Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Check the appropriate box:
[ ] Preliminary proxy statement
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OREGON TRAIL FINANCIAL CORP.
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(Name of Registrant as Specified in Its Charter)
OREGON TRAIL FINANCIAL CORP
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(Name of Person(s) Filing Proxy Statement)
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Vote "FOR" GENTRY AND LIENKAEMPER and Maximize the Value of Your Investment
say NO to Stilwell's shortsighted agenda!
Dear Shareholder:
Our annual shareholders' meeting, now rescheduled for October 12, 2001, will
be extremely important to you. HERE IS WHY:
* THE STILWELL GROUP WANTS TO SELL YOUR COMPANY
We believe Mr. STILWELL IS WRONG, and a sale now will not maximize
shareholder value. HERE IS WHY:
* NEW MANAGEMENT'S STRATEGIC INITIATIVES ARE WORKING TO
INCREASE SHAREHOLDER VALUE.
o OTFC STOCK IS UP OVER 60% since new management took over less
than 18 months ago.
o June 30, 2001 quarterly Return on Equity is ABOVE our peer
group (excluding Stilwell related expenses).
o For the quarter end March 31, 2001, EARNINGS PER SHARE
("EPS") WERE UP 53% from the same period last year.
o For the quarter end June 30, 2001, EPS WERE UP 78% from the
same period last year.
o We have provided guidance, projecting continued EPS growth
for fiscal year 2002 and EPS of up to $0.41 for the fourth
quarter.
o Company guidance predicts March 31, 2002 quarterly EPS WILL
BE UP TO 128% HIGHER than EPS for the quarter ended March 31,
2000.
* LEVERAGE OF CAPITAL IS NOT COMPLETE
o OTFC HAS REPURCHASED OVER 26% OF ITS SHARES originally
outstanding, at a total cost of $16.7 million, reducing its
capital down to 13.22% of assets.
o FURTHER REPURCHASES ARE INTEGRAL to fully leverage the
Company's franchise value and MAXIMIZE SHAREHOLDER VALUE.
o We believe fewer shares outstanding will have a positive
impact on our market value per share, the deposit premium per
share, as well as a potential sale price per share.
o OTFC HAS OVER $18 MILLION FOR FUTURE NEAR-TERM AGGRESSIVE
SHARE REPURCHASES.
* FRANCHISE VALUE IS INCREASING
o DEPOSITS ARE UP 42% since 1997, the last fiscal year prior to
the Company's IPO, and 7% for 2001.
o LOANS ARE UP 80% since 1997 and 14% for 2001.
o COMMERCIAL AND CONSUMER LOANS ARE UP TO 44.5% of total loans
from 25.9% in 1997, (and loan quality is excellent!).
o NON-INTEREST INCOME IS UP 226% since 1997, and 35% for 2001.
* FINANCIAL ADVISOR RETAINED
o Investment Banker, Keefe Bryette & Woods, Inc. ("KBW") was
retained to review management's plan to maximize shareholder
value.
o KBW provided guidance that the merger market today is a
"buyers market" for small rural thrifts, and SELLING NOW MAY
NOT MAXIMIZE SHARE VALUE.
o KBW commented that experience has shown that the price from a
sale today may be reduced because the earnings improvement is
so recent.
o KBW agreed with management's assertion that aggressive share
repurchases at levels below book value should enhance
shareholder value.
o KBW agreed that fewer shares should contribute to stronger
EPS.
o KBW agreed that continued execution of the business plan
should result in stronger franchise value.
MORE ABOUT STILWELL AND HIS NOMINEE
SUPPORTING STILWELL'S SHORTSIGHTED AGENDA WILL INCREASE EXPENSES. Here is
why:
* Stilwell will request reimbursement of HUNDREDS OF THOUSANDS OF
DOLLARS from OTFC, in connection with his proxy solicitation and
other legal fees, if his nominee is elected.
* Stilwell's actions have already caused OTFC to spend over $400,000 in
professional fees and legal services.
WE BELIEVE STILWELL'S NOMINEE IS UNSUITABLE FOR THE OTFC BOARD
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* STILWELL'S NOMINEE HAS BEEN ENTICED TO SERVE with short-term stock
options enabling him to purchase, from Stilwell, over $300,000 of
OTFC stock at favorable terms.
* Stilwell's nominee is an attorney with no banking experience.
* Stilwell's nominee was a partner at the law firm being paid by
Stilwell to sue OTFC.
* Stilwell's nominee has never lived in the Company's market area.
CLARIFICATION
In our previous proxy materials, we stated that we believed the Stilwell
Group wanted to force a quick sale of the Company. We continue to believe it
does want to sell your Company and the election of its candidate is a first
step in that process. Alone, Mr. Padrick could not cause the Company to be
sold and he says he is committed to act in the best interest of shareholders
and will exercise his fiduciary duties. We accept that statement but continue
to be concerned that he nonetheless has prejudged that a sale of the Company
is in the shareholders best interest and has done so without having reviewed
the Company's new business plan, met with senior management, attended a single
board meeting nor heard the advice of the Company's financial advisors.
SUMMARY
OTFC is increasing earnings, earnings per share, book value, market value, and
franchise value. In contrast, Stilwell's actions are increasing OTFC expenses
and derailing our efforts to maximize the value of your investment.
Your Board of Directors is committed to increasing shareholder value through
aggressive share repurchases and currently has over $18 million dollars in
cash at the holding company which may be used to repurchase a significant
percentage of shares outstanding. DON'T LET STILWELL MISLEAD YOU! WE HAVE
BEEN REPURCHASING SHARES! OTFC HAS REPURCHASED OVER 26% OF ITS SHARES
originally outstanding and is "in the market daily" repurchasing shares when
possible in accordance applicable rules, regulations and provisions. Thin
trading volume makes shares difficult to acquire. OTFC has considered
additional means to acquire shares, such as a DUTCH AUCTION OR MODIFIED
TENDER, and its Board believes that such other means are more effective tools
for capital utilization.
Your Board of Directors UNANIMOUSLY URGE you to COMPLETE, SIGN, DATE AND
RETURN Management's "GREEN" Proxy (another is enclosed) voting "FOR"
LIENKAEMPER AND GENTRY and THROW AWAY all "Blue and White" proxy cards that
you receive from Stilwell.
Respectfully yours,
/s/Stephen R. Whittemore /s/Charles Rouse /s/John Lienkaemper
Stephen R. Whittemore, Charles Rouse, John Lienkaemper,
Director and Chairman Director Director
/s/Al Durgan /s/John Gentry /s/Ed Elms
Al Durgan, John Gentry, Ed Elms,
Director Director Director
Forward-Looking Information
This release contains statements about the Company's future results and may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
may be identified by the use of such words as "believe", "may", "expect,"
"planned", "anticipated" and "potential." We have used forward-looking
statements to describe future plans and strategies, including our expectations
of the Company's future financial results. These forward-looking statements
are based on current expectations and the current economic environment.
Management's ability to predict results or the effect of future plans or
strategies is inherently uncertain. Factors which could cause actual results
to differ materially include, but are not limited to, general and local
economic conditions, changes in interest rates, deposit flows, demand for
mortgages and other loans, real estate value, competition, changes in
accounting principles, practices, policies or guidelines, changes in
legislation or regulation, and other economic, competitive, governmental,
regulatory and technological factors effecting operations, pricing, products
and services. Accordingly, these factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed on
such statements.
Such forward-looking statements may include projections. Such projections
were not prepared in accordance with published guidelines of the American
Institute of Certified Public Accountants or the SEC regarding projections and
forecasts, nor have such projections been audited, examined or otherwise
reviewed by independent auditors of the Company. In addition, such
projections are based upon many estimates and inherently subject to
significant economic and competitive uncertainties and contingencies, many of
which are beyond the control of management of the Company. Accordingly,
actual results may be materially higher or lower than those projected. The
inclusion of such projections herein should not be regarded as a
representation by the Company that the projections will prove to be correct.
The Company does not undertake to update any forward looking statement that
may be made on behalf of the Company.