First Federal in Ohio to Form Holding Company for Potential Acquisitions

Ohio's largest mutual bank is planning to form a holding company to position itself for acquisitions and other growth opportunities.

First Federal Lakewood, which isn't looking to sell stock, is keen on rolling up other mutuals. Most mutual thrifts want to remain independent, "but it's getting harder to absorb the costs," Thomas Fraser, First Federal's president and chief executive, said in an interview. Joining together under a single holding company would permit mutuals to spread costs over a larger asset base and improve product offerings, he said.

"We are proud to be an independent mutual bank and have no plans to convert to a stock company," Fraser said. "We hold sacrosanct the rights of our depositors."

A handful of mutuals have recently shown a willingness to form holding companies. Earlier this month, Provident Bank in Amesbury, Mass., and Cincinnati Federal Savings and Loan Association announced plans to form mutual holding companies and sell minority stakes to investors.

The $1.6 billion-asset First Federal hopes to have its holding company, tentatively named First Mutual Holding, in place by mid-summer, Fraser said.

In February, two Maine mutuals, the $383 million-asset Biddeford Savings Bank and the $370 million-asset Mechanics Savings Bank, agreed to form a holding company, Maine Mutual Bancorp. In that case the banks plan to keep separate charters and identities.

Fraser declined to discuss First Federal's specific acquisition plans. "This is a chance for mutuals to work together and stay strong," he said.