HALL CLAIMS WIN IN LOCAL BANK STAKES

The Fair Haven office is one of just five for the locally focused bank. (Click to enlarge)

By MIKE BARON

The shareholders of Rumson-Fair Haven Bank & Trust have spoken, and they apparently aren’t all that worried that hedge fund honcho George Hall is going to turn the their well-heeled area into a Pottersville.

Hall is the founder of investment firm Clinton Group, which has more than $2.5 billion in assets under management, according to its website. On May 11, he won his battle to remove William Barrett as chairman of of the five-branch bank after an independent judge finalized the results of the bank’s annual shareholder vote. Hall is replacing Barrett on the board, and a new chairman is set to be chosen when the bank’s directors meet on Monday.

While the area is undoubtedly a far cry from Bedford Falls, the fictional setting of the classic movie “It’s a Wonderful Life,” Barrett had reportedly likened Hall to Henry Potter, the film’s villain, amid criticism by Hall that the bank wasn’t doing enough local lending.

In a letter to shareholders, Dennis Flanagan, Rumson-Fair Haven Bank & Trust CEO, said that Barrett “continues as a significant shareholder and has indicated that he will remain supportive of the bank.”

Greg Taxin, a Clinton Group managing director, said Hall is looking to help both Rumson-Fair Haven shareholders and the community. Hall and entities controlled by Hall currently have a 7.2 percent stake in the bank and, according to an April 12 proxy statement , those holdings could be bumped up as high as 9.9 percent now that Hall is on the board.

Taxin doesn’t expect Hall to replace Barrett as chairman and is optimistic the other directors won’t be at odds with Hall.

“We hope it’s not contentious,” he said. “Our interests are aligned with shareholders, as the rest of the board’s should be.”

Flanagan is also confident that the bank and Hall will be able to turn the page and move forward together.

“The vote is done, it’s finalized, and Mr. Hall is on the board,” he said. “The board and I are looking forward to working together. We have basically the same goals. Loan production has been growing since last year, and we’re highly optimistic that can continue.”

Taxin said that Rumson-Fair Haven’s stock, which trades on the Pink Sheets, has been flat for more than a decade, mainly because the bank’s leadership has been “incredibly conservative.”

“They’ve basically taken in deposits and bought Treasuries and high-quality bonds but done very little lending,” Taxin explained. “This [the Rumson-Fair Haven area] isn’t some troubled backwater. The real estate here is solid collateral. There have been plenty of good loans out there to make and they haven’t. Those are missed opportunities.”

That sentiment is similar to what was put forth in Hall’s proxy statement, which said:

“We believe the company has a duty to serve the community by providing loans to qualified borrowers. The bank is located in a vibrant area, and there should be ample opportunity to make quality loans to local residents and business. Instead, the current approach of the company appears to be to emphasize using its cash and deposits to purchase government bonds and securities; we do not believe this should a major endeavor of a community bank.”

The bank is already moving in this direction. Flanagan also announced in the May letter to shareholders that Rumson-Fair Haven is “re-entering the residential mortgage market” and hiring Scott Keller, an experienced mortgage banker, to lead the charge.

The clash between Hall and Barrett has received attention in the New York tabloids, in part because Hall is a high-profile name in horse racing, having bred Ruler on Ice, the winner of Belmont Stakes in 2011.

Last year, Hall paid $12 million for Long Point, a sprawling estate fronting on the Navesink River in Rumson, from Heisman Trophy winner Pete Dawkins.

Hall’s link to the area goes back nearly two decades. According to property records, Hall purchased a home at 23 North Ward Avenue in Rumson in May 1995 for $1.45 million. In April 2004, he paid $6.79 million for a home at 2 Brown’s Dock Road in Middletown.