United Bancorporation of Alabama on Wednesday slammed a request by two activist investors to join the bank’s board.
Aaron Sallen, manager at Merion Road Capital Management, and Jason Blumberg, managing member at Blue Hill Advisors, wrote an open letter to United on Tuesday, asserting the bank had failed to provide them with feedback on concerns they expressed in July.
Sallen and Blumberg urged the $1.4 billion-asset lender, at the time, to make better use of its equity, control its expenses and add more board members with expertise in capital allocation. In particular, the investors called out a $123 million capital windfall from a Treasury Department program and proposed a $40 million stock buyback.
“Despite our long engagement and investor support, we have not seen any tangible progress from the Board in addressing or acting on our proposals,” Sallen and Blumberg wrote Tuesday.
Merion Road and Blue Hill together own roughly 2% of United’s shares.
“Inaction is not an option,” Sallen and Blumberg wrote. “High-level discussions are not a substitute for concrete analysis and decisive action.”
United, however, disputed the investors’ characterization of “inaction,” saying it’s “fully committed to acting in the best interests of all stockholders, including the approximately 98% of the Company's investor base unassociated” with Merion Road and Blue Hill.
The bank said it had “engaged constructively on numerous occasions with the Activist Group” – notably, on a video call Aug. 31.
“At no point during our meeting, or in any prior meetings, did Jason Blumberg or Aaron Sallen indicate they both would like to join the Board,” the bank said. “Yet, just hours after our August 31st meeting ended, we received an email making this demand and requesting a response within seven days.”
United called the request “unreasonable,” adding the investors “did not even account for standard processes and timelines associated with director candidate vetting.”
Agreeing to Sallen and Blumberg’s request “would have been a rash decision and undermined the interests of investors holding the other 98%” of United's shares, the bank said Wednesday.
United also defended the expertise of its board, saying it’s “regularly assesse[d] … to ensure that it has the right skills and experience to advance the best interests of all stockholders.”
Both sides appeared to associate their actions with recent improvements on the bank’s stock performance.
Sallen and Blumberg asserted Tuesday that United’s shares had risen more than 15% since they published their July letter, compared with a 1% increase for the broader Nasdaq Bank Index and 2% for the S&P 500.
Meanwhile, United on Wednesday said “leadership's focus on long-term value creation has supported total stockholder returns of more than 129% over the past five years.” That includes $41 million returned to stockholders through dividends and share repurchases in the past two years, the bank said.
United last month reported $11.3 million in profit for the first half of 2026. That’s up roughly 21.5% over the same time frame last year, the bank noted.
“We plan to continue driving value by building on our trajectory of loan and deposit growth and reaching top-tier profitability,” United said Wednesday. “We also intend to maintain a disciplined and balanced approach to capital allocation, while retaining the ability to act swiftly on opportunities for inorganic growth.”
Sallen and Blumberg, for their part, said Tuesday they “recognize that the Board must conduct an appropriate evaluation of our qualifications, and we welcome the opportunity to meet directly with the independent directors as part of that process.”
United on Wednesday said that while it “remain[s] open to ongoing engagement with the Activist Group, we do not believe it will be beneficial or constructive to continually issue public statements in response to [its] expanding and shifting demands.”
Activist investors pushed several banks to make changes in the past year or so. Most notably, HoldCo Asset Management sued Fifth Third and Comerica in the lead-up to the two banks’ combination. The investor argued the deal was “rushed” and sealed because it offered then-Comerica CEO Curt Farmer “a lucrative post-closing role.”
HoldCo later lodged unsuccessful bids against KeyBank and Eastern Bank.
Activist investor Diligence Capital Management pressed Maryland-based EagleBank in March to develop a performance improvement plan and replace three board members.
Blue Hill is no stranger to investor activism. The firm repeatedly made unsolicited counteroffers to buy Honolulu-based Territorial Bancorp in 2024, in the face of Los Angeles-based Hope Bancorp’s ultimately successful bid to acquire the Hawaii lender.
Facts Only
* Aaron Sallen and Jason Blumberg wrote an open letter to United on Tuesday.
* The investors asserted the bank failed to provide feedback on concerns expressed in July.
* The investors urged the lender to better use equity, control expenses, and add board members with capital allocation expertise.
* Investors called out a $123 million capital windfall from a Treasury Department program.
* Investors proposed a $40 million stock buyback.
* Sallen and Blumberg stated there was no tangible progress from the Board.
* Merion Road and Blue Hill own approximately 2% of United’s shares.
* United disputed the term "inaction," claiming commitment to stockholders' interests.
* United stated it had engaged constructively with the Activist Group, including a video call on August 31st.
* United stated neither investor indicated a desire to join the Board during the August 31st meeting.
* United called the request "unreasonable," citing lack of consideration for standard vetting processes.
Executive Summary
Full Take
The dynamic between activist investors and management reveals a tension over governance control and capital deployment, framed by competing narratives of performance and inaction. The core conflict is not simply about specific financial proposals but about the locus of power: whether executive leadership or external pressure dictates strategic direction. The narrative simultaneously juxtaposes documented growth—stock increases and total stockholder returns—against investor demands for more aggressive action in capital allocation. This creates a subtle friction where quantifiable success is used to defend management's execution while activist engagement seeks to redirect that success toward specific, immediate restructuring of corporate behavior.
The pattern observed is the framing of internal deliberation as external stagnation. When management cites long-term value creation and high returns, they attempt to neutralize the charge of "inaction," suggesting that their performance metrics inherently validate their decision-making process. However, the timing—receiving a demand immediately following a constructive engagement suggests that the operational reality of stakeholder influence operates outside traditional timelines for internal board assessment. The implication is that publicly reported success can function as a shield against immediate accountability regarding governance restructuring. The shift in focus from broad performance metrics to specific demands for board composition and buybacks illustrates the continuous negotiation over who ultimately defines the concept of "best interests" within the corporate structure.
Bridge questions: How does the quantification of long-term value (129% returns) interact with the immediacy demanded by activist investors regarding capital deployment? What are the systemic costs to corporate governance when engagement is framed as a potential liability rather than an ongoing dialogue? If management can successfully deflect accountability using historical performance, what structural changes are necessary to ensure future engagement moves beyond reactive responses?
Sentinel — Human
This article presents a balanced report on a dispute between activist investors and a bank's board, effectively modeling the tension between shareholder demands and institutional responses.