Glen Burnie Bancorp's net income slid in the first quarter after it shelled out $270,000 to stop a group of shareholders from ousting its board of directors, and to repulse a takeover bid by First Mariner Bancorp.
As a result, net income fell to $3,000 in the quarter, or about a quarter of a penny per share, compared with net income of $375,000, or 34 cents, for the same period a year ago.
The small banking company, which has six branches, spent the majority of the money on legal fees. One of the law firms it retained was Skadden Arps Slate Meagher & Flom, a New York specialist in mergers and acquisitions.
"They [the dissidents] obviously wanted to elect their own slate, and it cost us money to put our plan in place," said Michael P. Gavin, Glen Burnie's chief operating officer.
Glen Burnie's total expenses increased to $4 million -- up 60 percent over the the same quarter a year ago -- in part because of the legal fees, Gavin said. At the same time, assets have fallen 5 percent to $220 million, and loans and deposits have slipped, too.
"We are still recovering, and we have some things we can accomplish," Gavin said.
He said the company has launched new lending programs and it is introducing new products to customers in the hopes of reviving the bank.
Last year, Glen Burnie Bancorp made $747,247 after suffering losses in 1996 and 1995 totaling $2.7 million.
Shares of Glen Burnie, which last traded on May 8, closed at $25, up $1. Despite the problems, the company said it will pay a regular quarterly dividend of 10 cents a share, which was payable April 1.
The company has been tangled in a web of proxy battles and lawsuits for the past four years. A group of dissident shareholders led by Susan Demyan, a former director of the company, failed in March for the second year in row to remove the current board of directors.
Glen Burnie was forced to adopt a "poison pill" in February after Edwin F. Hale Sr., chairman of First Mariner, made an offer to buy the company.
Hale has an agreement to acquire a large block of Glen Burnie Bancorp's stock, which will give First Mariner 19.5 percent of the company.
Pub Date: 5/15/98