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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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The following will be submitted to newspapers in Oregon Trail's primary market
area:
Dear Shareholders and Community Members,
Let me preface this letter with acknowledging the tragic events in New York
City and Washington, D.C. this past week. Our country has suffered a great
loss and our thoughts and prayers are with those who have lost family members,
friends and co-workers. As a Company, we fully support our government's
leadership in its quest for justice.
I am writing to all of you who are concerned with recent developments and
unfavorable statements regarding Oregon Trail Financial Corp. (OTFC), the
holding company for Pioneer Bank. Many of you have read the paid
advertisements and mailings of a new shareholder in OTFC condemning the
Company's Board of Directors and management. This shareholder, Joseph
Stilwell, has expended a great amount of effort and resources in trying to
create an adverse perception of the Company and its Board. We, at the
Company, believe his lawsuits against the Company's individual directors are
designed to distract and upset employees, customers and shareholders. We
think it is improper to use the legal system to introduce frivolous lawsuits,
such as the ones brought by Mr. Stilwell against Directors Chuck Rouse and Ed
Elms. Therefore, we felt obligated to defend Directors Rouse and Elms against
Mr. Stilwell's claims and were vindicated in our actions when each of their
cases were dismissed.
Mr. Stilwell may determine to bring further law-suits, or take other actions,
against the Company and its directors, however, we will continue to make our
case in defense of these actions through the court system.
Mr. Stilwell has questioned an employee condominium which is owned by the
Company's subsidiary. The condo was purchased in 1974 for $21,000 and has
remained an asset of the Company for 27 years. Employees pay a nominal fee to
use it so that the cost to the Company is minimal, yet it is an employee
benefit that is truly appreciated by our employees. Directors do not use the
condo, are not paid to oversee the condo, but are paid a $125 monthly fee as
Board members of Pioneer Development Corporation whose primary assets consist
of real estate contracts and securities.
Mr. Stilwell has also taken issue with the Company's share repurchases. The
Company's directors and management have had a continuous practice to maximize
share repurchases since the mutual to stock conversion in 1997. The amount
and timing of the buybacks is determined by market conditions, available cash,
regulatory restrictions, and whether or not the buybacks are expected to
increase earnings per share. OTFC has repurchased in excess of 26% of the
shares it originally issued and has $18,000,000 available for future
repurchases and other uses.
The price of OTFC stock has increased at an annualized rate of over 14% per
year since going public in 1997, and has increased over 70% since May 2000.
We believe the stock price has increased due to successful execution of
strategic initiatives implemented by the Company, increased earnings, as well
as strong loan and deposit growth. Loans have increased 109% and deposits
have increased 40% from March 1997 to June 2001. Earnings per share were up
78% in the quarter ended June 30, 2001 compared to the same quarter one year
ago. Additionally, Pioneer Bank has made tremendous strides in its transition
from a traditional thrift to a diversified community bank and now business and
consumer loans represent 54% of its loan portfolio, up from 26% in 1997.
Our new management team has successfully developed and executed strategic
initiatives which have dramatically increased earnings in a short period of
time. We are grateful to our employees for their dedicated efforts in
providing excellent customer service and likewise appreciate the loyalty of
our customers.
Thank you for your continued support of Oregon Trail Financial Corp.
Sincerely,
/s/Stephen R. Whittemore
Stephen R. Whittemore
Chairman of the Board