A group of dissident Baltimore Bancorp shareholders said yesterday that it will fire Baltimore Bancorp Chief Executive Harry L. Robinson if it is successful in gaining control of the board.
Baltimore businessman Edwin F. Hale Sr. said he and other Baltimore Bancorp shareholders have formed a shareholders' committee for the purpose of soliciting proxies from shareholders. The announcement said that the group would install Charles Whittum, a former executive at Union Trust (now Signet Bank/Maryland), as temporary CEO if it wins enough proxies to take over the company's board.
In a harshly worded news release yesterday, the dissident group recounted a series of complaints about Mr. Robinson's leadership, many of them harking back to Mr. Robinson's refusal last year to entertain First Maryland Bancorp's $17-a-share takeover offer for Baltimore Bancorp. With that offer now off the table, Baltimore Bancorp's stock has sunk, closing at $8.875 yesterday.
The Hale group said in the release that if its bid to take over the board is successful, the new directors will conduct "a thorough review of the company's financial condition and existing management."
"The new board would also be responsive to stockholders' concerns," Mr. Hale said. "We believe that Harry Robinson's board has not made this a high priority."
Attempts to reach Mr. Robinson for comment last night were unsuccessful, but Jerome P. Baroch, executive vice president of Baltimore Bancorp, responded by citing connections between members of the dissident group and some troubled local companies.
He noted that J. Richard Leon, a member of Mr. Hale's slate of candidates for the banking company's board and president of James Madison Mortgage Co. of Fairfax, Va., is employed by James Madison's troubled parent company, James Madison Ltd. Washington. Additionally, he said, Mr. Hale has been an adviser to Bank Maryland Corp., which lost $11 million last year.
On the other hand, Mr. Baroch said, Baltimore Bancorp made $9 million last year -- at a time when other local banks were losing money because of problem loans -- and made another $5 million in the first quarter of this year.
The Hale group hopes to get enough proxies to allow it to elect a majority of the company's board at Baltimore Bancorp's annual meeting May 22. Proxies effectively delegate a shareholder's vote to the person to whom the shareholder grants a proxy.
Mr. Hale's slate includes 16 prominent business people, bankers and present and former public officials, such as former Baltimore County Executive Dennis F. Rasmussen and Robert A. Pascal, appointments secretary to Gov. William Donald Schaefer.
They are running for six seats that are open on the company's board, out of a total of 18.
Stanley J. Kay, a spokesman for a New York-based proxy solicitation firm retained by the Hale group, said the group won't yet comment on why it is running so many candidates for the available seats or how it plans to win a board majority with only six seats at stake.
Yesterday's announcement sparked the first skirmish of the verbal war that the sides will wage over the next three weeks.
The Hale group's press release contended that Baltimore Bancorp has had paltry returns on the company's equity and assets under Mr. Robinson's leadership, and that the margin between the interest rate it pays for deposits and the rate it receives on loans has narrowed.
Mr. Baroch said the company has already received proxies from about 13 percent of its shareholders, most of whom will vote with management. Mr. Kay said the Hale group hopes to send out its proxy solicitations early next week. The 16 members of the slate collectively own less than 1 percent of the company's stock, Mr. Kay said.
Neither side is yet claiming to have the proxy of T. Rowe Price Associates Inc., Baltimore Bancorp's biggest shareholder and one that crossed swords with management last year over the First Maryland bid.
"We'll disclose how we vote as soon as a decision is made, which should be shortly," Steven Norwitz, a T. Rowe Price spokesman, said.