Two US regional lenders – First Interstate BancSystem and Columbia Banking System – have averted proxy battles with activist hedge fund HoldCo Asset Management, after the banks made strategic concessions that addressed the fund’s demands, according to a report by Reuters.
HoldCo, a $2.6bn hedge fund known for its activism in the banking sector, had been pressuring several regional banks to abandon acquisition plans, review their capital allocation policies, and even consider potential sales. The fund said it would halt its campaign against both First Interstate and Columbia following recent comments from their executives signalling a pause on M&A activity.
In public statements, HoldCo portfolio managers Vik Ghei and Misha Zaitzeff said both companies were now “pursuing the right path” and that, if they remained focused on organic growth, “the next five years should deliver exceptional shareholder returns.”
Columbia’s CEO Clint Stein told analysts last week that he had “zero interest in M&A for the foreseeable future,” while First Interstate’s CEO James Reuter similarly emphasised the bank’s focus on organic growth and returning cash to shareholders. Neither committed to future actions but their remarks were enough to satisfy HoldCo — for now.
The agreements mark a temporary truce in HoldCo’s broader campaign across the regional banking landscape. The hedge fund, which gained attention after successfully pressing for a sale at Comerica, has since turned its focus to Columbia, First Interstate, and Eastern Bancshares, pushing for tighter discipline on capital use and deal-making.
HoldCo said it reserves the right to renew its activist campaign should either bank take actions “inconsistent with our expectations.”
At Eastern Bancshares, discussions with HoldCo remain ongoing, with executives reiterating that the bank is not for sale despite continued pressure from the hedge fund.
