Management Had Early Deal To Sell CUConvert
FEASTERVILLE, Pa. - (05/17/05) -- Top executives of IGA FederalSavings Bank had agreed to sell the thrift once known as IGA FCUmonths before a year-long regulatory cooling-off period hadexpired, after it became the first ex-credit union to go public inan October 1999 initial public offering. Documents obtained by TheCredit Union Journal show that IGA executives, who had also managedthe credit union until its conversion to a mutual savings bank twoyears before, had a definitive agreement to sell the creditunion-convert to PSB Bancorp., of Philadelphia in March of 2000,just six months after the IPO. But federal regulators with theOffice of Thrift Supervision ordered a halt to the deal, which wasto be signed on March 28, 2000, delaying its completion until thefull year had expired, the documents show. PSB, the parent ofPennsylvania Savings Bank, had agreed to buy the former creditunion for $14.50 a share, but lowered the price to $13.55 afterlearning that Jade Financial had lost $2.5 million in a failedInternet banking project known as Bankzip.com. The acquisition byPSB earned insiders in the credit union-turned-bank millions ofdollars in windfall profits on their newly minted stock, and onfuture stock grants and options.