West Bend-based Commerce State Bank, which first opened its doors in August 2005, is planning a second stock offering in January. The bank grew to more than $100 million in total assets in its first 13 months of business, said Joe Fazio, chief executive officer and co-founder.
The new stock offering provides an opportunity for investors and a chance for the bank to raise a second round of capital, he said.
Commerce State Bank’s initial stock offering raised about $12 million, Fazio said, enough to bring the bank to about $120 million in assets. The bank is hoping to raise enough in a second offering to carry it to $200 million to $250 million in assets, he said.
However, the bank is trying to stay under the limits of the Sarbanes-Oxley Act by having fewer than 500 shareholders, Fazio said. It currently has about 200 shareholders and is hoping to have around 250 when it ends the second stock offering.
Current shareholders will be offered the first chance to purchase new shares in the bank, Fazio said. Then shares will be offered to other interested parties. New shareholders need to be accredited investors, meaning they have a net worth of at least $1 million or annual income of at least $200,000 for a single person or $300,000 for a couple for at least two years.
The bank is not only interested in having shareholders with the highest net worth, Fazio said. It’s also looking for people with a solid network of friends and family they can steer to the bank.
“We will be most excited about new shareholders who can help the bank prosper with loans, referrals and deposits,” he said.
There will be no advertising for the second stock offering, Fazio said. Parties interested in purchasing shares should contact the bank, and they will be placed on a list of interested parties that the bank will contact later.
Commerce State Bank’s board of directors has not yet set prices for its shares, Fazio said. The board will also set minimum and maximum levels of investments before issuing its second stock offering.
Commerce State Bank needs to issue a second offering because it doubled its original expectations, Fazio said.
“Our business plan was to have $48 million (in assets) in our first year,” he said. “We had $96 million at the end of our first year. We were confident that we could meet and exceed our plan. It’s great to have to deal with these problems.”
Fazio said Commerce State Bank has been able to reach $100 million in assets so quickly because of two factors – its ability to meet the needs of commercial clients and the attractive rates it offers for deposits. The bank’s target products are business loans between $200,000 and $1 million, home mortgages and high net worth deposits such as CDs and money market accounts.
When the bank opened in August 2005, it had eight employees. Commerce State Bank now employs 12.
The bank opened in a strip mall at 508 Shepherds Drive in West Bend, with about 2,800 square feet of space. It expanded into an additional 1,000 square feet of space in the strip mall on Oct. 1. The space in the strip mall was always thought of as temporary, Fazio said previously.
Fazio and other bank officials are currently working with an architect to design the bank’s permanent home, which will be developed on a six-acre parcel near Highway 45 and Paradise Drive in West Bend. The two-story building will have about 20,000 square feet. Commerce State Bank will use more than half of the space in the building. The remainder will be leased.
The new bank and its parking lot will take up three to four acres. The remaining land will be sold for a development, Fazio said.
