Jeffersonville Bancorp (JFBC) is set to become the latest New York company to exchange the federal charter of its bank for oversight by a state regulator.
The $441 million-asset company said Friday that the conversion of First National Bank of Jeffersonville will take place next week. The company also plans to change the bank's name to me Jeff Bank.
The bank expects some annual cost savings from the conversion, Jeffersonville Bancorp said. After the switch, the New York State Department of Financial Services and the Federal Deposit Insurance Corp. will become the bank's primary regulators. The Federal Reserve Board will remain the primary regulator for the holding company.
"We believe the Bank will benefit from the insight and oversight of the [state regulator], which is focused on local New York community banks and financial institutions," Wayne Zanetti, Jefferson Bancorp's president and chief executive, said in a press release. "We anticipate that the regulatory oversight …will be similar to what we have received from our federal regulators in the past, but with a more local orientation."
A growing number of banks, including several in New York, have moved to switch from federal charters to state ones. Banks often cite the desire to be closer to their primary regulator and the chance to lower examination costs as reasons for the change.