Second-Shoe Drops: CU-Convert Sheds Mutual Structure

WAYCROSS, Ga. – Atlantic Coast Bank, the former Atlantic Coast FCU, announced yesterday it is leaving behind its mutually controlled format and becoming a fully public company. The former credit union is currently 64% owned by a mutual holding company and plans to raise millions of dollars of new capital with the sale of enough shares to put the majority of shares in public hands, the company reported yesterday. The second step of the so-called two-step conversion must be approved by federal regulators at the Office of Thrift Supervision and by the company’s shareholders, which are controlled by the management by virtue of the mutual holding company structure. The ex-credit union was chartered in 1939 to serve employees of Atlantic Coast Line Railroad, then converted to mutual savings banks in November 2000, before floating 36% of the stock in an initial public offering in October 2004 that raised more than $50 million. The credit union convert said it will give its depositors first chance to buy the new shares. Atlantic Coast’s shares traded up almost 3% yesterday to close at $19.72, almost twice the IPO price.