PORT ANGELES — The future of First Federal will be announced Wednesday.
Stock in First Federal, a locally owned North Olympic Peninsula bank, had sold out by Jan. 6, but it won’t be known until Wednesday whether the institution, which has been a mutual for 91 years, will be reborn as a bank owned by stockholders and the stock issued.
Wednesday’s meeting will begin at 10 a.m. at the Red Lion Hotel, 221 N. Lincoln St., and depositors can vote in person at the meeting until that time.
The final vote will be reported during the meeting.
First Federal stock was so popular that by Jan. 6, it had sold out with orders for 12,167,000 shares of stock, the maximum the bank can offer.
That guarantees that First Federal would gain about $121 million less costs if it becomes a publicly traded institution.
Vote deadline extended
But the deadline for votes on the proposed change, originally expected to end Jan. 6, was extended until this coming Wednesday to allow more depositors to cast their ballots.
Larry Hueth, president and CEO, said the decision was so major that bank officials wanted as many of the 25,000 account-holders to vote as possible.
Also eligible to vote on the conversion are the bank’s loan recipients.
If the conversion is made, stock will be issued at $10 a share.
Voting by mail began shortly before Thanksgiving.
The minimum order of stock was 25 shares for $250, with purchases limited to 20,000 shares per person ($200,000) or 40,000 shares ($400,000) for those acting together, such as a married couple or domestic partners.
The $121 million paid for the stock is being held in escrow, pending the vote on the conversion.
The available stock will go only to Tier 1 depositors, those with First Federal accounts as of March 31, 2011.
They more than bought out the stock offering.
Bank officials said many of these are long-term First Fed customers who live in Clallam and Jefferson counties.
Formula for issuing
Because the offering is oversubscribed, stock will be issued using a federally approved formula, one factor of which is how much money was in the depositor’s account as of the March 31, 2011, cutoff.
The larger the account, the more likely the depositor will receive the amount of stock ordered.
Money paid for stock will be refunded if the conversion is not approved.
Those in the other tiers who ordered and paid for stock will get refunds if the conversion is approved.
In addition to the conversion, voters are also being asked to approve the funding of a new First Fed community foundation, a 501(c)(3) nonprofit that would give money to charities and other local community groups.
If the conversion is approved, First Northwest Bancorp, newly formed by First Federal, would own 100 percent of First Federal.
First Fed’s current board of trustees would serve as trustees of First Northwest.
The stock would be publicly traded on the NASDAQ Capital Market under the symbol “FNBC.”
First Federal, which began in 1923, has branches in Port Angeles, Sequim, Port Townsend, Forks and Silverdale, plus a lending center in Bellingham. It has almost 180 employees.
