| 
Needham Bank's Ashland branch in 2019. Courtesy photo/ File
Needham Bank is planning to reorganize its corporate structure to add a mutual holding company.
The bank, which currently has more than $2.2 billion in assets and eight branches, made the announcement sometime last week.
The plan calls for an organization with a three-tier structure that includes a mutual holding company, a mid-tier holding company that is a subsidiary of the mutual holding company and a cooperative bank that would be a wholly-owned subsidiary of the mid-tier holding company.
“A mutual holding company, it’s simply a structure that allows us more flexibility in doing mergers, acquisitions, and expanding our footprint,” Joseph Campanelli, president and CEO of the Needham Bank, said in a video posted on the bank’s website regarding the reorganization. “It just gives us more financial flexibility.”
Although not uncommon to form a mutual holding company, the move hints the bank may eventually issue an IPO sometime down the line. But it’s not a certainty, as mutual holding companies also give banks greater flexibility to raise capital through the holding company, which can then funnel that capital into the subsidiary bank.
The Massachusetts Division of Banks requires that mutual banks seeking to reorganize into a mutual holding company form commit to not raising capital by issuing stock for at least 24 months after the proposed reorganization is consummated, unless emergency circumstances occur.
Still, an IPO is not out of the question after the holding period.
Campanelli has experience running publicly-traded banks. Before Needham Bank, he was the CEO and president of Sovereign Bank before it was bought by Santander, and then he went on to become CEO of Flagstar Bank in Michigan.
A vote on the reorganization will be held at the bank on July 18.
