An activist investment group is once again pushing for the sale of Norfolk, Va.-based Cenit Bancorp.
In a letter to Cenit's officers and directors, Mid-Atlantic Investors said the thrift company has not kept its promise to boost deposits. The Columbia, S.C., investment group-which owns 9.7% of Cenit's stock-said it will ask shareholders in a coming proxy statement to decide at Cenit's annual meeting in April whether the board should sell the $623 million- asset company.
A similar proposal was included in last year's proxy statement, but Mid- Atlantic withdrew it after reviewing Cenit's business plan and deciding it showed promise.
Jerry Shearer, Mid-Atlantic's managing partner, said the group is urging Cenit to sell because it has failed to "succeed in its principal line of business"-taking deposits.
"I don't feel like they were able to follow through with their plan," Mr. Shearer said in an interview this week. "A large institution running the company could attract those deposits."
Cenit's deposits fell less than 4%, to $488 million, in the first nine months of 1998, according to the company's third-quarter report.
The Federal Deposit Insurance Corp. reported that deposits at thrifts with assets of $500 million to $1 billion fell an average of 2% during this period.
Cenit officials would not comment on Mid-Atlantic's letter. In a statement released Dec. 28, president and chief executive officer Michael S. Ives said he plans to "communicate" with Mid-Atlantic and is hopeful that the group "will decide not to pursue its proposal."
Mid-Atlantic, which owns stakes in several banks, is one of Cenit's two largest shareholders. It first pushed for Cenit's sale in 1997 when it sought shareholder approval of a plan to hire an appraiser to determine the company's value.
That proposal-along with Mid-Atlantic's effort to replace three of the thrift's board members-was narrowly defeated at Cenit's 1997 annual meeting.
Its latest effort to force a sale was made public after the stock market closed Dec. 28. The next day, shares of Cenit stock rose $1.25, to close at $20. At midday Wednesday, the stock was trading at $19.75, well below its 52-week high of $29.
Cenit is the parent of Cenit Bank, a federal savings bank with 13 branches in Greater Norfolk. For the quarter ended Sept. 30, the company earned $1.6 million, down from $1.7 million a year earlier.