Community Investors Bancorp (NASDAQ:CIBI)
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Community Investors Bancorp, Inc. Announces Special Stockholders
Meeting to Approve Reverse Stock Split
BUCYRUS, Ohio, May 17 /PRNewswire-FirstCall/ -- Community Investors Bancorp,
Inc. (the "Company") (NASDAQ:CIBI), announced today that its board of directors
has unanimously approved a 1-to-225 reverse stock split of the Company's common
stock as part of a "going private" transaction. At a special meeting of
stockholders scheduled to be held in July 2005, stockholders will be asked to
approve the reverse stock split by authorizing an amendment to the Company's
Certificate of Incorporation. If the amendment receives stockholder approval,
the Board intends to effect the split immediately thereafter.
In commenting on the proposal, Phil Gerber, the Company's President and Chief
Executive Officer, stated that "As a result of the stock split, the Company
expects to have fewer than 300 record holders of its common stock, which would
permit the Company to terminate the registration of its common stock with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934. The Company intends to apply for such termination as soon as practicable
after effecting the split, and thereafter its common stock no longer will be
traded on the Nasdaq SmallCap Market System."
The Board carefully considered the merits of the going private transaction and
concluded that it was in the best interest of the Company and its stockholders.
The Board recognized that generally there are certain advantages to public
company status including investment liquidity for stockholders, easier access
to capital, the option to use company stock as capital in an acquisition and an
enhanced corporate image. However, the Board weighed those benefits against
accounting, legal and other costs of being a public company. It also
considered that, because the Company's stock does not actively trade, many of
the benefits of being a public company are not available to the Company.
Recent legislation, most notably the Sarbanes-Oxley Act of 2002
("Sarbanes-Oxley") and regulations adopted by the SEC and Nasdaq in furtherance
of the purposes of Sarbanes-Oxley, have greatly increased the costs associated
with being a public company. Mr. Gerber noted that "Compliance with those new
provisions results in substantially higher legal and accounting costs and
requires that significantly greater amounts of management's time be devoted to
regulatory matters." However, he said that "As a private company, the Company
will not have to comply with most of the requirements of Sarbanes-Oxley, file
reports with the SEC or comply with the corporate governance rules and onerous
disclosure requirements of the SEC and Nasdaq." As a result, management can
focus on long-term goals and values, rather than each quarter's financial
results and the attendant market reaction. The savings realized by the Company
will be invested in the business. The Board believes that the Company will
have a better opportunity to increase stockholder value if management is
allowed to focus its attention and resources on implementing the Company's
business plan and long-term strategy.
At March 31, 2005, Community Investors Bancorp, Inc. reported total assets of
$122.8 million, total liabilities of $109.8 million, including total deposits
of $83.5 million and total stockholders' equity of $13.0 million.
First Federal Community Bank of Bucyrus has served the Bucyrus and Crawford
County area since 1888. The Company currently has four office locations plus a
free-standing ATM facility in Crawford County.
DATASOURCE: Community Investors Bancorp, Inc.
CONTACT: Phillip W. Gerber, President and Chief Executive Officer of
Community Investors Bancorp, Inc., +1-419-562-7055
Web site: http://www.bucyrusfirstfederal.com/