IPO Costs Weigh On Ex-CU

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ALBANY, Ga. - (02/20/06) – The cost of going public in aninitial public offering cut deeply into earnings at former creditunion HeritageBank, halving fourth quarter earnings to just$561,000, or five cents a share, the savings bank reported Friday.For the fiscal year, the bank, known as AGE FCU until five yearsago, reported a 17% decline in earnings, to $2.9 million, or 31cents a share. The decline in earnings were due to a 20% dilutionof the company’s stock because of last year’s IPO andof the implementation of an Employee Stock Ownership Plan. Higherexpenses to pay legal and accounting costs required of a publiccompany helped push up costs, the company said. The companycompleted its IPO in June and raised $32 million in capital. Theshares were introduced at $10 each and were trading on the Nasdaqat $11.45 on Friday. In the first year of going public theex-credit union reported assets and loans increased by 6%, anddeposits fell by 4%. Some of that run-off in deposits was relatedto outside investors who had deposited shares in the mutual savingsbank to get in on the IPO, the bank said.

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