The board of Carver Bancorp, the nation's largest black-owned banking institution, on Tuesday struck down a second merger offer from a Boston rival.
Directors of New York-based Carver vetoed a proposal to combine it with Boston Bank of Commerce. Earlier this month the $106 million-asset Boston bank had raised its offer for $420 million-asset Carver to $29.7 million, or $13.51 per share, about equal to book value.
"After consulting with investment bankers and legal advisers, the board of directors has determined that the proposal was not in the interest of Carver shareholders," said David R. Jones, chairman of the Carver board.
Boston Bank of Commerce, which owns 7% of Carver's shares, called the rejection of its latest offer "irresponsible."
Kevin Cohee, the suitor's chairman and chief executive officer, said in a news release Tuesday that it would keep pushing for a merger.
It says it envisions the merger as the foundation for a nationwide minority-owned institution.
Carver's shares closed down 18.75 cents Tuesday, at $10.
Tuesday's rejection clears the way for Deborah C. Wright, the newly appointed chief executive, to take a shot at rebuilding the troubled institution.
Thomas L. Clark Jr., her predecessor, was fired in January after Carver reported a $5.7 million loss for the December quarter, the third of its fiscal year.
The company blamed troubles in its loan portfolio and a complicated data processing system conversion.
Mr. Jones, Carver's chairman, said in February that its problems were behind it. Results for the quarter that ended in March have not been announced.
Ms. Wright, whose hiring was announced in April, is president of the Upper Manhattan Empowerment Zone Development Corp., which oversees a federal grant to rebuild inner cities.
She has also worked at the New York City's Housing Authority and Planning Commission and was earlier with First Boston Corp.'s corporate finance group.
Mr. Jones said that in Ms. Wright the board had found someone who could rebuild the 51-year-old institution. "Our challenge in this search was to find a chief executive who had a solid understanding of finance, a proven commitment to our community, and exceptional management skills," he said. "Deborah Wright fits the bill in every respect."
But Boston Bank of Commerce said Ms. Wright lacks the banking experience needed to run Carver.
"As a troubled institution with more than $400 million in assets, Carver needs a seasoned management team with experience in financial turnarounds," the Boston bank said April 13, the day her hiring was announced.
The next battle will come at Carver's annual meeting, in August. Boston Bank of Commerce has said it intends to nominate two of its own executives, including Mr. Cohee, for seats on Carver's board.
Its present members include former New York Mayor David Dinkins.