Shareholders Vote Down Proposal For Whitman Bancorporation

A plan to reorganize Whitman Bancorporation Inc. failed to get the required two-thirds vote of shareholders Thursday night.

The board of directors proposed that the Colfax-based parent of Bank of Whitman convert to S corporation status. As such, the company would pay almost no federal income tax.

Revenues would be passed through to shareholders who would become responsible for the tax.

But to qualify for S status under Internal Revenue Service rules, a corporation can have no more than 75 shareholders. Whitman Bancorporation has 230.

The board proposal would have cashed out all those who own fewer than 1,328 shares at $40 per share.

Many of those shareholders did not want to sell. With the support of others who did possess the minimum number of shares to remain owners, they kept the proportion of shares voting for the board plan to 61 percent, Chairman Phillip Largent said Friday.

He said the plan, or a modification, would not be resubmitted to the shareholders, who turned out in force to hear presentations explaining the reorganization and its implications.

“I thought it was a good proposal for them,” Largent said.

But he acknowledged the difficulty of satisfying concerns of the shareholders who would have been ousted by the plan.

“I can appreciate why it was voted down,” he said.

Spokane attorney Doug Siddoway represented one of the larger shareholders who opposed the directors’ plan.

He said many of those who attended the meeting in the lobby of Bank of Whitman’s main branch said community banking is more than numbers.

They wanted the interests of their longtime friends and neighbors protected, he said.

“It was kind of a heartwarming thing to see,” Siddoway said, adding that he did not expect the reorganization plan to resurface.

Largent said there would be no changes in Whitman Bancorporation and its 11-branch operating subsidiary in the wake of the shareholder vote.