A dissident shareholder's bid to win a seat on the board of HF Financial Corp. received a boost Friday after an independent advisory firm endorsed his candidacy.
John Palmer, a principal at PL Capital Group in Naperville, Ill., said in September that he was seeking a board seat on behalf of investors who have been disgruntled by HF Financial's earnings and stock performance since it raised $20 million in capital two years ago. The company, based in Sioux Falls, S.D., is the parent of the $1.2 billion-asset Home Federal Bank. PL Capital is one the company's largest outside shareholders.
In its endorsement of Palmer's candidacy, the proxy advisory firm Glass, Lewis & Co. LLC, said that HF Financial and its shareholders would benefit from having a stronger outside voice on the company's board. It recommended investors vote for Palmer at the company's annual meeting on Dec. 13
"We believe that the company's recent financial performance and relative market valuations suggest that the company has lagged its peers in recent periods," Glass Lewis wrote in a recent analysis of the company. "In our view, these findings bolster the dissidents arguments and lend credence to their suggestion that a change to the...board structure may be warranted."
In the fiscal year that ended June 30, HF Financial earned $679,000 compared to a profit of $5.7 million a year earlier. In mid-October, the company announced a major management shakeup, in which it named a new chairman and chief executive to replace Curtis L. Hage, who had held both posts. Hage had previously announced that he would retire at the end of this year.
HF Financial's performance improved in its fiscal 2012 first quarter, when it reported a profit of $1.4 million, an increase of 185% over the same period a year earlier.
The company's shares were trading at $10 midday Friday, up nearly 5% from Thursday's close.