Beverly Bancorp. is the first commercial banking company to go public in the Chicago area in more than two years.
While thrift conversions that include public offerings have proliferated here and in other areas in recent years, commercial bank initial public offerings have been scarcer and are likely to remain so.
"We're not seeing a lot of bank IPOs anywhere," said James M. Schutz, an analyst at Chicago Corp.
"Banks generally have been able to boost their capital via earnings since 1992 or so," Mr. Schutz said, "and have not needed to raise equity capital."
Closely held banks' owners also may shun the public scrutiny and other burdens that accompany a public offering, such as proxy statements that specify their salaries, heightened outside observation of the company, and increased documentation and filing requirements, said Robert Ollech, an analyst at Principal Financial Securities in Milwaukee.
Moreover, banks looking to sell can get a "pretty nice price" without going public, he said.
Thus, public offerings have "really been dominated by the thrifts converting," Mr. Ollech said. "The thrifts clearly have a profit motive there, particularly for the insiders."
Nonetheless, "there's always been an appetite for IPOs of smaller banks," he said, because they can be inexpensive buys that bring stable returns.
And current pricing would make this a good time for banks to go public, Mr. Schutz noted.
However, the market may not look favorably on banks' doing so without a specific strategy for deploying the excess capital, he said.
Beverly, with $614 million of assets, has said how it would deploy the roughly $13.5 million in net proceeds it expects from the offering. The sale of 1 million shares will be the first commercial bank IPO in the area since that of Cole Taylor Financial Group in May 1994.
The company, named for the South Side Chicago neighborhood that is part of its market, said it would use part of the proceeds to repay outstanding short-term borrowings of $9 million used to buy back the 20% of its stock held by the estate of the former chairman last December, said John O'Neill, executive vice president.
The remaining $4.5 million would be used for general purposes, including possible expansion or acquisitions, the company said. Mr. O'Neill also said the offering would create more liquidity for shareholders.
The company owns four area banks, which it plans to merge by yearend into an institution called Beverly National Bank. Its stock, previously traded occasionally in the over-the-counter market, now will trade on Nasdaq.
