First Mariner Bancorp (OTCBB:FMAR) Climbing Up Chart
The investors’ interest around First Mariner Bancorp (OTCBB:FMAR) over the last two months has been truly outstanding. The ascend started on April 15 and apart from a few hesitations here and there the direction has been only one – North. The outcome of the surge is 212% gained in just two months. But how much of it is justified?
Yesterday FMAR finished the day 8% up compared to Friday’s close and that was the tenth green session on the trot. While the intraday performance of the ticker was not as impressive as the ones of Urban Ag Corp (OTCMKTS:AQUM) and Prince Mexico SA Inc (OTCMKTS:LUVE), the three enterprises are not really comparable since FMAR have a lot more to show in terms of operations and financials. Furthermore, while mentions from various entities like Stock Runway and Cooperman Bros-controlled AimHighProfits might have had some effect on the stock, FMAR are not the target of an outright promotional campaign which is not something that can be said about AQUM and LUVE.
FMAR actually control a Baltimore-based bank called First Mariner Bank and it has been working since 1994. The climb started back in April when they announced that they have managed to comply with some of the regulators’ requirements which, in turn lifted a cease and desist order that has been imposed on them by the Federal Deposit Insurance Corp. (FDIC) back in April, 2009. This apparently, made many investors set their eyes on FMAR (who were delisted from NASDAQ in 2011) and within one month the ticker jumped from $0.90 all the way to $1.83 per share.
Then the financial statement covering the first quarter of 2013 came out, however, and people started to have their doubts. On the face of it things are not looking that great, indeed. Here are the figures that we found in the 10-Q:
- cash: $273 million
- total assets: $1.3 billion
- total liabilities: $1.31 billion
- net loss: $2.2 million
The investors seemed to be put off by the fact that the same period in 2012 resulted in a net income of around $1.8 million, which could suggest that the bank is heading in the wrong direction. FMAR did explain that the losses incurred during Q1 of 2013 are due to charges related to the disposition of non-performing assets, but despite that, the ticker did see several red sessions. After that however, it’s been pretty much plain sailing and in just over a month FMAR have managed to add a further 83% to their value. Does that mean that they and their shareholders are out of the woods, though?
Well, we reckon that there are still a few things to go through. As we mentioned the cease and desist order from April 2009 has been lifted because FMAR managed to comply with some of the requirements imposed by the Federal Deposit Insurance Corp. but in the press release we read that there is another one dated September 2009 and it still remains active. We opened the 10-Q to read more about it and we found that FDIC have put FMAR under increased scrutiny and they are requiring several things among which increased earnings and capitalization, stronger management policies and actions etc. FMAR explain that they’re working hard to become compliant with all the orders imposed by the regulators, but they seem to be struggling. When the order was put in place, it stated that FMAR must achieve certain capital ratios before June 2010, but it would appear that they still haven’t managed to fulfill all the requirements and until they do, the order will remain active. According to the report a potential failure might lead to further actions.
We certainly hope that they will manage to succeed, but until they do, we would recommend that you consider the facts above as well as the inherent volatility of penny stocks carefully before investing any money in FMAR‘s stock.
