The Sunshine State Federal Savings board made a decision to file for a mutual-to-stock conversion in December. The bank plans to file in mid-March.
The initiative requires regulatory approval and must go through the Office of the Comptroller of Currency before being finalized.
“If everything goes right, we could be consummating in July,” President Floyd Hall said.
After its approval, proxy documents outlining the specifics and prospectives will go out to account holders for approval.
“I can’t speak to the financial part yet, because there are moving pieces,” Hall said. “We will know more when we have those documents.”
If approved, account holders will get the first right of purchase. Federal and state banking regulations require that the bank or savings association give depositors first priority to purchase the stock over all other interested investors, according to the U.S. Securities and Exchange Commission. These priority subscription rights allow depositors to purchase up to a set amount of shares at the “subscription price,” the value the company assigns before the shares trade publicly.
Sunshine State has posted notifications at its branches. So far, there haven’t been many inquiries about the conversion. Hall expects more comments once more finalized materials have been mailed. The earliest that could be is May.
“We want to raise capital to allow us to grow,” Hall said of the change. “In anticipation that the economy is going to get better, we want to support future efforts.”
Contact Amber Jurgensen at ajurgensen@plantcityobserver.com.
ABOUT THE CONVERSION
Many banks and insurance companies in the U.S. are organized as mutual companies. A mutual company is one that is owned — and sometimes governed — by its members — instead of being owned by public or private shareholders. In the case of a mutual savings bank or association, the members are the financial institution’s depositors.
Throughout the past two decades, a number of mutual companies have converted to a stock form of ownership — either to raise money, expand operations, enhance employee benefit options or some combination of these or other reasons. A host of federal and state banking laws govern “mutual-to-stock” conversions of banks and savings associations, including the rights — and responsibilities — of depositors.
SOURCE: U.S. Securities and Exchange Commission