Center Bancorp Inc. in Union, N.J., has denied an activist shareholder's request to join its board.
Frustrated with Center's lackluster earnings performance, Larry Seidman, who owns more than 7.5% of the outstanding shares, requested a seat on the board in June. Mr. Seidman, a well-known investor in bank and thrift stocks, has a reputation for pressuring managers into taking steps to improve performance or find a buyer. (See related story on page 1.)
Center Bancorp, the $1.1 billion-asset holding company for Union Center National Bank, said late Thursday that even though it appreciates Mr. Seidman's interest in increasing shareholder value, "the board ultimately determined that he offered little in the way of new ideas that would enhance the company's growth and profitability."
In a brief interview Friday, Mr. Seidman said that for a company that operates in one the nation's most attractive banking markets, Center has generated "abysmal" earnings.
Though he did not offer any specifics on what steps he would take to improve Center's performance, he said he could "not do any worse" than the current directors.
Shareholders will elect directors at an annual meeting scheduled for next spring, and Mr. Seidman said he plans to wage a proxy contest to get his name on the ballot.
The company's returns on assets and equity have declined in three of the last four years. For the first half its ROE was 1.70%, compared with 10.33% a year earlier, largely because of a $2.4 million charge it took in the first quarter to account for a balance-sheet restructuring.
Still, Center's stock has risen roughly 25% since early June and hit a 52-week high of $16.60 in mid-September.
In light trading Friday it rose 0.43%, to $16.32 a share.
