8-K: Magnolia Bancorp Completes Conversion and IPO, Stock to Trade on OTCQB

Magnolia Bancorp, the holding company for Mutual Savings and Loan Association, has completed its conversion to a stock savings association and initial public offering, with its common stock expected to begin trading on the OTCQB Market on January 15, 2025.

Summary

• Magnolia Bancorp, Inc. has completed the conversion of Mutual Savings and Loan Association from a federally chartered mutual savings and loan association to a federally chartered stock savings association.
• The conversion was effective as of the close of business on January 14, 2025.
• The company's common stock is expected to be quoted on the OTCQB Market under the ticker symbol MGNO starting January 15, 2025.
• Magnolia Bancorp sold 833,750 shares of common stock, including 66,700 shares to the Employee Stock Ownership Plan.
• Gross proceeds from the offering were approximately $8.3 million, based on an offering price of $10.00 per share.
• The stock offering was oversubscribed, and valid stock orders are expected to be filled according to the plan of conversion.
• Refund checks are being sent to some purchasers in the community offering from residents outside the Association's local community due to allocation procedures.
• Direct Registration System (DRS) Book-Entry statements and refund checks are planned to be mailed on or about January 15, 2025.
• At September 30, 2024, the Association had total assets of $35.1 million, total deposits of $20.4 million and equity of $14.0 million.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the successful completion of the conversion and IPO, but tempered by the inherent risks associated with forward-looking statements and the potential disappointment of some community offering participants receiving refunds.

Positives

• The conversion to a stock savings association and IPO were successfully completed.
• The stock offering was oversubscribed, indicating strong investor interest.
• The company raised approximately $8.3 million in gross proceeds from the offering.
• The company's stock is expected to be quoted on the OTCQB Market under the ticker symbol MGNO starting January 15, 2025.

Negatives

• Some purchasers in the community offering from residents outside the Association's local community are receiving refund checks due to allocation procedures, which may cause disappointment.

Risks

• The announcement contains forward-looking statements that are subject to various risks and uncertainties.
• These risks include factors related to the real estate and economic environment, government regulations, interest rate changes, and cybersecurity threats.
• The company cautions against undue reliance on these forward-looking statements.

Future Outlook

The company's future performance is subject to various factors, including economic conditions, regulatory changes, and interest rate fluctuations, as detailed in the forward-looking statements.

Management Comments

• Michael L. Hurley, President and Chief Executive Officer, is the contact person for further information.

Industry Context

This announcement reflects a trend of mutual savings and loan associations converting to stock savings associations to raise capital and enhance growth opportunities.

Comparison to Industry Standards

• Community banks often pursue IPOs on the OTCQB market to gain access to capital while maintaining a local focus.
• The $8.3 million raised is a typical amount for a community bank IPO of this size.
• Keefe, Bruyette & Woods, A Stifel Company, is a well-known advisor for community bank conversions and IPOs.

Stakeholder Impact

• Shareholders will now have publicly traded stock.
• Customers will continue to be served by the Association.
• Employees will benefit from the Employee Stock Ownership Plan.

Next Steps

• The company's common stock is expected to begin trading on the OTCQB Market on January 15, 2025.
• Direct Registration System (DRS) Book-Entry statements and refund checks are planned to be mailed on or about January 15, 2025.

Key Dates