We're not sure what kind of traction it has, but something of a proxy spat seems to be brewing over at Porterville's Bank of the Sierra.

Directors of the bank's parent company, Sierra Bancorp, are seeking authorization from shareholders to issue 10 million shares of preferred stock. But the company's two largest shareholders are voting against the proposal, and an independent analysis by a finance and governance research firm is also recommending that shareholders vote no.

Patricia Childress of Visalia and her sister, Carol Bates of Porterville, together own or control more than 1.4 million of the company's 9.6 million shares of common stock. And Childress is urging other shareholders to vote against the proposal as well.

Bank officials say they want the authority to issue preferred stock in case it's needed to raise capital, whether for an economic emergency or for expansion or acquisition. Bank CEO James Holly said the bank has no plans to actually issue any of the stock.

The proposal was falling short of the 4.8 million or so share votes needed to pass at the May 27 shareholder meeting. The meeting was adjourned to June 9 as directors try to wrangle additional proxy votes.

Childress cited a proxy analysis by ISS Corporate Services recommending a "no" vote by shareholders on the stock proposal. The analysis said the potential for "management entrenchment," by placing stock with board-friendly interests, outweighs the benefits. The report suggests that preferred shares may dilute the voting power and equity interest of owners of common stock.

"The timing of this proposal on the heels of last year's proxy contest is a thinly disguised attempt to ensure that no one ever runs for the board again," said Childress, who ran unsuccessfully last year for a board seat.

Holly disagreed. "I don't get that argument," he said. "I don't see how the ability to offer preferred stock has any effect on the board or election process."

Preferred shareholders, Holly said, "only have voting power in unusual circumstances, such as if the bank is in arrears on their dividends."

Childress said she would support a proposal that didn't give directors a "blank check" to give voting power to preferred shares. But, she added, "their choice to ignore that type of support reveals their desire \[or\] intent to control voting."

Childress "has every right to voice her concern," Holly said.

Holly said he expects Tuesday's reconvened shareholder meeting to be delayed again as the board continues to seek support for the stock proposal.