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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use
of the Commission Only
(as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
ss. 240.14a-11(c) or ss. 240.14a-12
FOOTHILL INDEPENDENT BANCORP
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(Name of Registrant as Specified in its Charter)
BASSWOOD FINANCIAL PARTNERS, L.P.
BASSWOOD PARTNERS, L.L.C.
BASSWOOD CAPITAL MANAGEMENT, L.L.C.
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(Name of Person(s) Filing Proxy Statement if
Other Than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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BASSWOOD PARTNERS, L.L.C.
BASSWOOD CAPITAL MANAGEMENT, L.L.C.
BASSWOOD FINANCIAL PARTNERS, L.P.
645 Madison Avenue, 10th Floor
New York, New York 10022
May 13, 1999
Dear Fellow Foothill Shareholder:
The past few years have seen the stock market perform far above
people's expectations. In the midst of this environment, the value of Foothill
stock has also risen. However, we should not rely on the current exuberance of
the market to continue forever. As owners (together with our affiliates) of over
9.3% of the outstanding common stock of Foothill, we are deeply concerned about
the performance of management as well as the current and future value of
Foothill stock.
We believe that Foothill shareholders are in a unique position to take
advantage of the spectacular merger activity occurring in the banking industry.
Now is the time to act! This is an excellent opportunity for Foothill to
actively explore the possibilities of achieving a sale of the company in order
to maximize shareholder value. There is no assurance that we will continue to
experience the rapid pace of merger activity we have seen in recent years. Nor
is there any assurance that the value of Foothill stock will remain at or exceed
its current level if the opportunity to merge is missed. It is our opinion that
Foothill shareholders should be allowed to benefit from this current explosion
of bank acquisitions. Furthermore, if and when the pace of bank mergers slows,
it is likely that the stock prices of many financial institutions such as
Foothill will decline significantly. Indeed, recent proposed accounting changes
could have this effect.
Recent transactions throughout the nation, and specifically in
California, suggest that through a sale, Foothill's shareholders would likely
receive a substantial premium over the current market price. For example, on May
10, 1999, Valley National Corp. and its subsidiary bank Valle de Oro Bank, N.A.
agreed to merge with Community First Bankshares Inc. in California, in a deal
representing approximately 3.25 times Valley National's targeted book value,
subject to certain changes in the price of Community First Bankshares' common
stock. Although price and other terms actually arrived at in a transaction
involving Foothill will depend on factors unique to the parties involved,
applying the ratio from the Valley National/Community First transaction to
Foothill's book value per share of $7.97 (reported as of March 31, 1999) would
imply a price of $25.90 per share for Foothill common stock, a 72.6% premium
over the closing price on May 13, 1999 of $15.00 per share.
We are not optimistic about the future for Foothill if it remains
independent. Foothill will not be able to compete effectively against the bigger
budgets and aggressive marketing tactics of larger financial companies. Apart
from potential problems with its financial performance, there are external
factors such as the "Year 2000 problem" which could cause it considerable
expense and possibly serious complications.
The financial statistics in our proxy bear out our concerns about
Foothill's financial condition and operating performance, and make a strong case
against Foothill's continued independence. We believe this negative report card
on management's record does not lend itself to such a high market price.
Therefore, we believe that the sale of Foothill is needed both to lock in the
stock price gains from what we believe to be the anticipation of a merger, and
to obtain a premium over the current market price.
We are not alone in our concerns. On April 13, 1999 we received a
letter from Mr. Wallace D. Gott, a local shareholder from Upland, California.
Mr. Gott was a founding director and former chairman of Foothill. Mr. Gott
indicated his dissatisfaction with the current directors, management and
-over-
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performance of Foothill, and particularly his dissatisfaction with Foothill's
current chairman. Mr. Gott is a local shareholder who supports our efforts. The
text of his letter is reproduced on page 13 of our proxy.
For these reasons, we are asking for your support in electing Mr. Matthew
Lindenbaum as nominee to the Foothill Board of Directors at the 1999 Annual
Meeting of Shareholders. We are soliciting your BLUE proxy card to elect Mr.
Lindenbaum as the Basswood Nominee. Mr. Lindenbaum will be open-minded to
exploring all strategic alternatives to maximize shareholder value, including
the sale of Foothill. Mr. Lindenbaum is committed to upholding the will of all
shareholders. Therefore, we urge you to sign and return the enclosed BLUE proxy
card in the envelope provided.
If elected, Mr. Lindenbaum would constitute one of seven directors on
the Foothill board. Mr. Lindenbaum is a successful businessman with expertise in
the financial services industry who can provide guidance in a time of rapid
evolution of the banking industry. We believe that after you have reviewed Mr.
Lindenbaum's qualifications, you will agree that he has the knowledge and
experience to represent the interests of the company and of all shareholders.
If you wish to elect an independent nominee pledged to protecting and
securing the interests of all Foothill shareholders, and believe that Foothill
management should seriously explore all options to maximize shareholder value,
including the sale of the company, please sign, date and return the enclosed
BLUE proxy card in the envelope provided. If you have already returned a proxy
card to Foothill, you may revoke that vote by sending us a later-dated BLUE
proxy card. Only your latest dated proxy counts.
If you have any questions for Mr. Lindenbaum, feel free to call him
anytime, collect, at 212-521-9500. If you have any questions regarding our
solicitation of proxies, please contact Beacon Hill Partners, who are assisting
us in the solicitation, toll-free at 1-800-755-5001 or collect at 212-843-8500.
In a recent letter to shareholders, management of Foothill claimed they
"look forward to the challenge of reaching our goal to develop 2000 new
relationships by the year 2001". There is, however, no discussion of shareholder
returns - past, present or future. OUR goal is to maximize shareholder returns
by the year 2000.
Thank you for your time and consideration in this matter.
Sincerely yours,
BASSWOOD PARTNERS, L.L.C.
BASSWOOD CAPITAL MANAGEMENT L.L.C.
BASSWOOD FINANCIAL PARTNERS, L.P.
Matthew Lindenbaum
