Activist investor Joseph Stilwell has launched his second proxy fight at a community bank in less than a month.
Stilwell nominated himself and Spencer Schneider, the general counsel of his New York investment firm, to the board of First Financial Northwest Inc. in Renton, Wash. Stilwell wants the $1.1 billion-asset parent company of First Savings Bank Northwest to sell itself to "a more shareholder-friendly company," Stilwell wrote in a letter to First Financial Northwest shareholders.
"When a company loses money and its board has given pay increases year-in and year-out to the very same CEO responsible for those losses, that board, ipso facto, is not representing the owners' best interests," Stilwell wrote in the letter, which was filed on Friday afternoon with the U.S. Securities and Exchange Commission.
Schneider was previously a director of First Financial Northwest, but he quit in February, after only five weeks, because the board would not vote on a series of demands that included limiting the refreshments served at board meetings to hard candy.
First Financial's chief executive, Victor Karpiak, told American Banker earlier this month that he believed Schneider's brief stint on the board was "orchestrated" with the intent of launching a proxy fight. In a preliminary proxy statement filed Friday with the SEC, Karpiak wrote in a letter to shareholders that Stilwell "and a group of funds he controls have announced that they intend to nominate one or more persons to First Financial's board of directors. Your board strongly urges you to support First Financial's nominees."
Stilwell Group owns an 8.5% stake in First Financial Northwest, according to First Financial's preliminary proxy.
Earlier this month, Stilwell filed notice of his intent to gain representation on the board of Harvard Illinois Bancorp Inc., of Harvard, Ill., in order to force that company to sell. Stilwell wrote in a letter to shareholders that the $170 million-asset mutual holding company's management and board "have not been able to run a profitable bank."