Metro Bancorp (METR) in Harrisburg, Pa., is facing pressure from an investor to sell itself.
Basswood Capital Management, which controls nearly 10% of the $2.9 billion-asset company's stock, is pushing Metro's board to hire an investment bank. "We strongly believe the best course for shareholders, employees, and the communities is for [Metro] to begin a process that leads to a sale of the company to a larger bank," Basswood's Matthew Lindenbaum wrote in a June 3 letter.
"Management and the board have done a great job over the past 29 years in building a bank that has resonated well within the communities it serves," Lindenbaum added. "However, it is clear that the environment is becoming more challenging and competitive."
Lindenbaum noted in his letter that Metro's deposit forecast for the end of this year fell 9% between November and May. He also flagged the company for a roughly 75% efficiency ratio.
Basswood isn't the only investor keeping an eye on Metro. PL Capital, which owns more than 5% of Metro's stock, has stated in recent filing that it is also monitoring the company and its management.
Lindenbaum referred to the filing in his letter. "We take this as a sign that other shareholders are concerned with [Metro's] direction and prospects and believe that the board's engaging in a sale process would be widely welcomed by the company's shareholders," he wrote.