A group of retired New York City bankers is looking to shake up the board of a Northern California thrift.
Four former Chase Manhattan and Deutsche Bank AG bankers have nominated themselves for seats on the board of Monterey Bay Bancorp, in Watsonville. The four, who combined own less than 1% of Monterey Bay's stock, say the 11-member board needs new blood to help improve the company's performance.
"It is time to see what can be done," said Charles Schroeder, a former senior executive at Chase and Deutsche Bank and now a financial consultant. "We believe we can bring something to the table to help out management."
The proposed slate is likely to win some support from major shareholders who have been pushing for change.
In a letter to the thrift's board last month, Josiah T. Austin wrote that he is frustrated with the company's earnings and said he intends to vote for "an alternative slate of directors at the next opportunity." Four board members-including the company's president-are up for re-election at Monterey Bay's annual meeting in the spring.
He added in an interview that he is skeptical of management's effort to shift the company's focus from residential to commercial real estate lending.
"Management hasn't shown me anything, and I don't think they can go forward with their plan," said Mr. Austin, an Arizona cattle rancher who owns 9.42% of Monterey Bay's outstanding shares.
Thomas G. Kahn, president of the investment advisory firm Kahn Brothers & Co., whose firm owns 8.56% of the company's shares, said the company needs to hire an investment banker to "pursue the alternatives."
Monterey Bay, parent of Monterey Bay Bank, operates eight branches in Northern and Central California. Since the company went public in 1995, its assets have grown by 84%, deposits have doubled, and it has posted an annualized investment return of 31%.
But earnings have suffered this year. For the first three quarters, the company reported earnings of $833,000, compared with $1.4 million for the same period in 1997.
President Marshall Delk is urging shareholders to be patient while the company implements its new plan. He attributed the nine-month earnings plunge to increased loan loss provisions associated with riskier lending and the cost of opening two branches.
"I have the highest degree of confidence that the strategic plan will bring the greatest value to the shareholders next year," said Mr. Delk, who owns a 3% stake in $460 million-asset Monterey Bay.