SELLING OFF OTFC NOT RIGHT FOR REGION
Taken on face value, new Oregon Trail Financial Corporation director Kevin Padricks statement that he wasnt elected to shake things up should be a positive sign for the future of the corporation, the holding company for Pioneer Bank.
At the same time, Padrick of Sunriver said he wouldnt rule out any options, including the sale of the company. Padrick, of course, would have to gain the backing of a majority of the six-member board to accomplish that end.
Padricks election to the board Oct. 12 in a contested race with a director from Ontario was supported by Joseph Stilwell, who, with 9 percent of OTFCs shares, is a major shareholder in the company.
Stilwell, a New York investment fund manager, has been critical of the strategy of both the board and the companys management team over the past year. He says his goal is to maximize shareholder value.
Stilwells agenda has included having OTFC commence the process of exploring the sale of the company. We dont think this approach makes much sense at all. Instead OTFC should be looking to acquire another banking institution. Stilwell also suggests that the companys Oregon coast condominium be sold. This would do little to improve OTFCs financial picture, and probably would only end up harming employee morale.
Oregon Trail Financial Corporation, under the leadership of board chairman Steve Whittemore of La Grande and CEO Berniel Maugham of Baker City, has shown significant growth over recent months and years.
OTFCs stock value has increased by 60 percent since Maugham took over a year and a half ago. For the quarter ending June 30, 2001, earnings per share were up 78 percent over the year before. And through the repurchase of stocks, capital is down to 13.2 percent of assets. Loans have grown 109 percent over a four-year period, and Pioneer Bank officials have done a good job screening them. The number of problem and delinquent loans has been low.
Every company needs strong leadership and vision for both the short- and long-term. Oregon Trail Financial Corporation has exhibited the desire to make itself a strong, solvent financial institution. Selling this Eastern Oregon banking company might help a few stockholders, but it would not be good for the region.
A few years ago, U.S. Bank was sold to a company in the east. Oregon has faced the loss of too many corporate headquarters over the years. Losing Pioneer Bank to some outside banking company could mean a resulting loss of jobs at corporate headquarters in Baker City and in banks in La Grande and elsewhere in the region. This is not an acceptable approach to take.
If Padrick can bring some ideas to the table, great. But selling off an important part of Eastern Oregon isnt one of them.