PremierWest Bancorp is in the stretch run with no guarantee of reaching the finish line.
A twice-adjourned special shareholders meeting continues Thursday at the bank's Airport Road headquarters as executives look for the final 78,106 votes needed to gain approval of a sale to the owners of AmericanWest Bank in Spokane.
Starbuck Bancshares Inc., increased its bid for the Medford bank to $2 per share, a 21 percent increase worth an additional $3.5 million after the latest extension two weeks ago.
Shareholder response to the original, Oct. 29 deal — for $1.65 per share, amounting to more than $16 million — was tepid at best. Starbuck's sweetened offer is worth a little more than $20 million.
Starbuck also would pay off PremierWest's $41.4 million TARP Capital Purchase Program debt to the U.S. Treasury.
There are slightly more than 10 million outstanding PremierWest Bancorp shares, and nearly 1.8 million shares had yet to be voted after the March 13 continuation.
At that point, 49.2 percent of all shares — and 60 percent of the shares voted — had been cast in favor of the deal.
More than 50 percent approval of all shares is required to ratify the deal, which means another 78,106 were needed. Unvoted shares have the same effect as a no vote.
Shares can be voted through 9 tonight or at Thursday's 9 a.m. meeting.
Despite the lukewarm response from shareholders, the deal has had staying power because the Treasury Department stands to retrieve its entire TARP investment.
Ken Thomas, a Miami-based banking consultant and economist, said that's a far different scenario than the case of a Florida bank that had a $50 million TARP loan.
"Treasury was willing to take $3 million from one investment group and another came up with $5 million," Thomas said. "I don't think you are going to see Treasury give in once it's got the big number."
Merger and acquisition activity hasn't stormed back or even come close to its former levels, indicating prices for struggling banks won't be good.
"The good times for banking ended in summer 2007," Thomas said.
"The industry is out of intensive care, but there's still a lot of recovery to be done. The deals that are getting done are more complex and time-consuming. As we say in the industry, there's a lot more hair on the deals than there ever was before. Banks aren't selling for two-and-a-half times book like they used to."
PremierWest President and Chief Executive Officer Jim Ford said he didn't have a feel for how things would go this time around.
"I can't really say, because the polls don't close until late Wednesday night," Ford said. "I haven't had that many conversations with shareholders the last week-and-a-half."
When Starbuck Bancshares upped the ante, it also gave PremierWest the ability to adjourn until April 18 if it fails to gain approval Thursday.