The battle over the control of Baltimore Bancorp heated up today as the rival groups ran competing advertisements in The Evening Sun and The Sun.
A group of 16 dissident shareholders are trying to win control of the board of Baltimore Bancorp, the parent company of the Bank of Baltimore. The attack is being led by Edwin F. Hale Sr., a Baltimore trucking and shipping executive and owner of the Baltimore Blast, a professional indoor soccer team. The showdown will be on Wednesday when Baltimore Bancorp holds its annual meeting.
While the battle has been become more bitter, the long-term effects will not be great, according to one banking analyst who asked that his name not be used. "Regardless of who is in control, it will be hard to remain independent," he said. "The average depositor is not worried one way or the other," he said.
The battle has also had little effect on the stock price of Baltimore Bancorp, which has been trading in the range of $8.75 to $9.25 a share since the proxy fight began. The stock closed yesterday at $8.87 1/2 and remained unchanged at midday today.
In addition to their battle it out in the media, they were scheduled to meet in U.S. District Court today to argue whether the dissidents need an 80 percent vote to win -- as required in the company's bylaws -- or just a simple majority. Meanwhile, Baltimore Bancorp has mounted legal challenges to the right of some of the dissidents to run for the board.
If the dissidents are successful in their bid, they have said one of their first acts will be to fire Harry L. Robinson, chairman and chief executive officer. Hale would then become chairman and Charles H. Whittum Jr., a former executive vice president of Union Trust Bank and its successor, Signet Bank, would become interim chief executive officer.
In their publicly traded jabs, Baltimore Bancorp management has been contending that the dissidents are inexperienced and opportunistic, while the opposition group has said the bank has been under-performing compared to other banks.
The Baltimore Bancorp advertisement today has the headline: "Baltimore Bancorp Shareholders: Can the Hale Group Run Your Bank? We doubt it. Here's Why."
The advertisement goes on to attack the banking experience of the dissidents and their eligibility to serve as directors. It also questions whether the dissidents are complying with banking regulations and says the comparison of Baltimore Bancorp with some of the leading banks in the area is "highly misleading."
"Baltimore Bancorp has maintained its capital and its profitability during a difficult period for all banks," the Baltimore Bancorp advertisement says. "The national banking crisis is not over. We urge you to vote for management's nominees, who are pledged to steer your bank safely through the crisis," the advertisement says.
The dissidents' advertisement has the headline: "To all Stockholders of Baltimore Bancorp, Poor Operating Performance Should Not Be Tolerated." A series of paragraphs then compares Baltimore Bancorp's results to "Competitors' Average."
In a previous interview, the dissidents said the comparison banks were First National Bank of Maryland, Baltimore-based Mercantile Bankshares Corp. and Riverdale-based Citizens Bank and Trust Co. of Maryland.
The advertisement says the group does not know whether an offer from First Maryland Bancorp, the parent of First National Bank, could have been completed last year. But the ad goes on to say the board should not have rejected it. "You deserve a new board that will seek a higher price rather than maintain roadblocks to block a premium offer," the advertisement says.
"All bona fide offers to purchase Baltimore Bancorp at a premium will be presented to stockholders -- the new board will not stand in the way of a majority of the stockholders," the advertisement says.
The advertisement says the group's program for the future includes improving yields, replacing Robinson, establishing a policy to prevent potential conflicts of interest by board members, focusing the bank on commercial and consumer markets and fostering relations with stockholders and the investment professionals who follow banks.