Home Federal Savings and Loan Association of Collinsville in Illinois is planning to raise at least $7.5 million as part of its conversion from a mutual to a stock-owned company.
The $99 million-asset mutual disclosed in a regulatory filing that Best Hometown Bancorp, a holding company formed for the conversion, plans to sell 747,500 shares of stock at $10 each. The offering could increase to 859,625 shares if there is enough demand.
Best Hometown plans to invest about $4.6 million in net proceeds in Home Federal. The thrift would use some of the funds to pay costs tied to the planned termination of its employer defined benefit pension plan, which should result in a $1.9 million charge to operations, a $137,000 decrease in equity, a $1.9 million decrease in regulatory capital and annual pretax cost savings of $117,000.
The company said it also plans to lend funds to its employee stock ownership plan to buy shares sold in the offering. Any other funds could be used for investments, cash dividends and share repurchases, among other things.