Two months after being forced out as chairman, a director of a suburban Philadelphia bank has lost his bid to replace one-third of the directors and pressure the board into seeking a merger.
Shareholders of Madison Bancshares Group, Blue Bell, Pa., voted overwhelmingly last week to reelect the current chairman and three directors. About 74% of the shares were voted for management's nominees, who were opposed by a four-person slate nominated by director and former chairman Alan T. Schiffman, according to bank officials.
Bank officials touted the vote as demonstration of support for their long-term growth strategy. Three-branch Madison, which earned $547,000 in 1995, just announced plans to open a new branch in June, and officials hope to open two annually through 2000.
"We believe that over the past six years the company has established a firm foundation and a solid reputation that will surely enhance future growth," Madison Bank president and chief executive Vito DeLisi said in a statement. "Now that we received the approval of our shareholders, we will be working diligently to achieve the goals set forth for the bank."
The shareholder vote follows a long period of divisiveness at the $92 million-asset bank, founded in 1989, over its strategy.
Last June, the board had unanimously reaffirmed its strategy of internal growth through improved earnings, branch expansion, and capital raising when necessary, with Mr. Schiffman voting in support, said senior vice president and chief financial officer E. Cheryl Hinkle.
But at a March 25 meeting, the board voted out Mr. Schiffman as chairman. He had been urging the board to consider merger offers from other companies, but the other directors were intent on remaining independent, Ms. Hinkle said.
But Mr. Schiffman brought two written merger offers to board members for consideration since then, and bank officials contend he solicited the offers despite the board's stated intent to remain independent.
"It's something that we had to confront or we wouldn't be able to go ahead," Ms. Hinkle said. "We need the directors to be together. You can't be successful without that."
In an interview, Mr. Schiffman denied that he solicited the merger offers and said he hadn't run the alternate slate in an effort to sell the bank.
"I'm extremely disappointed and was hopeful that a vote on behalf of the shareholders' interest would prevail," he said.