The chairman of Reliance Bancshares Inc. has quit after less than a year overseeing the board, claiming that he was forced out by the Frontenac, Mo., banking company's new consultant.
"With my resignation, you no longer have anyone with practical banking experience on the board, and that is not prudent," Patrick Gideon wrote in a resignation letter the company filed last week with the Securities and Exchange Commission.
The $1 billion-asset company's board had recently hired Tom Brouster to provide consulting services in a move that Gideon had opposed, his letter said. "My presence was threatening to [Brouster] and to other members of the board and management with whom my style of management and oversight conflicted," he wrote.
Gideon was named Reliance's nonexecutive chairman last April, after serving as a director since 1999. He is also the president and chief executive of Silver Lake Bank, a $218 million-asset bank in Topeka, Kan. Silver Lake's holding company is Gideon Enterprises LP.
Efforts to reach Gideon, Brouster and Allan Ivie 4th, Reliance's president and chief executive, were unsuccessful.
Gideon is the latest in a series of high level individuals to leave Reliance. Dale Oberkfell, the company's chief financial officer, left in December. Daniel Jasper retired as the president and chief executive of the company's Florida bank, Reliance Bank, on Dec. 31. Jerry Von Rohr left the company's board in September.
Problems in the commercial real estate markets of St. Louis, Mo., and southwest Florida, where Reliance has branches, had contributed to losses at Reliance. The company lost $34 million in 2011, which was an improvement from the $48.5 million loss from a year earlier. At Dec. 31, Reliance Bank had a total risk-based capital ratio of 10.04% but a negative return on equity.
Reliance in August reached a written agreement with the Federal Reserve Board, mandating that the company serve as a source of strength for Reliance Bank and develop a capital plan. The bank has been operating under a consent order since February 2011, where it was barred from paying dividends or taking on new debt without regulatory approval.
In May, the company hired KBW Inc.'s Keefe, Bruyette & Woods to help it develop a capital plan.
Reliance did not say in last week's regulatory filing if it had found a successor for Gideon.