Second Shoe Drops for Credit Union Convert

WAYCROSS, Ga. – Converted credit union Atlantic Coast Federal Bank announced yesterday it plans to raise up to $200 million with the conversion from a mutual holding company to a stock holding company–the second step of a so-called two-step conversion from mutual savings bank. The ex-credit union plans to convert existing shares in the mutual holding company to shares in the new corporation, and sell as many as 20 million new shares to the public at $10 each, according to a filing with the Securities and Exchange Commission. The credit union-convert sold 37% of the ownership in the holding company in an initial public offering in October 2004 which raised $52 million. The bank was chartered as Atlantic Coast FCU in 1939 to serve employees of Atlantic Coast Line Railroad, then converted to a mutual savings bank in 2000. The second-step offering is being underwritten by Ryan Beck & Co., the Wall Street investment bank, which stands to earn as much as $1.6 million in fees from the transaction. Separately, another former credit union, Covina, Calif.-based K-Fed Bancorp., known until 2000 as Kaiser FCU, said it board voted Tuesday to convert from a mutual holding company and to undertake the second step of a two-step conversion.