This feature has the latest news from the mutual bank conversion sector. As of Aug. 28, four conversions were in the pipeline.
On Aug. 27, Magnolia Bancorp Inc., the proposed holding company for Metairie, La.-based Mutual Savings and Loan Association, filed a registration statement for a mutual-to-stock conversion. The company's pro forma ratio of tangible common equity to tangible assets ranges from 45.6% at the minimum of the offering range to 49.5% at the supermax.
Mutual Savings has recorded a net loss for the last two quarters. "Because of declines in our net interest income and reduced demand for our fixed-rate loans, we currently expect to incur a net loss for the year ending December 31 2024," the company said in the S-1 filing.
The bank had just one loan officer as of June 30. The company said in the application, "We believe we will need to hire additional loan officers and grow our loan portfolio before we can return to sustained profitability, which will take time and increase our non-interest expense in the short term."
EWSB Bancorp Inc., the newly formed proposed holding company for Kaukauna, Wis.-based East Wisconsin Savings Bank, extended the expiration of its mutual-to-stock conversion offering to Sept. 6 at the latest. The company also increased the maximum purchase limitations.
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 IT, 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 June 30, as disclosed in its second-quarter Form 10-Q, 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 10 consecutive quarters. At June 30, its tangible common equity ratio was 3.80% and its leverage ratio was 5.90%.
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.
Both Tipp City, Ohio-based Monroe Federal Bancorp Inc. and New Orleans-based FB Bancorp Inc. have issued a prospectus for their mutual-to-stock conversions. Their offerings are scheduled to close Sept. 19 and Sept. 20, respectively.
Shares of New Orleans-based Fifth District Bancorp Inc. began trading Aug. 1, closing up 2.5% from the $10 IPO price. The company completed its mutual-to-stock conversion at a valuation between the minimum and the midpoint of the offering range.
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.
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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Other news stories about mutuals, mutual holding companies, recent conversions and activist investors
OCC enters formal agreement with First Federal Savings Bank of Kentucky
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OCC enters agreements with 1st National, Maple City Savings, Slovenian Savings
Ponce Bank gets $35M in subsidized deposits under New York's BDD program
NB Bancorp COO announces retirement
Freehold Bank-Columbia Bank merger secures regulatory approval
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