With profits declining and stock prices falling, pressure is mounting on some thrifts to find buyers.
In the last week three institutions - Bank Plus Corp. of Glendale, Calif., People's Bancshares Inc. of New Bedford, Mass., and Yonkers (N.Y.) Financial Corp. - received letters from disgruntled shareholder groups questioning their strategies and requesting seats on their boards.
At $3 billion-asset Bank Plus, Strome Investment Management LP said it would either call a special meeting of shareholders to expand the thrift's board or propose a new slate of directors at the next annual meeting, according to documents filed with the Securities and Exchange Commission.
Bank Plus, which put itself on the block more than a year ago because of mounting losses and shareholder unrest, said last month that merger talks with several suitors faltered because of problems in its $250 million subprime credit card portfolio.
In the SEC filing, Santa Monica, Calif.-based Strome Investment voiced disappointment with Bank Plus' management and said it may take its proposal to other shareholders. The hedge fund owns 9.62% of Bank Plus' shares.
The company lost more than $60 million last year and $16 million through the first nine months of 1999, mainly because of lingering problems with its credit card portfolio. Its stock has plummeted from a high of $6.325 in July - when a merger seemed possible - to $2.7187 late Tuesday.
Meanwhile, the New York-based investment fund RCG Kingston LLC said it is frustrated that $1 billion-asset People's Bancshares did not heed its advice in retaining an investment banker to sell the thrift or accept three of its nominees to the board.
In a Dec.1 letter to the People's board that was filed with the SEC, RCG Kingston concluded that the thrift company's operating strategy is flawed because its shares on a price-to-earnings basis are trading below those of its peers.
"We believe concerned shareholders can only conclude by the board's action that management does not have the interest of shareholders as its primary goal," wrote Thomas F. Gillen and Donald B. Jennings, principals at RCG Kingston, which owns 8.8% of the thrift company's stock.
And at $383 million-asset Yonkers, an investment group led by activist investor Lawrence B. Seidman is trying to get two of its nominees elected to the board. The group, known as the Committee to Enhance Shareholder Value, said its nominees would urge the thrift to make an acquisition or sell if a purchase proves impossible.
A well-known activist, Mr. Seidman first called for Yonkers' sale last May. He and colleague Dennis Pollack are the group's two nominees to the thrift's board.
These are difficult times for thrifts. The Office of Thrift Supervision reported last week that industry profits fell to $2.09 billion, down 6.3% from the same week in 1998. Meanwhile, thrift stocks are down an average of 15.85% for the year, according to SNL Securities Inc. of Charlottesville, Va.
Taran Provost contributed to this story.