Patapsco Federal S&L to convert, issues stock Dundalk-based thrift in 2-step changeover to commercial bank

Banking

February 27, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Patapsco Federal Savings and Loan Association said yesterday that it has received approval from federal regulators to convert to a federally chartered savings and loan that is publicly held.

Once the conversion is completed, the Dundalk-based thrift, which is currently owned by depositors, plans to become a state-chartered commercial bank upon receiving approval from state and federal banking regulators.

The conversion "will enable us to access the capital markets more effectively as a stock organization," said Joseph Bouffard, president of the $77.1 million-asset Patapsco Federal.

Mr. Bouffard said the thrift received approval Feb. 12 from the Office of Thrift Supervision to convert to a federally chartered institution.

Under the conversion plan, Patapsco Federal expects to raise anywhere from $8 million to $10.6 million in an offering to depositors and the public, Mr. Bouffard said. The thrift is offering up to 460,000 shares of common stock at $20 a share, but the number of shares can be increased to 529,000.

Mr. Bouffard said depositors who have been customers of Patapsco Federal since June 30, 1994, will be able to buy stock before any other depositors. If shares remain unsold, the offering will be opened to other depositors, residents of Baltimore County and eventually the general public.

The offering began Feb. 21 and will close March 20.

Mr. Bouffard thinks there will be few problems raising at least the minimum amount. "We've had a fair amount of interest expressed already," he said.

Patapsco Federal will use the funds to expand its loan portfolio, now concentrated in residential mortgages. After the conversion, Patapsco Federal will be able to make commercial real estate, business and consumer loans.

Eventually, all savings and loans may have to convert to bank charters because legislators, lobbyists and even some bank and thrift executives see little need for two separate charters.

Patapsco Federal is "seeing the writing on the wall," said Alex Hart, a banking analyst with Ferris, Baker Watts Inc. "If you look at the language of some reform bills in Congress the House version went so far as to say let's eliminate thrift charters and make them all convert to commercial banks."

If Patapsco Federal's conversion goes through, it will change its name to Patapsco Bank, and its holding company will be called Patapsco Bancorp Inc., Mr. Bouffard said. The company's stock will be traded on the "pink sheets" in the over-the-counter market.

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