That's how executives at CB Bancshares Inc. characterized the company's proxy battle with dissident shareholders to a standing-room only crowd at their annual shareholders meeting on Thursday.
A New York-based investment firm, M.A. Schapiro & Co., wants to place two outside directors on CB Bancshares' 11-member board, saying their nominees would better serve shareholders' interests.
Schapiro, which controls 6.2 percent of CB Bancshares' outstanding stock, has been critical of the company's performance, saying it has lagged the overall banking industry and has moved too slowly to cut costs. Schapiro's nominees are William Griffith, who heads a Hartford, Conn.-
based investment advisory company, and H. Clifton Whiteman, a former vice president at the Bank of Tokyo Trust Co.
But executives at CB Bancshares, the parent of City Bank and International Savings and Loan, contend that the dissident group has no apparent knowledge of the local banking and economic culture.
During a news conference after the shareholders' meeting, CB Bancshares' Chief Executive James Morita pointed to the bank's long-term growth and noted the emphasis on short-term profits has hurt big, mainland banks.
"A community-oriented banking institution cannot exist for the short term or for short-term results," said Morita. "Even major money-center banks have had major problems when they sacrificed long-term growth for short-term opportunities."
The outcome of the proxy battle will be unveiled next week after shareholders' votes are counted and verified by an independent company, Corporation Trust Co. CB Bancshares' largest stock owner is the employees' stock ownership plan, which holds 11.85 percent of the company's 3.55 million outstanding shares. They are followed by a Dutch company, TON Finance B.V., which has a 9.61 percent stake.
One individual shareholder, retiree Ben Wong, said he plans to vote for management's slate of directors. The 69-year-old Kapalama Heights resident said that while the company has had a difficult year, he "has to go with the local guys."
At the news conference, Morita spoke in detail about the bank's past relationship with Schapiro.
He said that the bank paid substantial fees to Schapiro when the Wall Street firm served as its investment adviser between 1992 and 1995. In 1993, the bank holding company paid Schapiro $1 million for underwriting a CB Bancshares' stock offering, according to a letter to shareholders.
Morita declined to say why the bank fired the investment company in December but he said that CB Bancshares was not satisfied with the Schapiro's role in promoting its stock.
At the time, CB Bancshares' stock was trading below its book value, which is defined as company assets minus its debts. That, Morita said, made it vulnerable to a takeover from outside investors.
"That really scared the daylights out of me," Morita said.
George Reycraft, Schapiro's chairman, on Friday said that the bank was satisfied with his company's performance, noting that CB Bancshares' stock price has doubled since Schapiro got involved with the company. He also said he didn't think the bank paid Schapiro as much as $1 million in 1993.
At the news conference, the bank also spelled out some of its long-term strategies. They include:
nContinued cost reductions through the company's voluntary retirement program.
nIncreased loans to small and mid-sized businesses.
nAn emphasis on mortgage brokerage services at its International Savings subsidiary.
"We're very serious about returning to the profitability levels of previous years," Morita said.