VIST of Pa. Beefs Up Board in Response to Class-Action Suit

The board of directors at VIST Financial (VIST) in Wyomissing, Pa., has formed a special litigation committee to investigate shareholder claims that the board breached its fiduciary duty when it agreed to sell VIST to an upstate New York company for $86 million.

VIST, with $1.2 billion of assets, announced in late January that it was selling itself to Tompkins Financial (TMP) of Ithaca, N.Y., in an all-stock deal equal to $12.50 per share, or about 1.18 times VIST's tangible book value. Less than three weeks later shareholders filed a class-action suit in a Pennsylvania court against 11 VIST directors, claiming that the agreed-upon deal price shortchanged investors.

Such suits have become more common of late and are typically initiated by class-action law firms, not shareholders themselves. In many instances the cases go nowhere but on occasion they have resulted in buyers slightly increasing offering prices.

That VIST has established an independent committee to look into the allegations seems to indicate that it is taking the suit seriously. The company is increasing the size of its board from 13 directors to 15, and it said in a Securities and Exchange Commission filing that both new directors have been named to the litigation committee. One of the directors, Brent L. Peters, is a former executive vice president at Harleysville National Bank, which was sold to First Niagara Financial Group (FNFG) in 2010.

VIST's sale to Tompkins is expected to close in the third quarter.