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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Village Bancorp, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
927051102000
- --------------------------------------------------------------------------------
(CUSIP Number)
William D. Rueckert, 167 Old Post Road, Southport, CT 06490
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and Communications)
April 6, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP No. 927051102000 Page 2 of 12 Pages
- ---------------------- ------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David A. Rosow
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
65,500
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 65,500
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
65,500
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.4%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 927051102000 Page 3 of 12 Pages
- ---------------------- ------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William D. Rueckert
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
29,300
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 29,300
WITH
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,300
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.5%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 927051102000 Page 4 of 12 Pages
- ---------------------- ------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Josiah T. Austin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 94,470
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH
10 SHARED DISPOSITIVE POWER
94,470
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
94,470
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
CUSIP No. 927051102000 Page 5 of 12 Pages
- ---------------------- ------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Valer C. Austin
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) |_|
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 94,470
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON
WITH
10 SHARED DISPOSITIVE POWER
94,470
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
94,470
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES* |_|
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.9%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
SCHEDULE 13D
Item 1. Security and Issuer
The title and class of equity security to which this statement relates is:
Common Stock par value $3.33 ("Common Stock"). The name and address of the
principal executive office of the issuer is: Village Bancorp., Inc. ("Bancorp"),
25 Prospect Street, Ridgefield, Connecticut, 06877.
Item 2. Identity and Background
(A) This schedule 13-D is filed by and on behalf of: Josiah T. Austin
and Valer C. Austin (the "Austins"); David A. Rosow ("Rosow"); and William D.
Rueckert ("Rueckert"), collectively the Filers.
(B) The principal business address of each of the persons filing this
statement is as follows:
Josiah T. Austin
El Coronado Ranch
Star Route 395
Pearce, AZ 85624
Valer C. Austin
El Coronado Ranch
Star Route 395
Pearce, AZ 85624
David A. Rosow
167 Old Post Road
Southport, CT 06490
William D. Rueckert
167 Old Post Road
Southport, CT 06490
(C) Josiah T. Austin and Valer C. Austin are presently principally
occupied as individual investors.
David A. Rosow is presently principally employed as Chairman and Chief
Executive Officer of International Golf Group, Inc., 167 Old Post Road,
Southport, CT 06490, the principal business of which is the ownership and
management of golf courses.
William D. Rueckert is presently principally employed as President of
International Golf Group, Inc., 167 Old Post Road, Southport, CT 06490, the
principal business of which is the ownership and management of golf courses.
(D) During the past five years, none of the persons filing this report
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(E) During the past five years, none of the persons filing this report
has been or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation, relating to such laws.
(F) Each of the persons filing this report is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
All of the shares owned by the Filers were acquired by them prior to
December 13, 1996 and not as a consequence of the event causing the report to be
made.
With respect to the shares owned by the Austins which are covered by this
statement, the shares were purchased for an aggregate price of $620,020.00. The
source of funds for such purchases is personal funds.
With respect to the shares owned by Rosow which are covered by this
statement, the shares were purchased for an aggregate price of $576,306.00. The
source of the funds for such purchases is personal funds.
With respect to the shares owned by Rueckert which are covered by this
statement, the shares were purchased for an aggregate price of $234,400.00. The
source of the funds for such purchases is personal funds.
Item 4. Purpose of Transaction
The Filers acquired the securities of the issuer solely for investment
purposes.
On April 6, 1998, the Filers mailed a letter to the Board of Directors of
the issuer, the contents of the letter are as follows:
DAVID A. ROSOW
167 Old Post Road
Southport, Connecticut 06490-1301
April 1, 1998
Edward J. Hannafin, Esq.
Chairman of the Board and
The Board of Directors
Village Bancorp
27 Prospect Street
Ridgefield, CT 06877
Dear Mr. Hannafin and the Board of Directors:
The undersigned filed a Form 13D with the Securities Exchange Commission on
December 20, 1996 to report our combined ownership interest in Village Bancorp
(the "Company"). The first purchase by any member of our group occurred on or
about May 23, 1994 and currently we own a combined total of 9.9% of the
Company's stock. Based upon publicly available information we believe our group
is the largest shareholder of the Company.
Mr. Hannafin, Chairman of the Board of Directors met in 1996 with David
Rosow, during which time the strategic objectives of the Company were discussed.
Mr. Rosow indicated that the Company was not achieving financial performance
equivalent to other banks of its size or other banks in the very attractive
market area of Fairfield County. Mr. Hannafin replied that the opening of the
Danbury offices and other programs would combine to enhance returns on
Shareholder Equity.
Mr. Rueckert reiterated Mr. Rosow's concerns in a letter to Mr. Hannafin
dated May 30, 1997 outlining peer group performance and the Company's lagging
participation. In his response, Mr. Hannafin stated that the Board is continuing
its "long range plan of development" including new branches with expanded loan
and trust opportunities.
To put it bluntly, the Company's largest shareholders believe that the
Board and Management have squandered an opportunity to realize substantial value
for the shareholders. We do not believe that our Company can produce future
earning which will justify the investment in time and capital represented by the
Board's actions over the past three years nor make up for the unsatisfactory
results of those years.
Despite the opening of the Danbury office, a new branch in Westport,
Connecticut, expansion of Trust Department activities and we presume other
decisions designed to improve financial performance, no improvement in financial
results has been reported to the Shareholders.
In fact, the Company's performance has deteriorated.
The recent announcement of the earnings for the period ended December 31,
1997 were substantially below those of a year ago. While the Company's fourth
quarter report points out the 24% increase in total assets for the year, the
value of the shareholders' investment as represented by stockholders' equity
only increased 3.7% on an earnings decline of 35%. This is extremely
disappointing since locally and nationwide, bank profits, returns on equity and
returns on assets have been at record levels.
On a longer term basis, the core results of the Company have declined for
each of the past three fiscal years. Net interest margins have fallen and
efficiency ratios have increased. Most importantly, earnings before taxes and
loan loss provisions have declined.
The table below outlines the distressing quarterly financial results this
Board and management team have delivered to the shareholders.
12/31/97 9/30/97 6/30/97 3/31/97 12/31/96
EPS by Quarter $0.12 $0.12 $0.17 $0.21 $0.29
Return on Assets - 0.40% 0.43% 0.64% 0.86% 1.22%
(Quarters Annualized)
Return on Equity - 5.62% 5.86% 8.04% 10.57% 14.36%
(Quarters Annualized)
Book Value $8.33 $8.29 $8.23 $8.13 $8.03
Efficiency Ratio 79.59% 77.34% 74.0% 71.98% 70.91%
Net Income by Quarter $223,000 $231,000 $315,000 $409,000 $549,000
The Board's explanation that the deteriorating results are due to continued
investment in the future is unacceptable. Many banks are expanding, all banks
invest in the future. Our Company, in the most attractive banking environment in
Connecticut, should at least be able to keep up with its peers.
Quarterly earnings per share have declined 59% since the fourth quarter of
1996 and return on shareholders' equity has plummeted 61%. To our knowledge, no
similar banks have suffered such disastrous results in the past year. The table
below shows comparative figures for the nine months ended, September 30, 1997
and clearly shows that our Company is seriously underperforming its peer group.
Return on Assets Return on Equity Efficiency Ratio
Village Bancorp 0.45% 5.88% 83.7%
Connecticut Median 0.89% 11.64% 69.4%
Source: First Albany Corp.
The recent decisions by the Board have included: expansion in a time of
intense competition when deposit gathering activities are costly in the face of
low loan rates; a stock dividend which has not had any effect on the liquidity
of the shares and, enacting a Shareholder Rights Plan which was not voted on by
the Shareholders and is an ill advised effort by the Board and Management to
protect their positions rather than acting in a fiduciary manner to enhance the
value of the interests of the Shareholders.
The strategic plans of the Board are not working. We cannot see any
meaningful prospect for improvement. We do not believe the Directors or
Management team can continue to lead this Company into the future and we are
convinced that the best means of maximizing value for all the Shareholders is to
retain investment banking assistance to sell the Company.
We believe that there may be other larger institutions who would have an
interest in purchasing the Company. A tax free exchange of our Company's stock
for that of another institution might provide substantially enhanced value to
the Shareholders. A failure by the Board to seriously explore the sale of the
Company would be, in our opinion, a flagrant violation of its fiduciary
obligations to the Shareholders.
Based upon Mr. Hannafin's comments to Mr. Rosow and Mr. Rueckert, we
suspect that the Board will not be in favor of our request that it engage
investment banking advise to explore the sale of the Company. We therefore are
prepared to communicate with other Shareholders of our Company on matters
relating to our mutual interests as Shareholders, including but not limited to
communications with respect to the financial underperformance by the company
over the past several years, its ill advised and costly expansion program, the
negative effects of the Shareholder Rights program and the alternative values
available to the Company's Shareholders.
We would object strongly to any anti-takeover defenses enacted in the face
of this letter, and we intend if necessary to bring the previously enacted
Shareholder Rights program initiated by a self serving Board to the appropriate
vote of all the Shareholders. We further believe that any effort to improve
earnings through an acquisition would involve substantial, and we believe
unacceptable, dilution to current shareholders, especially in light of the poor
financial performance of the Company to date.
In order to achieve communication with our fellow Shareholders we hereby
request that pursuant to Section 33-946 of the Connecticut Business Corporation
Act, we be allowed to inspect and copy the Company's shareholder records
including the number of shares held, the names of such Shareholders and their
addresses. We are prepared to pay reasonable out-of-pocket expenses incurred by
the Company or its Transfer Agent, to provide us with this Shareholder
information. In addition, we may at a later date request access to the minutes
of the meetings of the Company's Board of Directors.
Respectfully,
/s/ Josiah T. Austin /s/ David A. Rosow
/s/ Valer C. Austin /s/ William D. Rueckert
Item 5. Interest in Securities of the Issuer
(A) Josiah T. Austin and Valer C. Austin, who hold the shares jointly,
are the beneficial owners of 94,470 shares of the Common Stock representing 4.9%
of the total outstanding shares of the Common Stock. Rosow is the beneficial
owner of 65,500 shares of the Common Stock representing 3.4% of the total
outstanding shares of the Common Stock. Rueckert is the beneficial owner of
29,300 shares of the Common Stock representing 1.5% of the total outstanding
shares of the Common Stock. In the aggregate, the Filers are the beneficial
owners of 189,270 shares of the Common Stock representing 9.9% of the total
outstanding shares of the Common Stock.
(B) Josiah T. Austin and Valer C. Austin each share with the other
(but not others) the power to vote and dispose of 94,470 shares of the Common
Stock. Rosow has sole power to vote and dispose of 65,500 shares of the Common
Stock. Rueckert has sole power to vote and dispose of 29,300 shares of the
Common Stock.
(C) No purchases or sales of Common Stock have been made by the Filers
in the past sixty days.
(D) No person other than the Filers, with respect to the Common Stock
beneficially owned by each of them, has any right to receive or the power to
direct the receipt of dividends from or the proceeds from the sale of the Common
Stock.
(E) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
On December 20, 1996 Filers agreed to use their best efforts to maximize
the value of their investments in the Common Stock. They also agreed to evaluate
the business, financial condition and prospects of the Issuer, as well as
conditions in the economy and the banking industry, with a view toward
determining whether to hold, decrease or add to their investment in the Common
Stock.
Except as stated above, there are no contracts; arrangements;
understandings or relationships among the Filers and between the Filers and any
other person with respect to the securities of the Issuer.
Item 7. Material to be Filed as Exhibits
There is no material to be filed as exhibits to this report.
SIGNATURE
After reasonable inquiry and to the best of my knowledge, I certify that the
information set forth in this statement is true, complete and correct.
DATE: April 15, 1998
s/ Josiah T. Austin
Josiah T. Austin
s/ Valer C. Austin
Valer C. Austin
s/ David A. Rosow
David A. Rosow
s/ William D. Rueckert
William D. Rueckert
