Richard Lashley, an activist investor known for pressuring underperforming banks to find buyers, has won a seat on the board of BCSB Bancorp Inc. in Baltimore.
BCSB, the parent of the $630 million-asset Baltimore County Savings Bank, announced late Monday that it has added a board seat to make room for Lashley, a principal at PL Capital LLC.
PL Capital own a 9.77% stake in BCSB's and is the banking company's largest shareholder.
PL Capital had been lobbying for representation on the board at least since April, and Lashley's appointment is likely to put pressure on BCSB to substantially improve its performance or sell itself.
In a letter to BCSB President and Chief Executive Officer Joseph Broussard dated April 25, PL Capital wrote that the company's "historic (and likely prospective) inability to generate sufficient returns on shareholders' equity, …raises the question in our minds of whether [it] has "earned the right" to remain independent."
In that same letter, PL Capital said that if it did not honor its request for a board seat it intended to wage a proxy contest at the company's next annual meeting in early 2012.
On Monday, BCSB reported net income of $344,000 in the three-months that ended June 30, down 43% from the same period a year earlier. The company attributed the drop in earnings to costs associated with impaired loans and foreclosure activities. Its return on average equity for the quarter was 2.68%, down from 4.03% a year earlier, and its efficiency ratio was 90.15%, compared to 76.28% in the same quarter last year.
In a statement, Bouffard said that BCSB welcomes Lashley to the board and that it looks "forward to working with him to build shareholder value."
Lashley echoed Bouffard's comments. "I welcome the opportunity to work with my fellow board members and management to contribute to successfully achieving the company's business goals and growth potential," he said in a statement.