BCS plans limited stock offer Baltimore County thrift will become a mutual holding company

October 25, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Following the lead of other small financial institutions that want to raise capital but don't wish to become takeover bait, Baltimore County Savings Bank said yesterday it intends to issue a limited amount of stock under a new structure.

The conversion, which requires regulatory approval, would make the thrift a "mutual holding company." That's a relatively new form, created for depositor-owned institutions that want to wade into the public stock markets -- but only so far.

BCS, based in Perry Hall with $250 million in assets, essentially would sell up to 49 percent of itself to the public.

Borrowers and depositors would get first crack at the stock, which would yield an ownership stake in a parent holding company over all the thrift's operations.

With money raised from a stock offering, BCS could open new branches, invest in automatic teller machines, offer new products and otherwise beef up its presence, said Vice President Gary C. Loraditch. The plans are still in flux.

"We don't know how much money we're going to raise" at the moment, he said. "We can expand our personal lines; also we could get into some business loans" possibly.

BCS is a traditional thrift, eschewing commercial loans and concentrating on home mortgages and car loans. As a mutual, it is governed by depositors and borrowers and prohibited from selling stock.

Some mutual institutions have converted wholly to publicly owned stock companies, but BCS doesn't want to go that far.

By retaining mutual status in the holding company, it gets to issue public stock but retain local control.

"We think that a smaller community-based financial institution can exist and provide services in the future," Loraditch said.

BCS officers stressed that the switch wouldn't change the location of the thrift's six branches. And it wouldn't affect staffing, savings and checking accounts or federal deposit insurance. Depositors don't have to buy stock if they don't want to.

BCS was founded in 1955 and had net income of $2.7 million in the fiscal year ended Sept. 30. The stock offering is expected to be complete in February or March.

Pub Date: 10/25/97

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