by ALANA LINDEROTH
Sequim Gazette
Within only two days of approval to transition from a mutual to a stockholder-owned bank, shares of First Federal stock were on the NASDAQ Capital Market under the trading symbol FNWB on Jan. 30.
“As a mutual there are voting interests, but no ownership interest,” First Federal president and Chief Executive Officer Larry Hueth said.
“This gives us the opportunity to create more banks and expand into different markets. It allows us to keep pace with changing technology, too,” he said.
The proposal to convert the 92-year-old institution to a publicly owned bank passed with 2,120,479 yes votes, compared with 1,119,751 no votes by those eligible to vote. Those eligible included depositors and borrowers, and based on a formula, were permitted to vote once per $100 in their account balance, but not to exceed 1,000 votes.
Upon approval, the bank gained about $121 million in new capital from the sale of the maximum allowable share subscriptions, totaling 12,167,000 shares of stock with a minimum order of 25 shares.
Because of the great interest and thus oversubscription to first category depositors (account holders as of March 31, 2011) alone, shares weren’t available for purchase for the bank’s Employee Ownership Plan, but bank officials are prepared to buy shares of common stock for the plan, Hueth said.
Voters also approved the creation of First Federal Community Foundation, a 501(c)3 nonprofit to support charities and other local community groups. The foundation will be funded with $400,000 cash and the remainder in shares of common stock to total 8 percent of the offering.
“The foundation is a part of the bank’s historic tradition of giving and supporting the local community,” Hueth said.
Although bank officials began the voting process prior to Thanksgiving, Hueth said the deadline to vote was extended until Jan. 28 to allow as many account holders as possible to vote given the extent on the decision.
“Our goal was to truly have a democratic process,” he said.
The decision was “not taken lightly” by the board or management Hueth said and admits he has spent much of his six years at the bank working toward and evaluating the conversion as an option.
As for the everyday bank customer, nothing will change, Hueth said. If anything, the bank potentially will offer more services, like the installation of additional interactive teller machines and approval of more loans.
“The business that we do is not changing,” Hueth said.
Managed by First Northwest Bancorp, a Washington corporation created by First Federal officials as the bank’s holding company, FNWB is expected to sell 13,100,360 shares of common stock on the NASDAQ Capital Market.
Since opening in 1923 in downtown Port Angeles, First Federal has grown to include nine branches dispersed in Clallam, Jefferson and Kitsap counties and a lending center in Bellingham.
First Northwest Bancorp real time stock quotes can be viewed, at www.nasdaq.com/symbol/fnwb/real-time.
Reach Alana Linderoth at alinderoth@sequimgazette.com.
