How to Elect Steve

Robert Schuster
February 5, 2012 12:17 pm

How to get Steve elected.

Below is a copy and paste from the 8- K of last years annual meeting. When you analyze it, you will see that the broker non-vote and the withheld vote together, are greater than the total votes Craig received. Craig received only about 1/3 the total shares outstanding. If we can reduce the total votes for the banks candidate by withholding our votes for that person then we can get Steve elected. This is how it could play out:

Banks candidate receives 500,000 from proxy votes and bank officers.
15 person’s at the annual meeting vote 20,000 shares for Steve.
20 person’s at the annual meeting vote 5,000 shares for Steve.
50 person’s at the annual meeting vote 1,000 shares for Steve.
100 person’s at the annual meeting vote 500 shares for Steve.
And the one person that only holds 1 share and didn’t think they could make a difference, votes, and guess what Steve wins.

Item 5.07 Submission of Matters to a Vote of Security Holders.

On May 10, 2011the Company held its annual meeting of stockholders. The results of the vote at the meeting at which a quorum was present were as follows:

1. To elect one director to serve a three-year term:



Broker Non-Vote

Craig O. Wesner




2. To approve the Company’s executive compensation:




Broker Non-Vote





3. To ratify the selection of BKD, LLP as independent auditors for 2011:




Broker Non-Vote





4. Stockholder Proposal to eliminate the classified board of directors:




Broker Non-Vote





8 comments on “How to Elect Steve

  1. Today a lead article at The was headlined “155 Banks On The Brink” and and Citizens was one of the155. This piqued my curiosity about how bad are the numbers as published. We first need to define the capitalization categories and I have copied them from The below. Then we can look at the numbers and determine what category we fall into. We should also look at how close we are to jumping into the next best category. These are the numbers and stats:

    39th from the best at 3.93% Tier 1 Leverage Ratio ( undercapitalized )

    31st from the best at 5.91% Tier 1 Risk based Capital Ratio ( adequately capitalized )

    32nd from the best at 7.18% Total Risk based Capital Ratio ( undercapitalized )

    43rd from the best 11.06% Non Performing Assets ( top 1/3 percentile )

    3rd from the highest 1,032,000,000 Total Assets ( FDIC could close 25 of the lowest asset banks for what it would cost to close Citizens )

    In order to put this in perspective keep in mind that undercapitalized is the middle category, not the bottom.

    As bad as it is to be included in the group of 155 undercapitalized banks, I believe that the numbers paint a better picture than the headlines portray.

    Does this mean that we should not pursue changes in the governance of Citizens,no.

    In spite of those who post all negative’s on Citizen’s I believe there is hope to turn this ship around and I put my money on PNBC. And yes I am long PNBC.

    Copy and Paste from

    When we speak of banks that are “well-capitalized” or “undercapitalized,” we are using strictly-defined regulatory terms.
    More from Philip van Doorn

    There are five regulator-defined capital categories used to describe an institution’s capital strength: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.

    Each capital category has minimum requirements for the following three ratios:

    Tier-1 leverage ratio: This is an institution’s core capital (total equity capital with adjustments for unrealized gains and losses on securities, deferred tax benefits, non-qualifying preferred stock and other items) divided by its average total assets.
    Tier-1 risk-based capital Ratio: Since this ratio uses risk-weighted assets as the denominator, it is usually higher than the tier-1 capital ratio. Bank assets are weighted by risk on Schedule RC-R of the Call Report. For example, cash is weighed 0% risk. Performing single-family mortgages have a 50% risk-weighting. Nonperforming loans will have higher risk-weightings. All securities and loans have risk-weightings defined by several factors, including the issuer and agency ratings.
    Risk-adjusted capital ratio: This is the ratio of total risk-based capital to total risk-weighted assets. Risk-based capital is (roughly) tier-1 capital plus loan loss reserves. This is the ratio that most commonly slips below the minimum for an institution to be considered well capitalized under regulatory guidelines.

    Capital Ratios and Regulatory Capital Categories

    Taking those categories into account, the following are the criteria for determining a bank’s capital health:

    Well Capitalized

    Core capital to adjusted tangible assets as least 5%
    Core capital to risk-weighted assets at least 6%
    Risk-adjusted capital ratio1at least 10%

    Adequately Capitalized

    Core capital to adjusted tangible assets at least 4%
    Core capital to risk-weighted assets at least 4%
    Risk-adjusted capital ratio at least 8%


    Core capital to adjusted tangible assets less than 4%
    Core capital to risk-weighted assets less than 4%
    Risk-adjusted capital ratio less than 8%

    Significantly Undercapitalized

    Core capital to adjusted tangible assets less than 3%
    Core capital to risk-weighted assets less than 3%
    Risk-adjusted capital ratio at least less than 6%

    Critically Undercapitalized

    Tangible equity ratio less than 2%

    The tangible equity ratio is an institution’s tier-1 capital, plus non-qualifying preferred stock. For all the institutions on our list, the tangible equity ratio equals the tier-1 leverage ratio.

    The vast majority of institutions are well capitalized, and many greatly exceed the minimum requirements for a well-capitalized institution.

    Out of 8,459 domestic banks and thrifts reporting as of Sept. 30, 2008, all were well capitalized except for 161 institutions.

    Even slipping to adequately capitalized is something that institutions try very hard to avoid.

    • No, one is at least that ratio, and the other less than. I made the same observation at first. Very confusing. Bob

    • Or, unless there is some form of pass-through voting that allows participants of the profit sharing plan to vote their own shares. Another question for the annual meeting.

  2. I would enjoy Steve being on the Board of Directors. I hope he will put his money where his mouth is and write a check towards the Bank’s capital needs… $50 million??? Unfortunately, the prior management brought in $200 million in problem loans and generated over $50 million in loan losses for the Bank. Where are they now??? Retired??? Or working for a PNBC competitor and stealing business from the bank??? Shame on them!!!

  3. The scandalist behavior at CFNB was happening 20 yrs ago which I saw first hand since I worked there. I was smart enough to get out and not be witness to it any more. What bad leadership!

Comments are closed.