Magazine article American Banker

A 'Professional Depositor' Prods Mo. Mutual to Convert

Magazine article American Banker

A 'Professional Depositor' Prods Mo. Mutual to Convert

Article excerpt

A small Missouri thrift has come under attack by a well-known professional depositor who wants it sold as soon as possible.

Mutual Bancompany of Jefferson City, Mo., has received two letters from the professional, Jerome H. Davis, urging the $57 million-asset thrift to consider selling. Mutual has responded only by acknowledging receipt of the letters - the latest letter was on Oct. 4.

Mr. Davis' strategy as a professional depositor is to open an account in a mutual thrift, push for a conversion, buy its new stock - often more than a 5% stake - and then push for a sale to a larger company.

Mr. Davis and his wife, Susan, own 9.4% of Mutual's stock.

Mutual's management has "an inherent conflict of interest with shareholders," said Mr. Davis' attorney, David M. Perlmutter. "They may well lose their jobs by selling, but they have the duty of doing what's best for shareholders. One way to do that is selling and knocking out that whole level of bureaucracy."

Mutual, which just went public last January, has had one board meeting since Mr. Davis first made his desires known in August. Its next regularly scheduled meeting is on Oct. 18.

"They've had an opportunity to review the letters," said Dale Smith, Mutual's vice president and treasurer, "and I have no idea what they may decide to do - they have taken no action to date." Regulations require that a thrift cannot sell until at least one year after the date it converts from a mutual to a stock institution. Thus Mutual cannot do anything until February, but Mr. Davis wants the company to begin looking into possibilities now. …

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