An activist investor is applying pressure on First Niles Financial, but he doesn’t want the Ohio company to sell itself.

Rather, Lance Osborne, a prominent commercial developer with ties to Cleveland and a 7% stake in First Niles, wants the sleepy $98 million-asset thrift to aggressively ramp up lending and stop investing heavily in securities.

Osborne, through the investment vehicle Osborne Capital, is fighting to take over two of First Niles’ five board seats, a move that could also unseat James Kramer, the company’s chairman. Shareholders will vote at an annual meeting set for Wednesday.

Osborne, who has been meeting with management since 2014, has focused on First Niles’ 43% loan-to-deposit ratio, urging the parent of the 119-year-old Home Federal Savings & Loan to improve its balance sheet by stepping up lending efforts.

“We haven’t been able to get them to do anything,” Osborne said in an interview last week. “We really just want [Home Federal] to be a good, old-fashioned bank and to do it the right way.”

Osborne is not a banker and he lacks a lengthy track record of shareholder activism. He does, however, sit on the board of the $152.2 million-asset Lake National Bank in Mentor, Ohio, which recent agreed to sell itself to the $2.3 billion-asset CNB Financial in Clearfield, Pa.

Osborne’s effort at First Niles received a boost last week when Institutional Shareholder Services issued a report advising investors to vote for him, though it declined to endorse Steve Passov, a commercial real estate broker and Osborne’s other nominee, citing a lack of banking experience.

Institutional Shareholder Services, in its report, was critical of First Niles’ business plan. “Instead of lending to earn income, as the general banking business model … suggests it should have been doing, the company appears to have turned to buying and holding securities … to generate income,” the report said.

Securities made up 62% of First Niles’ assets at Dec. 31, based on data from the Federal Deposit Insurance Corp. Net loans made up 26% of assets.

Banks with less than $500 million in assets have, by and large, taken an opposite approach, with net loans making up 63% of total assets and securities accounting for 22% at the end of last year.

An unusual strategy has helped carry First Niles through some extremely tough times, including the financial crisis, said Lawrence Safarek, who has been the company’s president since 2007. He said First Niles was “disappointed” with the report from Institutional Shareholder Services, and he expressed a belief that the group’s backing of Osborne is not “in the best interest of shareholders.”

Home Federal, which earned $212,000 last year, has a Tier 1 leverage ratio of 12.67% at Dec. 31, according to FDIC data.

First Niles’ slow growth is more a function of its surroundings, Safarek said, noting that the town of Niles, where the company controls nearly 15% of local deposits, is in the middle of an economically depressed area. The town lost nearly 3% of its population from 2010 to 2014, and its median family income barely tops $38,000, based on data from the Census Bureau.

“Things really haven’t recovered,” said Safarek, who added that the company wants to add more mortgages to its balance sheet. “We want to make loans, but we want to do it in a safe and sound manner to qualified borrowers.”

First Niles faced a shareholder lawsuit nearly a decade ago that alleged breach of fiduciary duty and included claims that the company sought to sell itself but had second thoughts despite receiving three bids. First Niles, which eventually began a privatization process that included delisting from the Nasdaq, reportedly settled the lawsuit.

Osborne, who first invested in the company in 2012, said the one-branch thrift, which received a “needs to improve” rating on its most recent Community Reinvestment Act exam, should shake things up.

“I’ve been to three annual meetings and I’ve heard the same thing each year,” Osborne said, referring to management’s discussion of challenges in the local economy and with interest rates. “We hope to change the culture.”

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