BankRI again victorious in proxy battle

PROVIDENCE – Bancorp Rhode Island Inc. (Nasdaq: BARI), parent of Bank Rhode Island, appears to have fought off a second attempt by an out-of-state dissident shareholder to gain seats on the board of directors.

Merrill W. Sherman, the company’s president and CEO, announced at the end of the annual shareholders’ meeting today that preliminary results indicate the company’s entire slate of nominees has been re-elected.

She said the final results of the proxy vote will be announced in a week, once the votes have been tabulated and certified.

“We are pleased that our shareholders and the nation’s leading corporate governance firms have again recognized our board’s track record of value creation,” Sherman said in a statement. “We value the views and insights of our shareholders and appreciate their interest in the future of our company.”

Malcolm G. Chace, chairman of BancorpRI, offered thanks both to the shareholders and to “the nation’s leading corporate governance firms,” three of which endorsed the bank’s full slate of director nominees. (READ MORE) “We look forward to building on the momentum of our first quarter and continuing to deliver long-term value to our shareholders,” he added.

This is the second year in a row that Illinois-based investment firm PL Capital LLC – the bank’s largest institutional shareholder – has failed in its campaign to get representatives on BancorpRI’s board. (READ MORE)

PL Capital’s nominees to the Bancorp RI board were Daniel J. Mullane, a Tiverton resident, plus PL Capital principals Richard J. Lashley and John W. Palmer. All three attended the annual shareholders’ meeting at Hotel Providence. Afterward, they said they would probably seek seats on the board next year.

The investment firm and its prinicipals have argued that BankRI is underperforming and needs to either improve its performance or be sold. Meanwhile, Sherman and other BankRI executives have maintained that BankRI has performed well in a difficult banking environment and is well positioned for a profitable future.

Those conflicting opinions of the bank’s performance created a sometimes tense atmosphere at the annual meeting as Lashley, Palmer and Larry Seidman, a shareholder from New Jersey who is unaffiliated with PL Capital, criticized the bank’s performance.

After several shareholders praised the bank for its charitable donations to community organizations, Seidman questioned whether the directors donate any of their own money to charity, or just the company’s. That touched off angry responses from a director and from Sherman, who said she wanted to “stop the insults.”

“We will match our charitable giving, on a personal level, with anyone,” Sherman said.

Anthony F. Andrade, a member of the BancorpRI board and one of the company’s board nominees, shouted at Seidman that he donates his entire director’s fee to charity.

Then Andrade turned his attention to Lashley, Palmer and Mullane. He chided the PL Capital nominees because they “weren’t smart enough to get in on the ground floor” when BankRI went public in 1998. He offered to buy their stake in the bank at $25 a share.

Bancorp RI shares were selling at $31.86 at 11:45 a.m. today.

Before polls closed at the annual meeting, all proxy cards received by BancorpRI and the PL Capital Group were turned over to the independent inspector of elections, Carl T. Hagberg and Associates, for final tabulation and certification.

Bancorp Rhode Island Inc. (Nasdaq: BARI), is the parent of Bank Rhode Island, a state-chartered, FDIC-insured institution with 16 branches in Providence, Kent and Washington counties. Additional information about BankRI and its parent company is available at bankri.com.