MutualFirst Financial in Muncie, Ind., has reached a truce with an activist investor.
The $1.4 billion-asset company said in a press release Friday that it will allow Richard Lashley, a co-founder of PL Capital, to join its board. MutualFirst will also amend its bylaws to remove a requirement that director nominees must reside in counties that have an office tied to the company or its subsidiaries.
Lashley will be up for reelection to MutualFirst's board in May 2017.
PL Capital, in return, will not solicit proxies to oppose any recommendations or proposals by MutualFirst's board, as long as Lashley is a director. The investment firm also pledged support for MutualFirst's board nominees and promised to refrain from trying to force the company to sell itself.
Lashley "is well-qualified to serve as a director and it is in the best interests of the company and its stockholders to reach this agreement," Dave Heeter, MutualFirst's president and chief executive, said in the release. "This agreement will permit us to focus on the company's financial performance and profitability and continue to maximize value to our shareholders."
MutualFirst still faces a challenge from Ancora Catalyst Fund and Merlin Partners, which said in a recent regulatory filing that they had nominated Thomas Coley Brady and Timothy McMeekan to join the company's board. The shareholders, which collectively control about 4.6% of MutualFirst's common stock, also want management to find a buyer.
"We believe the actions taken today fully address the concerns raised by Ancora Advisors and satisfy the reasons for their board nominations and stockholder proposal," Heeter said in Friday's release.