West Town Bancorp Inc. has raised $17.5 million in equity and stock options from 13 investors for a proposed acquisition of Morehead City’s Sound Banking Co.
The Raleigh-based holding company for West Town Bank & Trust, an Illinois state-chartered bank based in North Riverside, Illinois, filed a Form D with the Securities and Exchange Commission on March 1 announcing the offering and listing the date of first sale as Feb. 16.
The company announced its proposed $24.6 million acquisition of Sound Banking Co. in a joint statement issued alongside the Morehead City bank on Feb. 17.
West Town said in the statement that it had entered into securities purchase agreements with investors to sell a total of 453,480 shares of West Town common stock at a purchase price of $23 per share and 30,739 shares of a non-voting, convertible, perpetual preferred stock at a purchase price of $230 per share for a total of $17.5 million.
“The combined bank offers a unique and highly attractive community bank franchise in contiguous markets in Eastern North Carolina that will expand branch access for the bank’s customers,” said Eric Bergevin, president and chief executive of both West Town Bancorp and its banking subsidiary, in the February statement. Bergevin signed the regulatory filing.
Under the terms of the agreement, Sound Bank shareholders will receive a combination of cash and stock valued at $24.6 million, based on West Town’s closing stock price of $23 on Feb. 16. Each share of Sound Bank common stock will be converted at closing of the merger into the right to receive either $12.75 in cash or 0.60 shares of West Town common stock.
The transaction is expected to close by the third quarter of 2017 pending approval from both regulatory agencies and Sound Bank shareholders.
West Town Bank & Trust currently operates four full-service banking centers in eastern North Carolina and Illinois. Its mortgage department also operates offices in both states, as well as Idaho, Florida, Virginia, New York, New Jersey and Maryland. Sound Bank operates five banking centers in North Carolina’s coastal region.
Under the proposed acquisition, the bank would have approximately $485 million in assets. Shares of West Town Bancorp stock closed at $25.25 on Friday.
The company claimed a Rule 506 (b) exemption for the filing. Companies relying on the Rule 506 exemption do not have to register their offering of securities with the SEC, but they must file what’s known as a Form D electronically with the SEC after they first sell their securities.
The filing can be found here.
