State Investors Bancorp was organized by State-Investors Bank in February 2011
to facilitate the conversion of the Bank from the mutual to the stock form of
ownership and commenced operations in July 2011. A total of 2,909,500 shares
of common stock of the Company were sold at $10.00 per share in the subscription
offering to eligible depositors and borrowers of the Bank through which the
Company received proceeds of approximately $27.9 million, net of offering expenses.
The Company is a savings and loan holding company regulated by the Board of
Governors of the Federal Reserve System. After completion of the conversion
and the offering, all of State-Investors Bank’s stock is owned by State
Investors Bancorp. The Company contributed approximately 50% of the net proceeds
to the Bank. All remaining proceeds were retained by State Investors Bancorp
for future capital needs.
The types of loans that State Investors Bancorp may originate or purchase are
subject to federal and state laws and regulations. Interest rates charged on
loans are affected principally by the demand for such loans, the supply of money
available for lending purposes and the rates offered by our competitors. These
factors are, in turn, affected by general and economic conditions, the monetary
policy of the federal government, including the Federal Reserve Board, legislative
and tax policies, and governmental budgetary matters.
Investments in mortgage-backed securities involve a risk that actual prepayments
will be greater than estimated prepayments over the life of the security, which
may require adjustments to the amortization of any premium or accretion of any
discount relating to such instruments thereby changing the net yield on such
securities. There is also reinvestment risk associated with the cash flows from
such securities or in the event such securities are redeemed by the issuer.
In addition, the market value of such securities may be adversely affected by
changes in interest rates.
Deposits are the primary source of State Investors Bancorp’s funds for
lending and, to a lesser extent, borrowings from the Federal Home Loan Bank
of Dallas. In addition to deposits, principal and interest payments on loans
are a source of funds. Loan repayments are a relatively stable source of funds,
while deposit inflows and outflows are significantly influenced by general interest
rates and money market conditions. Borrowings may also be used on a short-term
basis to compensate for reductions in the availability of funds from other sources
and on a longer-term basis for general business purposes.
Deposits. Deposits are attracted principally from Jefferson, Orleans and St.
Tammany Parishes, Louisiana. Deposit account terms vary, with the principal
differences being the minimum balance required, the time periods the funds must
remain on deposit and the interest rate.
The Company is affiliated with the Community Cash network. As part of the Community
Cash network, customers of State-Investors Bank have access to over 200 ATMs
in our market area with no service fee. We also utilize advertising, tiered
rates on certain deposit accounts and Internet banking as a means to increase
deposits. State-Investors Bank has not solicited deposits from outside Louisiana
or paid fees to brokers to solicit funds for deposit.
Interest rates paid, maturity terms, service fees and withdrawal penalties are
established on a periodic basis. Management determines the rates and terms based
on rates paid by competitors, the need for funds or liquidity, growth goals
and federal regulations. The Company attempts to control the flow of deposits
by pricing its accounts to remain generally competitive with other financial
institutions in its market area.