Coastway moves to become publicly traded bank
New headquarters office under construction at Metro Center office park
Coastway Community Bank has come a long way from its roots as the Telephone Workers Credit Union of Rhode Island and the Warwick Credit Union. It now has nine branches, 26,000 customers and about $375 million in assets.
If the membership ratifies the unanimous action taken by the bank’s board, Coastway stock could become publicly traded on the NASDAQ stock market as soon as early next year. And depending on the shares sold, which will be offered first to all those who were depositors on July 30, 2012, the bank could have twice the assets to invest back into the community in the form of mortgages and loans.
“To keep going, this business, like any other, needs to grow,” bank president and CEO Bill White said in an interview Friday. Since 2000, with the merger of the Warwick and Coastway Credit Unions, the institution has grown from four to nine branches.
But White and the Coastway Board are not looking to further expand the bank’s center of operations in the West Bay and Providence. Doing that, White explained, increases expenses with the addition of personnel and branches. The option is to increase capital though the sale of stock so, as White puts it, “It allows us to make more loans. We are able to fuel the engine with our own internal growth.”
White sees it, ensuring Coastway remains a “vibrant market alternative to the big banks.”
“I feel strongly that that market is still out there for us, that we provide most services for the average Rhode Islander,” he said.
While looking to grow bigger in Rhode Island, Coastway will also bring its headquarters back to Warwick.
“Once a Warwick boy, always a Warwick boy,” White said.
“We’re out of parking and there’s no more desk space,” White says of Coastway’s Cranston headquarters. That building offers about 21,000 square feet. Warwick developer Michael Integlia is in the process of building a three-story, 45,000-square-foot building in Metro Center. Coastway will occupy the second and third floors and lease the first floor.
White expects to make the move next April or May.
The big move, which to a state-chartered corporation that will serve as a holding company for Coastway and offer shares of common stock, will come in November when depositors receive a prospectus. White said depositors would have the ability to “subscribe” to shares that he expects would sell for about $10. A maximum of 20,000 shares will be available. He said in the event that the offer is over-subscribed, a reduced number of shares would go to the subscribers on a prorated basis. Thus, for example, if the offering were over subscribed by 110 percent, everyone would get 90 percent of the shares they wished to purchase.
“Everyone will be treated the same,” White said.
He said the intent of offering the stock to depositors first is to give them a “chance to benefit … and to share in the success of the bank going forward.”
White makes a point of emphasizing the bank will remain independent and a strong part of the community.
He said that, since July 2009, Coastway has made more than $700,000 in local charitable donations, not counting more than 3,000 hours in paid employee hours to organizations such as the Rhode Island Mentoring Partnership in just the past year. About 60 Coastway employees, or about 40 percent of its entire staff, serve as mentors for one hour a week during the academic year. Overall, White said, 90 percent of the company’s 149 employees participate in community non-profit organizations.
“We want to continue to grow, to be a part of the community,” he said.
As part of the community commitment, White said the bank would endow a foundation with $1.3 million.
In a statement released last week, White said, “After the conversion, our commitment to our customers will remain unchanged and they will continue to be served by the same great Coastway team with the same commitment to excellent service.”
In addition to requiring approval of the depositors, the conversion requires Federal Reserve Board and Rhode Island Department of Business Regulation approvals.
Sandler O’Neill & Partners, L.P. has been selected as the conversion agent and Luse Gorman Pomerenk & Schick, P.C. as counsel.
White estimated the conversion to cost about $1 million, which would come out of the proceeds of the sale of stock.