Editor’s Note: In its Sept. 20 edition, The Hartford Business Journal looks deeper into the reasons why Rockville Financial and a string of other Connecticut mutual banks and savings institutions are converting to stock companies.
Rockville Financial, Vernon parent of Rockville Bank, is launching a reorganization plan that will convert its mutual holding company parent to a fully public company.
The planned stock offering could raise more than $170 million for the community lender, a capital infusion that could spur acquisitions or other growth opportunities, bank officials said.
At 11:30 a.m., Rockville shares were down 83 cents, or 7.1 percent, to $10.89.
When Rockville Financial went public in 2005, a two-tier mutual holding company was created with two parents including Rockville Financial MHC, which holds about a 57 percent stake, and Rockville Financial, whose minority stake is publicly traded.
Under the planned reorganization Rockville Financial MHC will sell its share to the public and the cease existence.
Rockville Bank, the subsidiary organizations, will become a wholly owned subsidiary of Rockville Financial, which will be a state-chartered bank holding company.
Bank officials said the purpose of the reorganization is to provide ” additional capital to take advantage of potential growth and strategic opportunities, support our continued planned growth and successfully implement our business strategies.”
Rockville Bank’s normal business operations will continue without interruption during the process. There will be no change to Rockville Bank’s management as a result of the reorganization.
As part of the deal, Rockville Financial expects to offer between 11 million to $17 million shared, at a purchase price of $10 per share, which could raise close to $170 million.
First priority will be given to depositors at the bank as of June 30, 2009.
