Mutual Savings Bank - MSB

A bank may seem like a bank to you. One place with tellers and ATMs and cash in the back is the same as another. But individual banks have different structures, strategies, and overall goals.

It’s like pizza. All pizzas are pizza. But there’s a difference between the deep-dish meat-lovers deluxe with extra cheese and anchovies...and the kale and grilled artichoke gluten-free thin-crust white pizza.

As flavors of financial institutions go, a mutual savings bank is very conservative. It's the single-topping pepperoni from Domino's. These institutions look, first and foremost, to protect funds handed over by depositors. That fact points to the "mutual" part of the "mutual savings bank." The bank itself is owned, not by some cabal of cigar-chomping stockholders, but by the depositors themselves.

This situation means the institution is beholden only to its depositors, making the safety of their money its chief concern. The simplicity of focus leads to the overall conservativism. An MSB isn’t likely to take a flier on depressed Asian currencies or invest its capital in an untested new financial instrument. It just wants to keep funds safe for depositors, using the money for things like mortgages and other community loans.

But the ownership structure also limits the scope of the bank. It can't issue stock to fund expansion, meaning its only path to growth is increased deposits and the modest return it earns from making loans.