Magazine article American Banker

More Thrifts Converting to Stock Form as Values Soar

Magazine article American Banker

More Thrifts Converting to Stock Form as Values Soar

Article excerpt

More Thrifts Converting to Stock Form as Values Soar

Thrift conversions to stock ownership, once limited to very large savings and loans, are now occurring "across the board' and the conversion values are increasing, said a savings industry accountant.

A disproportionate number of the thrifts converting to stock from mutual associations have occurred in the Northeast and Middle Atlantic regions, said Gary Scott, a partner in the Miami office of Deloitte Haskin & Sells and a member of the accounting firm's financial institutions task force.

In the mid-Atantic region, 37 thrifts converted to stock associations from mutuals, while 39 northeastern thrifts converted to stock form, including 18 in Massachusetts and 20 in Florida, Mr. Scott this week told the Key Issues Clinic for the Financial Managers Society, the professional group for financial business executives.

The value of the conversions also has increased, he said. The 11 conversions in the first half of 1985 averaged 76% of book value, while the 22 conversions in the last half averaged 110% of book value. The values of the 22 conversions during the first half of this year soared to 214.4% of book value, said Mr. Scott.

Most of the conversions have been standard ones, but the Federal Home Loan Bank Board is making it easier for institutions to qualify for modified or voluntary conversion, he said. Relatively few modified conversions, which are more for financially troubled institutions, have been done because the bank board keeps changing the regulations, he explained. …

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