For the second time in a month, PremierWest Bancorp adjourned a special shareholder meeting Wednesday, still looking for enough votes to approve the takeover of PremierWest Bank by an investment group.
Starbuck Bancshares, the private equity parent company of Spokane-based AmericanWest Bank, reached an agreement to acquire the troubled Medford bank in October. Under terms, announced Oct. 29, Starbuck would pay $1.65 per share — more than $16 million — as well as paying off its $41.4 million TARP Capital Purchase Program debt to the U.S. Treasury.
There are just more than 10 million outstanding PremierWest Bancorp shares and nearly 1.8 million shares have yet to be voted, leaving the company short of the majority vote needed to approve the deal.
The shareholder meeting will reconvene at 9 a.m., Thursday, March 28, at PremierWest's headquarters, 503 Airport Road in Medford.
So far, 49.2 percent of all shares — and 60 percent of the shares voted — have been cast in favor of the deal.
To pass, the deal must get more than 50 percent approval of all shares, which means another 78,106 of the 1.8 million unvoted shares must be submitted in support for the proposal to succeed.
Unvoted shares have the same impact as a no vote.
Premier West president and chief executive officer James Ford said company officials will push to reach the necessary vote level.
"We continue to believe that the merger with Starbuck Bancshares is in the best interests of PremierWest shareholders and expect to use this further adjournment period to solicit proxies and to continue to gather additional votes," said Ford.
The PremierWest board, which is urging shareholders to cast votes in favor of the deal, said previously cast votes can be changed.
Georges St. Laurent, a PremierWest board member and its largest shareholder, made public his dissent over the deal shortly after the acquisition agreement was announced. Other shareholders have indicated they would withhold support because the agreement would saddle investors with losses, while providing executives with substantial severance payments.
PremierWest Bank was created in May 2000 when Bank of Southern Oregon and Douglas National Bank merged. The company grew rapidly, adding Timberline Community Bank of Yreka with its eight Northern California branches in April 2001. In January 2004, PremierWest moved farther south, acquiring Mid Valley Bank, based in Red Bluff, with offices in Shasta, Tehama and Butte counties.
It expanded again in January 2008, picking up Stockmans Bank in the Sacramento area.
When the real estate bubble burst, the company found itself overextended and lost money for 15 straight quarters before recording its first profitable reporting period last summer. It reported a loss in the fourth quarter of 2012.
In July 2009, the Federal Deposit Insurance Corp. labeled PremierWest Bank a "troubled institution."
If a majority of PremierWest shareholders approve the plan, the bank's Oregon and Northern California offices would become AmericanWest Bank branches later this year.
Shareholders will be allowed to vote their proxies between today and 8:59 p.m. Wednesday, March 27.