bank opens.

HomeTown Bank still is expected to open its doors in the fall at its main headquarters in the former Colonial American National Bank building at 202 S. Jefferson St.

Clark said if the bank raises $25 million before May 31, it will stop the offering.

But more money could pour in as the deadline approaches.

Harris said a bank often receives half of its capital in the final two weeks of a sale, because "people hold onto their money and only turn it loose at the last minute."