Group Extends IPO for Net Community Black Bank

By Off the BASN Sports Wire
Updated: June 28, 2006

–The group working to create a Boston-based online community bank targeting African-Americans is changing the terms of its public offering to give it more time to meet federal requirements for the number of shareholders.

BankBlackwell, which bills itself as the first African-American Internet bank, yesterday extended the deadline for investors to participate in its offering from June 23 to July 17. It is the third such extension for the bank, which is trying to sell a minimum of about 1.6 million shares at $10 apiece ahead of a July 28 regulatory deadline.

Jim Mundy, the bank’s president, said the extensions were due to an unusual gap between the time it was given a federal charter last February and when it was granted the insurance required for all banks from the Federal Deposit Insurance Corp. in August.

“We were out there all last summer trying to raise capital with one arm tied behind our back,” Mundy said.

If BankBlackwell doesn’t meet the July 28 deadline, it would have to give up its charter and return any monies collected from prospective shareholders, plus interest.

Mundy said the bank has nonbinding commitments for 1.3 million shares but did not say what percentage of those shares had already been paid for.

The bank has received a boost in its efforts in the last month, since it landed the help of Genesis Industries, a consulting firm led by former Washington Bullets basketball player and sports agent David Britton and partner Terry Reado. The duo, who are barred by federal rules from receiving fees for their assistance to the bank, have helped BlackBlackwell land several nonbinding commitments from current and former athletes, Mundy said.

Because of that, the company had increased the total number of shares in its offering from about 1.7 million to 2 million.