Independent Banker - December 2023 - 62

CONNECTIONS TRAILBLAZER
Stevens realized that the town of
Elberton-roughly an hour away
from Watkinsville-would lose a
bank that had been a part of the
community since 1922. He knew he
had to help.
However, there was one issue:
These types of acquisitions are rare.
Known as a merger conversion,
this transaction occurs when an
existing stock institution or holding
company acquires a converting
mutual institution.
According to the Office of the
Comptroller of the Currency's (OCC)
licensing manual for mutual to stock
conversions, " Merger conversions are
unusual and infrequent due to the
regulatory scrutiny applied to these
transactions. The mutual federal
savings association must provide
support that the merger conversion
is the only viable alternative and
document other proposed solutions
the FSA pursued. This includes
support that the standard conversion
is not economically feasible and not a
viable option. "
Oconee State Bank and Elberton
Federal felt like they had a strong
case, and in January of 2021, they
submitted their merger conversion
application to the U.S. Securities and
Exchange Commission and the OCC.
Then, there was radio silence.
More than a year later, Stevens
was at a conference in Washington,
D.C., listening to a speech by acting
comptroller of the currency Michael
Hsu when he got a text from Graves.
It read: " My attorney said our deal is
going to be escalated to comptroller
Hsu sometime next week. "
" I replied, 'You're not going to
believe this, but I'm sitting here
listening to Hsu speak,' " Stevens
recalls. " I made a beeline to Hsu after
the speech was over. I introduced
myself and told him what we were
doing. I said, '[We are the best
alternativefor them]. This community
needs a bank, and it's going to better
serve the community.' "
Hsu thanked Stevens for his input,
but it would still be about eight more
months before Oconee State Bank
and Elberton Federal received their
final approval to move forward with
the acquisition.
" Elberton Federal would have
folded, and the SEC finally came
to the conclusion that this was the
only viable option, " Stevens says.
" It was good for Elberton because
they were able to become part of our
culture and everything we do. It was
good for the community in Elberton
because now their customers can be
better served, and it was good for us
because we were in a new market. It
was a long, arduous process, but it
was a big win. "
Deepening the community
connection
The transaction was completed
on July 31, 2023, and on Sept. 18,
Elberton Federal reopened as a
branch of Oconee State Bank.
In the stock offering required by
merger conversion regulations, Oconee
sold 149,015 shares of common stock,
at a discounted price of $28.94 per
share, to depositors and borrowers
of Elberton Federal in a subscription
offering, and to stockholders of Oconee
and members of the general public as
a community offering. Gross offering
proceeds totaled approximately
$4.3 million.
As part of the merger, Oconee
retained all of Elberton Federal's
employees. Graves was named
senior vice president and community
president of Oconee's northeast
Georgia market. The new branch
brings Oconee State Bank's number of
locations to six, totaling $575 million
in assets.
" It has been such a blessing for the
community, " says Stevens. " You're
going to see a small bank in that
community give back in ways that
they never could have done without
this merger. " This includes expanding
into the commercial banking space, an
undeniable opportunity in Elberton,
" [The merger] has been such a blessing for the
community. You're going to see a small bank
in that community give back in ways that they
never could have done without this merger. "
-NEIL STEVENS, OCONEE STATE BANK
the granite capital of the world.
" They're such a close-knit group
of people that care about each other,
and they are all so connected to the
Elberton community with ties that
run much deeper than banking, "
Stevens says. " Our plan is to continue
to stay independent and carry on that
legacy as time goes on. " 
Taylor Hugo is a writer in Colorado.
62 // ICBA Independent Banker // December 2023
Independent Banker - December 2023

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