Bancorp Rhode Island shareholder PL Capital questions remark made in proxy advisory firm's report

By Lisa Kerner

Charlotte, N.C., May 20 - Bancorp Rhode Island, Inc. investor PL Capital Group called the company's recent explanation of possible misstatements in a proxy advisory firm's report "unsatisfactory and inconsistent."

PL Capital is in a proxy battle with Bancorp Rhode Island. The company's annual meeting is set for Wednesday.

Specifically, Bancorp Rhode Island does not believe it stated to ISS/RiskMetrics Group, Inc. that it expects the company's "efficiency ratio to decline to 65% in the short term, closer to its peer group average of 61%," PL Capital claims, citing an 8-K filed with the Securities and Exchange Commission.

The statement, according to PL Capital, is "a material and selective disclosure inconsistent with Bancorp Rhode Island's previous public guidance and disclosures, in violation of the proxy rules and regulation FD."

Bancorp Rhode Island's outside counsel called it a misstatement, PL Capital noted.

PL Capital believes the statement played a large part in ISS/RiskMetrics' decision to recommend that shareholders support Bancorp Rhode Island's nominees.

As a result, PL Capital asked for a postponement of the annual meeting, which Bancorp Rhode Island denied.

ISS/RiskMetrics maintains its position with respect to the statement and said it did not factor in to its vote recommendation, according to a statement released by Bancorp Rhode Island on Tuesday.

Bancorp Rhode Island said in the statement that ISS/RiskMetrics reiterated its recommendation that Bancorp Rhode Island shareholders vote for all of the board of directors' nominees.

"Frankly, I am confused whether Bancorp Rhode Island is claiming that they might have said it, or said it inadvertently with no basis to support it, or as its counsel now claims, management did not say it at all and the ISS/RiskMetrics report is simply wrong," PL Capital principal John Palmer stated in the release.

Palmer also chided the company for touting the report's voting recommendation and not publicly clarifying the material statement.

"Only after PL Capital called out this issue did Bancorp Rhode Island attempt to address the matter," Palmer added.

PL Capital said it plans to examine all alternatives available in the matter.

It was previously reported that PL Capital, an 8.5% shareholder, nominated its principals Palmer and Richard Lashley, as well as Daniel J. Mullane, for election to Bancorp Rhode Island's board.

Bancorp Rhode Island is based in Providence, R.I., and is the holding company for Bank Rhode Island, which provides commercial banking services.

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