Smaller banks looking for more exposure among investors got a boost when Tacoma-based
J. Bruce Whittaker, the president and CEO of the $289 million-asset Greene County Bancorp. Inc. of Catskill, N.Y., said being in the index has put its name before a broader market.
"It just adds more visibility to the stock and lets some people know, who may not have known you were out there, that you exist," Whittaker said.
Small banks struggle to gain attention. To help, in 2003 American's Community Bankers launched the Nasdaq bank stock index, which includes all banks and thrifts, minus the 50 largest and those with an international focus or specializing in credit cards.
Helen N. Sullivan, a senior vice president of the group, said it touts the index to analysts as a pure representation of the community banking industry.
"Historically, the smaller community banks have had a hard time getting coverage from the Street, because the stocks don't trade all that liquidly," she said.
The Russell Microcap Index includes the smallest 1,00 companies in the small-cap Russell 2000 index plus the 1,000 largest of the still-smaller companies. The financial services industry is the largest sector represented, with 494 companies. The next largest is health care, with 337.
The microcap index, which was launched after the markets closed on June 24, has a weighted average market capitalization of $290 million; the range is $55 million to $500 million. The average figure in the Russell 2000, which includes 476 financial services companies, is $900 million.
