Wells Financial in Minnesota has completed its purchase of St. James Federal Savings & Loan Association, in a deal closely watched by members of the mutual bank community.

The $252 million-asset Wells on Thursday closed its acquisition of the $27 million-asset St. James. Depositors of St. James on June 19 voted to approve the conversion of the St. James, Minn.-based institution from a mutual to a stock-owned bank. The conversion was required for St. James to be purchased by Wells.

To help finance the deal, Wells raised $2.15 million in a common stock offering; it sold the shares to St. James' depositors and to other members of the community. However, Wells paid only $1,000 to acquire St. James.

Douglas Faucette, an attorney at Locke Lord who advises mutuals, said that if the deal closed, it would send a troubling message that mutuals are under so much pressure that they are willing to sell for next to nothing.

Sterne, Agee & Leach was financial adviser to Wells and Jones Walker was its legal counsel. Lindquist & Vennum was legal counsel to St. James.

In a separate announcement last week, Wells said that Dale Stallkamp, a director since 1999, resigned on July 13. Wells did not provide a reason for Stallkamp's resignation or if it has named his replacement.

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