A growing number of community banks are taking advantage of the JOBS Act to deregister their publicly held stock with the SEC.

A provision of the JOBS Act, signed into law in April, increases the current 500-shareholder threshold for SEC registration to 2,000 for financial institutions. The legislation also raises the deregistration threshold for financial institutions from 300 to 1,200 shareholders.

The result is that “regulators are flooded with share deregistration filings as small banks take advantage of relaxed securities registration requirements,” says a recent report by SNL Financial, a provider of business intelligence services for the banking and financial services sectors, among others.

Since the JOBS Act was signed, 61 banks have filed (using SEC Form 15) to deregister their common stock and suspend securities reporting requirements, SNL Financial found, adding that these outnumber the tally of banks that had deregistered in the previous 16 quarters. The filings are subject to a 90-day waiting period.

Forty-nine of the banks had less than $500 million in total assets; only three had more than $1 billion in assets.

According to SNL, there are 336 public banks and thrifts in the U.S. with fewer than 1,200 shareholders and more than two-thirds have less than $1 billion in assets. Of them, 308 file their reports with the SEC, 15 file with the FDIC, eight file with the Office of the Comptroller of the Currency, and five file with the Federal Reserve Board.

Missouri-based First Bancshares, in a May 17th statement, said the reasons for delisting its common stock from the NASDAQ Global Market included: “the disproportionately large costs” of preparing and filing periodic reports; “substantial” accounting, audit, and legal expenses associated with being a public company; the demands placed on management and company personnel to comply with reporting requirements; and the “historically low trading volume” in the company's common stock.

R. Bradley Weaver, chairman of the board and CEO, said the bank expects to reduce annual costs by $200,000.