Harry L. Robinson, chairman and chief executive officer of Baltimore Bancorp, has characterized a group trying to take over the board as "inexperienced opportunists" whose stake in the bank holding company is very small.
The leader of the dissidents, Edwin F. Hale Sr., contends Baltimore Bancorp is not performing to its potential. He said the group is not opportunistic, but instead intends to improve the operations of the Bank of Baltimore.
Baltimore Bancorp, the bank's parent company, has become the prize in a bitter proxy fight that pits long-time board members against a group of disgruntled shareholders.
Robinson, who has been at the helm of Baltimore Bancorp for the last seven years, says the group wants only to seize control of what he calls "this rather successful banking institution."
Hale, a self-made Baltimore trucking and shipping magnate who also owns the Baltimore Blast soccer team, is footing the bill of more than half million dollars to mount the attack. If he and the rest of the group of 16 dissidents are elected, they would control the bank holding company.
Hale would then become the chairman and Charles H. Whittum Jr., a former executive vice president of Signet Bank, would be the interim chief executive officer, according to Hale.
A key strategy of the dissidents is to enlist the support of large institutional investors, which hold large blocks of Baltimore Bancorp stock. Hale said he has gotten one such commitment, but he would not reveal who it is.
The showdown will come on May 22 when Baltimore Bancorp holds its annual meeting.
The dissidents' proxy material has been reviewed by the Securities and Exchange Commission and "we plan to mail to shareholders today," said Stanley J. Kay of Dewe Rogerson Inc., a proxy solicitation firm.
A shareholder, Barbara S. Larkin, has filed suit in U.S. District Court seeking a temporary restraining order to delay the meeting. She contends the bank misrepresented a proposal she submitted calling for a stockholders' advisory board. Larkin is the mother of R. Andrew Larkin, a member of Hale's slate.
Baltimore Bancorp yesterday responded to the suit with a motion agreeing to send shareholders a supplemental solicitation.
The spark for the proxy fight is generally seen as Baltimore Bancorp's rejection last year of a $17-a-share offer from First Maryland Bancorp, the parent company of First National Bank of Maryland. Before First Maryland made its bid, Baltimore Bancorp stock was trading at $10 1/4 . The stock closed yesterday at $8 1/2 , down 1/4 .
Robinson argues that the rejection of the bid has nothing to do with the current takeover effort since only a few of the 16 dissidents owned stock in the company during the First Maryland battle.
According to information filed with the Securities and Exchange Commission, only three of the 16 men held stock before the First Maryland offer on April 27, 1990, and those holdings amounted to only 25,000 shares out of the total 12.8 million shares outstanding. Of the 91,325 shares now held by the group, 49,125 shares were bought in the last two months.
Hale and the profit-sharing program of his trucking company, Port East Transfer Inc., owned only 4,000 shares until the middle of March. Since then, Hale and the profit-sharing program have bought an additional 25,000 shares. Now, Hale owns 17,000 shares and the Port East Profit Sharing plan owns 12,000 shares.
Hale said the rejection of the First Maryland bid is one motivation for his takeover effort. He also said members of the dissident group made their recent purchases of Baltimore Bancorp stock because "I asked them to."
Responding to Robinson's contention that the group held an insufficient amount of stock to be characterized as serious shareholders, Hale said, "I don't think it's a prerequisite for a proxy fight."
Robinson questioned the group's expertise in banking, contending that what little experience they do have has been poor.
"That's extremely weak," Hale said, reacting to Robinson's comments on banking experience.
Robinson specifically criticized the banking experience of Hale, J. Richard Leon and Richard E. Fasold.
Hale was a member of an advisory board to the Baltimore office of the Bank Maryland Corp. of Towson. Robinson pointed out that the holding company has not made a profit since it became a publicly traded company in 1987 and that it has never paid its shareholders a dividend.
Leon is the president of the James Madison Mortgage Co. in Fairfax, part of James Madison Ltd., a Washington-based bank holding company that has a negative net worth of $12 million after losing $73.9 million last year and $8.7 million in the first quarter. In a recent press release, the company said its banking subsidiaries "could be the subject of regulatory actions."
"Clearly, that's not much of an endorsement of his banking abilities," Robinson said about Leon.