For the better part of a century, if you wanted to buy or sell stock in Farmers Bank, you pretty much had to know the bank’s CEO – one of the three generations of Hollands that have run the old country bank.
But while plenty of businesses, farmers and homeowners across Isle of Wight, Suffolk and Southampton do indeed know Richard J. Holland Jr. – and plenty still remember his dad, the late state Sen. Richard Holland — calling the man who runs a $450 million financial institution to see if he knows anyone who wants to buy or sell some Farmers shares isn’t always the easiest way to make an investment.
“There were always more buyers than sellers,” says Holland. “I used to keep a list of each, and try to get them in touch with each other so they could see if they could agree on a deal.”
That’s the big reason that a grand total of five deals were struck last year – and why even the sale of a few hundred shares can send the price soaring by double digit percentages – or plunging dramatically.
And while Farmers’ basic business is pretty much what it’s been since 1919 – taking deposits from the people of western Tidewater and lending money to businesses, farmers and homebuyers in the region – families’ needs change over time, including families that have banked at Farmers and owned its shares for generations.
“The first generation was tied to the bank. The second generation succeeded, but the thrid generation, many have moved away. They want money to buy a home or to buy a car, but they don’t care about a dividend from a bank they’ve never been to,” Holland said.
So this year, Farmers asked FIG Partners, an Atlanta-based securities firm, if it would make a market in the stock.
Within days, FIG handled the second biggest volume of shares in Farmers stock in the past five years, doing so with barely a ripple – the price rose 2 cents with 5,400 shares changing hands. In contrast, before FIG stepped in, the stock jumped $2.50, or 7 percent, when just 1,000 shares changed hands in mid-March. It dropped by almost the same amount back in October, when just 200 shares changed hands.
But having a market-maker – that is, a firm that stands ready to buy or sell at the prices it quotes – means the bank’s 450 stockholders can be more confident in the value of their shares.
“I think it’s a service for our stockholders,” said president Vernon M. Towler.