Shareholders of Lacey-based Anchor Bancorp heard a pitch Wednesday from an activist investor who wants to join the board and sell the company.
Joel Lawson IV, an investor from Berwyn, Pennsylvania, who owns about 9 percent of the company, has stated through SEC filings and releases that Anchor has underperformed, relative to its banking peers, and that a sale of the company should be considered.
In a letter to Anchor stockholders last week, Lawson complained that the bank’s current return on equity is only about 2 percent, well below the cost of capital. He called for a committee to explore alternatives, “including a sale of the company.”
Anchor Bank is a community bank with 11 branches, serving mostly Aberdeen, Hoquiam and other communities in Grays Harbor County.
The meeting breezed through its agenda at the Lacey Community Center in about 15 minutes, but Lawson was given time to address Anchor Bancorp’s board of directors and others in attendance by reading from a prepared statement. He nominated himself for a board seat.
“I urge the board to listen to shareholders and to take their fiduciary obligations seriously,” he said, adding that shareholders have a right to be heard.
“I will take their voice seriously, professionally and responsibly,” he said, if elected.
In Internet postings, Lawson is identified as the managing member of Cloister Capital LLC, which invests in “orphaned and undervalued securities, primarily in the financial sector.” He is also listed as a director of Biscayne Bank of Miami.
Lawson declined to comment after the meeting. The outcome of the shareholder vote on Lawson’s candidacy for the board wasn’t immediately known on Wednesday, but will be decided in the coming days, said John Breyer, legal counsel for Anchor Bancorp.
In a news release, ISS Proxy Advisory Services has taken the opposite view, defending management’s work with the company since it went public in 2011.
Martin Nelson, president of a Seattle-based stock brokerage that bears his name, praised management during Wednesday’s meeting, saying it had reduced challenging loans at the company, but he also said they have a lot more to do.
He described Lawson as experienced and knowledgeable, and agreed that he would be an advocate for shareholders. He also took issue with the company’s policy of requiring board members to be Washington state residents. It limits the pool of potential board candidates, he said.
“Super high-quality individuals should be considered for the board,” Nelson said.
Nelson, too, said Anchor Bancorp should tread carefully with activist investors, citing the recent example of First Financial Northwest, the parent company of Renton-based First Savings Bank Northwest.
In that proxy fight, the activist investor, Stilwell Group, ultimately sued, resulting in the resignation of First Financial Northwest’s chairman and significant legal costs for the bank-holding company. At one point, those costs stood at $868,000, according to an American Banker report.
Stilwell also has a stake in Anchor Bancorp.
On Wednesday, Anchor Bancorp’s stock, which trades under the ticker symbol ANCB, finished a penny higher to close at $22.39 a share. But in the past month, the stock is up about 5 percent.