Farmers Shareholders Urged to Increase Common Shares
CANFIELD, Ohio -- The president and CEO of Farmers National Banc Corp., John S. Gulas, has sent shareholders a letter urging them to support proposals sought by management and board of directors to increase the number of authorized shares and eliminate preemptive rights.
Management and the board believe voting for these two proposals “will significantly increase the company’s ability to continue to grow and enhance shareholder value,” Gulas said.
The annual meeting of Farmers National Banc Corp. is scheduled to take place Thursday, April 25, at the Joyce E. Brooks Center (inside the Mahoning County Career and Technical Center) in Canfield.
Below is the edited text of the letter Gulas sent Farmers shareholders:
During [the last several years], we have expanded our product offerings and our territory. Farmers is now a regional community bank with a presence beyond the Mahoning Valley. As a result of this growth and our bank’s strong asset quality, total shareholder value has grown nearly 80% over the last two years. Positive momentum is on our side and it is important we continue to capitalize on it.
A vote for the two issues will allow us to continue growing and enhance shareholder value.
We request your support to increase the [number of] shares authorized so that we will be able to issue common shares and raise additional capital, should a compelling opportunity present itself. Acquisitions and growth allow for us to acquire additional income-producing assets and revenue sources that would further enhance shareholder value. Without the authorization, we would be forced to wait for a special meeting to authorize shares, which could affect our ability as a credible buyer and result in missed opportunities to create value for all shareholders. Authorizing these shares would be consistent with past practice as demonstrated by the shareholders’ approval to double our authorized shares in 2001 from 12.5 million to the 25 million currently authorized.
We need your votes to eliminate preemptive rights. Last year, we received over 71% of shares voting in favor, but fell short of the required two-thirds of our total outstanding shares because we needed more shareholder participation. [Not voting or abstaining] is equivalent to an “against” vote. The elimination of this item would allow us to file a registration statement with the Securities and Exchange Commission that would create greater flexibility to raise cash should the compelling need arise for capital, without a lengthy and expensive process involving a preemptive rights offering. This move would also add to our credibility and responsiveness should an opportunity for a strategic investment present itself. Passage of this proposal would not affect your rights under our charters involving a “control share acquisition” or “business combination.”
Published by The Business Journal, Youngstown, Ohio.
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