Depositors Block Conversion of MA Community Bank to Stock Posted by Association of Vermont Credit Unions on 9:27 AM

In a rare development last month, depositors of the $332 million Beverly Bank in Massachusetts blocked a plan by bank management to convert to public ownership, meaning that the company would sell shares on a stock exchange. The vote of 238 to 205 in favor of the proposal fell short of the two-thirds majority needed for approval.

Reportedly, Massachusetts has lost a quarter of its banks over the past 14 years, many of them community institutions like Beverly Bank, to waves of consolidation that have swept the industry. Most community banks in the state are mutually owned. Until recently, conversions to public ownership happened infrequently, with just nine community banks converting in the previous decade. But in 2014 five small, local banks hav
e moved to become publicly traded companies, and that has raised concerns among critics, who worry that conversions often harm communities while enriching top executives.

Read the entire story on the Boston Globe.