Flushing Savings Bank has filed an application with regulators to combine with its subsidiary, Flushing Commercial Bank, under a New York commercial bank charter.
The move would change the $642 million-asset Flushing Commercial's charter from a limited purpose commercial bank to a full-service one. Flushing Savings would convert from a federally chartered thrift to a New York state chartered commercial bank.
The combined bank would operate under the name Flushing Bank, Flushing Financial (FFIC) in Lake Success, N.Y., said Thursday. Flushing Financial is the parent of the $4.4 billion-asset Flushing Savings.
The company has been preparing to transition to a commercial bank for several years and the charter change would streamline operations, resulting in more than $800,000 in annual savings, John R. Buran, president and chief executive of Flushing Financial, said in a news release. The bank also would benefit from oversight by the New York State Department of Financial Services, "which is focused on the local community banks and financial institutions," Buran said.
Flushing Savings filed the application with the New York State Department of Financial Services and has filed a notice of the proposed consolidation and charter change with its primary federal regulator, the Office of the Comptroller of the Currency. It also filed an application about the combination with the Federal Deposit Insurance Corp.
Flushing Financial plans to file an application with the Federal Reserve to change from a savings and loan holding company to a bank holding company.
Flushing Savings, founded in 1929, had been a New York state-chartered savings bank until it switched to a federal charter in 1994 to convert from a mutual to a stock company. The company established its commercial bank in 2007.
The change is expected to be completed in the fourth quarter or in the first quarter of 2013. The New York State Department of Financial Services and the FDIC would be the primary regulators for Flushing Bank. The Fed would remain as the primary federal regulator for Flushing Financial.
A growing number of banks, including several in New York, have moved to switch from federal charters to state ones. Banks often cite the ability to reduce examination costs and a desire to be closer to their primary regulator as the reason for the change.