Radius Bancorp, a New England-based provider of virtual banking with over $700 million in assets, announced terms for its IPO on Friday. The Boston, MA-based company plans to raise $64 million by offering 5 million shares (73% insider) at a price range of $11.75 to $13.75. At the midpoint of the proposed range, Radius Bancorp would command a fully diluted market value of $71 million.
Business
Radius Bancorp previously operated as First Trade Union Bancorp, which provides virtual banking through www.ftub.com. Nearly half of the bank's deposits are from pension funds, unions, municipal and not-for-profit organizations. Radius has one branch in Boston, MA and one loan production office in New Hyde Park, NY. The company's loan portfolio consists primarily of residential and commercial real estate.
A Dodd-Frank-compliant IPO exit from two pension funds
The company was jointly owned by selling shareholders the New England Carpenters' Benefits Funds (4.9% post-IPO stake) and the Empire State Carpenters' Pension Fund (4.9%), which are divesting the bank in compliance with the Dodd-Frank Act so that the funds will not be deemed savings and loan holding companies. Radius is converting from a federal savings association to a national bank upon the offering.
Financials
Combined net interest and noninterest income rose 13% to $11.5 million during the six months ended June 30, 2014. Radius Bancorp's pre-tax income rose by about 50% to $1.8 million. Net interest margins fell slightly to 3%. Its efficiency ratio improved 150 bps to 83.2%. Its ROA rose 7 bps to 0.37% and ROE rose 125 bps to 4.6%. Radius increased assets by 16% to $703 million compared to the end of the 2Q13.
Radius Bancorp, which was founded in 1987 and booked $23 million in net interest and noninterest income for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol RADB. Baird and Sandler O'Neill are the joint bookrunners on the deal. It is expected to price during the week of November 3, 2014.
