NEW BUFFALO, Mich.--(BUSINESS WIRE)--New Bancorp, Inc. (OTC PINK: NWBB) (“New Bancorp”), the holding company of New Buffalo Savings Bank (“New Buffalo”), and New Buffalo announced today that they have updated the previously-announced purchase and assumption agreement with Teachers Credit Union (“TCU”) pursuant to which TCU will acquire the assets and assume the liabilities of New Bancorp and New Buffalo. Under the revised terms, New Bancorp will receive $26.00 per share in cash for each share of outstanding New Bancorp common stock. The adjustment in the per share price was based primarily on a significant increase in the termination cost of New Buffalo’s defined pension plan due to the unprecedented decline in long-term interest rates, as well as significant economic and market uncertainties related to the COVID-19 pandemic. The revised price also reflects the resolution of certain issues regarding the treatment of the Bank’s liquidation account, which will be paid out to certain long-term depositors several months following the completion of the purchase and assumption transaction. Under the revised agreement, this payment will not affect the consideration to be received by New Bancorp.
Unlike in the original purchase and assumption agreement, the revised price is not subject to further adjustment based on the amount of New Bancorp’s shareholders’ equity at closing. However, the price per share to be received by stockholders may be less than $26.00 per share based on the level of post-closing expenses, which are uncertain at this time and stockholders should not assume that they will receive a price of $26.00 per share upon the liquidation of New Bancorp.
The parties have received all regulatory approvals required to complete the transaction and expect to close the transaction on June 5, 2020, subject to obtaining the approval of the New Bancorp stockholders at a special meeting to be held on June 4, 2020 and the satisfaction of customary closing conditions.
Following the completion of the sale of its assets and liabilities, it is expected that the corporate existence of New Buffalo will be terminated and that New Bancorp will be dissolved. It is expected that this process may take approximately 120 days to be completed. Stockholders will not receive the sale consideration until this process is substantially completed.
Teachers Credit Union (TCU) is Indiana’s largest Credit Union with more than $3 billion in assets, 54 branches throughout the state of Indiana and Southwest Michigan, and more than 300,000 members. A financial cooperative owned by its members, TCU offers traditional financial services including checking, savings, mortgages and credit cards, as well as non-traditional services such as investments and insurance. Since its founding in 1931, TCU has been invested in the communities it serves. For more information about TCU, visit tcunet.com.
About New Bancorp, Inc.
New Bancorp became the stock holding company of New Buffalo in connection with New Buffalo’s mutual to stock conversion in 2015. New Buffalo operates three bank branches in New Buffalo, Sawyer and Three Oaks, Michigan and had $111.2 million in assets as of March 31, 2020. New Bancorp’s common stock is quoted on the OTC Pink Marketplace under the symbol “NWBB.” For more information about New Bancorp and New Buffalo, visit newbuffalosavings.com.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements include statements regarding the anticipated closing date of the transaction and anticipated future plans and expectations. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could” or “may.” Certain factors that could cause actual results to differ materially from expected results include delays in completing the transaction, uncertainties regarding the proper treatment and calculation of the liquidation account, the financial, economic and the impact of the COVID-19 pandemic, future changes in the valuation of New Buffalo’s pension plan obligation, transaction expenses, additions to New Buffalo’s allowance for loan losses, difficulties in achieving cost savings from the transaction or in achieving such cost savings within the expected time frame, difficulties in integrating New Buffalo into TCU, increased competitive pressures, changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which TCU and New Buffalo are engaged, changes in the securities markets and other risks and uncertainties. Except as required by law, neither TCU nor New Bancorp undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statement is made.