It's not often that banks, much less community banks, make news on the hostile takeover front.
But that's what's happening in Newport, Ore., where a group of shareholders in $132 million-asset Bank of Newport have joined to fight an unsolicited bid by Western Bank, Coos Bay.
Western, which covers most of Oregon, would like a presence on the central coast. But Newport considers the offer inadequate and doubts its tradition of community banking would be preserved.
"Newport was founded in 1925 by a man who was originally with a big bank," says chairman J.F. Ouderkirk, "and his |mission statement' specifically requires me to serve the best interests of our shareholders, communities, customers, and employees. Western has a different agenda."
That's not to say that Newport would never entertain a bid. But "there are suitors, and there are suitors," says Mr. Ouderkirk, terming Western CEO Georges C. St. Laurent a "New York style financier whose stated purpose is growing Western and selling it."
That, said Newport president Victor R. Bartruff, "raises the possibility that a superregional will end up owning our bank and making the [lending] decisions a 1,000 miles away."
Mr. Bartruff adds that Newport is one of the largest employers in Lincoln County, and a superregional, if not Western itself, would likely replace most of the existing employees.
Quite a few of Newport's 400 shareholders agree. Last week, a group representing 19.3% of outstanding shares signed a proxy statement that bars any sale of their shares to Western.
In 1988, Mr. St. Laurent prevented a U.S. Bancorp takeover of Western. "The media out here makes it seem like he was a white knight in that situation and a corporate raider in this one," said Mr. Ouderkirk, "but U.S. Bancorp's offer was a friendly one."
Western's April bid for Newport was not very friendly. "They sent us a letter spelling out the terms of the bid, and they presented the letter to the media on the same day."
The terms - an offer of $18 per share or a stock swaps - already had been turned down by Newport last year.
There is a point, Mr. Ouderkirk admits, where it would be in the best interests of Newport shareholders to support a Western offer. On the other hand, he says, "the longer we hang on, the more of a premium we'll have in our stock. After all, aren't the analysts saying there'll only be 50 community banks left at the end of the decade?"