A victory for BankRI’s leadership

'WE THANK all of our shareholders for their continued confidence in the board as well as in BancorpRI?s long-term prospects,' BancorpRI President and CEO Merrill W. Sherman said in a statement after the bank's annual meeting. /
'WE THANK all of our shareholders for their continued confidence in the board as well as in BancorpRI?s long-term prospects,' BancorpRI President and CEO Merrill W. Sherman said in a statement after the bank's annual meeting. /

Exhaling after months under the gun, top executives and board members of Bancorp Rhode Island, the parent company of Bank Rhode Island, said last Wednesday that they believe they have won a proxy battle with an out-of-state activist shareholder.
The shareholder – PL Capital Group, a Naperville, Ill.-based investment firm – had tried to place two of its principals on the bank’s board. However, an estimate of the votes cast at the company’s annual shareholder meeting last Wednesday suggests that the effort failed and instead, the entire slate nominated by the bank’s leadership was elected.
“We thank all of our shareholders for their continued confidence in the board as well as in BancorpRI’s long-term prospects,” Merrill W. Sherman, BankRI’s president and CEO, said after the bank’s annual meeting.
Prior to the polls’ closing at the meeting, all proxy cards received by the bank and PL Capital were turned over to the independent inspector of elections, IVS Associates Inc., for final tabulation and certification, the bank said in a news release.
Final results will be released after the votes have been tabulated and certified, the bank said, adding that it should occur within one week from last Wednesday.
Calling BankRI an underperforming company, PL Capital increased its shares of the bank last year to try to take it over, becoming the second-biggest out-of-state shareholder, with 8 percent ownership.
Pointing to slowed growth of BankRI, PL Capital’s principals John W. Palmer and Richard Lashley raised the possibility of selling the bank to increase its value and sought to join the bank’s board in order to play a role in guiding the bank’s future.
Sherman and BankRI Chairman Malcolm G. Chace said the bank’s financial performance in recent years has been adversely impacted by interest rate trends that were cutting into earnings for all banks, and contended that BankRI has a bright future as an independent bank.
BankRI spent much of the past year cutting costs in an attempt to bolster its financial performance, culminating with first-quarter results released at the end of April in which the bank reported earnings of $2.2 million, up $653,000, or 43 percent, from a year earlier.
(Chief Financial Officer Linda Simmons did note at the time that the 2006 figure included a one-time pre-tax loss of $868,000, without which the jump would be smaller.)
Ultimately, BankRI executives were able to convince institutional shareholders that own larger chunks of stock that the bank was better off without PL Capital playing a role in directing the bank, said Mary Sadlier, a BankRI spokeswoman.
PL Capital Group’s Palmer did not immediately return a telephone call seeking comment.
BankRI is the second-largest independent bank in the state, after The Washington Trust Co.
It is also the only Rhode Island company started in the last decade that employs more than 250 people – about 300 at this point. It now has 16 branches in Providence, Kent, and Washington counties and, as of Sept. 30, nearly $1.5 billion in assets.

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