-
Community banks are hoping regulators' recent decision to drop certain items from call reports is just the beginning of supervisory efforts to streamline the forms to reduce their burden.
September 18 -
It remains unclear if a new platform from the Chicago Board Options Exchange will provide enough incentives and safeguards to prompt community banks to switch from using the existing federal funds system.
September 16 -
Activity at credit unions has been on the rise since the Bank Transfer Day movement in November 2011. It remains to be seen, however, if credit unions can succeed at keeping many of those relationships.
September 17
River Valley Bancorp could face a challenge from an investor who is upset over some of the Madison, Ind., company's policies and procedures.
Thomas Davee wants River Valley's board to do away with a bylaw designed to discourage investors from owning more than 10% of the $520 million-asset company's stock. Davee, who has a 6.3% stake in the company,
The bylaw in question caps an investor's voting rights at 10% of outstanding shares.
"It's a very disadvantageous measure that really disenfranchises shareholders," Davee said. "If you own a block of stock, you should be able to vote it."
Other industry observers questioned the reasons for the rule.
"It's an anti-takeover device, but in my view a very unfriendly one to investors," said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. "It certainly doesn't make them shareholder friendly."
The rule closely resembles regulations from the
The OCC's regulation "is designed to protect a newly public organization from takeovers and also help them raise capital to begin with," said Chip MacDonald, a lawyer at Jones Day in Atlanta. "It can help [management] get over the fear of losing their jobs by taking their company public and losing capital."
The OCC, however, recommends that banks remove ownership limits within five years of a conversion. River Valley became a stock-owned company in 1996.
River Valley did not return multiple requests for comment, but industry observers said a delay in changing the bylaw, per the OCC's guidance, could stem from the company's relatively small size, low profile and a diverse shareholder base that is likely made up of depositors who bought in during the conversion.
River Valley's biggest shareholder at the time of its March proxy statement was its employee stock ownership plan, with a 6.4% stake. The company's board collectively holds about 13% of its shares outstanding.
"For smaller banks, people know each other and they trust each other," MacDonald said. "They're not necessarily subject to the same pressure [as larger banks], and there's not a lot of institutional shareholders."
Davee, who has raised concerns about the issue at least as
Removing the bylaw would give Davee and his wife a chance to build a bigger ownership stake, which could make it easier for them to push a bigger agenda at River Valley. In 2009, the couple proposed an amendment to do away with plurality voting in board elections; they only gained 42% of the vote.
Davee also wrote an
Davee, who has until Nov. 19 to file his shareholder proposal, said he has been able to contact fewer than 10 other investors. "I'm trying to find ways that bring their bylaws up to a level that's fair to all shareholders," he said.
River Valley, meanwhile, has been among the nation's
