LSB would transfer approximately $30 million in capital assets to Home Savings under the agreement.
LSB, which is listed on the American Stock Exchange, is a diversified company that manufactures commercial air conditioning products, automotive replacement parts, chemical products and machine tools.
The savings and loan would become a subsidiary of LSB's non-consolidated, wholly-owned finance company, LSB Financial Corp., according to Tony Shelby, chief financial officer.
The finance company has been inactive for the past year, he said, adding that LSB Financial has been a financing arm in the past for contracts and installment receivables for LSB customers, similarto General Motors Acceptance Corp.
Home Savings, a federal institution with assets of approximately $218 million, has branch offices in Ada, Chickasha, Cleveland, Collinsville and Nowata.
Clark W. Trammell, president of the 75-year-old savings and loan, said the companies were brought together by Arthur Young & Co., the audit firm for both Home Savings and LSB.
"They were looking to diversify their asset base, and we were looking for a good partner to position ourselves for the growth in the banking industry for the next decade," Trammell said.
The audit firm was aware of the needs of its two clients, he said, and put them in touch.
A copy of the agreement letter has been filed with the Federal Home Loan Bank in Topeka, which must approve the acquisition, Trammell said. A definitive agreement will be filed with the Topeka bank in no more than 30 days, he added.
Trammell declined to detail the final agreement, saying it was still being drafted. The mechanics are set up on the "technical" aspects of the paperwork, he said, so that the figures can be run through a computer when finished. He is optimistic the deal will be approved within 90 to 180 days after the Topeka bank receives the final agreement, rather than the common 6 to 12-month delay. …