First Mariner Bancorp, the bank founded by former Baltimore Bancorp Chairman Edwin F. Hale Sr., suffered a setback this week in its bid to take over Maryland Permanent Bank & Trust Co. of Owings Mills as shareholders rejected First Mariner's bid to acquire the $32 million bank.
Maryland Permanent Chairman Michael P. Meisel said the First Mariner offer won majority support from shareholders, but did not get the required two-thirds majority at a shareholder meeting Thursday.
First Mariner offered to pay $18.69 a share in cash for Maryland Permanent, as well as a 50-cent dividend that pushed the overall value to $19.19 for each share of the Owings Mills bank, Mr. Meisel said. The bank has about 335,000 shares, which would put the value of the deal at about $6.4 million.
The Maryland Permanent board recommended that the offer be LTC approved, Mr. Meisel said.
"The bank was somewhat divided on whether we should stay autonomous," said Mr. Meisel, who said Maryland Permanent has also received a "letter of interest" regarding an acquisition from Union National Bank of Westminster. "We're going to proceed running our bank and looking for business."
Mr. Meisel said First Mariner has launched a tender offer to buy the shares that voted in favor of its friendly merger bid, hoping to get a 51 percent majority that Mr. Meisel said would allow Mr. Hale to direct the sale without a proxy vote.
Mr. Meisel said he did not believe the Union National proposal was a major factor in shareholders' rejection of the sale, although a source close to the situation said Union National's offer has a higher face value.
Unlike First Mariner's all-cash offer, Mr. Meisel said, the Union National proposal contemplated offering a mix of cash and Union National stock, a mix that could be difficult to value because the shares do not trade on a public market.
Union National President Joseph H. Beaver Jr. was mum about his company's bid for Maryland Permanent, which had been in talks with First Mariner since April.
"There is some interest on our part, but I can't reveal anything that hasn't been approved" by Maryland Permanent, he said. "It's at a point where it could live or it could die."
First Mariner, which reported $27 million in assets in May, hopes to boost its original branches to $50 million in assets, grow to $100 million by acquisitions and go public when assets reach $200 million. Mr. Hale has said he hopes to reach $200 million in assets within two to three years.
Mr. Hale and a group of investors launched the bank in May, after Mr. Hale sold Baltimore Bancorp to First Fidelity Bancorp of Newark, N.J., last year. The sale came after a three-year reign that began when Mr. Hale, shipping executive with no prior banking experience, ousted the prior management team in a 1991 proxy fight.