The war of words at Baltimore Bancorp escalated in a very public way yesterday.
Wracked by a power struggle between management and a group of dissident shareholders, Baltimore Bancorp put it's side of the story in The Sun, The Evening Sun and the Daily Record. In an ad addressed to shareholders, the firm attacked the credentials and abilities of the 16 shareholders trying to wrest control from Chief Executive Officer Harry L. Robinson and his board.
The insurgents, who claim that Baltimore Bancorp is TC mismanaged and a chronic underperformer, are led by Edwin F. Hale Sr., the owner of Baltimore-based trucking and shipping companies.
Mr. Hale's group "has little banking experience" and would be "disastrous for Baltimore Bancorp's shareholders and depositors alike," the ad says, adding: "Too many Maryland banking institutions [such as Old Court Savings & Loan] have failed after outsiders took control."
It notes that one dissident shareholder "was associated with the now-failed Baldwin-United [thrift], another with James Madison Ltd.," references to Richard E. Fasold and J. Richard Leon, respectively.
Mr. Fasold was vice president of corporate planning for Baldwin-United, while Mr. Leon is president of James Madison Mortgage Co., a subsidiary of James Madison Ltd., a financially troubled Washington bank holding company.
No specific reference was made to Charles H. Whittum Jr., with whom the dissidents want to replace Mr. Robinson as CEO. Mr. Whittum is a retired vice president of Signet Bank/Maryland and its predecessor, Union Trust Co. of Maryland.
Mr. Hale said that he heard about the ad on his car phone as he drove from Cockeysville to Baltimore yesterday morning. He wasted little time returning Baltimore Bancorp's rhetorical fire.
"I would say that it's just a desperate attempt to resurrect what looks to be a grave situation for them," Mr. Hale said. "I was not surprised. Not at all. . . . I wonder how much that ad cost."
The dissidents were also busy preparing a stockholder message yesterday. Their proxy statement was approved by the Securities and Exchange Commission on Wednesday, clearing the way for a letter to Baltimore Bancorp's shareholders.
Among other things, the missive says that it's time to replace Mr. Robinson as chairman and chief executive "before further damage is done to the value of your investment."
It compared Baltimore Bancorp's performance over the last five years unfavorably with that of First National Bank of Maryland, Mercantile Bank & Trust, and Citizens Bank & Trust Co. of Maryland, based on return on equity, return on assets and net yield on earning assets.
However, Jerome P. Baroch, Baltimore Bancorp senior vice president, has said the comparison is unfair because First National, Mercantile and Citizens are long-established commercial banks and three of the best performers in the region, while Bank of Baltimore is a converted thrift.
"We feel that the bank has performed better than most of our peer group, or certainly better than peer group banks," Mr. Baroch said yesterday.
Yesterday's newspaper ad will run again today and tomorrow, Mr. Baroch said. "I think a point is that we've talked with the press, and the press has brought up these issues," he said. "We can't really control what the press says. We wanted to make sure that some of these issues were brought before the public."
Mr. Hale and his group own roughly 1 percent of Baltimore Bancorp's stock. Yesterday's ads appear to indicate Mr. Hale's takeover try is being taken seriously by Mr. Robinson and his board, although Mr. Baroch downplayed the effort.
"We don't take anything at the bank lightly, but we don't believe he has a chance" to gain a majority on the board, he said.
Part of the impetus behind the dissidents' effort is resentment over a $17-per-share offer for Baltimore Bancorp made by First Maryland Bancorp last year. The offer was rebuffed, and the price of Baltimore Bancorp's stock later dropped. It closed at $8.625 yesterday.
The dissident group hopes to have all of its members elected to the board, which would give it control and increase the number of board members from 18 to 28.