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Shareholder urges Five Star parent to seek sale

A Dallas-based shareholder is urging Five Star Bank’s parent company to stop making acquisitions and sell itself to a larger bank, citing displeasure with two Buffalo-area deals.

Clover Partners LP laid out its complaints in a letter to Warsaw-based Financial Institutions Inc.’s board of directors. A copy was filed with federal regulators. Clover owns about 5 percent of Financial Institutions’ stock.

In the letter, managing partner Johnny Guerry faulted the bank’s 2014 deal for Amherst-based insurance agency Scott Danahy Naylon, and its pending acquisition of Buffalo-based Courier Capital. Courier provides investment management and consulting and retirement plan services. Guerry contended both deals dilute shareholder value and that their earn-back periods are too long.

Guerry said Clover remains “resolute in seeing that shareholders’ interests are fully addressed and will pursue board representation via a proxy contest should we deem it necessary.”

Asked to comment about the letter, Financial Institutions’ president and CEO, Martin K. Birmingham said: “Financial Institutions is aware of the filing, and is currently reviewing it. The company will share more information when we are able.”