Edwin F. Hale Sr. is about to learn the truth of an old saying: Be careful what you wish for, because you just might get it.
Mr. Hale is on the verge of triumph in his five-month proxy fight to gain control of Baltimore Bancorp, the parent of The Bank of Baltimore. He could be chairman of the board as soon as Tuesday, if preliminary voting tallies hold up. But he won his new job by charging that the former thrift was behind the times, not profitable enough -- even a bit stuck in the mud.
Here's the dirty little secret: If his charges were true, they still will be on Tuesday. So, for Mr. Hale and his CEO-in-waiting, former Signet Bank/Maryland Executive Vice President Charles H. (Buck) Whittum Jr., the hard part is just beginning.
Mr. Hale must calm about 1,000 employees who don't know his plans for them, and who have seen him described for months as the closest thing to Attila the Hun. Then he must do what bank officials have been unable to do: lure a base of corporate and small-business customers, who set top-performing commercial banks apart from also-rans.
"The amount of corporate business done by The Bank of Baltimore is woefully low," Mr. Hale said Thursday, the day a preliminary vote count showed his slate of candidates winning a majority on the company's board of directors. "We're going to change that."
A lot of things will change. First, current Chairman and Chief Executive Robert F. Comstock, who replaced Harry L. Robinson in June, will be replaced. Then the company is expected to assume the bill Mr. Hale ran up during the proxy fight, which he said would be $1.2 million to $1.3 million.
"It'll make Ed Hale a happy boy," he admits, since he would have been stuck with the bill if he had lost.
Later, the bank will lower its dependence on high-interest certificates of deposit, which were used to bankroll rapid growth in the late 1980s, Mr. Hale and Mr. Whittum said. Such brokered CDs, which must carry high interest rates to lure investors, leave little profit margin for banks.
Meanwhile, loans will get more expensive, as the bank acts on Mr. Whittum's belief that it relies too much on low rates -- rather than good service -- to attract customers. And new or retrained staffers will turn their thoughts to romancing corporate customers.
Those changes follow months of battling over bank policies. It began last year, after Mr. Robinson and other bank officials rejected a buyout offer from First Maryland Bancorp. As Baltimore Bancorp's stock price slid -- to half the value of the buyout offer -- Mr. Hale and other shareholders prepared a proxy battle to take control of the company. Their strategy, enlarging the board of directors and winning the new seats, appears to have worked, according to last week's vote tally.
In a way, Mr. Hale may relish transforming the bank more than battling Mr. Robinson and Mr. Comstock. The owner of trucking and barge companies, Mr. Hale rose from a blue-collar background and has made no bones about his disdain for bankers. He thinks too many are elitists who look down on hustling small businessmen -- like, coincidentally, Ed Hale.
Still, the Bank of Baltimore was never an elite institution. And Mr. Robinson, the son of a school maintenance man from Waverly, was hardly the type Mr. Hale calls "born on third base who thinks he hit a triple."
Once the vote count is final, Mr. Hale will get a crack at competing with the type of bankers he really wants to tangle with. He plans to make The Bank of Baltimore more profitable by going to other banks' small-business customers and offering them respect.
"I don't know of one bank customer who's happy with his banking relationship," said Mr. Hale, who also owns the Baltimore Blast soccer team. "I think a lot of people will be ready for a change."
If he's right, and picks up lots of middle-market commercial business, it would go a long way toward solving The Bank of Baltimore's problems, which weren't earth-shaking to begin with. Unlike bigger banks whose survival was threatened by bad real estate loans, The Bank of Baltimore is steady. It just doesn't make very much money. Its $9 million 1990 profit worked out to a return on assets of .52 percent, well below the 1 percent that analysts say is the mark of a solid performer.
Getting more commercial bank customers can help in two ways. First, they keep a lot of money in checking accounts that don't pay interest, so they generate more profits than high-interest certificates of deposit. Second, they generate loan business that, while not risk-free, is more appealing than, say, proposals to build speculative office buildings.