Metro Bancorp Inc. has reached an agreement with activist investor Richard Lashley and has nominated him to join its board of directors, halting a possible proxy battle showdown.
Lashley, co-founder and principal at Chicago-based PL Capital LLC, had been fighting for a seat on Metro’s board since the fall. The agreement likely halts any proxy battle at Metro’s annual shareholder meeting, which is expected to be in mid-to-late June, company spokeswoman Natalie Neyer said Friday morning.
Neyer said the board seat Lashley is being nominated for is a new seat, so it won’t cause any current Metro directors to lose their seat on the board.
Lashley did not respond to requests for comment.
Metro also announced that by close of business today, it will terminate the shareholder rights agreement it enacted in February. The policy would have caused substantial dilution to any group that would have bought more than 15 percent ownership in Metro Bancorp.
Following the adoption of the rights agreement — often called a “poison pill” — PL Capital ripped Metro, claiming it was based on PL Capital buying significant amounts of Metro stock over the last year. Last spring, PL owned 5.24 percent of Metro stock, but it now owns 8.8 percent as one of Metro’s largest shareholders, according to a news release.
In return for Metro’s support, PL Capital has agreed to vote its shares in favor of the other Metro-supported director nominees, Neyer said.
PL Capital is part of a trio of activist Metro investors that publicly have urged the holding company for Swatara Township-based Metro Bank to be sold or merged. The activists stated their worries about Metro’s long-term sustainability based on its current model of many brick-and-mortar branches with long hours and high-touch customer service.
Since then, Metro has taken steps to address some of the concerns, and initiated a plan in the fall that included examining branch hours and awarding quarterly cash dividends for the first time. While Metro officials said it had nothing to do with the activist investors, it announced it will close two branches, one in the York area and one in Carlisle, in June.
Initially PL Capital had sought two seats on Metro’s board. However, in March, the Securities and Exchange Commission announced a cease-and-desist agreement with William A. Houlihan, who was to be the second nominee. The SEC had been investigating Houlihan for his dealings with another of this companies. Lashley later confirmed PL dropped Houlihan as a nominee because of the SEC order and said PL had no knowledge of the order when it nominated Houlihan.
Metro has about $3 billion in assets and trades its shares on the NASDAQ exchange at the ticker symbol METR.