WASHINGTON - The Office of Thrift Supervision approved a complex, multistep merger Friday that is to create a $2.6 billion thrift company in Wisconsin.

The decision clears the way for Mutual Savings Bank of Brown Deer to form a mutual holding company and create a stock holding company that will, in turn, acquire First Northern Savings Bank of Green Bay.

Mutual Savings, with $1.7 billion of assets, and First Northern, with $905 million, are to convert from state to federal charters and operate separately.

Mutual Savings is to own more than 50% of the stock holding company's shares. Another 24% are to be offered to First Northern shareholders. The rest will be offered by subscription, starting with eligible account holders, at $10 per share.

Each share of First Northern stock is to be converted to a right to receive $15 cash, 1.5 shares in the stock holding company, or a combination of cash and stock.

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