Malvern Federal Bancorp Inc.'s stock price soared to its highest level since mid-summer Wednesday after the Paoli, Pa., company announced that it is converting from a mutual holding company to a 100% stock-owned company.
In a news release late Tuesday, the $667 million-asset company said it has filed an application with regulators to sell the 55.5% of its shares now owned by the holding company to the public sometime during the fourth quarter of this year. The company said that an offering price would be determined based on independent appraisal of its value and overall interest from investors.
Malvern's thinly traded shares were up nearly 19% midday Wednesday, to $7.40, on news of the conversion. It is the first time the shares have traded above $7 since August.
Malvern President and Chief Executive Ronald Anderson said in Tuesday's news release that the company made the decision to pursue a second-step conversion "after giving particular consideration to the current capital levels...as well as the increased risk profile of the bank in recent years."
Though the company remains well capitalized in the eyes of regulators, its capital levels have declined of late as loan losses have piled up. Malvern lost $6.1 million in the fiscal year that ended Sept. 30, nearly twice what it lost in the prior fiscal year. Its total risk-based capital to assets ratio at Sept. 30 was 12.01%, down 84 basis points from a year earlier.
Malvern is one of several mutual holding companies to recently
