The Proposed Reorganization will allow us to retain all of the fundamental characteristics of a mutual
banking institution while expanding our organizational flexibility to engage in strategic transactions and
opportunities to raise capital—without selling common stock. The mutual holding company structure
would preserve our mutuality and our depositors’ interests in the Bank.
Among other things, the Proposed Reorganization would allow The Guilford Savings Bank to do things in
the mutual holding company structure that it cannot now do as a mutual bank, such as:
Acquire or affiliate with other mutual or stock banks in a manner that permits The Guilford Savings Bank and the acquired or affiliated bank to share resources at the holding company level without losing their separate identities, resulting in more efficient, effective, and less expensive, operation of the banks;
Acquire, through the mutual holding company, a stock bank holding company in a manner that would allow each subsidiary bank to retain its separate identity, as described above;
Acquire an existing mutual bank not already in the mutual holding company form and operate it as a separate bank under the mutual holding company; or
Gain access to the capital markets, should the need arise. For example, after the Proposed Reorganization, the mid-tier holding company could raise capital by issuing debt instruments, which capital could be contributed to The Guilford Savings Bank as equity capital under certain circumstances.