The Illawarra having its own home-grown bank is being seen as exciting by the directors and management of the IMB.
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Staff and members also responded favourably to the news last Friday.
Chief executive Robert Ryan said the move came as no surprise to most.
"We were flagging it since last year that we were looking at this issue," he said.
"At the AGM, chairman Michael Cole made some statements about the fact we were having a look at it."
Mr Cole said that was done to try to condition people that change might be coming.
"We were saying that we were doing some customer research and were talking to the regulatory authorities," he said.
"The core of the institution won't change."
Mr Ryan said Australia had around 14 mutual banks, many of them former credit unions.
APRA's minimum requirements for a credit union or building society to become a bank include having $50 million in capital.
"IMB has always been much larger than that," Mr Ryan said.
"We could have converted before this but we wanted to take our time."
Research showed that people understood banks better.
"Importantly from our point of view is it will be a member-based bank ... We won't change the way we interact with our members, with our services and our satisfaction. And we won't change all of our low fees and good rates that we give. Importantly now we will start to extend our footprint and invest in technology," Mr Ryan said.
Mr Cole said research showed that the concept of a bank was just easier for people to identify with, particularly younger people.
"Part of our challenge is that for mutual organisations in general, credit unions and building societies, there is an ageing demographic that dominates their depositor bases," he said.
"Therefore the challenge is to be relevant to the current generation."
Mr Cole said IMB thought long and hard about whether giving itself the tagline of a bank was going to be a good thing.
From August 1 it will officially become known as IMB Bank but in the Illawarra it is expected most people will just keep calling it IMB.
IMB Bank will be the trading name but there will be no change in the legal entity.
The board has elected to go for IMB Ltd trading as IMB Bank.
A statement was made to members in early 2015 that IMB had applied to the prudential regulator.
"And once the board made the final decision we have wanted to get on with it and change the livery and everything," Mr Ryan said.
A new IMB branch has just opened in Oran Park and more are expected soon in Sydney, the ACT and Melbourne.
"And the online space is allowing us around the country to acquire new members and do further lend," Mr Ryan said.
"We are investing for growth so the staff are excited that we are going to be growing and we are investing in technology."
Mr Cole said it was exciting to enter IMB's 135th year by becoming a bank.
"We have put a lot of focus on the more conventional measures of greater return on equity because ... if you are growing the business and you have very good ratios you have a confident staff who are going to deliver and the organisation will prosper."
