Former Credit Union OmniAmerican Hits the Market With an IPO
A credit union that fought the NCUA to become a mutual bank in 2005 has moved on to become a stock-issuing bank.
In 2005, Plano, Texas-based OmniAmerican Bank, then OmniAmerican Credit Union, joined with Dallas-based Community Credit Union (now Viewpoint Bank) in a legal battle with the NCUA over some of the details of their attempts to convert to mutual bank charters. Court decisions favored the credit unions, and both started doing business as banks in 2006.
Community Credit Union took the additional step to move to a mutual holding company structure and issued a limited amount of stock soon after completing its bank conversion. But OmniAmerican held back from that step, hampered in part by a leadership change after its longtime CEO Larry Duckworth, the man who had led the credit union through the charter change, died of a heart attack in February 2007. Now, it too has joined the ranks of former credit unions that have issued stock.
OmniAmerican started trading under the symbol OABC on the NASDAQ on Jan. 21. Under the bank's plan of conversion for the stock offering, OmniAmerican depositors, bank board members and executives were offered the opportunity to purchase shares in the bank for $10 per share. The shares opened at $12.00 on Jan. 21 and began falling immediately, closing as of press time at $11.55.
OmniAmerican broke with the previous trend among former credit unions turned banks when it converted to a fully stock-issuing bank. Under the mutual holding company structure that Community and other former credit unions chose to use to issue stock, the bank is owned by a mutual holding company, which then usually issues about 45% of its equity as stock. Under this structure, the bank remains owned by its depositors who have voting rights in the institution. In a straight stock issuing institution, the bank is owned by its shareholders who may or may not be its depositors.
"The overwhelming response to our initial public offering has been very encouraging and, in light of the current economic conditions, is a testament to the faith that our members have in the OmniAmerican leadership team," said Tim Carter, president/CEO of OmniAmerican Bank. "We are excited to provide our depositors a chance to share in the ownership of our institution and look forward to using this revenue to grow and create new opportunities for customers and employees."
According to its filings with the Securities and Exchange Commission, the bank grossed over $119 million from the offering.
Also, according to the filing, 17 members of the bank's board and executive team also subscribed to the offering. They purchased 175,000 shares altogether for $1.75 million. It remained unclear how many board members or executives had also served as board members or executives for OmniAmerican Credit Union.