Chicago Thrifts Luring Investors with Initial Public Stock Offerings

By Vogelstein, Fred | American Banker, August 28, 1991 | Go to article overview

Chicago Thrifts Luring Investors with Initial Public Stock Offerings


Vogelstein, Fred, American Banker


Chicago Thrifts Luring Investors With Initial Public Stock Offerings

Initial public stock offerings by depositor-owned thrifts have surged in Chicago, attracting investors nationwide in search of big gains.

In the past three weeks four thrifts have announced plans to issue stock, and more announcements are expected. Thrift executives said a desire to participate in the banking industry's current merger wave is fueling the activity.

More Deals Expected

"I think you'll see a rash more of these coming down the road," said Thomas McCabe, senior vice president and treasurer of NS Bancorp, a $1.3 billion-asset thrift that issued 10 million shares last Dec. 19.

With assets of $1.8 billion, Bell Federal Savings Bank is the largest of the thrifts to recently announce plans to go public. The others are Liberty Federal Savings Bank, Security Federal Savings and Loan, and Calumet Federal Savings Bank, each with less than $500 million in assets.

The trend has brought some skepticism along with attractive returns.

Many thrifts, particularly in New England, have failed or fallen on hard times after using capital from initial public offerings to make risky condominium and office building loans.

Squandering Feared

Experts question whether newly converted thrifts will avoid squandering their new capital on bad loans as other thrifts have done in the past.

"It's a very interesting question [as to whether they will be able to control themselves]," said Bruce Harting, an analyst at Salomon Brothers Inc.

The pace of thrift conversions is up nationwide. Experts say Chicago is likely to remain the epicenter because roughly 150 of Illinois' 250 depositor owned thrifts are based there. This concentration is a throwback to the days when branch banking was forbidden in the state, and each Chicago neighborhood had its own ethnic roots and its own thrift.

A rising stock market for bank and thrift issues and successful offerings by Cragin Financial Corp. on June 6 and NS Bancorp sparked the current round of conversions in Chicago, experts said.

Up from Offering Price

Cragin's stock has risen to $21.125 from its offering price of $10 a share, and NS Bancorp's stock has risen to $17.375 from its offering price of $8 a share.

But beyond that, experts say there is a sense among the management of these banks that they can't be players in banking consolidation if they remain depositor owned.

"You need to be a stockholder-owned company to acquire other institutions," said Donald Holton, Cragin's chief marketing officer.

Reid Nagle, president of SNL Securities, said thrift public offerings have an additional appeal to thrift managers in that they can become wealthy overnight. "They typically buy lots of the offering and get options. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Chicago Thrifts Luring Investors with Initial Public Stock Offerings
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.