Baltimore Bancorp's Hale: Tough as Bullets
Edwin F. Hale, the new chairman of Baltimore Bancorp, is not the type to run away from a fight, especially about money.
Four years ago, the Baltimore shipping executive donned a flak jacket and bought a pistol after receiving death threats during a longshoremen's strike. Mr. Hale, who is nearly six feet tall and solidly built, refused to stop his trucks from making deliveries to a shipping company that was being struck.
Combativeness Proves Useful
"I was not intimidated," growled the self-made millionaire, who used that same combativeness to gain control of the parent of the Bank of Baltimore last summer.
When the 44-year-old Mr. Hale saw his investment in Baltimore Bancorp sinking, he rallied 15 other dissident shareholders and launched a proxy fight for the $3.4 billion asset company.
Mr. Hale put up about $1.5 million of his own money, and by September he pulled off an upset, driving out 15 of 18 Baltimore Bancorp directors, including chairman Harry L. Robinson, who had worked at the bank for more than 40 years.
"Winning beats losing every time," Mr. Hale said. "Once I got started, I almost got into it as a crusade or a cause. When I felt it became winnable, it just fed on itself. It kept me motivated."
While Mr. Hale and his allies won that battle, the war may just be beginning.
Only weeks after Mr. Hale had been installed as chairman, Baltimore Bancorp posted a loss of $40 million, or $3.14 a share, for the quarter ended Sept. 30. The company had net income of $5 million, or 39 cents a share, for the 1990 quarter.
Nonperforming assets jumped to $222 million on Sept. 30, or 6.6% of assets, from only $35 million a year earlier. Meanwhile, the region's real estate market continues to flag, with little sign of recovery.
A Tough Assignment
"I think he certainly has his work cut out for him," said John Bailey, an analyst with Ferris Baker Watts Inc. in Washington.
Mr. Hale said he hasn't had time to savor his big victory. He brought in his own president, Alan M. Leberknight, a former executive vice president of commercial banking at Signet Bank /Maryland. He fired the bank's auditor, Ernst & Young, in favor of Coopers & Lybrand. And he has started working through the bad-loan portfolio.
"We got right in, rolled up our sleeves, and have been hard at work ever since," he said. "I've been here every Saturday."
Mr. Hale stands in sharp contrast to the well-connected Baltimore businessmen who led the 110-year-old institution. They include F. Barton Harvey Jr., the former chairman of Alex. Brown Inc., the Baltimore brokerage firm, who decided to remain on the board; and Charles T. Albert, a member of one of Baltimore's most prestigious law firms, Piper & Marbury.
Owns Three Enterprises
A millionaire, Mr. Hale is the chairman and chief executive of two companies involved in trucking and shipping. He also owns the Baltimore Blast, a professional indoor soccer team, and he was part of a group of investors seeking to bring a professional football team to Baltimore.
Despite his wealth, to the city's business establishment he is an outsider. He grew up on the docks, in a working-class family. As a child he wanted to be a thoracic surgeon, an idea he got from his grandfather, who was a volunteer worker in a hospital. He scrapped the dream when he couldn't pass chemistry in college.
Mr. Hale attended Essex Community College in Baltimore from 1964 to 1966, but dropped out - though he said he returned last year as the commencement speaker. He entered the Air Force and eventually returned to Baltimore to start Port East Transfer Inc. in 1975.
So what set Mr. Hale in pursuit of Baltimore Bancorp?
He was mad because the bank's management rebuffed a $17-a-share buyout bid in 1990 from First Maryland Bancorp, when the stock was selling for around $12 a share. First Maryland is an affiliate of Allied Irish Banks of Dublin.
Mr. Hale's anger simmered for months and boiled over last spring, when he began putting together his slate of dissident directors just three weeks before Baltimore Bancorp's annual meeting.
"It was a very tense situation. Everybody in the world was telling him he was crazy," said Dennis Gingold, Mr. Hale's lawyer, a partner with the law firm of Ross & Hardies in Washington.
The Battle Heats Up
The fight turned messy when management ran advertisements calling Mr. Hale's slate inexperienced, charging a takeover might lead to massive withdrawals, and noted that one of the dissidents had connections to a failed bank in Washington.
But Mr. Hale was used to this sort of thing. Several years ago, a Baltimore newspaper covered his divorce blow-by-blow.
The existing management "did everything they could to keep themselves entrenched and went beyond the normal bounds of the fight to keep me out."
In May, Mr. Hale's slate won six seats but wanted to expand the board by 10 seats.
Dissidents Win Second Vote
Management cried foul, and challenged the vote in court on the ground that shareholders were confused about the issues.
The judge ruled in favor of management and ordered a reelection, which the dissidents won on Aug. 29.
"If Ed Hale had not stepped to the plate, this thing would never have happened," said Drew Larkin, a Baltimore businessmen and a new director, who has fought against management for years. "It was just what the doctor ordered."