Baltimore Bancorp's leaders promised shareholders three more profitable quarters this year and in return received a relatively smooth ride at the company's annual meeting yesterday.
Shareholders were buoyed by news last month of a $5.1 million first-quarter profit for the Bank of Baltimore's parent and $3.1 billion in assets. Even though half of the profits came from the sale of securities, the results stood in marked contrast to the $94.6 million loss in the fourth quarter last year.
Chairman Edwin F. Hale Sr. also assured shareholders, many of whom were outraged to see the company turn down a $17-a-share takeover offer from First Maryland Bancorp two years ago, that any new purchase offers would be taken seriously.
"If a bona fide offer comes into this bank, rest assured it will be reviewed and brought before you, as opposed to what happened with previous management," said Mr. Hale, who took over in September after an extended proxy fight.
He and Chief Executive Officer Charles H. "Buck" Whittum Jr. assured about 150 shareholders at the Stouffer Harborplace Hotel that the-first-quarter performance would be repeated throughout the year and that by this time next year, the company would be ready to raise capital by selling stock to the public -- perhaps as much as $40 million worth.
That prospect concerned some shareholders, who questioned whether a stock sale would dilute the earning power of the shares they hold. But Chief Financial Officer Joseph A. Cicero said raising capital would be better for the company in the long term than maintaining the current number of shares.
Mr. Hale also announced that the Bank of Baltimore, the main subsidiary of the $3.1 billion Baltimore Bancorp, began a newspaper ad campaign yesterday unveiling a new product, refinancing for auto loans, that is intended to attract those who bought cars a few years ago when interest rates on auto loans were 12 percent or higher. Current rates are 8 percent to 9 percent.
One snag at yesterday's meeting came when shareholders were asked to vote for two management proposals aimed at making the company more democratic.
The proposals, which Mr. Hale billed as a way to avoid "entrenched management," would have reduced the proportion of shareholders required to approve the removal of directors from the board or make other significant changes.
But the proposals to require only a simple majority vote for those actions failed for the lack of a two-thirds majority, the current requirement. The proposals were raised by Mr. Hale and some of his fellow directors last summer when they were still outsiders waging a proxy fight to oust management.
"They didn't choose to vote for [them], and I don't understand why," Mr. Hale said after the meeting. "But if they choose to do it again, we'll keep [the issue] open."
Part of the problem is that stockbrokers are authorized to vote shares they hold on behalf of their clients for ordinary corporate matters, such as electing new directors (four of whom were voted in yesterday), Corporate Secretary James A. Gast said.
But brokers are not allowed to vote their clients' shares on extraordinary matters, such as the two management proposals.
Because of that restriction, an insufficient number of votes were cast to reach a two-thirds majority of all outstanding shares. Of the votes that were cast, however, nearly all were in favor, Mr. Gast said.