Magazine article American Banker

Texas Firm Pushes Two Massachusetts Thrifts to Sell

Magazine article American Banker

Texas Firm Pushes Two Massachusetts Thrifts to Sell

Article excerpt

Byline: John Reosti

A Dallas hedge fund is causing Texas-size headaches for a small thrift in Springfield, Mass.

Clover Partners, which has made clear its desire that the $653 million-asset Hampden Bancorp (HBNK) should sell itself, has initiated a proxy fight to elect two representatives to the company's board. In a Sept. 5 letter to shareholders, Clover, which owns 6.5% of Hampden's common stock, claims the company underperforms its peers and pays executives too much.

The battle is set to take place at Hampden's Nov. 5 annual meeting. The hedge fund has nominated Johnny Guerry, one of its principals, and Garold Base, a former president and chief executive of Viewpoint Financial Group (VPFG) in Dallas, to serve as directors.

Clover has investments in more than two dozen community banks, but it has been devoting a great deal of its attention to Springfield in the past year. In filings with the Securities and Exchange Commission, Clover labels the Springfield area a mature, slow-growth market with a banking sector in need of consolidation.

Springfield has "low growth and limited opportunity," says Guerry, who has not been shy about stirring the pot. In addition to Hampden, Clover has also urged the $591 million-asset Chicopee Bancorp (CBNK) in nearby Chicopee, Mass., to consider selling.

Clover's proxy fight with Hampden represents its first foray into full-fledged shareholder activism. The firm was reluctant to make its objections so public, but "communications with the company have been broken down for quite a while now," Guerry says. …

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