First Mutual Holding Co. announced its latest mutual banking affiliation in combination with the Warsaw Federal Credit and Savings Association of Cincinnati.
The transaction is expected to close in the first quarter of 2020, subject to regulatory and member approvals. Being an affiliation among mutual banks owned by depositors, there is no money exchanged in the agreement.
Warsaw has two offices in the Queen City and approximately $ 56 million in total assets that will join FMHC’s combined assets of $ 2.1 billion.
“Warsaw Federal has a long history of community investment dating back to 1893. We were looking to strategically align with a like-minded partner to improve the products and services we provide to our customers and support our commitment to the community,” said said Warsaw President Richard. Flynn in a statement. “After careful consideration, we determined that FMHC was the ideal partner, offering both a closely aligned culture and a mutual shared mindset. We will continue to be a 100% mutual bank and operate under the name and charter of Warsaw Federal, with the same management team and employees, while receiving the substantial support and resources offered by FMHC to help us grow our business. and invest more in our neighborhoods in Greater Cincinnati. ”
The suit is also part of a succession plan for Warsaw, although Flynn has no plans to retire immediately. The bank will keep its current name and charter.
Warsaw adds a new presence for FMHC in Cincinnati. The holding company’s mutual banking subsidiaries now cover Ohio’s three largest subways with additional locations in Kentucky and West Virginia.
FMHC will benefit from the increased market presence and some additional strengths. Warsaw will benefit from the size of a larger parent organization, which will support new developments in areas such as technology and products.
“FMHC is dedicated to a unique mission: to help mutual banks thrive in today’s financial climate so that they can serve their communities and help them prosper. Our independent banking model allows community banks like Warsaw Federal to affiliate with FMHC to achieve economies of scale, develop product and service offerings and achieve greater operational efficiency while remaining an autonomous mutual bank ” , said Tom Fraser, president and CEO of FMHC, in a statement. “Warsaw Federal has a strong presence in the Cincinnati communities it serves. The capacity to invest in these communities must be strengthened with more opportunities for balance sheet growth and increased profitability as a subsidiary of FMHC. “
FMHC, the former parent company of First Federal Lakewood, was formed in 2015 as a non-stock holding company to allow affiliations with member-owned mutual banks. The Warsaw combination comes just weeks after the announcement of an affiliation with Blue Grass Federal Savings & Loan Association of Paris, Ky.
It is also the fourth affiliation of the FMHC in as many years. FMHC was also affiliated with Belpre Savings Bank in Ohio in 2016 and Doolin Security Savings Bank in Parkersburg. W.Va., in 2017. These two banks, which were struggling to develop, were merged under First Mutual Bank in 2018.
Fraser has indicated that he expects more affiliates to be in store in the coming months, although another is unlikely to be announced before the end of the year.
You can read more about FMHC, how it works, and why Fraser is pursuing affiliations under this model in this Source Lunch feature from March 2018.