IPO For CU Convert Creates Millions In Windfall Profits

Credit Union Journal   October 4, 2006

WALL STREET – Shares in Viewpoint Bank, known until January as Community CU, soared 50% yesterday in the first day of trading on the Nasdaq, to close at $14.99. The first day run-up earned insiders and former credit union members millions of dollars in windfall profits, making it one of the most successful credit union conversions ever. β€œIt was a great day for all of our members,” Gary Base, president of the $1.5 billion credit union-convert, told The Credit Union Journal. He said all of the shares in the first stage of the initial public offering were sold to former credit union members and depositors of the newly minted thrift at $10 each, earning nice first-day profits for those who decided to buy stock. Most important, said Base, was the almost $120 million in new capital raised in the first stage of the offering, providing new funding for expansion of branches and products and services. The first-day success also earned millions of dollars in windfall profits for Base and other insiders, including directors of the former credit union, who bought 190,000 shares at the $10 offering price, meaning a nice $850,000 one-day profit on their stock What's more, the first day "pop" on the IPO added another $8 million in value to the $17 million in stock set aside for a bonus pool for many of those same insiders, including employee stock ownership shares, restricted stock awards and stock options, to be parceled out over the next two years.

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