NEW YORK – A credit union that turned bank saw only a modest return on its initial public offering of stock on June 29, leading some observers to wonder if the previously hot market for the stocks of former credit union has started to cool. The Monadnock Community Bank, a $44 million bank, used to be the AWANE Credit Union, and issued its stock in association with a conversion to a mutual holding company structure. In an MHC structure, the bank is owned by a bank holding company, which issues stock, and which is in turn owned by a mutual holding company. An MHC structure has the advantage of keeping control of the bank in the hands of the depositors, since the mutual holding company keeps a majority of the bank holding company's stock. It also has the relative disadvantage of keeping the stock offering fairly small. Monadnock saw its initial stock offering rise only modestly in its first day of trading, closing $0.30 higher than its opening $8.00 price. By comparison two other former credit unions saw much stronger IPO's. Rainier Pacific's October 2003 jumped by almost a dollar in the first day's trading of almost five million shares and Kaiser Federal's by roughly $0.55 on just over 1.3 million shares in late April. Richard Garabedian, a partner with the Washington, D.C. law firm of Luse Gorman Pomerenk & Schick who has helped five former credit unions go on to issue stock, hoped that Monadnock's modest showing might help "take out some of the hyperbole" from the way such stock offerings have been discussed in the past. The fact remains that Wall Street is not paved in gold and there are no free tickets just because a credit union takes on a bank charter and issues an IPO, Garebian explained. While stressing that he is not a stock analyst, Garabedian noted that Monadnock's offering was fairly small and thinly traded. He also pointed out that the bank had not had tremendously strong earning statements over the last few years and this would have colored the analysts treatment of the stock. "In the end I think investors probably saw this as a good long term growth stock," Garabedian said, "and one with good growth potential." The stock's modest performance has meant that the bank's officers and directors who invested in it did not reap as much of a profit as other former credit union officers and directors have in their institutions' stock offerings. According to filings with the Securities and Exchange Commission, the banks officers and directors pledged to purchase 57,150 shares at $8.00 per share for a total commitment of $457,200 The stock's small showing means that, collectively, the group made only a little bit more than $17,000 on the trading. This means that if the banks officers and directors fulfilled their investment commitments, they collectively made just over $148,000. Bank officers and directors had previously told the Securities and Exchange Commission that they would purchase $494,000 worth of the bank's stock. While no one would speak for the record, Wall Street financial services analysts said the Monadnock stock offering doesn't necessarily mean other similar offerings would face the same fate. "It really is an individual thing, how the street treats an offering," observed one analyst. "It just so happens that there has been a dip in interest in thrift stock lately. But that could also change." AWANE Credit Union was chartered in 1971 to serve the Automobile Wholesalers Association of New England. [email protected]