PB Financial Corporation 450 N. Winstead Avenue Rocky Mount, North Carolina 27804

Transcription

1 PB Financial Corporation 450 N. Winstead Avenue Rocky Mount, North Carolina NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held June 28, To the Shareholders of PB Financial Corporation: The Annual Meeting of Shareholders of PB Financial Corporation, a North Carolina corporation, will be held at 450 N. Winstead Avenue, Rocky Mount, North Carolina, on Thursday, June 28, at 2:00 p.m. for the following purposes: to elect three directors to serve for one-year terms expiring in 2019, three directors to serve for two-year terms expiring in 2020 and three directors to serve for three-year terms expiring in 2021; to ratify the appointment of Dixon Hughes Goodman LLP, Greenville, North Carolina, as our independent registered public accounting firm for the fiscal year ending December 31, ; to ratify the language in the Company s bylaws providing for staggered terms of directors; and to act upon such other matters as may properly come before the meeting or any adjournment thereof. These matters are more fully described in the attached proxy statement. The Board of Directors has fixed the close of business on May 14, as the record date for the determination of shareholders entitled to notice of and to vote at the meeting or any adjournment thereof. We cordially invite you to attend the meeting in person. However, to assure your representation at the meeting, please mark, sign, date and return the enclosed proxy as promptly as possible in the enclosed postage-prepaid envelope. You also may vote via the internet; voting instructions are printed on the enclosed proxy card. If you attend the meeting you may vote in person, even if you returned a proxy or voted via the internet. Our proxy statement and proxy are enclosed. Our annual disclosure statement for the year ended December 31, 2017, which consists of our audited financial statements for the year, is available on our website at The annual disclosure statement has not been reviewed or confirmed by the Federal Deposit Insurance Corporation. IMPORTANT -- YOUR PROXY IS ENCLOSED Whether or not you plan to attend the meeting, please execute and promptly return the enclosed proxy in the enclosed envelope or vote via the internet. No postage is required for mailing in the United States. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON JUNE 28,. The proxy statement and annual report to security holders are available at Please select the Corporate Info tab at the top of the page and click on Annual Meeting Documents in the dropdown bar. By Order of the Board of Directors Rocky Mount, North Carolina May 31, Ted E. Whitehurst, President and Chief Executive Officer

2 PB FINANCIAL CORPORATION 450 N. Winstead Avenue Rocky Mount, North Carolina (252) PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS June 28, INFORMATION CONCERNING SOLICITATION AND VOTING The enclosed proxy is solicited by the Board of Directors of PB Financial Corporation, a North Carolina corporation (the Company ), for use at our Annual Meeting of Shareholders to be held at 450 N. Winstead Avenue, Rocky Mount, North Carolina, at 2:00 p.m. on Thursday, June 28,, and any adjournment thereof. We will bear the cost of soliciting proxies. In addition to solicitation of proxies by mail, our employees, without extra remuneration, may solicit proxies personally or by telephone. We will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-ofpocket expenses for forwarding proxy materials to beneficial owners and seeking instruction with respect thereto. Our principal executive offices are located at 450 N. Winstead Avenue, Rocky Mount, North Carolina The mailing address of our principal executive offices is Post Office Box 7727, Rocky Mount, North Carolina Copies of this proxy statement and accompanying proxy card were mailed to shareholders on or about May 31,. Revocability of Proxies Any registered shareholder giving a proxy or voting via the internet has the power to revoke it at any time before it is voted by giving a later signed proxy or written notice to us (Attention: Joseph B. Brewer, III Secretary), by using the internet to revoke an internet proxy and give a new internet proxy, or by attending the meeting and voting in person. To vote via the internet, follow the voting instructions printed on the enclosed proxy card. If, however, your shares are held in nominee or street name, you must contact your bank, broker or other nominee to revoke a proxy, or, if you have obtained a legal proxy from your bank, broker or other nominee giving you the right to vote your shares, you may change your vote by attending the meeting and voting in person. Voting When the enclosed proxy is properly executed and returned or when your vote is cast via the internet (and not subsequently properly revoked), the shares it represents will be voted by David E. Keul, our Chief Financial Officer, and Robert H. Ladd III, our Chief Lending Officer (the Proxies ), in accordance with the directions indicated thereon, or, if no direction is indicated thereon, it will be voted: (1) FOR the election of each of the nine director nominees named in Proposal 1; (2) FOR ratification of the appointment of Dixon Hughes Goodman LLP, Greenville, North Carolina, as our independent registered public accounting firm for the fiscal year ending December 31, ; and (3) FOR ratification of the language in the Company s bylaws providing for staggered terms of directors. In accordance with North Carolina law, broker non-votes, abstentions and votes withheld from any director will be counted for purposes of determining the presence or absence of a quorum for the transaction of business. Abstentions, withheld votes and broker non-votes, if any, are not treated as votes cast and, therefore, will have no effect on the election of directors or the ratification of the appointment of auditors. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting and on matters incident to the conduct of the meeting. Voting by Internet You can appoint the Proxies to vote your shares for you by going to the following internet website, You will need your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. You may vote by Internet only until 5:00 p.m. on June 1

3 27,, which is the day before the Annual Meeting date. If you vote by internet, you need not sign and return a proxy card. You will be appointing the Proxies to vote your shares on the same terms and with the same authority as if you marked, signed and returned the proxy card. Record Date Only the holders of record of our common stock at the close of business on the record date, May 14,, are entitled to notice of and to vote at the meeting. On the record date, 2,176,015 shares of our common stock were outstanding. Shareholders are entitled to one vote for each share of common stock held on the record date. Explanatory Note At a special meeting of shareholders held on October 26, 2017, the shareholders of Providence Bank approved the reorganization of Providence Bank into the bank holding company form of organization. Effective March 12,, the reorganization was completed, and the Company is now the bank holding company of Providence Bank. As a result, any information presented in this proxy statement that speaks as of a date prior to the effective date of the reorganization relates to the business and affairs of Providence Bank. Any prospective information presented in this proxy statement regarding the current year relates to the business and affairs of the Company unless specifically stated otherwise. [The remainder of this page is intentionally left blank.] 2

4 PROPOSAL NO ELECTION OF DIRECTORS To elect three directors to serve for one-year terms expiring in 2019, three directors to serve for two-year terms expiring in 2020 and three directors to serve for three-year terms expiring in Pursuant to our bylaws, our board of directors is divided into three classes. Each of the director nominees listed below currently serves on the board of directors of Providence Bank, a subsidiary of PB Financial Corporation, and has served in such capacity since Their respective biographical summaries are presented below. Nominees Name Age Director Since Principal Occupation and Business Experience Class I - One-Year Term Michael W. Boddie 61 President of Boddie-Noell Enterprises, Rocky Mount NC Wiley B. Gillam, III 69 Farmer, Owner, Gillam & Mason, Inc., Harrellsville, NC Melvin M. Mitchell 66 President, Melvin M. Mitchell Insurance Agency, Inc., Exclusive Agency Allstate Insurance Company, Rocky Mount, NC, 1974 to present. Class II - Two-Year Term William F. Davis 71 Vice President and CFO, Barnhill Contracting Company, Rocky Mount NC Bryan T. Mayo 59 Vice President Sales and Production, Mayo Knitting Mills, Tarboro, NC 1984 to present Ted E. Whitehurst Class III - Three-Year Term 52 President and Chief Executive Officer, PB Financial Corporation since March ; President and Chief Executive Officer of Providence Bank since July 2016, Senior Executive Vice-President and Secretary, Providence Bank since March 2006, Tarboro, NC Richard C. Anderson 54 Owner/Operator Anderson Farms, President Creekside Farms, Inc., President Polly Ridge Farms, Inc., Tarboro, NC Joseph B. Brewer, III 55 President, Brewer Foods, Inc., Rocky Mount, NC Douglas K. Martin 60 Manager, Brigade Properties, LLC, Rocky Mount, NC Vote Required The nominees receiving the highest number of affirmative votes of the shares present or represented and entitled to be voted at the meeting shall be elected as directors. Shareholders do not have cumulative voting rights. Your vote may be cast for or withheld from each nominee. Our Board of Directors has unanimously approved and recommends that shareholders vote FOR the election of the director nominees listed above. 3

5 PROPOSAL NO RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors has appointed the firm of Dixon Hughes Goodman LLP, Greenville, North Carolina, to serve as our independent registered public accounting firm for the fiscal year ending December 31,. The Board of Directors recommends that the shareholders ratify this appointment. If the appointment of Dixon Hughes Goodman LLP is not ratified by the shareholders, the Board of Directors will reconsider, but might not change, its selection. Dixon Hughes Goodman LLP has advised us that it does not have, and has not had, any direct or indirect financial interest in our company in any capacity other than that of serving as independent registered public accounting firm. A representative of Dixon Hughes Goodman LLP is expected to attend the annual meeting. Vote Required The affirmative vote of the holders of a majority of the shares of our common stock present or represented and voting on this proposal at the meeting shall constitute ratification of the appointment of Dixon Hughes Goodman LLP. Your vote may be cast for or against or you may abstain from voting on this proposal. Our Board of Directors has unanimously approved and recommends a vote FOR the ratification of the appointment of Dixon Hughes Goodman LLP as our independent registered public accounting firm for the fiscal year ending December 31,. PROPOSAL NO RATIFICATION OF STAGGERED DIRECTOR TERMS PROVISION OF BYLAWS When Providence Bank completed its reorganization into the bank holding company form of organization this year, the shareholders of Providence Bank exchanged their Providence Bank common stock for common stock of the Company. As a result, the Providence Bank shareholders became the shareholders of the Company and subject to the terms of the Company s articles of incorporation and bylaws. The Company s bylaws are substantially similar to the bylaws of Providence Bank and contain an identical provision providing for the Board of Directors to be divided into three classes, as nearly equal in number as possible, with initial terms of office staggered into one-, two- and three-year terms, otherwise known as a classified or staggered board of directors, as outlined below: The number of directors constituting the Board of Directors shall range from seven (7) to sixteen (16). The number of directors may be fixed or changed from time to time within the minimum and maximum by the Board of Directors or the shareholders. Directors need not be residents of the State of North Carolina. The directors shall be divided into three classes, as nearly equal in number as may be, to serve in the first instance for terms of one, two and three years, respectively, and thereafter the successors in each class of directors shall be elected to serve for terms of three years. In the event of any increase or decrease in the number of directors, the additional or eliminated directorships shall be so classified or chosen that all classes of directors shall remain or become as nearly equal in number as may be. The Board of Directors recommends to shareholders that they adopt a proposal to ratify the language in Article III, Section 3.2 of the Company s bylaws providing for staggered terms of directors Background and Purpose of Staggered Terms for Directors A staggered board is designed to assure continuity and stability in the Board of Directors leadership and policies by ensuring that at any given time a majority of the directors will have prior experience with the Company s business and operations. The Board believes that stable leadership and policies contribute to the creation of long-term shareholder value. In addition, the Board of Directors believes a staggered board will assist in the protection of shareholders interests in the event of an unsolicited offer for the Company by encouraging any potential acquirer to negotiate directly with the Board. Over the years, there has been a trend toward the accumulation of substantial stock positions in corporations by outside parties whether with a view toward utilizing a controlling block of stock to force a merger or as a prelude to proposing a restructuring or sale of all or part of a corporation or other similar extraordinary corporate action requiring the approval of its board of directors. These actions are often undertaken without advance notice to or consultation with management of the corporation. In many cases, such third parties seek representation on the corporation s board of directors in order to increase the likelihood that their proposals will be implemented by the corporation. If the corporation resists the efforts to obtain representation on its board, the outside parties may commence proxy contests to have themselves or their nominees elected to 4

6 the board in place of certain directors or the entire board. The Board of Directors believes that, in many circumstances, such efforts may not be beneficial to the interests of the Company and its shareholders, because they may deprive management of the time and information necessary to evaluate the proposals, to study alternative proposals, and to help ensure that the best price is obtained in any transaction that may ultimately be undertaken. Thus, Proposal 3 is designed to protect against rapid shifts in control of the Board of Directors and assist in assuring continuity in the management, affairs and business strategies of the Company. Potential Anti-Takeover Effects The overall effect of Proposal 3, however, may be to render more difficult or to discourage altogether a merger or tender offer, or the assumption of control by a holder of a large block of common stock and the removal of incumbent management, even if such transactions or events are favorable to the interests of shareholders. Specifically, it should be noted that Proposal 3 would make a change in directors and management for any reason more difficult at each election of directors because the staggering of terms of directors would have the effect of requiring at least two shareholder meetings, rather than one, to effect a change in majority control of the Company s Board. If Proposal 3 is adopted, shareholders will elect directors to longer terms. Considering the totality of factors, the Board of Directors recommends that shareholders approve Proposal 3 and ratify the staggered board provision in the Company s bylaws. Vote Required The affirmative vote of the holders of a majority of the shares of our common stock present or represented and voting on this proposal at the meeting shall constitute ratification of the language in the Company s bylaws providing for staggered terms of directors as outlined above. Your vote may be cast for or against or you may abstain from voting on this proposal. Our Board of Directors has unanimously approved and recommends a vote FOR the ratification of the provision in the Company s bylaws providing for staggered terms of directors. Principal Shareholders OTHER INFORMATION The following table sets forth certain information regarding the ownership of shares of our common stock as of May 14, by (a) each director of our company, (b) each of our executive officers, identified below, and (c) all directors and executive officers of our company as a group. Unless otherwise indicated in the footnotes to this table, each of the shareholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based on 2,176,015 shares outstanding on May 14,. Name of Beneficial Owner Shares Beneficially Owned Percentage Owned (1) Richard C. Anderson (2) 141, % Michael W. Boddie (3) 119, Joseph B. Brewer, III (4) 70, William F. Davis (5) 41, Wiley B. Gillam, III (6) 43, Douglas K. Martin (7) 28, Bryan T. Mayo (8) 31, Melvin M. Mitchell (9) 51, Ted E. Whitehurst (10) 63, Robert H. Ladd, III (11) David E. Keul (12) 8,400 7, All directors and executive officers as a group (11 persons) 607, % (1) We treat the shares of our common stock and options held by the individual that are exercisable within 60 days as outstanding when calculating that individual s percentage ownership. (2) Includes 48,525 shares held by Mr. Anderson s spouse and 9,440 shares held by one of Mr. Anderson s businesses. Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. 5

7 (3) Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (4) Includes 4,500 shares held by Mr. Brewer s spouse and 44,965 shares held by Mr. Brewer s business. Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (5) Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (6) Includes 31,562 shares held jointly by Mr. Gillam and his spouse and 4,500 shares held by a business owned by his spouse. Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (7) Includes options to purchase 1,178 shares that are exercisable within 60 days of May 14,. (8) Includes 1,000 shares held by one of Mr. Mayo s businesses. Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (9) Includes 320 shares held as custodian for Mr. Mitchell s grandson. Includes options to purchase 3,534 shares that are exercisable within 60 days of May 14,. (10) Includes options to purchase 3,500 shares that are exercisable within 60 days of May 14,. (11) Includes 1,880 shares held jointly by Mr. Ladd and his spouse. Includes options to purchase 2,900 shares that are exercisable within 60 days of May 14,. (12) Includes options to purchase 1,900 shares that are exercisable within 60 days of May 14,. Director Compensation In the period of January through September of 2017, the non-employee directors were paid a $500 fee per Board of Directors meeting and per committee meeting attended in person and during the period of October through December of 2017 they were paid a fee of $550 per Board of Directors meeting and per committee meeting attended in person. The eight nonemployee directors were paid a retainer fee of $10, for the year On April 30, 2015, we granted our non-employee directors stock options to purchase an aggregate of 53,008 shares of our common stock under our Directors Stock Option Plan for their continued service as directors. These options vest in equal installments over five years. Each option has an exercise price of $13.27 per share, which was the fair market value of our stock on the date of the grant and will expire ten years from the date they were issued. On March 6,, we granted our non-employee directors stock options to purchase an aggregate of 48,000 shares of our common stock under our 2017 Omnibus Stock Plan for their continued service as directors. These options vest in equal installments over five years. Each option has an exercise price of $23.00 per share, which was the fair market value of our stock on the date of the grant and will expire ten years from the date they were issued. Board of Director Meetings The business of our company is under the general management of the Board of Directors as provided by the laws of North Carolina and our bylaws. The Board of Directors usually holds regular meetings every other month. The Executive Committee of the Board meets in each month that the full Board does not meet. The Board met eight times in As a community banking organization, we strongly encourage all of our directors to attend our annual meetings of shareholders. Committees We have an Executive Committee and an Audit Committee of our Board of Directors. Executive Committee. The Executive Committee is composed of directors Richard Anderson (Chairman), Joseph Brewer, Douglas Martin and Ted Whitehurst. When the full Board is not in session, the Executive Committee has the power to act on behalf of the full Board of Directors in nearly all matters concerning our operations. The Executive Committee met seven times in Audit Committee. The Audit Committee is composed of directors Douglas Martin (Chairman), Richard Anderson, Michael W. Boddie and William Davis, none of whom are our employees. The Audit Committee reviews the findings of external audits and examinations, provides general oversight of the internal audit function and reviews the activities of our regulatory compliance efforts. The Audit Committee met five times in

8 Executive Officers The following table sets forth certain information concerning our executive officers as of May 14,. Name Age Position with PB Financial Corporation and Providence Bank Ted E. Whitehurst 52 President and Chief Executive Officer, PB Financial Corporation since March ; President and Chief Executive Officer of Providence Bank since July 2016, Senior Executive Vice-President and Secretary, Providence Bank since March 2006 Robert H. Ladd III 59 Executive Vice-President, Chief Lending Officer, Providence Bank since December 2016, Senior Vice President, Chief Lending Officer, Providence Bank since August 2015; Vice President, Market Executive, Tarboro Office, Providence Bank since August David E. Keul 58 Executive Vice President, PB Financial Corporation since March ; Executive Vice President, Chief Financial Officer and Treasurer, Providence Bank since December 2016, Senior Vice President, Chief Financial Officer, Providence Bank since April 2016, Senior Vice President, Controller, Providence Bank since August Transactions with Management We expect to have banking transactions in the ordinary course of business with our executive officers, directors and their associates, on the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with third parties. At the time we enter into any banking transaction, in the opinion of our management, these transactions will not involve more than the normal risk of collectibility or present other unfavorable features. DEADLINE FOR SHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING We expect to hold our 2019 annual meeting of shareholders in April or May of that year. In accordance with our bylaws, shareholders having proposals that they desire to present at next year s annual meeting must submit any proposals to us not more than 90 days and not less than 60 days before the meeting. The procedure for submitting shareholder proposals is set out in Section 2.14 of our bylaws, a copy of which is available upon request to the Secretary. Proposals should be mailed to the Secretary, Post Office Box 7727, Rocky Mount, North Carolina SHAREHOLDER COMMUNICATIONS Shareholders and other interested parties may communicate with the Board by writing to Ted E. Whitehurst, our President and Chief Executive Officer, at PB Financial Corporation, Post Office Box 7727, Rocky Mount, North Carolina Mr. Whitehurst will relay such communications to the Board of Directors. OTHER MATTERS The Board of Directors knows of no other business to be brought before the meeting, but intends that, as to any such other business, the shares will be voted pursuant to the proxy in accordance with the best judgment of the person or persons acting thereunder. 7