Mutual thrift executive William E. Swan has heard all the words used to describe mutuals-"dinosaur," "dying breed."

But at a recent conference in Boston, Mr. Swan, chief executive officer of New York's Lockport Savings Bank, stood before a dozen bank and thrift executives and gave an impassioned defense of "mutuality," calling it among the most "misunderstood and maligned forms of banking" around today.

Mr. Swan and other mutual thrift executives are increasingly called upon to explain and defend their ownership structure in an industry that appears to be leaving it behind.

James Tumbleson, president and chief executive officer of Mansfield Cooperative Bank in Massachusetts, a state that's one of the last bastions of mutual financial institutions, said his thrift intends to remain a mutual as long as possible. He said it has sufficient capital and wants to maintain its autonomy.

"You don't have to look to the bottom line every quarter and worry about the profits," Mr. Tumbleson said, expressing a sentiment echoed by other thrift executives there. "The other thing is, you control your own destiny."

Though stock conversions continue to whittle away the number of mutual thrifts, Mr. Swan expressed confidence that those remaining will stay strong because of a need for what he considers true community banking: banks owned and run by community members.

"I think the public relates to the mutual organization as being a real, true community bank," Mr. Swan said. "We like being an independent entity. We're sort of an enigma in western New York."

But such independent sentiments are at odds with the current trend. Mutuals are converting to stock form-or the intermediate mutual holding company form-at a steady pace.

Fifty-four conversions last year by federally chartered mutuals brought the total of federal mutual institutions down to 653 on Dec. 31, from 1,817 at the end of 1972, according to the Office of Thrift Supervision. Data on state-chartered mutual savings bank conversions were not available.

Even Mr. Swan admits to feeling more and more lonely.

"What is left we are losing," Mr. Swan said. He added, however, "That doesn't mean that those who are here aren't successful. I think every mutual would say ... 'Let us do our thing until we want to do something else.'"

In the past two weeks, two of the largest remaining mutual thrifts, $1.85 billion-asset Staten Island Savings Bank and $3.7 billion-asset mutual holding company Independence Community Bank Corp., have announced they will convert to stock form. Both had been staunch proponents of the mutual system.

"Realistically, you're looking at a dying breed," said Harry Doherty, chairman and chief executive officer of Staten Island Savings. "You have multiple conversions, but you don't have any new mutuals coming in."

However, officials of America's Community Bankers, the main trade group for mutual thrifts, said the industry would get new members from an expected wave of federal credit union conversions. Three federal credit unions are already making the switch.

Some longtime mutual thrifts say independence is a major priority, especially as merger and acquisition frenzy sweeps the banking industry.

"Some parts of the community prefer not to deal with regional or multistate institutions," said Lee Beard, president and chief executive officer of First Federal Savings Bank in Hazleton, Pa. "By being mutual ... we will continue to be community-based, in terms of ownership."

In Massachusetts, about 180 mutual institutions make up 65% of the banking industry. That's the largest collection of mutuals in the nation. Local bankers say there's little doubt about the future of these institutions.

"They are clearly a vibrant force here," said Daniel J. Forte, president of the Massachusetts Bankers Association. "They really have been the bedrock of community banking here in Massachusetts."

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