7/29/2026
Down Range Capital Opportunity Fund Prods Washington Bank to Sell
Banking Dive (07/29/26) Mullen, Caitlin
Cashmere Valley’s (OTCMKTS: CSHX) board acknowledged the receipt of shareholder communications regarding a potential sale, saying it “takes its fiduciary duties to the bank and all its shareholders seriously,” and “remains committed to the best interests of the bank and its shareholders as a whole, and to the continued safe and sound operation of the bank.” The bank’s CFO, Mike Lundstrom, also didn’t respond to phone inquiries. Down Range estimates there are about seven banks or credit unions that would pay between $125 and $165 per share to acquire Cashmere Valley. The letter was signed by Bradley Rinschler, the sole portfolio manager of Down Range, who said the firm has a “significant” investment in the bank. Rinschler declined to detail the size of that stake in a July 20 interview. Since issuing the letter, he said he had been contacted by other supportive Cashmere Valley shareholders. If the board undertakes a national search for the company's next CEO, “historically, this approach has been associated with a lower probability of success,” the letter said. “Even if the board hired the best community bank CEO in the country and the bank significantly outperformed, we do not believe the CEO could achieve a higher stock price over the next five years than is available through a strategic sale today,” Rinschler wrote. “Remaining independent would ask shareholders to accept meaningful risk for very little upside potential.” The central Washington bank, founded in 1932, has about $2.3 billion in assets and 12 branches, according to Federal Deposit Insurance Corp. data. Cashmere Valley Bank has the largest deposit market share in three of the four counties it operates in, where it's “the only true community bank left that could realistically be acquired,” Rinschler said. The lender's markets are otherwise dominated by super-regional and money-center banks, he said. Rinschler said he expects there could be more than seven potential interested parties, noting in-state banks as well as those in Alaska, Oregon, California, Montana and Toronto could have interest in acquiring Cashmere Valley Bank. Rinschler also called out the bank board's low stock ownership. The board owns less than 2% of the company's outstanding shares, according to the most recent proxy statement. “Since 2023, [bank] stock has periodically traded at a discount to tangible book value, yet during that time directors have purchased very little stock,” he wrote in the letter. “Did the board fail to recognize the value being created, or did it simply choose not to invest alongside the shareholders that they represent?” And no director has elected to take their board compensation in stock. “If you're a director at a bank that you're proud of, that's a huge opportunity,” Rinschler said July 20. “They may feel differently about a sale if they actually would make some money on the sale.” Last year, HoldCo Asset Management pushed Comerica (NYSE: CMA) to sell itself, then blasted that lender's deal with Fifth Third (NYSE: FITB) and sued the banks in the lead-up to their combination. In March, Diligence Capital Management pressed Maryland-based EagleBank (NASDAQ: EGBN) to develop a performance improvement plan and replace three board members. And earlier this month, Merion Road Capital Management and Blue Hill Advisors urged $1.4 billion-asset United Bancorporation of Alabama (OTCMKTS: UBAB) to use its built-up equity, control its expenses and determine why deposit levels have stagnated compared to peers. UBAB is another bank that's “growing up and getting a broader shareholder base and is having to adapt to these situations,” said Sam Haskell, who manages financial sector-focused investment firm Colarion and previously owned shares of Cashmere Valley Bank. The bigger a bank gets, the more likely it is to have a more diversified shareholder base, and “it's increasingly difficult to try to stay hidden and outside the scrutiny of the broader markets,” he said Tuesday. “I think they want it to be kept as a community bank, so there's a tension there,” Haskell said of Cashmere Valley Bank's board. “If you have a broad shareholder base, it's going to be difficult to act as though the only people who own it are in the community.”
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