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.
