Michael J. Brown Sr. is relishing the good times at Harbor Federal Savings Bank: Solid earnings, a booming stock price, newfound attention from analysts, and speculation about future plans.

Not bad for a thrift that suffered through a savings and loan crisis that brought it to the brink of failure.

"There were some nights you didn't sleep so well thinking, 'How am I going to go to work tomorrow?'" said Mr. Brown, the thrift's president and chief executive officer. "It's a very humbling experience."

That has all changed since Harbor Federal made a strong comeback in 1992. Since then, the 60-year-old thrift has become a major player in several south Florida counties, raised $22 million in an initial public offering two years ago, and is slowly becoming a favorite among Wall Street analysts.

Harbor Federal has managed to raise capital and grow by becoming one of only 36 mutual holding companies in the country. Its experience shows how that structure is helping small thrifts keep local control and garner profits and public attention without completely shedding their heritage of mutual ownership.

"We had been one of those dyed-in-the-wool mutuals," Mr. Brown said. "Our board and myself held off on converting, feeling it would be tantamount to a takeover ... But I think we found being a publicly owned company isn't that bad."

The "elite" mutual holding company structure, as some have termed it, permits a thrift to sell a minority stake to investors to generate capital, while leaving majority control in the hands of the mutual parent.

Harbor Federal chose this relatively new route in January 1994, selling 2.2 million shares to public investors, or about 46% of the company's stock. Since then, the thrift's stock has soared from its initial public offering price of $10 to $34.625 at midafternoon on Friday.

"This is a quality company - they're whistle-clean," said Laurie Havener Hunsicker, a thrift analyst at Friedman, Billings, Ramsey & Co. in Arlington, Va. "When you look at this company simply from an operating standpoint, it's exceptional."

Now, it's among the leaders of the pack. Harbor Federal, fourth largest of the 36 mutual holding companies, reported a return on equity of 13.03% at midyear, compared with the group average of 7.54%. Its return on assets was 1.17%, compared to a group average of 0.83%.

Ms. Hunsicker is now among several analysts wondering whether the $1 billion-asset thrift will take the final plunge - and convert its mutual holding company to a public stock company.

Mr. Brown said there are no current plans to do so, however, because such a move would give the thrift a capital ratio of more than 14%. But he's not ruling it out, especially if mutual holding companies should start to disappear. "I'm not sure I'd want to be the last one," he said.

Not one to be left behind by new developments, Harbor Federal in the meantime is seeking approval to create a two-tiered holding company structure. This new concept would create a publicly traded holding company above the thrift subsidiary, but owned by the mutual holding company.

Among other things, that would allow Harbor to complete a stock buyback that is otherwise restricted to public companies, giving it the best of both worlds.

"We could have continued as a mutual," adds Harbor Federal chairman Edward G. Enns, who was elected mayor of Fort Pierce last month. "This gave us an opportunity to step out into the real business world and really show what we're made of."

Despite the changes in corporate structure and success on Wall Street, Harbor Federal hasn't really altered the way it operates or the way it looks.

The thrift, which has 23 branches in six counties, maintains its hometown focus in blue-collar Fort Pierce. Its primary business is still residential mortgages, and it has a deposit market share of almost 19% in its home county of St. Lucie.

"We focus on our little part of the world and do it well," said Mr. Brown, a transplanted midwesterner who has been at the helm for 20 years.

Fort Pierce is a waterfront working class town situated between two of south Florida's more affluent beach communities, Vero Beach and Palm Beach.

Harbor Federal's market includes some of the fastest growing areas in the nation, with a constant need for new housing. In fact, that's what drove earnings and growth at the thrift and other area financial institutions for years.

When that local real estate market collapsed in the early 1990s, the thrift faced hard times. Mr. Enns said that the thrift's management - seeing an erosion in credit quality - temporarily put an end to commercial real estate lending and started selling off bad assets.

Since its nadir in 1991, Harbor Federal has cut back its nonperforming assets from 11% of total assets to a current 0.50%. And the thrift earned $8.6 million in the third quarter - about $11.5 million before the special assessment for the Savings Association Insurance Fund.

Management has insisted on keeping costs low as well. For example, the conference room at the thrift's headquarters still has a faux-wood table top that dates back to the 1970s. And Mr. Brown said competitors poke fun at Harbor Federal's headquarters because it hasn't been remodeled in years.

But Vernon Smith, president and chief executive of rival Riverside National Bank, the dominant Fort Pierce institution, said he's envious of Harbor Federal's low overhead. Harbor Federal's overhead is less than 2.5% of assets, while Riverside's is about 3.3%. "I think it's great to be frugal," Mr. Smith said.

Now, Mr. Brown said Harbor Federal's biggest challenge is to keep up with the technology. He hopes to offer services through the telephone and computer.

However, he said that Harbor Federal will remain a community bank that focuses on personal service. And he hopes that the branch system never becomes obsolete. "If it gets to that, I'm in trouble," Mr. Brown said.

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