This feature has the latest news from the mutual bank conversion sector. As of July 24, five conversions were in the pipeline.
EWSB Bancorp Inc., the newly formed proposed holding company for Kaukauna, Wis.-based East Wisconsin Savings Bank, has commenced an offering for its mutual-to-stock conversion. The offering closes Aug. 8.
The company filed its initial registration statement March 11 and disclosed in the application that the bank entered into a confidential memorandum of understanding with the Federal Deposit Insurance Corp. and the Wisconsin Department of Financial Institutions in July 2023.
The memorandum of understanding required the bank to address certain practices and conditions identified during regulatory examinations, such as levels of capital, earnings, liquidity, investments and information technology, according to the filing. Board oversight, asset/liability management and risk management also needed to be enhanced.
Further, East Wisconsin Savings Bank's net worth ratio of 4.31% as of March 31, as disclosed in a prospectus, was lower than the 6% requirement for Wisconsin-chartered savings banks.
"If our net worth ratio continues to be less than 6%, the [Wisconsin Department of Financial Institutions] may direct us to adhere to a specific written plan established by the Department to correct the deficiency, as well as a number of other restrictions on our operations, including a prohibition on the payment of dividends," the company said in the prospectus.
East Wisconsin Savings Bank has lost money for nine consecutive quarters. As of March 31, its tangible common equity ratio was 3.92% and its leverage ratio was 6.17%.
Also noteworthy is the termination of East Wisconsin Savings Bank's planned merger of mutuals with Lake City, Minn.-based Lake City Federal Bank on Sept. 30, 2023. Lake City Federal Bank subsequently announced another merger of mutuals in December 2023 with Marshfield, Wis.-based Forward Bank, which closed May 3.
In a June 25 prospectus supplement, Fifth District Bancorp Inc., the proposed holding company for New Orleans-based Fifth District Savings Bank, said it "received valid stock orders for approximately 57%" of the required minimum amount for completion in the subscription offering for its mutual-to-stock conversion. For subscribers who submitted a maximum stock purchase order and expressed interest to be resolicited, the company increased the purchase limit to $1 million for individuals and groups. The resolicited offering closed July 5. In addition, Fifth District completed a community offering.
In its prospectus, Fifth District Bancorp said it had identified material weaknesses in its internal control over financial reporting related to allowance for credit losses.
The company said management did not maintain sufficient evidence of independent review or supporting documentation regarding key methodologies, assumptions and calculations, including support for qualitative factors that were utilized in the allowance for credit losses as of Dec. 31, 2023, and the allowance for loan losses as of Dec. 31, 2022. Further, management did not maintain adequate evidence of independent review or supporting documentation, including support for the qualitative factors related to the adoption on Jan. 1, 2023, of Accounting Standards Update 2016-13 Financial Instruments – Credit Losses.
On June 13, Monroe Federal Bancorp Inc., the proposed holding company for Tipp City, Ohio-based Monroe Federal Savings and Loan Association, filed a registration statement for a mutual-to-stock conversion. The purchase limits in the offering are $150,000 for individuals and $200,000 for groups. Seven of the 12 directors and executive officers intend to buy at least $150,000 of stock. These dozen insiders are expected to purchase an aggregate 142,700 shares, representing 28.0% of the shares offered at the minimum range.
FB Bancorp Inc., the proposed holding company for New Orleans-based Fidelity Bank, submitted its standard conversion application March 4, followed by amendments dated April 15, May 2, May 7, June 7 and July 18. Across filings, the range of shares offered has not changed, with gross proceeds of $198.4 million at the supermax.
On Feb. 2, Metairie, La.-based Mutual Savings and Loan Association announced a mutual-to-stock conversion. At the end of June, the institution had $35.5 million in total assets and a tangible common equity to tangible assets ratio of 39.4%.
Download a template showing the conversion pipeline, the market performance of recent conversions, the valuations of mutual holding companies and a list of conversion candidates.
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