Mass. mutual planning second-step conversion
Nearly four years after completing its initial stock conversion, Provident Bancorp in Amesbury, Mass., is looking to finish the job.
The $1 billion-asset Provident said in a press release Wednesday that it plans to sell the remaining 52% stake held by its mutual holding company. It has yet to conduct an independent valuation, so it’s still unclear how many shares will be offered or how much money will be raised.
The company plans to use the cash raised to enhance its capital position, improve the liquidity of its shares, start paying dividends and “facilitate future mergers and acquisitions.”
Provident was founded in 1828, making it the nation's 10th-oldest active bank. It brought in $44 million in capital from the first-step conversion, which closed in July 2015. First-step conversions result in the sale of a minority stake to investors. They preserve an institution's mutual character, since the majority of shares remain under corporate control.
A strictly residential lender for most of its history, Provident began lending to businesses in the late 1990s and has grown its commercial-and-industrial portfolio significantly since. C&I loans comprised 43% of its $848 million loan portfolio at Dec. 31; residential and consumer loans had shrunk to just 9%.
The conversion plan is subject to approval of Provident’s shareholders and the corporators of its mutual holding company, as well as the Federal Reserve and the Massachusetts Division of Banks.