One of the mutual thrift industry's biggest cheerleaders is taking the plunge into the stock market.

Lockport Savings Bank, a 147-year-old mutual thrift in Lockport, N.Y., is adopting a two-tier mutual holding company structure. The $1.5 billion- asset thrift is one of an increasing number of mutual institutions that are shedding at least part of their private status.

"It's a much more flexible way of being structured," said William E. Swan, Lockport's chief executive officer and president.

Mr. Swan, a strong proponent of the benefits of mutual ownership, said forming a mutual holding company is a natural extension of the cooperative form of ownership.

Mr. Swan said he has no inclination to fully convert to a public company, although many thrifts that convert to two-tiered mutual holding companies go public within a short time.

The two-tier mutual holding company structure allows the thrift to sell a minority stake in a mid-tier holding company.

The majority of shares in the publicly traded mid-tier holding company are owned by the mutual holding company, which is owned by the thrift's depositors and governed by a board of trustees.

A 49% stake in the mid-tier holding company, to be called Niagara Bancorp, will be offered first to depositors with balances greater than $100 on Aug. 31.

Nationwide, the number of state and federally chartered mutual thrifts has declined from 51, with $17.5 billion of assets, in 1992 to 30, with $4.5 billion of assets, in 1997, according to the Office of Thrift Supervision.

Lockport expects to complete its conversion during the first quarter of 1998. Mr. Swan said keeping control in a mutual holding company will help fend off acquirers.

"The mutual holding company gives you the best of both worlds," Mr. Swan said. "The minority shares allow customers and employees to become owners, and you can secure your independence."

Mr. Swan also said the conversion will give the thrift more leverage when negotiating to acquire smaller banks because such purchases could be structured as stock swaps.

Moreover, smaller banks can remain independent subsidiaries of the mutual holding company rather than being completely dissolved into the larger thrift, Mr. Swan said.

"We have our eyes open," he said. "If there are like-minded organizations out there, it could be a possibility."

Kevin Timmons, a bank analyst at First Albany Corp., said he expects the initial stock offering to be popular with thrift depositors.

"They have always been very community-oriented," he said, "so I expect their stock will be well received there. Typically, thrift conversions have been very successful for investors."

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