The $227 million SharePlus Federal Bank, the former SharePlus Federal Credit Union, has filed papers with the Securities and Exchange Commission to make the move.

Under the terms of the offering, the Plano, Texas-based bank's holding company would issue roughly 1.9 million shares of stock in the bank and expects to raise $18.5 million in capital from the sale. Bank depositors with at least $50 on deposit with the bank as of March 31, 2009, would have the first chance to buy shares in the new offering, the bank's filing said. Followed by the bank's employee benefit plan and employee stock ownership plan, the bank said in its filing.

SharePlus converted from a credit union to a mutual bank charter in 2004. At the time of the conversion the bank said it had $142.9 million in total loans, $149.3 million in deposits and $18.4 million of total equity. Since then, the bank has grown to $227.2 million in total assets, $167.2 million in loans, including loans held for sale, $192.2 million in deposits and $17.0 million in total equity.

"The objective of the charter conversion was to implement our business strategy of broadening our banking services into residential mortgage lending as well as commercial real estate and commercial business lending," the bank wrote in its filing. "This has allowed us to better serve the needs of our customers and the local communities in which we operate, compete more effectively with other financial service providers, and have access to the capital markets through a potential stock offering"

Most credit unions that convert to bank charters convert to mutual bank charters. Some then go on to issue stock, either through a mutual holding company or in a straight stock sale. In a mutual holding company structure, the bank forms a company that bank depositors own mutually and which issues a minority share of stock, usually between 40% and 46% of the bank's equity in stock. Whereas in a straight stock issuance, a bank may issue the bulk of its equity as stock and loses its mutual character entirely.

As of Feb. 15, CU Financial Services, a consultancy that advises CUs contemplating charter change reported that of the 36 credit unions that have converted to banks since 1995, nine of them had not issued stock, 10 had issued stock through a mutual holding company structure and the balance had become straight stock issuing institutions. SharePlus will make its offering through a straight stock structure, according to its filing.

The bank said it was seeking to issue stock in order to increase capital to support future growth, to have greater flexibility to structure and finance the expansion of its operations, including potential cash or stock acquisitions of other financial institutions, and to attract and retain qualified personnel by establishing stock-based benefit plans for management and employees.

In the same quarter the bank was filing its IPO, its filings with the Office of Thrift Resolution and FDIC indicated it had lost $323,000. The bank has not commented on its income statement in light of the stock offering.

The filing indicates that only two of the bank's current board members were also on the board when the bank was a credit union.

Financial analysts expressed caution about the IPO. While declining to speak about the specific issue, several noted that the market for initial stock offerings had begun to revive after a long downturn, but others expressed doubt about a bank IPO coming while there was still a relatively high uncertainty about the impact of the recent financial reform law.

"Much of the law's impact will rest with the regulators" said one. "Financial stocks will likely remain uncertain until more of the regulations are written."

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