NEW ORLEANS — Fifth District Savings Bank announced that it has received approval from federal regulators for its conversion from a mutual bank to a stock-owned bank corporation. The Algiers-based financial institution plans to start trading its common stock on Aug. 31 on the NASDAQ using the symbol FDSB.
The bank’s new holding company, Fifth District Bancorp, said it intends to sell nearly six million shares of common stock at $10 per share to gross roughly $54.6 million.
In an earlier filing with the U.S. Securities and Exchange Commission, the bank said it may use the newfound cash to “moderately” increase its loan portfolio and potentially make acquisitions.
Founded in 1926 as a savings and loan, Fifth District now claims $481 million in assets and $390 million in deposits. It has six locations.
The bank’s members approved the transaction at a June 27 meeting. That move was not a surprise since earlier this year Fifth District began the process of converting from a private, member-owned company into a public company.
“When a financial institution signs the paperwork to demutualize, an IPO is often to follow,” said Tulane University business professor Peter Ricchiuti, who’s an expert on the region’s publicly traded companies. “It’s always nice to have the cash as it gives a bank a lot of new positive options. The IPO allows the market to determine the value of the company.”
Ricchiuti said that declining interest rates are generally good for banks, so Fifth District’s decision to go public appears to be well timed.
