In a brief, emotionally subdued meeting yesterday, a commanding majority of Baltimore Bancorp shareholders voted to sell their company to First Fidelity Bancorp., of Lawrenceville, N.J., for $346 million in cash.
The deal, worth $20.75 a share, is expected to close by the end of this year or early next year, soon after all regulatory approvals are received.
At that time, Baltimore will bid farewell to the 176-year-old company and its main subsidiary, the Bank of Baltimore, and welcome the nation's 24th-largest banking company, with a combined $35 billion in assets and just under 700 branches in five East Coast states.
Yesterday's vote, at the company's former headquarters RTC building at Charles and Baltimore streets, brought a favorable response from 99.5 percent of those who cast a ballot, and from 77.3 percent of all out standing shares. It capped a tumultuous final four years that saw a management coup, near financial collapse, and the dramatic resurrection of what was Maryland's fifth-largest banking company.
"Although in a lot of respects I won't be doing too badly in this, I am a bit saddened that I won't be the CEO of a banking company anymore," said Chairman and Chief Executive Edwin F. Hale Sr.
"I have not enjoyed the last six months, because it's been like being a lame duck chairman," he said.
But as for his entire term, "It's been a roller coaster ride, and I've enjoyed it greatly."
The trucking and shipping executive took the reins of Baltimore Bancorp in late 1990 after waging a successful proxy fight against the prior management.
Mr. Hale rode in on a wave of shareholder anger against a management that rejected a $17-a-share takeover offer from First Maryland Bancorp in April 1990.
Numerous takeover bids came in almost from the day the company revealed serious problems in its loan portfolio that led to a $126.5 million loss in 1991, Mr. Hale said yesterday.
"We got some 'vulture' offers early on," he recalled, including bids as low as $6 and $7 a share. "We declined them because we knew we had a lot of work yet to be done."
Several shareholders questioned yesterday why the deal was negotiated for all cash, which is taxable, as opposed to an exchange of stock.
"I happen to agree with you. I would've preferred stock," Mr. Hale said to one shareholder. He stands to make about $6 million in stock and stock options, as well as some severance payments.
At first the companies envisioned a 50-50 mix of stock and cash, he explained, but First Fidelity ultimately rejected a stock transfer. "As the negotiations went along, it became clear that cash was the only way the deal was going to get done at 2.1 times book value."
Shareholder Howard Kuehn of Linthicum said he has been a customer of the bank and its predecessor company, the Savings Bank of Baltimore, for about 45 years. "What's going to happen to my bank?" Mr. Kuehn asked Mr. Hale after the meeting.
First Fidelity has promised to bring a wider range of products and services, Mr. Hale countered, "and I believe them."
The company already has moved to make its services available seamlessly across state lines, in advance of the national interstate banking law Congress passed this year, but which won't take effect until 1997.
Mr. Hale also recalled statements from First Fidelity that it planned to move one or two important functions to Baltimore, which should make up for some of the expected 300 or so job losses.
In March, when the proposed acquisition was unveiled, First Fidelity's vice chairman and chief financial officer, Wolfgang Schoellkopf, said "the most obvious" possibility for a move to Baltimore is First Fidelity's mortgage company, which is roughly the same size as Baltimore Bancorp's mortgage operation.