Activist shareholder Seymour Holtzman is urging an already beleaguered Pennsylvania thrift to sell out.
Mr. Holtzman, a shareholder of Media-based First Keystone Financial Inc., said in a short public statement that "the underperformance of First Keystone has not justified its continued independence when weighed against what shareholders could receive through a sale of the bank."
Mr. Holtzman, whose stake in First Keystone is less than 5%, was unavailable for comment on Monday. But his attorney, David R. Cope, said the investor is unhappy with the thrift's management and sluggish stock price.
"Mr. Holtzman is a value investor," he said. "Only when his investments underperform does he get proactive."
Mr. Cope said Mr. Holtzman wants $290.5 million-asset First Keystone to be sold to either a local Pennsylvania bank or a regional bank with a presence in the Philadelphia area. That list includes Pittsburgh-based PNC Bank Corp. and Mellon Bank Corp. and First Union Corp. of Charlotte, N.C.
First Keystone president and chief executive Donald S. Guthrie could not be reached for comment on Monday. However, he has stated in past interviews that the bank wishes to remain independent. When another shareholder pushed for First Keystone's sale last May, Guthrie told American Banker that the bank wouldn't be sold just to please one shareholder.
But the list of shareholders wanting to sell has grown.
Shareholder activist Jerome Davis and Genesis Financial Partners, a Newport Beach, Calif., hedge fund, have been lobbying for other shareholders' support. Genesis owns 5.9% of First Keystone's 1,292,500 shares, while Mr. Davis owns a 9.9% stake.
Genesis criticized the thrift last fall for its poor performance, and urged it to cut costs and restructure its balance sheet or sell out.
Management initially resisted but ultimately agreed to close some branches and reduce staff. But Genesis reiterated its demand for a sale in the spring, submitting a shareholder proposal that calls on the thrift to sell.
Stephen H. Gordon, president of Genesis general partner Gen Fin Inc., said on Monday that the pressure is increasing from other shareholders. But he said he could not comment on what Genesis' next move will be.
He said that the shareholder proposal, which is to be included in First Keystone's next proxy statement, "sends a pretty strong message" to the thrift's management.
