24 Underperforming Bank Stocks

Stuck Owning Stock in a Bank that Should be Sold?

Image of a person's legs with boots stuck in mud
Happily, if you’ve owned some of the bank’s stock for awhile,* there’s a legal process whereby you can strongly encourage management to sell the bank. 

Specifically, according to SEC Rule §240.14a-8, you can write a shareholder proposal that the bank’s board of directors must include in the next proxy statement they send to all shareholders.

Submitting individual shareholder proposals to bank management has gotten easier since 2010, but it appears that interest in supporting such proposals is just starting to be “a thing.” Personally, I’d like to see it become an even bigger thing, because there are a couple dozen community banks in the country that could use a public kick in the pants, ideally dealt from a shareholder in their own back yard.

Disclosure: As of this posting, I own shares in all but one of the 25 banks mentioned in this post and may subsequently either dispose of them or purchase more.

How It Works
*WHO Can Submit a Proposal
According to SEC rules, if you’ve owned the following dollar values of a given bank stock for the following durations, then you can submit a proposal to management that the bank must both include in its next proxy statement, and present to your fellow shareholders for a vote.
  • $2K for three years
  • $15K for two years
  • $25K for one year

HOW To Submit a Proposal 
Basically, to deliver this sort of kick, you write a proposal outlining your reasons for believing it’s high time management sell the bank, submit your proposal to the bank with a letter that conforms both to SEC rules and the bank’s previous proxy statement, and follow up with bank management as needed to see it through to a proxy vote. 

WHAT to Expect
Management may ignore you (if you let them) in an attempt to run out the proxy deadline clock. They may try to talk you out of it, challenge your right to make the proposal, or claim your proposal is deficient in some way. 

Note that even if your proposal is deficient, there’s a deadline for the bank to make this claim, and the bank is required by SEC rules to afford you time to cure the deficiency, for example, by amending your proposal or submitting documentation supporting your claims.

Good Example
Mid-Southern Bank Management Gets a Kick in the Pants
Since the day it went public in July 2018, Indiana’s Mid-Southern Bancorp (MSVB) has been mismanaged and underperforming. Unsurprisingly, Mid-Southern’s performance invited pressure from shareholders losing money on the stock. 

On August 3, 2021, Mid-Southern silenced its loudest shareholder critic by buying him out at a premium not afforded to other MSVB shareholders. 

On December 22, 2023, another shareholder of Mid-Southern Bancorp submitted a formal proposal recommending the bank be sold. Apparently, Mid-Southern deemed this shareholder too small to be worthy of a premium buy-out offer, but as required by law, the bank did publish the shareholder’s proposal in the proxy for its annual meeting. The proposal won 56% of the shareholder vote, in spite of self-serving opposition by bank Management and proxy advisors. 

Was the kick enough to make Mid-Southern respect shareholders' demands to sell the bank? Time will tell. But it was a well-deserved and well-delivered kick that should inspire confidence in shareholders seeking to protect their investments from being squandered.

24 Invitations
Banks Deserving a Kick in the Pants
Here’s a shortlist of community banks I believe are worth far more in a sale than the market will accord them under current Management. 

Managers of these banks are a walking invitation for a good kick in the pants. Were I to see a shareholder proposal recommending the sale of any of these banks in a proxy statement, I would very likely vote for it. 
  1. 1895 Bancorp of WIS (BCOW)
  2. Ameriserv Financial (ASRV)
  3. BankFinancial (BFIN)
  4. Broadway Financial (BYFC)
  5. California Bancorp (CALB)
  6. Citizens Community Bancorp (CZWI)
  7. Community Bank of Santa Maria (CYSM)
  8. Community First Bancorporation (CFOK)
  9. First Commerce Bancorporation (CMRB)
  10. First US Bancshares (FUSB)
  11. FVCBankcorp (FVCB)
  12. Horizon Bancorp (HBNC)
  13. LCNB Corp (LCNB)
  14. Lewis & Clark Bancorp (LWCL)
  15. MainStreet Bancshares (MNSB)
  16. North Dallas Bank & Trust (NODB)
  17. NSTS Bancorp (NSTS)
  18. Oregon Pacific Bancorp (ORPB)
  19. Pathfinder Bancorp (PBHC)
  20. Ponce Financial (PDLB)
  21. Provident Financial Holdings (PROV) 
  22. Third Century Bancorp (TDCB) 
  23. Touchstone Bankshares (TSBA)
  24. Town Center Bank (TCNB)


  1. One of the best and most interesting posts/ideas I have read in the past decade anywhere in the financial world. Thank you!

  2. Also, I would like to add this link https://tinyurl.com/y3wz5ppx to a posting by Dan Schum, who with Jim Rivest, successfully fought in Delaware court for Financial Statements from a company that deregistered and failed to disclose their financials (I see Mid-Southern also deregistered) without the limitations of an NDA. Delaware Supreme Court decision. I think this is a good companion to your post in that it also empowers shareholders with the power of the pen.

    1. Thank you Peter!
      Other investors might find this Hauppauge Digital ruling most helpful. Jim did a great service for his fellow shareholders and shareholders of all dark securities. I know it wasn't easy.

  3. PDLB and NSTS cannot be sold until 3 years has elapsed since their mutual to stock conversions.

    1. This comment has been removed by the author.

    2. Phil, NSTS conversion was January 2022, not 2021.

    3. This reply includes a corrected rewrite of the comment I deleted above:

      Hello, Anonymous!
      Thanks for reading and commenting. You are correct -- Both NSTS and PDLB second stepped in JAN 2022 and legally can't sell for three years from those dates. That makes the 2024 annual meetings of both banks the last annual meeting before the moratorium ends. In my view, now is the perfect time to let them both know that selling is the will of the shareholders.

  4. Bravo! They need a good kick in the you know what - correct course or sell to someone who can

    1. Thank you, Anonymous. I appreciate your reading this and taking the time to comment.

  5. This is a great idea! Thanks for posting this

  6. Thanks for the post, always appreciate your contributions ! What is your take on Wayne Saving $Wayn and Mainstreet financials $Mswv merger of equal. Tried to get it touch with $Wayn concerning their capital redistribution post merger but never heard anything back from them.

  7. Thank you, Anon! I'm still a fan of WAYN and Jim VanSiickle. the merger is supposed to close in the second quarter.

  8. Good news on TSBA being sold, albeit at 105% of TBV.

  9. Yes, Anon. Thanks for noticing and posting.
    I think the price seems light vs book value due to the loan marks, high CIC contracts and the large breakage fee for the data processor contract. I am happy that the board and management agreed that selling to a bank that had a currency we can all ride was in the best interests of everyone.