Eight Banks That Gave In After Activist Pressure
January 31, 2016 9:00 PM
Activist investors thrive when the banking industry is in consolidation mode. Last year, overall M&A started to gain momentum , and several deals involved banks that had been pressured by large, vocal shareholders. The following is a list of deals where sellers had their hands forced by dissident investors.
Alliance Bancorp of Pennsylvania
In February, Alliance, based in Broomall, Pa., reached a truce with PL Capital that allowed the activist investor to add a representative to the company's board. In October, WSFS Financial in Wilmington, Del., announced it would buy Alliance for $92 million in cash and stock.
Astoria Financial
Astoria agreed to sell itself to New York Community Bancorp for $2 billion shortly after Basswood Capital Management went public with an effort to press the Lake Success, N.Y., company to boost shareholder value. Basswood had also been seeking a board seat at Astoria.
Cardinal Bankshares
The Floyd, Va., company ousted its chief executive in 2012 after investor Doug Schaller (pictured) led a revolt. Another CEO was shown the door two years later. In November, Cardinal agreed to merge with Grayson Bankshares in Independence, Va., in a deal that will create a new company called Parkway Acquisition.
Cheviot Financial
Cheviot resolved a dispute with Seidman Group in 2014 that let the investor put a director on the Cincinnati company's board. In return, Seidman agreed to back Cheviot's board nominees, cap its stake and refrain from pushing for a sale. Still, Cheviot in November agreed to sell itself to MainSource Financial in Greensburg, Ind., for $107 million.
Fairmount Bancorp
The Baltimore company, which had been facing pressure from activist investor Joseph Stilwell (pictured), sold itself in September to Hamilton Bancorp in Towson, Md., in April. Just a few months earlier, Stilwell had vowed to pursue a board seat at Fairmount .
Harvard Illinois Bancorp
The Illinois company defeated Stilwell in three straight proxy battles before exposure to a fraud scheme forced it to wind down operations by agreeing to sell its bank to Wonder Bancorp in Wonder Lake, Ill. During a past proxy battle, Stilwell sent shareholders a picture of a former Harvard Illinois chairman napping at an annual meeting in an effort to win votes.
Metro Bancorp
The Harrisburg, Pa., company had been facing pressure from investors such as Basswood, Clover Partners and PL Capital to improve returns or find a buyer. Metro sold itself in August to F.N.B. Corp. in Pittsburgh , which also bought activist-challenged OBA Financial Services.
Naugatuck Valley Financial
The Naugatuck, Conn., company in late 2014 added a pair of directors with ties to activist investors . Less than a year later, the company agreed to sell itself to Liberty Bank in Middletown, Conn. The deal closed in mid-January.
