Still groggy after an all-night negotiating session, an exhausted Benjamin A. Plotkin said he only had a few minutes to talk.

But the subject was mutual holding companies, and soon, Mr. Plotkin was in the midst of an enthusiastic lecture on the ins and outs of an increasingly common, though controversial, method of raising capital.

Despite fierce regulatory and shareholder resistance, Mr. Plotkin, president of Community Capital Group, a division of Ryan, Beck & Co., has established mutual holding companies as a realistic alternative to full stock conversion for mutual thrifts.

A gentle, soft-spoken man, Mr. Plotkin is a patient salesman with none of the usual investment banker glitz.

A veteran of the banking industry, he began his career working for the Federal Home Loan Bank Board in the late 1970s, and later became a Washington thrift and bank lawyer. For the last seven years he has worked for West Orange, N.J.-based Ryan, Beck, establishing the firm as one of the leading M&A advisers to community banks.

As Mr. Plotkin explains it, the mutual holding company occurs when a mutually-owned thrift converts to stock ownership with an initial public offering of shares, the majority of which are owned by a newly created holding company. The new holding company is controlled by the mutual's management.

The structure allows a mutual savings association to enjoy the benefits of issuing equity, while maintaining the control that would 'be relinquished in a full stock conversion, Mr. Plotkin said.

"Companies want to have control over their destiny," he said. "Given current market conditions, it is relatively likely that if you do a full conversion shareholders may want a subsequent acquisition."

The mutual holding company avoids another pitfall of going public, Mr. Plotkin said, noting that full stock conversion sometimes results in excess capital, making it difficult to produce an acceptable return on equity.

Prior to 1992, he said, only People's Bank in Bridgeport, Conn., had mutual holding company status. Today there are 37 mutual holding companies in 22 states controlling roughly $17 billion in assets.

Mr. Plotkin had a hand in creating 68% of those mutual. holding company thrifts trading on Nasdaq and roughly one-third of all such companies.

Most mutual thrifts - there were 1,600 fewer than 10 years ago - have chosen to convert to full public status. These companies often are acquired soon after conversion.

But in a mutual holding company deal, the maximum amount of stock that can be issued to the public is 49.9%, with the remainder 'controlled by the holding company.

And because minority shareholders have no voting rights, acquiring the bank is virtually impossible. This is a redeeming feature for mutuals that wish to continue serving the local community, but a negative for shareholders seeking takeover premiums.

"We would have been a sitting duck," said Thomas Brown Sr., CEO of Harbor Federal Savings Bank in Ft. Pierce, Fla., describing what would have happened if Harbor had issued all its stock, instead of converting to a mutual holding company last January.

In 1992, 12 mutual thrifts became holding companies, and another 12 made the move in 1993. This year another dozen have already converted. And Mr. Plotkin said he is working on at least seven other deals.

"What sparked it in 1992 was a more open regulatory approach toward these types of transactions, a strong equity market, and professionals pointing out some of the benefits of the mutual holding company approach," he said.

The Office of Thrift Supervision issued a white paper earlier this year questioning who owns a mutual's equity - the depositors or management spurring more thrifts to turn corporate as soon as possible.

There are 758 mutual savings association left in the United States today, with assets in excess of $50 million. This could be fertile ground for Mr. Plotkin as mutuals straggle with the dual goals of independence and capital needs.

Indeed, Ryan, Beck plans to highlight mutual holding companies at an investor conference in New York next month, believed to be the first conference of its kind.

But there are some significant obstacles.

Detractors ask why investors would be interested in a company that grants them no voting rights and is takeover-proof.

"No one among us can figure out why anyone would buy into a situation where they have a permanent minority status," said Samuel J. Beebe of Robert W. Baird & Co., a Milwaukee-based investment firm. "They are saying basically, 'Give us your money but after that we don't want to ever hear from you on how to mn the thrift.'"

Other analysts have derisively called mutual holding companies a legal concept, and not a product of investment banking - perhaps a dig at Mr. Plotkin, who has a law degree, but not a business degree.

Since 1993, however, mutual holding companies listed on Nasdaq have appreciated on average 65% from their initial public offering price, while fully converted thrifts have appreciated 57.5%, according to Ryan, Beck.

"Originally many people said they would not work because there would be nobody to buy the stock," Mr. Plotkin said. "The results are the best proof that investors love this transaction."

Mr. Beebe conceded the stocks were sound performers and often oversubscribed - but attributed the ron-up to the general surge in thrift stocks caused by takeover speculation.

Mr. Beebe and other critics prefer ordinary thrifts to hybrids, arguing that a thrift with no takeover strings attached is better than one with strings. This is why institutional investors have stayed away, the critics say.

But mutual holding companies' biggest problem is not investors and shareholders, but Washington regulators, who already have put a moratorium on so-called "merger-conversions."

Merger-conversions are full mutual conversions where the new thrift agrees to be acquired before its stock become public. In the past, .some mutuals were granted sweetheart deals to entice their boards' approval, but depositors failed to reap rewards they should have been entitled to as owners.

Federal and state regulators are now closely scrutinizing mutual holding company conversions to see if similar problems exist.

In Pennsylvania, four proposed conversions to mutual holding company status were scuttled earlier this year. The banks abandoned their plans, complaining that federal and state regulators would not allow the change.

Why even try to convert when regulators are just going to say "no," complained George Hartman, CEO of Sewickley Savings Bank, one of the four banks.

Home Financial Corp., which had been the mutual holding company for Hollywood, Fla.based Home Savings Bank, cited federal regulations in its decision earlier this year to convert from a mutual holding company to a full stock thrift, the first switch of its kind.

Two other mutual holding companies have since announced plans to fully convert, Mr. Plotkin said.

And now, even the courts are getting into the act.

Last week a federal judge ruled local depositors could not be given preference in buying shares of the convened mutuals, which is an underlying tenet of keeping the institutions in-the community - and speculators out.

While the judge's ruling focused on the comment period the OTS had provided in the case in question, some pending mutual holding companies could be delayed as a result.

Nonetheless, Mr. Plotkin continues to plow forward, carrying his gospel to those who will listen.

Mr. Plotkin is known in some circles as the father of mutual holding companies, but the moniker is technically inaccurate, Mr. Brown of Harbor Federal said.

The People's Bank conversion in 1988 occurred well before Mr. Plotkin took up the holding company mantle, Mr. Brown explained.

"The prophet of mutual holding companies," would be a better description, said Mr. Brown, who first learned about mutual holding companies two years ago at the Florida League of Savings Association annual meeting where Mr. Plotkin spoke.

Over the next year, the two negotiated Harbor Federal's conversion, and completed the initial public offering in January.

"He did not take a high-pressure approach, which I appreciated," Mr. Brown recounted of Mr. Plotkin.

"But I am sure whenever he left here that year, he must have pulled out what little hair he had left."

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