Mutual Federal Bancorp, Inc. Unveils Plans for Significant Reorganization through Second Step Conversion

Mutual Federal Bancorp, Inc. Announces a Major Corporate Restructuring Plan

In a significant move poised to reshape its corporate structure, Mutual Federal Bancorp, Inc., the parent company of Mutual Federal Bank, announced that it is set to embark on a "second step" conversion from its current mutual holding company structure to a stock holding company format. This plan was revealed during a board meeting, where the decision was unanimously endorsed by the Board of Directors.

Background on the Current Structure

Mutual Federal Bancorp, MHC holds approximately 77.4% of the outstanding shares of the Company and transitioned to a mutual holding company structure back in 2006 as part of the Bank's reorganization and initial public offering. This substantial stake provides a robust foundation for the planned conversion.

Details of the Planned Conversion

The upcoming transition aims to establish a new stock holding company that would replace the existing one. This new entity will facilitate the sale of shares of its common stock representing Mutual Federal Bancorp, MHC's stake in the company. The offering will prioritize eligible depositors and certain borrowers of the Bank. The initial subscription offering will permit these depositors to purchase shares, with community offerings available should there be excess demand.

Account holders eligible as of March 31, 2025, are granted exclusive nontransferable rights to subscribe for these shares, a step designed to ensure the continued trust and participation of existing stakeholders.

An independent appraisal will determine the exact number of shares based on the aggregate pro forma market value of the new holding company. Additionally, minority stockholders of the Company will undergo a conversion process designed to ensure they retain a similar ownership percentage in the new structure.

Expected Timeline and Approval Process

The completion of this transformative transaction is projected for the first quarter of 2027, subjected to the necessary approvals from regulatory bodies and the stakeholders of both Mutual Federal Bancorp, MHC and the Company itself. Each group must vote in favor of the proposed changes, reflecting a commitment to collective decision-making and governance.

Once regulatory approval is secured, detailed information about the necessary steps for participation in the stock offering will be disseminated to all involved parties. This communication aims to enhance transparency and keep stakeholders informed throughout the process.

Legal and Financial Guidance

Mutual Federal Bancorp, Inc. has engaged Vedder Price P.C. as their legal counsel to navigate the complexities of this transition. Performance Trust Capital Partners, LLC will serve as the selling agent, ensuring a streamlined process during the conversion, while Breyer Associates PC will lend additional legal support to Performance Trust.

Cautionary Notes & Forward-Looking Statements

The release includes forward-looking statements, highlighting potential risks that could affect the successful execution of the planned conversion. These statements reflect management's current anticipations and are susceptible to changes based on various factors, including regulatory approvals and market conditions. Shareholders are advised to remain vigilant and informed by reviewing forthcoming documents that will be filed with the SEC.

In conclusion, Mutual Federal Bancorp, Inc. is taking significant steps to modernize its corporate structure and enhance its operational capacities, aiming for a seamless transition that prioritizes stakeholder involvement and regulatory compliance. This initiative is a defining moment in the future trajectory of Mutual Federal Bancorp and highlights its commitment to adapting in an evolving financial landscape.

About Mutual Federal Bancorp, Inc.

Mutual Federal Bancorp, Inc. serves as the holding company for Mutual Federal Bank, a federally chartered savings institution headquartered in Chicago, Illinois. This conversion is intended to bolster the Bank's mission and support its diverse range of offerings, ultimately benefiting its customers and investors.