First Financial Service Corp. increases stock flexibility

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By John Friedlein

Like putting money in the bank, First Financial Service Corp. recently increased its authorized shares of common stock from 10 million to 35 million.
The move provides the Elizabethtown-based corporation flexibility for the future if it needs additional capital — but it won’t impact the 4.7 million shares already issued. First Financial Service Corp. added 25 million shares to the 5.3 million it had in reserve.
The corporation is holding company for First Federal Savings Bank.
Shareholders voted for the measure Nov. 17 by more than 60 percent — after the Board of Directors recommended it. Stockowners’ approval was necessary because it was a change to the bylaws.
Because the increase doesn’t issue any new stocks, it doesn’t dilute current holdings, said Greg Schreacke, president of First Financial Service and First Federal Savings.
Having more un-issued stocks on the shelf could benefit the corporation down the road if it decided to open new bank branches, increase lending or make an acquisition.
When the company filed its initial public offerings in 1987, it authorized the 10 million shares which it thought would last forever, Schreacke said.
The company’s stock has been trading at around $4 a share this month — down from more than $20 two years ago.
Trading is in line with similar bank holding companies of this size, Schreacke said. “I don’t think the stock price represents the fundamental performance of the company. We’re still doing well.”
The company is well-capitalized, he said. And the price of bank stocks will recover as the economy does.
First Financial last year received $20 million from the federal Capital Purchase Program, which was part of the Emergency Economic Stabilization Act of 2008. The money helped stimulate lending to local businesses.
John Friedlein can be reached at (270) 505-1746.