Times are truly changing for mutuals.
With absolutely no fanfare, Citizens Savings Bank, a $230 million-asset mutual in Normal, Ill., has revealed its intention to convert to stock form next April. With so many mutuals converting across the country, that wouldn't normally be so unusual.
Except that Citizens' president and chief executive, C. William Landefeld, has been a strong defender of mutuality and an advocate of its protection by Congress. And he's also the first vice chairman of America's Community Bankers, scheduled to take over as the group's leader next fall.
"Some people would probably think I'm talking through both sides of my mouth, but I have no problem in speaking about the mutual form of charter," Mr. Landefeld said, noting that Citizens has been mutual since it was founded in 1888.
"When I spoke for mutuals it came from the heart, because I really do believe in that corporate structure and what they're trying to accomplish in the financial arena," he said. "I think the mutual association probably does a better job in meeting what I would call its community bank role."
The Thanksgiving Day announcement has caught some of Mr. Landefeld's colleagues flat-footed.
"I never expected to see that," said Donald S. Glass, president of the Community Bank League of New England, which comprises mostly mutuals. "I wonder what he was doing at the front of the room espousing all the reasons why institutions should remain mutual? I'd be surprised if there weren't some chins dropped at that one."
In fact, Mr. Landefeld explained, the directors of Citizens have actually been discussing a conversion for several years, "just like most mutual boards."
"It was eventually something that we would probably do, but were not intending for another three to five years," he said. "The timeframe to do it was just shrunk from three to five years to 18 months, or even less than that, because of what's happening in Washington."
In particular, Mr. Landefeld said, Citizens' directors and management were concerned about the future of the thrift industry and mutuality, and worried that the Office of Thrift Supervision might be eliminated. That would leave the federally chartered thrift without its "user-friendly regulator," especially if it converted to a state charter to remain mutual, he said.
Mr. Landefeld admits that some of his colleagues' reactions could be "initially one of disappointment that I am converting," but expects there will also be "understanding why I'm doing it at this time vis-a-vis three to five years from now."
