SCHEDULE 14A
INFORMATION
Proxy Statement
Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ___)
Filed by the Registrant
[ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] |
Preliminary
Proxy Statement |
[ ] |
Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
[ ] |
Definitive
Proxy Statement |
[X] |
Definitive
Additional Materials |
[ ] |
Soliciting
Material under Rule 14a-12 |
BANCORP RHODE
ISLAND, INC.
(Name of Registrant as Specified in its Charter)
Financial Edge Fund,
L.P.
PL Capital, LLC
Goodbody/PL Capital, LLC
Financial Edge-Strategic Fund, L.P.
PL
Capital/Focused Fund, L.P.
Goodbody/PL Capital, L.P.
PL Capital Advisors, LLC
Richard J.
Lashley
Daniel J. Mullane
John W. Palmer
(Name of Person(s) Filing Proxy Statement if other
than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
[ ] |
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
1. |
Title
of each class of securities to which transaction applies: |
|
2. |
Aggregate
number of securities to which transaction applies: |
|
3. |
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): |
|
4. |
Proposed
maximum aggregate value of transaction: |
[ ] |
Fee
paid previously with preliminary materials. |
[ ] |
Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing. |
|
1. |
Amount
Previously Paid: |
|
2. |
Form,
Schedule or Registration Statement No.: |
Filed by PL Capital
Group
PL
Capital Group is sending a letter to shareholders of Bancorp Rhode Island, Inc.
(Bancorp Rhode Island). A copy of the letter follows as part of this filing
under Rule 14a-6 of the Securities Exchange Act of 1934, as amended.
Important Information
PL
Capital Group has filed a definitive proxy statement and other proxy materials with the
Securities and Exchange Commission (the SEC) in connection with the nomination
of Daniel J. Mullane, Richard J. Lashley and John W. Palmer (the PL Capital
Nominees) to serve as directors of Bancorp Rhode Island, Inc. The definitive proxy
statement has been sent to shareholders of Bancorp Rhode Island seeking their support of
the PL Capital Nominees at Bancorp Rhode Islands 2008 Annual Meeting of
Shareholders. Shareholders are urged to read the definitive proxy statement and proxy
card because they contain important information about PL Capital Group, the PL Capital
Nominees, Bancorp Rhode Island and related matters. Shareholders may obtain a free
copy of the definitive proxy statement and other documents filed by PL Capital Group with
the SEC at the SECs web site at www.sec.gov. The definitive proxy statement and
other related SEC documents filed by PL Capital Group with the SEC may also be obtained
free of charge from PL Capital Group.
Participants in
Solicitation
PL
Capital Group consists of the following persons who are participants in the solicitation
from Bancorp Rhode Island, Inc.s shareholders of proxies in favor of the PL Capital
Nominees: PL Capital, LLC; Goodbody/PL Capital, LLC; Financial Edge Fund, L.P.; Financial
Edge-Strategic Fund, L.P.; PL Capital/Focused Fund, L.P.; Goodbody/PL Capital, L.P.; PL
Capital Advisors, LLC; Richard J. Lashley; John W. Palmer and Daniel J. Mullane. Such
participants may have interests in the solicitation, including as a result of holding
shares of Bancorp Rhode Island common stock. Information regarding the participants and
their interests is contained in the definitive proxy statement filed by PL Capital Group
with the SEC in connection with Bancorp Rhode Islands 2008 Annual Meeting of
Shareholders.
BANCORP RHODE ISLAND,
INC.
IMPORTANT NOTICE FROM PL
CAPITAL YOUR FELLOW SHAREHOLDER
YOUR VOTE IS
IMPORTANT
Please RETURN the GREEN card today!
Bancorp Rhode Islands Annual
Meeting of Shareholders is scheduled for May 21, 2008. We urge you to read the PL Capital
Groups proxy statement (which has been sent separately) and to return the enclosed
GREEN proxy card today in support of our nominees, Richard Lashley, John Palmer and
Daniel Mullane. Discard BancorpRIs white proxy card. You can vote again even if you
previously voted on the Companys white proxy card.
WHY ARE WE RUNNING FOR
BOARD SEATS?
We seek 3 board seats (out of 15) in order to be
in a position to advocate for the best interests of all shareholders of
BancorpRI. Our goal is to improve the profitability and financial performance of
BancorpRI, which we believe is subpar, and to fully examine all available
strategic alternatives, including remaining independent, or selling the Company if that
will produce superior shareholder value. BancorpRI claims our agenda is self-serving. If
improving the Companys financial performance and seeking to maximize the value of
every shareholders investment is self-serving, we plead guilty!
BANCORPRI CLAIMS 2007
WAS ANOTHER SUCCESSFUL YEAR
LETS LOOK AT THE
FACTS:
|
1. |
BancorpRIs
Return on Equity (ROE) in 2007 (7.87%) was the SECOND LOWEST in the past ten
years (1998-2007). |
|
2. |
BancorpRIs
Return on Assets in 2007 (0.62%) was the SECOND LOWEST in the past ten years. |
|
3. |
BancorpRIs
2007 Efficiency Ratio (73.4%) barely improved versus 2006 (73.9%) and was the
second highest in the past ten years (Note: a lower Efficiency Ratio is
better). |
|
4. |
BancorpRIs
total deposits DECLINED in 2007. |
|
5. |
BancorpRIs
total assets DECLINED in 2007. |
|
6. |
BancorpRIs
2007 results trailed its peers: |
|
BancorpRI |
Peer Group (1) |
All U.S. Banks (2) |
Return on Equity: |
7.9% |
8.9% |
9.3% |
Return on Assets: |
0.62% |
0.84% |
0.95% |
Efficiency Ratio: |
73.4% |
61.4% |
59.1% |
|
Sources: |
(1)
SNL Financial LC--Includes 149 publicly traded banks with total assets between $1.0
billion to $5.0 billion (2) Federal Deposit Insurance Corporation,
Statistics on Depository Institutions (www.fdic.gov) includes all
U.S. banks |
BANCORPRIS 2008
EPS GUIDANCE SHOWS RESULTS WONT IMPROVE MUCH
During the fourth quarter 2007
earnings conference call on January 24, 2008, BancorpRI management projected a range of
$1.94 to $1.99 for 2008 EPS, a 5% to 8% increase over 2007. While we are pleased to see a
projected increase in EPS for 2008, the 2008 EPS guidance is basically comparable to the
$1.92 earned six years ago in 2002, and below the $2.04 earned in both 2004 and
2005. Even if we assume that BancorpRI can achieve the upper end of the projected
range ($1.99), this would equate to approximately an 8% ROE in 2008, effectively no
improvement compared to the 2007 ROE of 7.9%, and a level well below the 10% to 12% ROEs
earned by BancorpRI in 2000 through 2005.
BANCORPRI CLAIMS OUR
CANDIDATES WOULD NOT ADD ANY NEW EXPERTISE TO THE BOARDWE STRONGLY DISAGREE
PL Capital Group is seeking to replace 3 of
the 5 incumbent directors nominated by the Company, namely, Mr. Anthony Andrade and Mr.
Edward Mack II, as well as Ms. Merrill Sherman, the current CEO. Mr. Andrade is the
President of a printing company and Mr. Mack is the owner of a plastics manufacturing
company. Outside of previous service on BancorpRIs board, neither Mr. Andrade nor
Mr. Mack has disclosed any prior experience or formal expertise in banking. Conversely,
all of the PL Capital Group candidates have spent their entire careers focused on the
banking and financial services industries. PL Capital Group principals Mr. Lashley and Mr.
Palmer have spent their entire careers (25+ years each) in various capacities focused
exclusively in the banking industry as CPAs, corporate finance specialists, bank board
members and investment managers.
In addition, our other candidate Mr. Daniel
Mullane is the distinguished former CEO of Advest, a former NYSE member broker dealer and
investment bank based in New England. Mr. Mullane has significant experience as a member
of various boards of directors and in providing financial services products and services
to both individuals and businesses. His experience improving the financial results and
operating efficiency of Advest is very relevant to the challenges faced by BancorpRI. Mr.
Mullane is involved in a number of non-profit organizations and resides in Tiverton, Rhode
Island.
We are seeking the board seat
currently held by Ms. Sherman because we believe she has failed to fully deliver on her
promises to improve the efficiency and performance of the Company and the Bank, and
appears more focused on her own personal timetable and agenda for the Company regardless
of whether or not it coincides with shareholders interests. We also believe that her
management style and tenure has resulted in lower morale, lower productivity and higher
turnover among all levels of officers and employees. We also have concerns that Ms.
Shermans compensation continues to increase significantly every year, even as the
Companys efficiency ratio deteriorates (in 2000 the efficiency ratio was 61.7% and
Ms. Sherman earned $428,862; since that time the efficiency ratio has gone up almost every
year; in 2007 the efficiency ratio was 73.4% and she earned $1,075,237). As CEO of the
Company and the Bank, the proverbial buck stops at her desk and she must be
held accountable. Ms. Sherman has told us that it is not possible to reduce
the Companys efficiency ratio below 60%. We strongly disagree because thousands of
banks in this country beat that benchmark every year (in 2007 the average bank in the U.S.
had a 59% efficiency ratio). If she cannot figure out how to do it, the board should
consider finding a CEO who can.
2
DONT BE FOOLED
BY BANCORPRIS CLAIMS THAT KEEFE, BRUYETTE & WOODS (KBW) IS ALREADY PROVIDING
STRATEGIC INSIGHT TO THE BOARD
In a letter to shareholders dated
April 3, BancorpRI announced that KBW is evaluating (BancorpRIs) current
operations and providing the Board with strategic insight on the banking
industry marketplace and all potential value-creating opportunities. While this
sounds promising for shareholders, we have significant doubts about the actual nature and
scope of KBWs involvement. We call on the Company to publicly clarify the nature and
scope of KBWs assignment, and when KBWs evaluation is completed,
to publicly disclose KBWs conclusions as well as the strategic direction the Board
is setting for the Company. Unfortunately, in our view this is a manipulative attempt by
the Company to deflect PL Capitals proxy contest, KBW will not be authorized to seek
out bona fide strategic alternatives and nothing will change.
DONT BE FOOLED
BY BANCORPRIS CLAIMS THAT PL CAPITAL IS SOLELY INTERESTED IN A SALE OF BANCORPRI
On the contrary, at any given time
the PL Capital Group holds investments in 40 or more bank stocks, and the vast majority of
those investments are held long term without us advocating for the sale of the company or
taking on the extraordinary effort and expense of pursuing board seats in a proxy contest.
We will, however, pursue such action in those rare instances where we feel it is needed
because management and the board seem unable or unwilling to improve operations and/or
maximize shareholder value themselves. Ms. Sherman claimed that we cannot point out
examples where we called for the sale of a company, or pursued a proxy contest, and the
company was subsequently not sold (her theory is that we really dont have any
other agenda other than a sale). There are in fact several instances. A very relevant
recent example is our investment in State Bancorp of Long Island (symbol: STBC), a bank
very similar to BancorpRI (both are well located franchises that had/have earnings and
performance issues and managements and boards that seemed unable to address their
problems). In 2006, we publicly and privately called on STBCs board to improve
results, and failing improvement, to consider the sale of the Company. Similar to Ms.
Sherman, the (now former) CEO of STBC told us that it was impractical to get
STBCs efficiency ratio down to 55-60%. We decided to run a proxy contest, but
withdrew our efforts after the board hired a new and highly competent CEO, Mr. Tom
OBrien, and the former CEO and two Vice Chairman retired. Mr. OBrien has
implemented a number of important changes, which we support, to improve the performance
and value of State Bancorp. We now intend to hold STBC as a long term investment without
advocating for board seats or a sale. We urge Ms. Sherman and BancorpRI board members to
call Mr. OBrien to ask him about PL Capital Group. We urge BancorpRIs Board to also
look at STBC as an example of how a change in senior management can dramatically improve
the culture and outlook for a bank.
CEO MERRILL SHERMAN
HAD A SUCCESSFUL YEAR HER TOTAL COMPENSATION WAS UP 16% IN 2007
Despite the Companys lackluster
results in 2007, as noted on page 1, CEO Shermans total compensation increased
handsomely. In 2007 her total compensation was $1,075,237, up $150,325, or 16%, from 2006,
and up $760,117, or 240%, over the past ten years since 1998. During a time when BancorpRI
is struggling to control costs and decrease its efficiency ratio, we are hard pressed to
see how this level of total compensation makes sense.
3
WHO IS THE PL CAPITAL
GROUP?
PL Capital Group
focuses exclusively on the banking industry. PL Capital Group owns 8.5% of
BancorpRIs common stock and is seeking your help in electing Richard Lashley, John
Palmer and Daniel Mullane to the board of BancorpRI. Please read our proxy materials for
more complete information, and feel free to contact us:
Mr. Richard J. Lashley, Principal |
Mr. John W. Palmer, Principal |
PL Capital, LLC |
PL Capital, LLC |
466 Southern Blvd. |
20 East Jefferson Avenue |
Chatham, NJ 07928 |
Suite 22 |
(973) 360-1666 |
Naperville, IL 60540 |
(973) 360-1720 (fax) |
(630) 848-1340 |
bankfund@aol.com |
(630) 848-1342 (fax) |
|
palmersail@aol.com |
If you require any
assistance in voting, please contact our proxy solicitor:
D.F. KING & CO.,
INC., 48 Wall Street, New York, NY 10005
Toll Free: 1-800-488-8035
IT IS IMPORTANT THAT YOU RETURN
YOUR PROXY PROMPTLY. PLEASE SIGN AND DATE YOUR GREEN PROXY CARD PROMPTLY AND RETURN
IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY. IF YOUR SHARES ARE HELD AT A BANK OR
BROKERAGE FIRM, PLEASE FOLLOW THE INSTRUCTIONS ON THE VOTING FORM PROVIDED. DO NOT RETURN
BANCORP RIS WHITE CARD EVEN AS A SIGN OF PROTEST. NO MATTER HOW MANY OR HOW FEW
SHARES YOU OWN WE ARE SEEKING YOUR SUPPORT. PLEASE VOTE FOR MESSRS. LASHLEY, PALMER AND
MULLANE BY SIGNING, DATING, AND MAILING IN THE ENCLOSED POSTAGE-PAID ENVELOPE THE ENCLOSED
GREEN PROXY CARD AS SOON AS POSSIBLE. ONLY YOUR LATEST DATED PROXY COUNTS. EVEN IF YOU
HAVE ALREADY RETURNED A WHITE PROXY TO BANCORP RIS BOARD OF DIRECTORS, YOU HAVE
EVERY LEGAL RIGHT TO REVOKE IT BY SIGNING, DATING, AND MAILING THE ENCLOSED GREEN PROXY
CARD OR BY VOTING IN PERSON AT THE ANNUAL MEETING.