Depositors at Coastway Community Bank, a $310 million bank in Cranston, R.I., that used to be Coastway Community Credit Union, have approved the bank's formation of a mutual holding company.
The bank announced that 94% of more than 2,000 depositors had voted in favor of the mutual holding company structure. In that structure, the organization founds and charters a mutual holding company that an elected board of directors controls and which owns the bank as a subsidiary.
The structure is a way a mutual bank can retain its ownership by depositors and still issue stock. The mutual holding company will usually offer a minority stock position to investors while retaining control over the institution through a majority stock position.
A media contact for the bank would not comment on any plans to issue stock and the bank did not mention any when reporting the structure change.
“For 92 years, Coastway’s top priority has been to serve our depositors, to make our local economy stronger and to serve our community,” said Bill White, CEO of Coastway. “We are deeply gratified by this vote of confidence in Coastway’s future, and in the team we have in place here.
“The formation of a mutual holding company will give us the capacity to further expand the financial products and services Coastway offers, expand our capital base and establish relationships with other banks and financial service providers,” White said.
“The move will also allow us to maintain our independence, our identity, our proud history, our local and long-term focus, and – most importantly – our mutual ownership structure,” he added. White had been CEO of the credit union when it converted charters and, should the mutual holding company issue stock, he will likely be among he largest initial investors.
Coastway credit union members voted in favor of the charter change in 2009 and the bank reported that since that time Coastway increased its business loans by 58%, from $71 million to $112 million; made more than 1,800 residential mortgage loans totaling $357 million; wrote 270 commercial loans, totaling $91 million, for local businesses and increased its total assets by 11%.
“We believe the formation of a mutual holding company is the next logical step in Coastway’s evolution as a strong, vibrant financial institution that serves its depositors and its community,” White added. “We are confident this will be another milestone in our pursuit of our paramount business goal – to help our members become more successful.”