American Security Corp. shareholders voted yesterday to change the Washington bank's stock structure to prepare for acquisitions and the expected introduction of interstate banking.
The plan approved overwhelmingly by American Security stockholders calls for a two-for-one stock split and an increase in the number of shares from 5.25 million to 15 million.
Chairman W. Jarvis Moody said the changes in American Security's capital structure will give the bank additional shares that could be used to acquire another bank or other businesses when federal regulations are relaxed to allow such diversification. "We don't have anything specific in mind," Moody said, "It's to prepare us down the road for interstate banking."
The stock split will double the number of shares available for trading and will cut in half the price of American Security shares.
"Our advisers have told us we're better off having shares selling at $20 each than at $40," Moody added.
There were a few questions from stockholders about the change in stock structure and one angry complaint about the bank's plan to offer a new stock option bonus plan for top executives.
In his annual review of operations, Moody noted that first-quarter profits were up 17 percent but added, "We cannot predict that this performance will be sustainable for the next three quarters.
"Looking ahead, we see little, if any, economic growth in the next several months, with perhaps a slight recovery in the last half of the year."
Moody said attorneys advised him not to comment on recent reports of a multimillion-dollar theft from one of the bank's branches.