Independent Banker - January 2025 - 50

accounting officer
at $2.2 billion-asset
MainStreet Bank in Fairfax,
from that point to an SEC-regulated
bank is less of a heavy lift. "
Va., which transitioned from
trading over the counter to listing
on Nasdaq in 2019.
CONSIDERATIONS FOR LISTING
Some community banks decide to
list on the NYSE or Nasdaq due to
rapid growth and a need for greater
visibility, liquidity or capital than
trading OTC can offer. Each exchange
has specific listing requirements
and prerequisites.
MainStreet's holding company, for
instance, had just over $1 billion of
assets when it was listed as an SEC
registrant. Vari says the community
bank wanted to access a new realm
of capital from investors, so moving
from the OTC market to Nasdaq
made sense.
The move also helped the bank gain
attention from analysts, and it gained
the potential to be included in a broad
market index, which can further
broaden the bank's shareholder base
and raise its profile with investors.
Of course, listing as an SEC
registrant requires significantly
more time and effort than being a
private bank or listing OTC. Banks
that trade as SEC registrants have
more rigorous auditing standards,
corporate governance requirements
and additional legal work.
There are also listing fees and other
exchange-related requirements, as
well as the headaches associated with
being more prominently in the public
eye. " There's a bigger audience, " says
Cornerstone's Arvia. " There's more
scrutiny, there are more voices in the
room than with private capital. "
For MainStreet, listing on an
exchange was part of a longer,
strategic journey made easier by
its growth trajectory. Crossing the
$1 billion-asset mark meant it
automatically had to contend with
additional regulatory and compliance
requirements based on its bigger size,
" [Listing shares is] a
strategic decision. It's not
×Ò¥èºċ¥ģïèËË ·¥ä¥Ŵ
-Shawn Davis, CNB Bank & Trust, N.A.
THE PRICE TAG ON LISTING
The costs that come with listing
on an exchange depend on how
much regulatory and audit function
build-up each bank needs. Unless
existing staff is experienced, banks
should also expect to hire additional
staff and rack up auditor, registration
compliance and legal fees.
so there was less work to get in shape
for being an SEC registrant and listing
on an exchange.
" If you've crossed that threshold,
you've already had to up your
regulatory game, " Vari says. " To go
Community banks might expect to
pay $250,000 annually to be listed on
an exchange, give or take depending
on the bank's size and staffing, says
Phillip Buffington, partner with
law firm Balch & Bingham LLP in
Birmingham, Miss.
Legal fees alone can be hefty. In
its registration statement with the
SEC, Chain Bridge Bancorp, the bank
holding company for Chain Bridge
Bank in McLean, Va., discussed some
Shawn Davis knows CNB Bank &
Trust must carefully weigh its options
before listing on an exchange,
though it remains a long-term goal.
50 // ICBA Independent Banker // January 2025
Independent Banker - January 2025

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