Mid-Southern Bancorp Stock Price, News & Analysis

Mid-Southern Bancorp, Inc. (MSVB) historically operated as the holding company for Mid-Southern Savings Bank, FSB, a federally chartered savings bank headquartered in Salem, Indiana. The company is classified in the finance and insurance sector and is associated with the savings institutions industry. Its common stock has traded under the symbol MSVB, including quotation on the OTC Pink and OTCQX markets after a voluntary delisting from The Nasdaq Stock Market.

According to company disclosures, Mid-Southern Savings Bank, FSB conducted business from its main office in Salem, Indiana, with branch offices located in Mitchell and Orleans, Indiana, and loan production offices in New Albany, Indiana and Louisville, Kentucky. The bank’s activities and performance have been described in periodic earnings releases that discuss net interest income, noninterest income and expense, loan growth, credit quality, and capital ratios.

Corporate structure and transformation

Mid-Southern Bancorp, Inc. has been identified as the parent holding company of Mid-Southern Savings Bank, FSB. In a press release, the company announced a definitive purchase and assumption agreement under which Beacon Credit Union agreed to acquire substantially all of the assets and assume substantially all of the liabilities, including all deposit account liabilities, of Mid-Southern Savings Bank, FSB in an all-cash transaction. Following completion of that purchase and assumption transaction and the settlement of obligations, Mid-Southern Bank is expected to liquidate and distribute its remaining assets to Mid-Southern Bancorp, which in turn plans to dissolve and distribute its remaining assets to shareholders in accordance with a plan of liquidation and dissolution.

Subsequent company communications describe Mid-Southern Bancorp, Inc. as the former parent holding company of the former Mid-Southern Savings Bank, FSB and state that the company is in the process of dissolving and winding up its business. The company has indicated that this wind-up process is expected to take up to two years and that any residual funds remaining after completion of the wind up, which are expected to be nominal, are intended to be donated to one or more charitable organizations pursuant to the approved plan of liquidation and dissolution.

Trading status and deregistration

Mid-Southern Bancorp, Inc. announced a voluntary decision to delist its common stock from The Nasdaq Stock Market and to deregister its common stock with the Securities and Exchange Commission. The company notified Nasdaq of its intent to delist and stated that it intended to file a Form 25 (Notification of Removal from Listing) with the SEC, after which it expected its last trading day on Nasdaq and a transition of quotation for its common stock to the OTCQX Market while retaining the symbol MSVB. The company also stated its intention to file a Form 15 (Certification and Notice of Termination From Registration) with the SEC, which would suspend and ultimately terminate its periodic reporting obligations, including the filing of Forms 10-K, 10-Q and 8-K.

Following deregistration, the company has indicated that it will continue to provide stockholders with an annual report containing audited consolidated financial statements and that quarterly interim financial information would be made available through company channels. The bank has also noted that it continues to file quarterly Call Reports with the Federal Deposit Insurance Corporation.

Operations and financial reporting

In its earnings releases, Mid-Southern Bancorp, Inc. has described its financial performance in terms of net interest income, net interest margin, noninterest income, noninterest expense, and credit quality metrics such as non-performing loans and allowance for credit losses. The company has discussed the impact of changes in interest-earning assets and interest-bearing liabilities, including the effect of yields, funding costs, and borrowing arrangements. It has also reported on the composition of its balance sheet, including total assets, loans, investment securities, deposits, borrowings, and stockholders’ equity.

The bank has elected to use the Community Bank Leverage Ratio framework and has reported that it met the criteria to be considered well-capitalized under applicable federal regulatory capital guidelines. The company has also discussed its adoption of the current expected credit loss methodology for estimating allowance for credit losses and the related impact on retained earnings and regulatory capital calculations.

Strategic transactions and dissolution

In connection with the purchase and assumption agreement with Beacon Credit Union, Mid-Southern Bancorp, Inc. has disclosed that Mid-Southern Bank would retain a specified amount of cash and that Beacon Credit Union agreed to pay a cash purchase price subject to adjustment based on the bank’s total equity at closing, with provisions allowing termination of the agreement if the purchase price fell below a stated threshold. The company has also provided estimates of the per share cash consideration that Mid-Southern Bancorp’s shareholders are expected to receive upon dissolution, while emphasizing that the ultimate per share amount is subject to significant variation due to factors such as the bank’s equity at closing, corporate taxation, regulatory treatment and costs associated with liquidation accounts, cash levels at dissolution, and costs related to the liquidation and dissolution processes.

Later communications updated the estimated range of per share consideration based on the company’s financial condition at a specified date and identified a record date for determining stockholders eligible to receive the dissolution payment. The company has indicated that, after that record date, it expects its common stock to be removed from the OTC Pink Marketplace and that trades in the common stock would no longer be processed, while noting that it cannot guarantee the exact removal date and does not intend to provide notice once removal is effective.

Shareholder distributions and transfer arrangements

Mid-Southern Bancorp, Inc. has stated that it appointed Pacific Stock Transfer as its transfer agent and paying agent for the dissolution distribution. The company has explained that stockholders holding shares of common stock in book-entry form at Pacific Stock Transfer are expected to receive checks for their cash distribution and that their shares will be cancelled. Stockholders holding shares through a broker or other nominee registered with the Depository Trust Company are expected to receive their cash distribution directly into their brokerage or nominee accounts, with those shares also being cancelled.

Prior to the dissolution process, the company’s board of directors declared quarterly cash dividends on its common stock, with payment dates and record dates disclosed in press releases. The company has noted that the declaration and payment of future dividends are at the discretion of the board of directors and depend on factors such as financial condition, earnings, capital requirements, legal requirements, regulatory constraints, industry practice, and other factors considered relevant by the board.

Governance and organizational developments

Mid-Southern Bancorp, Inc. has reported changes to its board of directors, including an increase in the number of directors and the appointment of a new director who also serves on the board of the bank. The company’s corporate governance and nominating committee proposed, and the board ratified, the increase in board size and the appointment. The company has described the appointee’s background in community banking and prior leadership roles at another bank and its holding company, as well as the acquisition of that holding company by a regional bank.

In connection with the transaction with Beacon Credit Union, Mid-Southern Bancorp, Inc. has also described expected roles for certain executives and employees following completion of the transaction, including a transitional consulting role and positions in business development and operational leadership. Beacon Credit Union has indicated its intention to keep Mid-Southern Bank’s branches and loan production offices open following completion of the purchase and assumption transaction.

Company status and historical context

Based on the company’s public statements, Mid-Southern Bancorp, Inc. is in the process of dissolving and winding up its business pursuant to a plan of liquidation and dissolution approved by its stockholders. The company has characterized itself as the former parent holding company of the former Mid-Southern Savings Bank, FSB and has outlined a sequence in which the bank’s assets and liabilities are transferred in the purchase and assumption transaction, followed by liquidation of the bank and dissolution of the holding company. For investors and researchers, MSVB represents the historical equity of a savings institution holding company that has undergone a voluntary delisting, deregistration, asset sale, liquidation, and planned dissolution.