Greenfield-based PyraMax Bank has filed with regulators to convert from a mutual savings bank to a mutual holding company and stock issuance plan.
The company announced last week it has submitted documentation to the SEC, the Office of the Comptroller of the Currency and the FDIC to become a two-tier mutual holding company. It also plans to offer 3.3 million shares of stock at an initial value of $10 per share, which would raise up to $32.7 million.
Richard Hurd, president and chief executive officer of PyraMax, expects the offering to raise about $26 million.
PyraMax has formed a new parent company, 1895 Bancorp of Wisconsin Inc. PyraMax Bank FSB 401(k) savings plan participants can invest up to 50 percent of their accounts in shares of common stock of 1895, according to an SEC filing.
As part of the reorganization, PyraMax will also form a charitable foundation. The purchasers in the offering and the charity will own 45 percent of 1895 Bancorp of Wisconsin Inc. and the mutual holding company will own 55 percent of the outstanding shares.
The charity will be capitalized with 1 percent of the shares sold, Hurd said.
The board of directors of PyraMax approved the plan of reorganization on Sept. 5.
In its filing, PyraMax explains that the primary reason for the reorganization is to allow the bank to expand in the financial services marketplace.
“We’re in a good position. We’ve been growing the bank. We’ve started to emphasize commercial lending more than we have in the past,” Hurd said. “We have adequate capital, but if we want to grow, we have to raise more capital.”
It also gives PyraMax a chance to reward long-term depositors by providing an equity stake, he said.
The SEC will now have 60 days to review PyraMax’s filing, and if all remains on schedule Hurd expects to mail a prospectus to the bank’s depositors by mid-November.
PyraMax has been increasing its emphasis on commercial lending as it seeks to increase its size and reach. It also has about $100 million in mortgages in its portfolio.
“For us, we feel (commercial is) the way to grow. You get the opportunity to serve more people that way,” Hurd said. “Our business model has changed from the old thrift model to a commercial community bank.”
PyraMax, established in 1895, has 132 employees at nine locations in the Milwaukee area. It has about $480.3 million in assets. It reported a net loss of $323,000 as of June 30 in its most recent report to the FDIC.
