Magazine article American Banker

Agitation at Provident Heats Up Sale Talk

Magazine article American Banker

Agitation at Provident Heats Up Sale Talk

Article excerpt

An investor group known for persuading boards to sell their banking companies is clamoring for two board seats at a California thrift company.

The group, led by JAM Partners general partner Sy Jacobs, in August demanded all shareholder information from the current board of directors of Provident Financial Holdings Inc., the $1 billion-asset parent of Provident Savings Bank FSB.

Mr. Jacobs, whose company is based in New York, could use the information to get himself and Gene Gaines, an executive vice president at $796 million-asset Pacific Western Bank in Santa Monica, Calif., elected to the Provident Financial board, according to a letter from Mr. Jacobs filed Aug. 16 with the Securities and Exchange Commission.

In a May 29 letter to the board, Mr. Jacobs said the group, which owns more than 7% of Provident's stock, was disappointed by the thrift's "subpar performance" -- specifically, its failure to meet its goal of at least 10% return on equity.

Provident has returned an average of 6.9% on equity over the past five years. The average ROE for its peers nationwide was 11.91% as of June 30, according to the Federal Deposit Insurance Corp.

No date has been set for the annual meeting, but Provident usually holds it in October.

Mr. Jacobs would not comment for this article. Craig G. Blunden, Provident's president and chief executive officer, said he would not discuss Mr. Jacobs' recent correspondence.

Mr. Jacobs' letters did not say whether he would push for a sale if elected to the board. …

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