After two false starts, Chicago's Avondale Federal Savings Bank has received a green light to convert to a stock institution.
The $460 million-asset mutual savings bank got the go-ahead from the Office of Thrift Supervision to offer up to $36.8 million in common stock.
The offering by the proposed holding company, Avondale Financial Corp., will commence later this month, with the stock slated to trade in the Nasdaq over-the-counter market.
Avondale's road to public ownership has been bumpy.
Last year, the thrift terminated a controversial merger-conversion deal and later saw its application for a standard stock conversion delayed until after a Community Reinvestment Act examination.
Avondale executives are clearly pleased by the latest development.
"I think we're well situated to take advantage of the capital we're going to raise and continue to build the organization," said Robert S. Engelman Jr., president and chief executive.
Customers, employees, and directors will get the first shots in a subscription offering. Remaining shares will be offered to the general public.
The company's directors and executive officers said they intend to purchase about $1.4 million in stock.
Avondale's conversion attempts began in August 1993, when it announced a merger-conversion deal with Central Resource Group Inc., Des Moines. Avondale would have been acquired by CRG's Midland Savings Bank as it converted to stock.
Some Avondale depositors, however, complained they would lose money in the deal, while management would profit. The Office of Thrift Supervision heard oral arguments from both sides during a closed session in December 1993.
Although OTS approved the deal in March 1994, the companies terminated the agreement in June, citing improved performance at both thrifts and changes in merger-conversion regulations.
Avondale then announced plans for a standard stock conversion, but its application was delayed last August pending the outcome of a CRA exam.
The thrift had received "needs to improve" ratings in 1992 and 1993, after getting the lowest rating, "substantial noncompliance," in 1991.
It received a "satisfactory" rating in the 1994 exam, said Mr. Engelman.