Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the registrant [x]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[ ] Definitive proxy statement
[x] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
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)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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to Exchange Act Rule 0-11:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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(2) Form, schedule or registration statement no.:
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The following advertisement will be submitted to newspapers in Oregon Trail's
primary market area:
(OTFC Logo)
Holding company for Pioneer Bank, FSB
Dear Shareholders, Customers, Community Members and Friends,
One hundred years ago, Pioneer Bank, then called Eastern Oregon Building and
Loan Association, committed itself to the financial needs of Eastern Oregon.
Now, a century later, Pioneer Bank is still working for its friends and
neighbors. In 1997, to further strengthen our Bank, we raised additional
capital by converting to stock ownership and organized Oregon Trail Financial
Corp. ("OTFC"), our publicly traded holding company.
The additional capital raised in converting to stock ownership provided
funding for additional human resources, product expansions and facilities to
better meet your financial needs. We are pleased with the tremendous loan and
deposit growth we have experienced in these first few years of transition.
More importantly to our shareholders, we have enjoyed record earnings in the
last two completed quarters. However, we have a new shareholder from the east
coast who thinks your Bank should be sold. Although we appreciate
suggestions on how we can better serve our customers and enhance shareholder
value, we do not agree with Mr. Stilwell.
Here is why:
NEW MANAGEMENT'S STRATEGIC INITIATIVES ARE WORKING TO INCREASE SHAREHOLDER
VALUE.
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 June 30, 2001, our EARNINGS PER SHARE (EPS) WERE
UP 78% from the same period last year.
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 OTFC HAS OVER $18 MILLION IN CASH 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 conversion to stock ownership, and 7% for 2001.
o LOANS ARE UP 80% since 1997 and 14% for 2001.
o COMMERCIAL AND CONSUMER LOANS ARE UP TO 45% of total loans from 26%
in 1997, (and our loan quality is considered excellent!).
Mr. Stilwell is attempting to replace one of your local board members with his
own nominee. However, we do not believe we need his director on your board.
Here is why:
WE BELIEVE STILWELL'S NOMINEE IS UNSUITABLE FOR THE OTFC BOARD.
o 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.
o Stilwell's nominee is an attorney with no banking experience.
o Stilwell's nominee was a partner at the law firm being paid by
Stilwell to sue OTFC.
o Stilwell's nominee has never lived in the Company's market area.
SUPPORTING STILWELL'S SHORTSIGHTED AGENDA WILL INCREASE EXPENSES. HERE IS WHY:
o Stilwell says he 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.
o Stilwell's actions have already caused OTFC to spend over $400,000
in professional fees and legal services.
WHAT YOU SHOULD KNOW ABOUT STILWELL'S LAWSUITS/CLAIMS:
o A meritless suit was brought against director, Chuck Rouse, which
was dismissed after the Judge found there was "no evidence".
o A meritless suit was brought against director, Ed Elms, which was
also dismissed.
o The Board does not receive compensation for overseeing the employee
condo nor does any member use it. The $125 monthly fee referred to
by Mr. Stilwell is compensation for overseeing Pioneer Development
Corp. which invests in millions of dollars of real estate contracts
and securities.
We are proud to be the largest public company headquartered in our
marketplace. As of June 30, 2001, Oregon Trail Financial Corp., the Bank's
parent company, had over $400 million in assets and over $56 million in
equity. The Eastern Oregon economy has struggled with high unemployment, yet
our loan portfolio is one of the best in the nation with respect to the low
level of problem and delinquent loans. We believe Pioneer Bank's
extraordinary financial strength combined with its excellent loan portfolio
make it one of the safest choices for banking in the entire Northwest.
Thank you for helping us prosper through the last one hundred years. We value
our relationship with each and every community member and customer. Our
dominant market share lets us know that you also value Pioneer Bank. We are
proud to serve your financial needs and take our responsibilities very
seriously.
As the large banks exit our rural marketplace, we strive to fill in and help
wherever possible.
We are also pleased to be a major contributor to the local economy. Our 130
employees, earning a combined $4 million payroll, are honored to support our
hometown businesses and community groups. Pioneer Bank donates over $40,000
per year to local community groups and charities while bank employees
contribute over 14,000 working hours per year to these favorite causes.
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 UNANIMOUSLY URGES shareholders to COMPLETE, SIGN, DATE
AND RETURN Management's "GREEN" Proxy 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
On August 29, 2001, the Company filed with the Securities and Exchange
Commission (the "Commission") a definitive proxy statement in connection with
the Company's 2001 annual meeting of stockholders. Copies of the definitive
proxy statement were mailed to stockholders on or about August 29, 2001.
Investors and security holders are urged to read the definitive proxy
statement and additional definitive soliciting material because they contain
important information. Investors and security holders may obtain a free copy
of the definitive proxy statement and other documents filed by the Company
with the Commission at the Commission's website at www.sec.gov. The
definitive proxy statement and these other documents may also be obtained for
free by writing to the Company at P.O. Box 846, Baker City, Oregon 97814,
attention President.
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
are based on current expectations and the current economic environment.
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.