Piedmont Federal Savings Bank in Winston-Salem, N.C., is seeking flexibility by forming a mutual holding company.
The $1 billion-asset bank recently applied with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. related to the move.
Creating an MHC would give Piedmont Federal more options for growth in the future such as getting into title insurance or participating in an insurance consortium, CEO David Barksdale said in an email.
“We like the flexibility of the MHC,” Barksdale said.
“This structure also allows us to raise alternative capital,” Barksdale said, though Piedmont Federal – with a 24% leverage ratio – has no immediate need to bring in more capital. “However, forming the MHC when you don’t have the immediate need seems prudent.”
Barksdale said the move would better position Piedmont Federal should it ever plan to acquire or merge with another mutual, though he said there are “no plans for this strategy at this time.”
Piedmont Federal is forming a single tier holding company, where the MHC would own all of the stock in the bank. There will be no outside shareholders, and Barksdale said there are no plans to go public anytime soon.