The former head of a Pittsburgh-based community bank is pushing for it to be sold.
George F. Pendro retired as president of Allegheny Valley Bancorp in May 1996, after 20 years on the job, but remained a shareholder. Now he and three other former directors have launched a proxy campaign to force the $235 million-asset bank to find a buyer.
"The ongoing decline of the economy in western Pennsylvania, coupled with job losses, makes it very difficult" for Allegheny Valley to prosper, the group said in its filing accompanying the bank's proxy statement, which was issued last week.
Mr. Pendro did not return a reporter's calls to the Pittsburgh address listed on the proxy.
But in the filing, he said the current management does not have what it takes to make the bank succeed.
"The fear is that Allegheny Valley will not be strong enough to weather an economic decline," he wrote to investors. "As shareholders, we could miss this opportunity if we wait too long."
Mr. Pendro and his associates own about 4% of the company's thinly traded shares. They estimate Allegheny Valley could get three times its book value in a sale, or about $94.50 per share. The company's shares was trading late Wednesday afternoon at $62.50.
But bank president Jerry Kunig said, "We believe we have a very bright future as an independent community bank."
Mr. Kunig referred specific questions to the bank's proxy. There, management points out that Allegheny Valley has beaten the Nasdaq bank index in each of the last nine years. In 1998, for example, the bank's stock price rose 29.7%, versus an 11.77% decline in the bank index.
Chuck Brown, a director and local businessman who owns about 10% of the shares, predicted the 99-year-old company will survive the dissident challenge.
"Most of the shareholders at the bank are older, and they are supportive of management," said Mr. Brown, who's great-grandfather co-founded the bank. "They want to keep the bank independent."
The company's annual meeting is scheduled for April 13.