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Since You Asked: Bank stock didn't move much, until you asked

The stock price shown in the Mail Tribune for People's Bank of Commerce is constant at $10. If you follow the market for bank stocks, you know it's been a roller-coaster since late 2007, so People's $10 listing may be misleading versus other bank-stock prices.

— Dan H., Medford

Yes, Dan, for the longest time People's Bank of Commerce stock, which trades over the counter as PBCO, was listed at $10. Not long after you contacted SYA headquarters, the stock dropped to $6.11 on Dec. 29.

It was a relatively big drop, but coming right before the end of the tax year, it wasn't surprising to People's Bank President Ken Trautman.

An average of 267 People's Bank shares traded hands on trading days during the final three months of 2008, Trautman said. In the final two weeks, that average bumped up to 2,800 shares daily as investors made tax-related moves.

Trautman says most community bank shareholders are long-term investors, which results in a very limited amount of bank stock actually being offered for sale.

"We are aware of potential buyers offering less than $10 per share and finding no sellers," Trautman said. "Our six market makers are offering it for sale at $15 and finding no buyers. We can only conclude that the stock is priced correctly (when) there have been trades at $10."

A look at the bank's six market-maker trading sites — including Scottrade and Charles Schwab — show that buyers are lined up if the price falls to a certain level, while others are willing to sell at particular price points. There were buyers looking for someone to sell at $8.50, while the lowest-priced seller was $15.

"That's why a small number of shares can change the stock price," Trautman said.

People's Bank has fewer than 400 shareholders on its books, although some of those represent multiple parties.