Poage in Kentucky Prevails in Proxy Fight

Poage Bankshares (PBSK) has fended off a proxy challenge from activist investor Joseph Stilwell.

The Ashland, Ky., company's three board nominees prevailed at its annual meeting last week, according to a Tuesday regulatory filing. Stilwell's nominee, Steve Burchett, fell short by 188,000 votes, or 5% of the total.

The company's shareholders also approved an executive pay plan and the appointment of Crowe Horwath as accountant.

The dispute between Stilwell and the $439 million-asset Poage centered on the bank's M&A strategy. Stilwell had sought one of Poage's nine board seats in order to encourage the company to sell itself, while Poage's management plans to be an acquirer. It paid $15 million for Town Square Financial earlier this year, a deal that Stilwell criticized.

Stilwell, who owns more than 8% of Poage's shares, said his nominee would "use his experience and commitment to maximize value for all shareholders to discourage [Poage] from doing another dilutive deal." The bank defended the Town Square acquisition, arguing in a filing that "controlled growth" is "the key to unlocking shareholder value."

Shareholders took the company's side, electing Stuart Moore, Charles Robinson and Thomas Burnette.

Poage lost $425,000 in the first quarter because of higher expenses. Its stock price has risen more than 28% since a mutual conversion three years ago, to $14.25 a share on Tuesday afternoon.