Mutual Holding Company Ownership Structure
Public stockholders own a minority of the outstanding shares of TEB Bancorp, Inc.’s common stock. As a result, stockholders other than TEB MHC are not be able to exercise voting control over most matters put to a vote of stockholders. TEB MHC owns a majority of TEB Bancorp, Inc.’s common stock and, through its board of directors, is able to exercise voting control over most matters put to a vote of stockholders. The same directors and officers who manage The Equitable Bank also manage TEB Bancorp, Inc. and TEB MHC. The board of directors of TEB MHC must ensure that the interests of depositors of The Equitable Bank (as members of TEB MHC) are represented and considered in matters put to a vote of stockholders of TEB Bancorp, Inc. Therefore, TEB MHC may take action that the public stockholders believe to be contrary to their interests. For example, TEB MHC may exercise its voting control to defeat a stockholder nominee for election to the board of directors of TEB Bancorp, Inc.
In addition, stockholders are not able to force a merger or second-step conversion transaction without the consent of TEB MHC since such transactions also require the approval of a majority of all of the outstanding voting stock of TEB Bancorp, Inc., which can only be achieved if TEB MHC voted to approve such transactions. Some stockholders may desire a sale or merger transaction, since stockholders typically receive a premium for their shares, or a second-step conversion transaction, since, on a fully converted basis, most full stock institutions tend to trade at higher multiples than mutual holding companies. Stockholders could, however, prevent a second-step conversion or the implementation of equity incentive plans as under current regulations and policies, such matters also require the separate approval of the stockholders other than TEB MHC.
We conduct our business from our main office and five branch offices, which are located in Milwaukee, Racine and Waukesha Counties, Wisconsin, and a loan production office, which is located in Ozaukee County, Wisconsin. Our primary market area is broadly defined as the Milwaukee, Wisconsin metropolitan area, which is geographically located in the southeast corner of the state. Our primary market area for deposits includes the communities in which we maintain our banking office locations, while our primary lending market area is broader, and also includes Ozaukee County, where we maintain our loan production office, as well as Washington County, Wisconsin, which borders both Ozaukee County and Waukesha County. The following discusses the demographics of the counties where our offices are located.
According to information from S&P Global Market Intelligence as of August 2020, from 2015 to 2020, the population decreased in Milwaukee County by 1.5%, and experienced increases in Racine, Waukesha and Ozaukee Counties of 1.1%, 2.5% and 2.9%, respectively, compared to 1.2% for Wisconsin and 3.4% for the United States as a whole. Projections indicate that through 2025, the population will remain fairly stable in Milwaukee County, with modest increases (less than 2.5%) for Racine, Waukesha and Ozaukee Counties, as well as for Wisconsin, compared to projected United States population growth of more than 3%. Trends in numbers of households in our market area, Wisconsin and the United States as a whole were consistent with trends in population, and projections for the numbers of households are also consistent with the projections for population changes.
The median household income for 2020 was $52,205, $67,125, $90,164 and $89,895 for Milwaukee, Racine, Waukesha and Ozaukee Counties, respectively, compared to $65,076 in Wisconsin and $66,010 for the United States as a whole. By 2025, the projected annual growth rates in median household income are expected to be 2.2%, 2.1%, 1.7% and 1.9% in Milwaukee, Racine, Waukesha and Ozaukee Counties, respectively, compared to 2.0% for Wisconsin and 1.9% for the United States as a whole.
Unemployment rates as of June 2020 and 2019 are set forth in the following table.