Middlefield, Peoples Financial face proxy challenges

A pair of community banks is facing proxy challenges from activist investors. 

Middlefield Banc Corp. in Beachwood, Ohio, is dealing with pressure from Ancora Advisors to find a buyer. 

The investor included a proposal for consideration at the $1.3 billion-asset Middlefield’s annual meeting that would recommend that the board “take the necessary steps to achieve a sale, merger, or other disposition of the company on terms that will maximize shareholder value as expeditiously as possible.” 

Ancora, which owns about 7.6% of Middlefield’s stock, said the company has been underperforming peers, adding that it believes “there are several interested buyers … since the bank is a scarce asset with the second-largest deposit market share in Geauga County.” 

Middlefield, which in February appointed a new president and CEO, told shareholders in a regulatory filing that the proposal, if enacted, could “potentially weaken” its business. The company disputed the peer group that Ancora used, and asserted that its depressed stock price was a result of it being removed from the Russell 3000 Index. 

“The company has taken favorable governance actions by addressing CEO succession and strengthening the board with capital markets expertise,” the board said in the regulatory filing. 

Peoples Financial in Biloxi, Miss., is navigating a proxy challenge from Stilwell Group in New York.

Stilwell, which owns about 9.9% of the $819 million-asset Peoples stock, is looking to have Rodney Blackwell added to the company’s board. 

“We believe the issuer should explore all possibilities to maximize shareholder value,” the investor said in a regulatory filing. “We do not believe the value of the Issuer's assets is adequately reflected in the current market price of the issuer's common stock.” 

Peoples’ board is recommending that shareholders vote against Blackwell. 

“We sympathize with you, our shareholders, and understand that this unnecessary proxy contest … has caused frustration through the numerous unwanted mailings and different forms of green proxy cards you have received,” the company said in a regulatory filing.