July 2, 2007
Mail-Stop 4561
Mr. Lee A. Brady
President and Chief Executive Officer
LaPorte Bancorp, Inc.
710 Indiana Avenue
LaPorte, Indiana 45350
Re: LaPorte Bancorp, Inc.
Form S-1
Filed June 5, 2007
File No. 333-143526
Dear Mr. Brady:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or any other aspect of our review. Feel free
to
call us at the telephone numbers listed at the end of this letter.
Form S-1
Savings Plan for Employees
The Stock Offering
Securities Offered, page i
1. Revise to disclose the source of funds for the purchase by the
Plan, the repayment terms as well as any interest payable on the
funds.
Performance History, page 6
2. Revise to add a preamble to the table and briefly discuss the
material terms of the common stock option, e.g., what market will
it
trade in, it has no current market, the annual return on equity
and
return on assets for the last three years.
Holding Company Prospectus cover page
3. Revise the heading to also include a second line for the
issuance
of 961,967 to City Savings holders.
4. Revise to add a paragraph immediately preceding the paragraph
starting with "Keefe Bruyette" and briefly discuss the approximate
amount of cash proceeds that will be used to purchase City saving
shares and cash out its benefit plans.
Summary
Acquisition of City Savings Financial, page 7
5. Revise to briefly discuss the approximate cash amount to be
used
in the purchase, the percentage of LaPorte Bancorp shares that
will
be held by former holders of City shares, and what will happen to
City`s benefit plans, including the ESOP. If a significant amount
of
cash will be used for anything other than the direct purchase of
City
shares from unaffiliated holders, so describe.
6. Supplementally provide the staff with any materials
(Boardbooks),
including financial projections, that were exchanged by or between
Laporte and City Savings (or any party to the merger and/or
acquisition).
Reasons for the Offering, page 12
7. Revise the second bullet to disclose whether or not there are
any
plans, arrangements, and/or understandings to acquire any other
entities or acquire or build any branches.
Benefits of the Offering to Management, page 12
8. Revise to add a subsection for benefits to City Savings`
officers
and directors.
Each Share of City Savings Financial..., page 19
9. Revise to disclose the approximate percentage ownership
interest
former holders of City Savings common stock will hold in the new
LaPorte resulting from the stock exchange.
MD&A
Deposits, page 76
10. With a view towards additional disclosure, advise the staff if
any of the deposits are "brokered deposits".
Treatment of City Savings Financial Stock Options, page 179
11. Revise to disclose the aggregate payment, i.e., the number of
options times 34 less the aggregate exercise prices.
Treatment of Stock Options, page 181
12. Revise to also disclose the total number of options to be
cashed
out and the aggregate payment.
Material Income Tax Consequences, page 211
13. Revise to also summarize the tax opinion for the merger. In
this
regard, we note the discussion is in the proxy for City Savings
holders, however, the staff believes it should also be included in
the prospectus.
Pro Forma Data, page 38
14. Please revise to reconcile the cash adjustment of $11,976,000
on
page 42 with the purchase price of $19,600,000 on page 38.
15. We note the various assumptions on pages 38-39. Please revise
to
discuss the likelihood of material changes to the expected
purchase
price from these factors such as certain variable expenses you
refer
to in this context.
16. You state the cost of purchasing options is $591,000, on page
43.
However, the number of City Savings options acquired (39,016)
multiplied by the average exercise price of options ($18.84)
equals
$735,061. Please revise to reconcile these amounts in this
disclosure and elsewhere in the pro forma data, as needed.
17. Please revise to disclose the total number of shares used to
compute the per share data presented in the Pro Forma Statements
of
Income, in accordance with paragraph Article 11-02(b)(7) of
Regulation S-X.
Additional Pro Forma Data, page 65
18. Please tell us how you derived the amounts reported as
"Historical combined, net of effect of purchase accounting" and
"Pro
forma impact of funding the merger with City Savings Financial,
net
of tax." Revise the presentations and other ancillary information
as
needed.
Critical Accounting Policies, page 74
19. We note your disclosure stating the allowance consists of
general
and specific components and is determined based on "past loan loss
experience, the nature and volume of the portfolio,...economic
conditions, and other factors." With a view toward enhanced
disclosure, please revise to discuss:
* how you determine each element of the allowance;
* which loans are evaluated individually and which loans are
evaluated as a group;
* your review of individual loans in the various categories of
your
portfolio and how you analyze them;
* how you determine both the allocated and unallocated portions of
the allowance for loan losses; and
* and what self-correcting mechanism you use to reduce differences
between estimated and actual observed losses.
Nonperforming Assets, page 103
20. Please include a discussion of the nature of restructured
commercial loans in your textual portion of this section. We note
their relative significance to total nonperforming loans and their
apparent presence in your Guide III table since 2005. Describe
any
unique features or other characteristics that would enhance a
reader`s understanding of this nonperforming loan component.
Management`s Discussion and Analysis, page 137
21. You state "total nonperforming loans to total loans increased
from 3.1% at June 30, 2005 to 3.3% at June 30, 2006" in the last
paragraph on page 142 . In the table on page 159 you report
nonperforming loans to total loans for such periods as 3.29% and
4.01%. Please reconcile these differences and revise the document
as
necessary. Clearly explain in your revisions the nonperforming
loan
components included or excluded in these calculations.
Financial Statements, page F-2
22. Please note the updating requirements for the financial
statements and related disclosures pursuant to Rule 3-12 of
Regulation S-X.
Note 2 - Securities, page F-14
23. We note your transfer of $2,330,664 securities from held to
maturity to available for sale in 2005. Please disclose the type
of
securities that were transferred. Revise to provide all of the
disclosures required by paragraph 22 of SFAS 115. This disclosure
should include a robust explanation of the circumstances leading
to
the decision to transfer the securities. Also, please reconcile
the
amount of unrealized gain or loss recorded for the transfer with
the
amounts reported in the table in Note 14.
24. We note the unrealized losses on your investments. Please
revise
to provide the disclosures required by paragraph 21b of EITF 03-1.
Note 3 - Loans, page F-18
25. Please revise to include the disclosures required by paragraph
20c of SFAS 114 for the fiscal year ending December 31, 2004.
Additionally, please explain to us why the interest income and
cash
basis interest income recognized on impaired loans is "not
considered
material to [the] presentation" on page F-18.
Financial Statements, page F-32
26. We note you have not included a statement of operations or
cash
flows for the nine-months ending March 31, 2006. Please revise to
include such statements in accordance with Item 302(b) of
Regulation
S-X.
27. Your June 30, 2004 statement of operations reports $3,393,275
in
net interest income after provision for loan losses. This appears
to
be a typographical error as the amount should be $4,476,340.
Please
revise the statement of operations accordingly.
Merger proxy
Questions and Answers, page 1
28. Revise the last Q&A on page 3 to make the question, "Do I have
dissenters` rights and how do I perfect them?" In this regard,
briefly explain what actions holders must make or not make and, if
notice is to be provided, include a name and address. Finally, add
a
cross-reference to a more complete discussion elsewhere in the
proxy.
The Merger
Background of the Merger, page 22
29. Revise the fourth full paragraph on page 23 to disclose the
offering terms of the other potential acquiror.
30. Revise the first three paragraphs on page 24 to briefly
discuss
the changes made to the draft agreements.
Exhibit 5
31. Revise and refile to disclose the number of shares being
opined
upon.
Exhibit 8
32. Revise to delete the first sentence of the last paragraph.
Exhibit 23
33. Provide a current consent of the independent accountant in any
amendment.
* * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed investment decision. Since the company and its
management are in possession of all facts relating to a company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
??should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
??the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
??the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in connection with our review
of
your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the
securities specified in the above registration statement. We will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
The accounting staff are reviewing the accounting responses
and
may have additional comments based upon their review. Any
questions
regarding the accounting comments may be directed to Babette
Cooper
at (202) 551-3396 or John Nolan at (202) 551-3492. All other
questions may be directed to Michael Clampitt at (202) 551-3434 or
to
me at (202) 551-3491.
Sincerely,
Todd Schiffman
Assistant Director
Financial Services Group
CC: Kip A. Weissman, Esq.
Luse Gorman Pomerenk & Schick P.C.
5335 Wisconsin Avenue N.W., Suite 400
Washington, DC 20015
Phone (202) 274-2000
Facsimile (202) 362-2902
Mr. Lee A. Brady
LaPorte Bancorp, Inc.
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