A couple of years ago, the activist investor Joseph Stilwell said Anchor Bancorp in Lacey, Wash., deserved more time to try to right itself. Apparently he thinks that time is up.

"Continued poor performance highlights the reality that Anchor should now be sold," the New York-based Stilwell Group said in a July 7 letter to the $419 million-asset company. Stilwell is the largest shareholder in Anchor, with a 9.8% stake.

Anchor's pledges during a meeting in June to improve its return on equity by the end of 2018 "sound unrealistic to us," the letter said. "In our view, it is not in shareholders' best interests for management and the board to work 2½ more years towards a marginally better but still inadequate ROE."

In a July 7 email reply to the letter, Anchor said a sale at this time "seems premature." It said "a consistently overlooked" issue is that the bank "was not allowed to put any significant Recognition Program in place" at its initial public offering in January 2011, resulting in "a large drag on current earnings."

Stilwell said last year that a recaptured deferred tax asset would significantly boost Anchor's earnings and should deliver more value to shareholders. Anchor's July 7 email to Stilwell stated that "the residual $2.4 million deferred tax asset … will be lost in any likely sale" of the company.

When Anchor converted from a mutual thrift in 2011, various activist and institutional investors bought roughly half of its stock, and Joel Lawson 4th, an activist investor from Berwyn, Pa., became one of the bank's largest shareholders. Lawson pushed Anchor to sell itself in 2013 and 2014, but he faced resistance from Stilwell, who said he was willing to give the company more time to return to profitability and maximize shareholder value.

Lawson's bid for a board seat in October 2015 received a two-thirds backing from Anchor's shareholders, but he was unable to meet the company's residency requirement. Lawson and Anchor reached an agreement that allowed the investor to designate a board representative, Varonica Ragan. Ragan, a compliance officer and director of accounting and finance at the Seattle wealth management firm Brighton Jones, was named to the board in December 2015. The agreement, though, prevented Lawson, Ragan or their affiliates from pursuing a proxy contest.

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