Harvard Illinois Bancorp, which has struggled with
The $171 million-asset company said in a press release Thursday that it will sell its bank, along with certain assets and "substantially all" its liabilities, to State Bank, a $169 million-asset unit of Wonder Bancorp in Wonder Lake, Ill. The deal will exclude rights tied to Harvard Savings Bank's $18.1 million investment in loan-repurchase agreements managed by Pennant Management and related litigation, tax assets and prepaid expenses.
State Bank will pay a purchase price equal to the adjusted tangible book value of the assets and liabilities acquired, minus transaction-related expenses, plus a $3 million premium. The transaction is expected to close in the third or fourth quarter.
"The decision to sell Harvard Savings Bank was a difficult decision for our Board of Directors, and was made only after many months of carefully considering our strategic options with our financial advisors," Donn Claussen, Harvard Illinois' president and chief executive, said in the release.
Harvard Illinois also said it plans to deregister as a savings and loan holding company. Its primary activities will consist of monitoring and supporting litigation related to Pennant, along with collection and disposition efforts. Once those tasks are complete, the company plans to voluntarily dissolve and liquidate.
The company revealed in October that it had invested about $18 million in
"This fraud and the resulting losses have impacted a number of community banks... and unfortunately have resulted in significant financial and regulatory issues for our institution," Claussen said.
The company also announced that its annual meeting, which was set for June 25, has been postponed to Aug. 27.
Harvard Illinois was facing a proxy battle with Joseph Stilwell, whose investment group had launched its fourth consecutive effort to take board seats. Stilwell had nominated Mark Saladin, a lawyer who
A representative for Stilwell Group, which owns roughly 10% of the company's stock, declined to comment.
