Malvern hires activist investor as outside consultant

Malvern Bancorp in Paoli, Pa., has retained a well-known activist investor to provide consulting services.

The $1.2 billion-asset company said in a press release Thursday that Lawrence Seidman will provide capital markets advice and financial analysis. Malvern did not disclose any information on Seidman’s compensation.

"Seidman is a seasoned veteran with extensive community banking experience,” Anthony Weagley, Malvern’s president and CEO, said in the release.

“The company will benefit significantly from his insights and network within the industry,” Weagley added. “We are very pleased to have … Seidman join Malvern in this capacity and look forward to working with him as we continue to grow and strengthen the company."

Malvern has been grappling with a troubled commercial real estate loan in New York.

The company disclosed in February that it would amend and restate its annual report and delay an upcoming quarterly report after recording an additional impairment to the $13.5 million loan.

Malvern had placed the loan on nonaccrual status during its fiscal fourth quarter, which ended Sept. 30. The company had also marked the balance down by $2.9 million and created a $581,000 specific reserve as it waited for the results of a third-party appraisal.

With the appraisal complete, Malvern determined that another $3.1 million impairment was needed. It recorded a new $4 million loan-loss provision for the fiscal fourth quarter to reflect the change, which increased its quarterly loss from $546,000 to $3.5 million.

Seidman, founder and manager of Seidman & Associates, earned a reputation in the 1990s and early 2000s for pressing community banks to improve shareholder value. The targeted institution often ended up being sold to another bank.

One of his most infamous battles took place more than a decade ago with the board and management of Yardville National Bancorp. Seidman filed several lawsuits as part of a campaign to force the Hamilton, N.J., company to oust its CEO or find a buyer. Yardville finally agreed to be sold in 2007 to PNC Financial Services Group in Pittsburgh.

While he has largely shifted away from aggressive tactics, Seidman remains embroiled in a dispute with Spencer Savings Bank in Elmwood Park, N.J., that goes back to at least 2007. Last fall, a judge in New Jersey backed a push by Seidman to require Spencer to obtain an independent review before converting from a state savings association to a state savings bank.

Seidman has also tussled with Malvern.

The investor said in a January 2016 regulatory filing that he would withhold support for Malvern's proposed slate of three directors. He reversed course a month later to back one of the nominees after two of the other directors announced plans to resign.

But Seidman has also supported Weagley, whom he has known for years. Siedman was a director at Center Bancorp when Weagley was the company’s CEO. Center merged with ConnectOne Bancorp in 2014.