In a fiery speech to shareholders, the top official of Suffolk Bancorp said the bank won't consider a merger with rival North Fork Bancorp because it would place investors in danger.
"If we were to accept North Fork stock as consideration in a transaction, we would be exposing our shareholders to a degree of risk to which they are not accustomed," president and chief executive Edward J. Merz told 82 shareholders at the bank's annual meeting last week.
A copy of the speech was obtained by the American Banker.
North Fork, which already owns 4.9% of Suffolk stock, has applied to the Fed to purchase up to 19.9% of the bank's outstanding shares and has stated its interest in possibly acquiring all the stock. Suffolk has protested publicly and to the Fed, claiming that such a merger would reduce competition for small business loans.
Mr. Merz reiterated to shareholders that Suffolk directors "have not had and do not anticipate having" discussions with the $2.7 billion-asset North Fork and "have no intention of 'shopping' the company around."
Mr. Merz criticized North Fork management for diluting its stock with an aggressive acquisition strategy.
In his speech Mr. Merz contrasted North Fork's recent history of financial troubles with Suffolk's steadiness during the recession. He said that while Suffolk maintained a 14.44% return on equity during the past 10 years, North Fork's ROE averaged 8.56% for the same time, including an "astounding" negative 24.46% in 1991.
And Suffolk kept increasing its dividend throughout the period.