A South Carolina thrift company says it won't look for a buyer despite a vote from shareholders favoring a prompt merger.
Officials of Palfed Inc., Aiken, S.C., say they will not observe a nonbinding resolution passed by shareholders last week that calls for the sale of the $663.3 million-asset thrift.
Approximately 2.5 million shares voted for a proposal by Mid-Atlantic Investors, a Columbia, S.C., group trying to force Palfed to look for a buyer. Approximately 1.9 million shares voted against Mid-Atlantic's proposal.
Officials of Palfed, the parent of Palmetto Federal Savings Bank, said the board would continue to follow its expansion strategy. They added that the company has no plans to enter into an "auction."
"Nothing will change for us," said John C. Troutman, president and chief executive officer of Palfed. "It is a myth that selling our bank is the only way to maximize shareholder value."
H. Jerry Shearer, managing partner of Mid-Atlantic Investors, said he would continue to pressure the company to sell. He said he was upset that management would ignore the vote by shareholders.
"Mr. Troutman appears to have lost sight of his duty to act in the best interest of the shareholders," Mr. Shearer said. "His arrogant 'I will do what I want to' attitude does not exhibit the kind of leadership needed by a company like Palfed."
Mid-Atlantic, which owns 9.9% of Palfed, received the support of John Hancock Advisors of Boston, which owns 8%.
But Palfed officials claim that local shareholders voted against the proposal more than 10 to 1. Mr. Troutman said that an outpouring of support in letters, phone calls, and comments from South Carolina residents confirmed that shareholders and customers "believe there is an important place in South Carolina for community banks like Palmetto Federal."
Mr. Shearer called Palfed's comment about South Carolinians' support one of the "dumbest" statements made by management.
He said the vote sent a strong message that shareholders want Palfed to sell.
Howard M. Hickey Jr., executive vice president and general counsel, said shareholder support of four directors who don't want to sell the company shows otherwise.
"We probably lost in the hype of a sale environment," Mr. Hickey said.