The management of Loyola Capital Corp., the parent company of Loyola Federal Savings and Loan Association, again pleaded with frustrated shareholders to be patient, saying that some day their investment will increase in value.
At the company's annual meeting yesterday, Joseph W. Mosmiller, Loyola's chairman and chief executive officer, described a prospering thrift with a low level of bad loans, stable earnings and a strong capital position. But some shareholders want something more -- dividends and a higher stock price.
"I find this all very boring," said one shareholder. "It's not putting anything in my pocket."
Loyola, the second largest thrift in Maryland, has not paid a dividend since it became a publicly traded company in 1986. Mosmiller said this policy is intended to build the company's capital and to increase shareholder's value in the company. In fact, the book value -- the net worth of the company divided by the outstanding shares -- has increased from $20.55 per share at the end of 1986 to $29.95 per share at the end of last year.
But this has not translated into significantly higher stock prices. The stock was initially offered at $12.50 per share and has traded as high as 19.37 1/2 a share. It closed yesterday at $13.25 a share.
Mosmiller blames the stock's performance on the continuing bad press surrounding the thrift and banking business. "Ever since we became a public company in 1986, we have had problems in this industry," he told the shareholders.
But Mosmiller said management's strategy will pay off. "Eventually this will be reflected in that stock price," he said. As to when the company will pay a dividend, Mosmiller said the board of directors regularly reviews the issue, but he did not know when it will change its position.
While many of the shareholders criticized the dividend policy, one shareholder who had investments in two troubled banks praised management for its actions. "At least I can see a continued growth in book value," he said. "I would certainly endorse the continued retention of earnings," the stockholder said.
Loyola, which has $2.1 billion in assets, had a net income last year of $8.6 million, or $1.82 a share, a 17.7 percent drop from 1989 when the company earned $10.5 million, or $2.08 a share.