A small North Carolina thrift planning to go public this month has dropped a local-depositor provision from its application to the Securities and Exchange Commission.
Landis Savings Bank announced last fall that it was converting from a mutual thrift to a stockholder-owned commercial bank. To ensure that the 84-year-old institution remained in friendly hands, the board of directors adopted a plan giving local depositors preference in buying the company's stock.
That plan, however, angered some large, out-of-state depositors who argued that the provision essentially barred them from buying Landis Savings stock. Also, the Federal Deposit Insurance Corp. told the bank's directors that the dispute could delay the commercial bank application, leading to the decision to drop the provision.
"It wasn't worth the fight," said Tony Gaeta, a Raleigh, N.C., attorney representing $24 million-asset Landis Savings. "It's expensive enough just going through the conversion process. We didn't want to add any more legal costs."