HOPKINSVILLE, Ky., April 30, 2013 /PRNewswire/ -- HopFed Bancorp, Inc. (NASDAQ: HFBC) (the "Company"), the holding company for Heritage Bank, today announced that Glass Lewis & Co., a leading independent proxy advisory firm, recommended that HopFed stockholders vote in favor of management's proposals, including the election of Dr. Thomas I. Miller, Steve Hunt and Michael L. Woolfolk as directors, approval of the HopFed Bancorp, Inc. 2013 Long Term Incentive Plan, and all other Company proposals on the WHITE proxy card. The Company's Annual Meeting of Stockholders will be held May 15, 2013.
Commenting on the Glass Lewis report, John E. Peck, president and chief executive officer, said, "We are gratified that a highly respected and independent proxy advisory firm supports HopFed by recommending a vote in favor of all of management's proposals. In addition, the report also supports management's proposed acquisition of Sumner Bank and Trust. The Sumner Bank acquisition represents a key difference between management's plan to increase earnings for HopFed and statements opposing the acquisition by Joseph Stilwell and the Stilwell Group, the dissidents."
The Glass Lewis report highlighted the advantages of the proposed acquisition of Sumner Bank and Trust:
The Glass Lewis report was also critical of the Dissident for not providing any details regarding its agenda to terminate the Sumner Bank transaction or the Dissident's proposed share repurchase plan. In its April 29, 2013 report, Glass Lewis "recommend(s) that shareholders vote FOR all Management Nominees." In making the recommendation, they stated that "the Dissident has not suggested a plan how it might improve the Company's operating or financial performance nor has it justified its belief that Mr. Miller (HopFed's nominee) should removed from the board." It further noted that, "we do not believe the Dissident has provided a sufficiently compelling argument or plan to warrant supporting its nominee or removing an incumbent director at this time." The Glass Lewis report is particularly critical of Mr. Robert Bolton, the Dissident's nominee to replace Dr. Miller on the HopFed Board of Directors. "While we recognize the Dissident Nominee has considerable experience in investment management, we are concerned that he does not appear to have any specific executive level experience at a depository institution that would be helpful in addressing the concerns noted by the Dissident. Further, the Dissident has granted its nominee an option to purchase shares of the Company's common stock that will become exercisable only upon the occurrence of a change of control. We are concerned this arrangement provides Mr. Bolton with an incentive to pursue a sale of the Company irrespective of whether it is in the best interests of other shareholders. Additionally, to our knowledge, the Dissident has not provided any rationale to support its proposal to remove Mr. Miller from the board." The Glass Lewis report also provided a detailed analysis of the proposed 2013 Long Term Incentive Plan and "recommend(s) that shareholders vote FOR this proposal." They stated that, "Based on the value of equity-based incentive programs, we believe such a plan could be beneficial for the Company and its shareholders." In other recommendations in favor of management's proposals, the Glass Lewis report recommends, "that shareholders vote FOR the ratification of the appointment of Rayburn, Bates & Fitzgerald as the Company's auditors for fiscal year 2013." They "recommend that shareholders vote FOR the Advisory Vote on Executive Compensation," and "recommend that shareholders vote for the advisory vote on executive compensation frequency of ONE YEAR." HopFed's Board urges stockholders to vote FOR the three nominees proposed by the Board and FOR all other company proposals on the WHITE proxy card, and to not sign or return any GREEN proxy card sent by the dissidents, Joseph Stilwell and the Stilwell Group. Glass Lewis advises institutional investors and other institutional participants in the financial and capital markets. In its Conflict of Interest Statement, Glass Lewis notes that the firm "takes precautions to ensure its research is objective at all times and under all circumstances."
"The acquisition is expected to bolster the Company's presence in the Nashville metropolitan area and provide additional exposure to growing markets with attractive demographic profiles. It is also expected to allow for significant cost savings in the amount of $2.1 million and improve the Company's deposit mix and net interest margin. Further, the acquisition is in-line with the objectives outlined by the Company in connection with a June 2010 equity issuance under which the Company raised $30.4 million to repay TARP funds, fund internal growth and pursue acquisition opportunities."