A Washington state-based bank that recently faced investor pressure to sell has named a new CEO.
Cashmere Valley Bank in Cashmere, Washington, named Len Devaisher, a Nicolet National Bank executive vice president, as its next CEO. He’ll join Cashmere Valley on Oct. 5, and succeed CEO Greg Oakes on Dec. 31, the bank announced last week.
Devaisher was president and chief operating officer of $6.3 billion-asset MidWestOne Bank until Nicolet acquired it. His career as a bank executive spans more than 25 years. Before his six years at MidWest One, Devaisher was Wisconsin Region CEO at Old National Bank, according to LinkedIn.
Oakes’ year-end retirement had been rumored well ahead of last week’s announcement – and the apparent absence of a succession plan, among other factors, drew concern from investor Down Range Capital Opportunity Fund. The East Stroudsburg, Pennsylvania-based hedge fund made public the news of the bank’s CEO search last month in a letter pressuring the bank to sell.
“One of the greatest responsibilities entrusted to any CEO is ensuring an organization is positioned for continued success long after your own tenure,” Oakes said in a prepared statement last week. “I have tremendous confidence in Len’s leadership and character, and I look forward to working alongside him during this transition. I know he'll bring fresh perspective while honoring the values that have made Cashmere Valley Bank such a special place.”
Devaisher is from “a quality bank, a good bank, a solid bank,” Bradley Rinschler, the portfolio manager at Down Range, told Banking Dive.
However, Rinschler said, Cashmere Valley “started this,” by engaging in a search for its next CEO without sharing that information with shareholders. Rinschler called that “a material event they should have disclosed.”
Also at issue to Rinschler: In April, Cashmere Valley bought back shares at $75, acquiring 3.43% of outstanding common stock for roughly $9,556,425. But he said the bank could have pursued a full sale for a materially higher value – between $125 and $165 per share. The bank harmed shareholders with its decision, he said.
Oakes and Cashmere Valley CFO Mike Lundstrom did not immediately respond to requests for comment.
The CEO switch doesn’t change much for Rinschler, who said he’s considering ramping up pressure on the bank until it executes a sale or replaces its board of directors.
The $2.3 billion-asset bank’s board, Rinschler noted, is composed of community members with “no bank experience.” His July letter said the board of directors owns less than 2% of outstanding shares, ranking Cashmere Valley director ownership “in the bottom 5% of all U.S. community banks under $5 billion in assets.”
That “shows how little skin they have in the game compared with the shareholders they’re supposed to protect,” Rinschler told Banking Dive.
Down Range has “a significant stake” in Cashmere Valley, Rinschler said. Since releasing his letter, he said he’d been in contact with roughly 40 shareholders who own a combined 35% of the bank. He’s said he’s confident that if he pressured the bank to remove and replace its board, those shareholders would side with him.
“We will [remove the board], if we decide to want to. It’s our call now,” he said. “We’re not concerned about losing. I’ll tell you that.”
Rinschler said Down Range Capital looks forward to engaging with the new CEO.
“The best thing the bank can do probably for us is to reach out and have a conversation with us instead of telling other investors that they're not concerned about anything,” he said.
