Our Pioneer neighbors
Published 12:00 am Friday, November 2, 2001
New York-investor Joseph Stilwells adventures in Eastern Oregon appear to be over for now.
After a successful bid to unseat one of the directors of the board of the Oregon Trail Financial Corporation the holding company for Pioneer Bank and install a candidate sympathetic to his views, Stilwell says hell back off for a while.
At their root, Stilwells goals arent that different from any other OTFC shareholder. Who doesnt buy stock with the hope that it will increase in value and realize a profit for the purchaser?
In Stilwells case, he takes that hope and transforms it into aggressive action. Lawsuits, advertisements, mailings his methods, if at times rough, are all within his rights as the companys largest shareholder. Still, one business news service has described Stilwell as an activist investor, a term that at times seems almost tame.
But lodged within Stilwells prescription for improving the value of OTFCs stock is a provision that could potentially realize a profit for shareholders at Baker Citys expense.
Among a host of other objectives, Stilwell has suggested the company could realize better shareholder value by seeking the sale of the company. The purchasing entity would presumably pay a premium on stocks, and shareholders would profit.
But what would be a one-time windfall for shareholders would be a lasting blow to Baker Citys economy.
Pioneer Bank has been a part of the Baker City business community since 1901. Few firms are older.
The past few years have been a period of tremendous change and growth for the company. From its transformation into a publically held corporation, to its investments in new technologies, to its expansion into the lucrative Pendleton market, the company has taken demonstrable steps to increase its value to customers and shareholders even if Wall Street hasnt readily rewarded it for the efforts.
And while its status as a possibly undervalued stock made it attractive to investors like Stilwell and could make it attractive as an acquisition for a larger company, Pioneer Bank has a value to this community greater than any stock ticker can indicate.
The staff at the corporate office live in Baker City, buy their groceries and gasoline here, and dine at downtown restaurants for lunch.
Sometimes they rally in a matter of days to feed hungry firefighters and police officers a first-rate barbecue, as we saw in late September.
When you include the staff at its Baker City bank, Pioneer is the single-largest employer in downtown Baker City.
If the bank were purchased by a larger institution, we would likely see the corporate staff trimmed or eliminated in the process.
Shareholders might pocket a small sum on the sale, but the lasting effect to Baker Citys economy would not be a positive one.
Stilwell and other investors are entitled to seek the best return on their investment they can achieve.
But wed be glad to have Pioneer Bank as a neighbor for another 100 years.