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TFS Financial announced dividend plans recently that have many wondering whether it is headed toward a second-step conversion in the near future. The speculation makes sense, but the Cleveland company would face some obstacles.
July 3 -
Birds, hot tubs, carousels and more. These are among the images that Beneficial Mutual in Philadelphia used in creative ads to promote financial education and attract customers.
October 3 -
Beneficial Mutual Bancorp in Philadelphia is the subject of a governmental investigation into its residential real estate lending.
April 25
Beneficial Mutual Bancorp's long-awaited announcement came Thursday: the Philadelphia-based mutual thrift
Though the move had been expected eventually, the timing was unclear given market conditions and a government investigation of the $4.4 billion-asset company. It announced a year ago that
"Following the recent closure of the fair lending investigation we have evaluated market conditions and the changing regulatory environment, particularly the impact of regulatory change on mutual holding companies, and we believe it is in the best interests of both the company and our stockholders to move forward with our conversion," the board said in a press release Thursday.
Conversions, and speculation that more mutuals will make the move, have been big news in recent years.
Under the so-called second-step conversion, Beneficial's holding company would sell its majority ownership in the thrift to the public. Beneficial would then reorganize as a fully public-stockholder company. Stock held by current shareholders other than the mutual holding company is to be converted into shares of the new company at an exchange rate meant to preserve their current level of ownership, the release said.
Also, depositors in the Beneficial Bank unit with qualifying deposits as of June 30, 2013, will have first priority to purchase shares of the new company.
The conversion plan includes a $1 million contribution to The Beneficial Foundation, a charitable organization.
The conversion "will provide us with additional capital to pursue our strategic and growth objectives," Gerard Cuddy, Beneficial's president and chief executive, said in the release.
Depositors, existing shareholders and the Federal Reserve Board must approve the plan.
Beneficial reported net income in the first half of the year of $7 million, up 15% from the same period a year earlier.
Beneficial Bank was founded in 1853. It has 58 branches in greater Philadelphia and southern New Jersey.