Atlantic Coast Financial Corp., the Jacksonville, Fla., bank holding company where local banker Jay S. Sidhu serves as a board member, announced Tuesday it plans to merge into Bond Street Holdings Co. Inc. for about $13 million in stock.
Sidhu, chairman and CEO of Customers Bancorp., Wyomissing, has been on the Atlantic Coast board since 2010 and was a past board chairman.
About the merger, Sidhu, responding from Istanbul Tuesday, where he is on business, said, "At this time, I have no comment."
Sidhu and another board member filed paperwork with the Securities and Exchange Commission Feb. 15, challenging the board to produce better financial results and asking for three nominees to be considered for the board at the annual shareholders' meeting.
Sidhu holds 57,072 shares of Atlantic Coast stock, according to the SEC filing.
Also, in the same filing, Sidhu of Wyomissing and Atlantic Coast board member, Bhanu Choudhrie of London said they believe the board has consistently failed to act to mitigate or significantly reduce the risks to them as shareholders.
They further outlined that they believe a change in the board is necessary and that each of their nominees possesses the energy, commitment and skill set to approach matters with an open mind and a keen sense of urgency.
Patrick J. Watson, principal at Corporate Communications Inc., representing Atlantic Coast, cautioned not to construe anything from the merger plans with regard to Sidhu and Choudhrie's potential proxy fight.
Watson said that in August the Office of Comptroller of the Currency filed a consent order against Atlantic Coast to require that the bank increase its liquidity and capital levels, and the bank continues to operate as normal.
A spokeswoman for the public affairs department of the OCC said the agency outlines what the bank needs to do to comply in a 25-page public document dated Aug. 12. However, the follow-up is not open to the public, but remains between the bank and the OCC.
The Atlantic Coast brand will be folded into the Bond Street banking subsidiary, Florida Community Bank.
Atlantic has 12 branches and assets of $777 million as of the third quarter, the last it has reported.
The deal would give shareholders of Atlantic Coast $5 a share, a premium of about 49 percent over the company's average stock price of $3.36 over the 10-day period ended Feb. 25.
Atlantic Coast is traded on the Nasdaq Stock Market under the ticker symbol, ACFC. It closed Tuesday at $XX a share, up XX cents.
Bond Street, a bank holding company based in Southern Florida, was founded in 2009 and since then has acquired several banks.
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