Thrift Shareholder Pushing For Merger with His Bank

A battle between North Bancshares - the holding company for a small Chicago thrift - and a pesky banker-shareholder escalated at the thrift's annual meeting last week.

But the meeting ended without a vote on the shareholder's proposal for a merger, or any other clear resolution of the dispute.

Saul D. Binder, president of $251 million-asset Success National Bank, Lincolnwood, Ill., continues to seek a meeting with North Bancshares' management about merging the two companies.

But North Bancshares executives continue to rebuff his overtures. Joseph A. Graber, president of North, which owns North Federal Savings Bank, said that the company would consider "valid" offers - but he doesn't put Mr. Binder's bid in that category.

"He's got nothing to offer us, nothing to offer our shareholders," Mr. Graber said.

While shareholder activism has become more commonplace at community banks and thrifts in recent years, it is rare when it comes from a banker interested in merger options.

At the shareholder meeting last week, Mr. Binder tried to raise several questions about $114 million-asset North's performance and management. Mr. Binder said he did not get the answers he sought, and has since written management and shareholders saying that he's not through asking questions.

"We will keep watching them," he said in an interview. "We will be in constant communication. We think there are things to be done."

Mr. Binder began acquiring North Bankshares stock after the thrift refused to discuss merging with his institution. He now holds about 10,000 shares - 0.8% of North's outstanding shares.

Mr. Binder says North needs help boosting its return on equity - 3.27% in 1995 - and deploying excess capital from its 1993 conversion.

Before last week's meeting, Mr. Binder wrote shareholders about his concerns and had hoped to ask about 20 questions at the meeting.

However, he asked only a few of questions before the meeting ended. Mr. Binder later complained that the meeting was adjourned without a motion.

Mr. Graber said chairman Mary Ann Hass acted within her authority. Mr. Binder "was basically preaching his own story - and we weren't getting anything done," Mr. Graber said.

In his subsequent letter to Mr. Graber, Mr. Binder questioned the company's contributions to its employee stock ownership plan in 1993, 1994, and 1995, which he said were missing from its audited financial statement, and which he said lowered stockholders' return.

Mr. Graber said those figures accidentally were omitted from the statement. They were $114,000, $188,000, and $179,000, respectively, he said. Anything above $110,000 was interest paid on loans to the employee stock option plan from the holding company, he said.

Mr. Binder told the thrift he would continue to question management and still wants North to consider his merger offer. He said he doesn't necessarily want to acquire North. "Let them acquire us," he said. "We'd be more than happy to exchange our shares for their shares. That was the plan to begin with."

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