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Wednesday, 10 June 2015 11:11

New Buffalo Savings Bank plans IPO, conversion to federal savings bank

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A small community bank in Berrien County plans to issue stock and convert to a federal savings bank to drive future growth and profitability.

New Buffalo Savings Bank wants to issue up to 805,000 shares at $10 per share, according to a filing with federal securities regulators. The bank would initially sell shares to eligible depositors and borrowers, and then conduct a community offering of stock with a preference to selling shares to residents of Berrien County or their trusts.

The bank could increase the sock offering to 925,750 shares if the demand or market conditions warrant.

New Buffalo Savings Bank, with roots dating back to 1921, also seeks to convert from a federal mutual savings bank to a federally-chartered bank with stock.

The move is similar to what happened at St. Joseph-based Edgewater Bancorp Inc., which in early 2014 completed a $6.7 million stock offering and converted from a mutual savings and loan to a stock corporation.

New Buffalo Savings’ newly formed parent company, New Bancorp Inc., would use the proceeds from the stock sale “to build long-term value for our stockholders by operating a profitable community-oriented financial institution dedicated to meeting the banking needs of our customers by emphasizing personalized and efficient customer service,” according to the June 9 filing with the U.S. Securities and Exchange Commission.

New Buffalo Savings has three offices in western Berrien County – New Buffalo, Sawyer and Three Oaks – and a lending office in Merrillville, Ind. The bank as of March 31, 2015, had total assets of $89.1 million and total deposits of $71.2 million.

The bank’s business plan for the future includes “prudently and opportunistically growing our assets and liabilities by increasing our presence in the communities we serve in Michigan and expanding further our market area in northwest Indiana” through the possible formation of new offices or acquiring branches, states the regulatory filing.

New Buffalo Savings also would increase emphasis on commercial real estate lending and “to a lesser extent, commercial business lending, in our existing market area and expanding our market area in northwestern Indiana, and continuing our emphasis on originating one- to four-family residential real estate loans.”

The conversion and the planned stock offering come as New Buffalo Savings continues to recover from the recession and follows a restructuring initiated in 2012.

The bank lost $8.5 million from 2008 to 2014, including a net loss of $2.4 million last year and $685,000 in 2013. Many of the losses over the past two years are attributed to final, non-recurring payouts to former bank officers and an increase of $456,000 in costs for a multi-employer defined benefit pension plan that was frozen in 2011. The bank plans to withdrawal from the pension plan following the conversion.

New Buffalo Savings recorded net income for the first quarter of 2014 of $61,000.

Read 6211 times Last modified on Sunday, 28 June 2015 18:04