Less than a year after stepping down as chairman of Atlantic Coast Financial (ACFC) in Jacksonville, Fla., Jay Sidhu is seeking to oust three members of the company's board and replace them with a new slate of directors.
Sidhu, a director of the $785 million-asset company who currently serves as chairman and chief executive of Customers Bancorp in Pennsylvania, has joined with a fellow director, Bhanu Choudhrie, to nominate John Dolan, Kevin Champagne and Dave Bhasin to the company's board, according to a recent Securities and Exchange Commission filing.
According to Sidhu and Choudhrie, Atlantic's board "has consistently failed to act to mitigate or significantly reduce the risks facing the issuer and follow prudent safety and sound banking practices, in spite of several plans put forward by certain directors."
If the board fails to nominate the candidates, the men say they "may take additional action," including seeking a vote by shareholders on the slate.
An Atlantic Coast spokesman declined to comment on the demand by Sidhu and Choudhrie.
Sidhu resigned as chairman of Atlantic Coast in May, saying the board had failed to reduce risks facing the company. A second director, Charles Carey, stepped down in June, citing concerns over how the company was run.
The bank responded that the views of Sidhu and Carey were in the minority and said that a majority of directors believed the company "is taking appropriate action to explore all strategic alternatives to enhance stockholder value," according to a filing with the SEC on June 7.
Atlantic Coast has struggled over the past year to shore up its capital. An order issued in August by the Office of the Comptroller of the Currency obligated the company's Atlantic Coast Bank unit to achieve Tier 1 capital of at least 9% of adjusted total assets and a total risk-based capital ratio of at least 13% of risk-weighted assets by the end of the year.
As of Dec. 31, the bank had Tier 1 capital of 9% and a total risk-based capital ratio of 10%, according to the Federal Deposit Insurance Corp.