SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
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the Securities Exchange Act of 1934 (Amendment No. )
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<PAGE>
VOTE "For" ALL of Management's Directors on MANAGEMENT'S
"WHITE" PROXY ONLY.
Date October 10, 2000
Dear Fellow Shareholder:
BEWARE! A large, private corporation whose owner wants to buy StateFed is
attempting to insert two of its employees (one of whom is his son) on the Board.
Don't let him do it. VOTE THE "WHITE" PROXY CARD ENCLOSED AND DO NOTHING WITH
THE "BLUE" ONE.
Imagine this: You own stock in a profitable, SAFE savings bank holding
company that has increased its profits each and every year since going public
and hasn't missed a dividend. Its asset quality is STRONG, and its stock
performance over the last year has bested the national & state stock
performances for savings banks.
Then, a local businessman -- Bill Krause -- who controls Krause Gentle
Corporation and rival Liberty Bankshares, Inc. -- makes an offer to buy your
Company that is rejected by your board for being too low. Used to getting his
way, what does Krause do next? He starts a 'Proxy Fight' -- to put his own son
and a senior officer of his corporation on the board of your Company!
KRAUSE STILL WANTS TO BUY YOUR COMPANY AND WANTS HIS PEOPLE ON THE
'INSIDE' TO HELP HIM. DON'T LET HIM DO IT!
What do you think Kyle Krause and Dennis Folden are going to do if you
elect them? You can bet they are going to try to push your Company into a sale
to Liberty Bankshares - which Krause controls and which Krause's other son runs!
What's more, they even admit it in the filing they made recently with the
Securites and Exchange Commission. Do you really think that Krause is going to
have his own son and senior employee fight for a high price for you when they
are trying to buy Statefed? That would be completely contrary to
their own self-interest.
YOUR BOARD IS ON YOUR SIDE
Your Board understands its DUTY to you to MAXIMIZE the value of your
shares and do RIGHT by you. That is why we are continuing to repurchase shares
on the open market and, that is why, following the MOST PROFITABLE YEAR IN OUR
HISTORY, we just INCREASED YOUR DIVIDEND AGAIN! Starting with the next quarter,
you will get 40 cents a year for each and every share you own. If you bought our
shares when we went public that's a yield of 8.00%, and at our current price of
$9.875, that's a yield of 4.05%, all for one of the SAFEST banks you can own.
Why change a WINNING formula for success? Under the current Board,
StateFed's accomplishments include:
o INCREASING PROFITABILITY each and every year since going public.
o Consistent, DEPENDABLE PAYMENT OF DIVIDENDS.
o INCREASING DIVIDENDS.
o STRONG 'ASSET QUALITY' due to sound loan underwriting.
o A BRAND NEW OFFICE on the west side of town that will be the envy of
our competition and provide added convenience to our customers.
<PAGE>
Be smart. Send a message that your Company is not "for sale" to a
corporation that is trying to wheel a 'Trojan horse" into your boardroom. DON'T
BE FOOLED. VOTE THE ENCLOSED "WHITE" PROXY CARD TO PROTECT YOUR OWNERSHIP AND
YOUR INVESTMENT.
We greatly appreciate your faith and confidence in us. We assure you that
we will always do our best to maximize your investment.
StateFed Board of Directors
/s/ John F. Golden /s/ Andra K. Black
John F. Golden Andra K. Black
/s/ Harry A. Winegar /s/ Kevin J. Kruse
Harry A. Winegar Kevin J. Kruse
/s/ Sidney M. Ramey /s/ Craig Wood
Sidney M. Ramey Craig Wood
/s/ Eugene M. McCormick /s/ William T. Nassif
Eugene M. McCormick William T. Nassif
-VERY IMPORTANT-
As a general rule, return our "WHITE" proxy ONLY in the prepaid
envelope that was supplied to you. IF YOUR SHARES ARE HELD FOR YOU BY YOUR STOCK
BROKER OR YOUR BANK, then return your proxy instructions to them FIRST, so that
they can issue a vote on your behalf. And do nothing with the BLUE proxy!
IF you have any questions about HOW to vote "FOR" your Company's
proposals, please call our proxy solicitor, Regan & Associates, Inc. toll free
at (800) 737-3426.
This letter may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risk and
uncertainty. It should be noted that a variety of factors could cause the
combined company's actual results and experience to differ materially from the
anticipated results or expectations expressed in the forward-looking statements.
The risks and uncertainties that may affect the operations,
performance, development, growth projections and results of the combined
company's business include, but are not limited to, the growth of the economy,
interest rate movements, timely development by the company of technology
enhancements for its products and operating systems, the impact of competitive
products, services and pricing, customer based requirements, Congressional
legislation, acquisition cost savings and revenue enhancements and similar
matters. Readers are cautioned not to place undue reliance on forward-looking
statements which are subject to influence by the named risk factors and
unanticipated future events. Actual results, accordingly, may differ materially
from management expectations.
<PAGE>
We do not undertake, and specifically disclaim, any obligation to
publicly release the results of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.
StateFed and its directors and executive officers may be deemed to be
participants in the solicitation of proxies. INFORMATION ABOUT THE PARTICIPANTS
MAY BE OBTAINED THROUGH THE SEC'S WEBSITE, www.sec.gov, FROM THE DEFINITIVE
PROXY STATEMENT, FILED WITH THE SEC ON OCTOBER 3, 2000 AND FROM THE 10-KSB,
FILED WITH THE SEC ON SEPTEMBER 28, 2000.
