JACKSONVILLE, Fla. (AP) -- Shares of Atlantic Coast Financial Corp. surged almost 50 percent Monday after the company said it hired a consultant to pursue new a strategy that could include a merger or a new rights offering.
The shares surged 42 cents, or 48.3 percent, to $1.29 in morning trading. But they were trading $1.05 — near their 52-week low of 87 cents — when the day began and they remain well below their year-high of $10.44.
The company said its board of directors hired Stifel, Nicolaus & Co. to help the company explore "strategic alternatives to enhance stockholder value."
Earlier this month, Atlantic Coast Financial told its investors that it might raise new capital with a rights offering on the heels of a stock offering that was completed in February. The company is trying to increase its capital reserves, which give banks a financial cushion. Atlantic Coast Financial said it must have a ratio of capital reserves to debt of 7 percent. Its ratio was 6.22 percent as of Sept. 30.
The company said it received permission from regulators at the Federal Reserve to pursue its new strategies.
Atlantic Coast Financial is the bank holding company for Atlantic Coast Bank. The bank does retail customer business primarily in northeastern Florida and southeastern Georgia. Its loan portfolio included commercial and residential real estate loans and consumer loans.