A nearly yearlong changeover in the upper echelons of MNC Financial Inc. would continue into the boardroom if shareholders approve a new lineup of directors proposed to head the Baltimore banking company.
MNC, which saw 10 of the corporation's directors resign over the past year, has disclosed that another seven of its directors -- including MNC's former vice chairman, William H. Daiger Jr. -- will not stand for re-election to the board when shareholders vote at their annual meeting May 16, according to MNC's 1991 proxy statement dated Friday.
The document also publicly revealed for the first time the extent of millions of dollars in troubled loans that have yet to be repaid by three former directors.
The proposed changes at MNC comes as the state's largest banking company continues to fine-tune its structure and makeup in the wake of its $440 million loss last year. Alfred Lerner, the company's largest shareholder who was elected chairman last year, has either replaced or restructured virtually the entire slate of top management as MNC battled to overcome a severe cash crunch and an onslaught of deteriorating real estate loans.
For more than six months, MNC has undertaken a series of steps aimed at simplifying the reporting lines within its core banking business while shedding numerous operating units, including its prized credit card subsidiary, MBNA Corp.
Under the new MNC board proposal, the different boards at the parent company and its two banking subsidiaries, American Security Bank in Washington and Maryland National Bank, would be unified into a single 18-member board that would preside over the entire banking operation. While distinct boards would still exist over each of the discrete companies, the three boards would be identical in their members.
"The company has made an attempt to combine the best director talent from the board of the two banks plus MNC into an entity which has a number of directors which is commensurate with the number of directors at similarly sized banking companies," Daniel G. Finney Jr., a company spokesman, said. MNC had 28 directors at the beginning of last year.
Mr. Daiger and his former counterpart at American Security, Daniel J. Callahan III, remain executive vice presidents of MNC, Mr. Finney said.
While many of the changes in the board were in response to a shifting organization of the banking company, some directors involved in real estate development and construction left for more personal reasons.
According to the proxy statement, entities involving former MNC director Oliver T. Carr Jr., head of the Washington real estate company that bears his name, had 16 outstanding loans, worth about $55.2 million, with an MNC bank as of March 1. About $30.9 million of that amount was due by the beginning of last month, the proxy said. In addition, A. James Clark and Earl L. Linehan, former MNC directors, had combined more than $37 million in loans outstanding on March 1.
Although it was not clear how much of the outstanding balances were considered in arrears, the inclusion of the details of the loans in the proxy clearly implied that at least a portion of the loans were regarded as troubled by the bank.
"Any involvement by a director in nonperforming loans needs to be reported," Mr. Finney said. "The disclosure must speak for itself."
The following MNC directors will not stand for re-election: Benjamin R. Civiletti; William H. Daiger Jr.; Richard A. Eliasberg; Sheldon W. Fantle; Thomas M. Gibbons; Joseph A. Sellinger; and Harry K. Wells.
The following directors are proposed for election to the MNC board this year: Bette B. Anderson; Andrew F. Brimmer; Joseph C. Eanes Jr.; Charles H. Foelber; H. Grant Hathaway; A. Linwood Holton Jr.; Richard E. Hug; William L. Jews; Joseph S. Keelty; Paul X. Kelley; Francis X. Knott; Richard L. Leatherwood; Alfred Lerner; Francis P. Lucier; George V. McGowan; George G. Radcliffe; Stephen J. Trachtenberg; and Oliver S. Travers Jr.