CUSIP No. 055367106
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Page 1 of 18 Pages
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SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO
SCHEDULE 13D/A
Under the Securities Exchange
Act of 1934
BCSB BANCORP, INC.
(Name of Issuer)
Common Stock, par
value $0.01 per share
(Title of Class of Securities)
055367106
(CUSIP Number)
Mr. Richard J. Lashley
PL Capital, LLC
20 E. Jefferson Ave.
Suite 22
Naperville, IL 60540
973-360-1666
(Name, Address and
Telephone Number of Person
Authorized to Receive Notices and Communications)
December 10, 2008
(Date
of Event which Requires Filing of this Statement)
If the filing person has previously
filed a statement on Schedule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
CUSIP No. 055367106
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Page 2 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Financial Edge Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
164,771
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
164,771
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
164,771
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.3%
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14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 055367106
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Page 3 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Financial EdgeStrategic Fund, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
67,491
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
67,491
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
67,491
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.2%
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14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 055367106
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Page 4 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Goodbody/PL Capital, L.P.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
WC
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
79,410
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
79,410
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,410
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
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14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 055367106
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Page 5 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PL Capital, LLC
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
232,262
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
232,262
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
232,262
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4%
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14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 055367106
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Page 6 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PL Capital Advisors, LLC
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
311,672
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
311,672
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
311,672
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0%*
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14
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TYPE OF REPORTING PERSON
PN
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*
9.99% ownership was rounded to 10.0%
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CUSIP No. 055367106
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Page 7 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Goodbody/PL Capital, LLC
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
79,410
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
79,410
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,410
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
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14
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TYPE OF REPORTING PERSON
PN
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CUSIP No. 055367106
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Page 8 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
John W. Palmer
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
0
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
311,672
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
0
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
311,672
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
311,672
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[X]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0%*
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14
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TYPE OF REPORTING PERSON
IN
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*
9.99% ownership was rounded to 10.0%
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CUSIP No. 055367106
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Page 9 of 18 Pages
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1
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NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Richard J. Lashley
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) [X]
(b) [ ]
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS
AF,PF
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5
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
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[ ]
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF
SHARES
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7
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SOLE VOTING POWER
52
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BENEFICIALLY
OWNED
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8
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SHARED VOTING POWER
311,672
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BY EACH
REPORTING
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9
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SOLE DISPOSITIVE POWER
52
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PERSON WITH:
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10
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SHARED DISPOSITIVE POWER
311,672
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
311,724
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[ ]
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.0%*
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14
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TYPE OF REPORTING PERSON
IN
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*
9.99% ownership was rounded to 10.0%
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CUSIP No. 055367106
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Page 10 of 18 Pages
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Item 1.
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Security
and Issuer
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The
initial Schedule 13D, dated August 5, 2008, was filed with the Securities and Exchange
Commission on August 13, 2008 (the Initial Schedule 13D). This Amendment No. 1
to the Initial Schedule 13D (this Amended Schedule 13D) relates to the common
stock, $0.01 par value (Common Stock), of BCSB Bancorp, Inc. (the
Company or BCSB Bancorp). The address of the principal executive
offices of the Company is 4111 E. Joppa Road, Baltimore, Maryland 21236.
Item 2.
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Identity
and Background
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This
Amended Schedule 13D is being filed jointly by the parties identified below. All of the
filers of this Amended Schedule 13D are collectively the PL Capital Group. The
joint filing agreement of the members of the PL Capital Group is attached as Exhibit 1 to
the Initial Schedule 13D.
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Financial
Edge Fund, L.P., a Delaware limited partnership (Financial Edge Fund)
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Financial
Edge-Strategic Fund, L.P., a Delaware limited partnership (Financial Edge Strategic)
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PL
Capital, LLC, a Delaware limited liability company and General Partner of Financial Edge
Fund and Financial Edge Strategic (PL Capital)
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PL
Capital Advisors, LLC, a Delaware limited liability company and Investment Advisor to
Financial Edge Fund, Financial Edge Strategic and Goodbody/PL
Capital, L.P. (PL Capital Advisors)
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Goodbody/PL
Capital, L.P., a Delaware limited partnership (Goodbody/PL LP)
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Goodbody/PL
Capital, LLC, a Delaware limited liability company and General Partner of Goodbody/PL LP
(Goodbody/PL LLC)
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John
W. Palmer and Richard J. Lashley, Managing Members of PL Capital, PL Capital Advisors and
Goodbody/PL LLC
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(a)-(c)
This statement is filed by Mr. John Palmer and Mr. Richard Lashley, with
respect to the shares of Common Stock beneficially owned by them, as follows:
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(1)
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shares
of Common Stock held in the name of Financial Edge Fund and Financial Edge
Strategic, in Mr. Palmers and Mr. Lashleys capacity as Managing
Members of PL Capital, the General Partner of Financial Edge Fund and Financial
Edge Strategic;
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CUSIP No. 055367106
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Page 11 of 18 Pages
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(2)
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shares
of Common Stock held in the name of Financial Edge Fund, Financial Edge
Strategic and Goodbody/PL LP, in Mr. Palmers and Mr. Lashleys
capacity as Managing Members of PL Capital Advisors, the Investment Advisor to
Financial Edge Fund, Financial Edge Strategic and Goodbody/PL LP;
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(3)
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shares
of Common Stock held in the name of Goodbody/PL LP, in Mr. Palmers and
Mr. Lashleys capacity as Managing Members of Goodbody/PL LLC, the General
Partner of Goodbody/PL LP; and
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(4)
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shares
of Common Stock held by Mr. Lashley, as an individual.
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The
business address of Financial Edge Fund, Financial Edge Strategic, PL Capital, PL Capital
Advisors, Goodbody/PL LP, Goodbody/PL LLC, Mr. Palmer and Mr. Lashley is: c/o PL Capital,
20 East Jefferson Avenue, Suite 22, Naperville, Illinois 60540. Each of Financial Edge
Fund, Financial Edge Strategic, Focused Fund, PL Capital, PL Capital Advisors, Goodbody/PL
LP and Goodbody/PL LLC are engaged in various interests, including investments.
The
principal employment of Messrs. Palmer and Lashley is investment management with each of
PL Capital, PL Capital Advisors and Goodbody/PL LLC, whose principal business is
investments.
(d) During
the past five years, no member of the PL Capital Group has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During
the past five years, no member of the PL Capital Group has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and, as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or State securities laws or finding any
violation with respect to such laws.
(f) All
of the individuals who are members of the PL Capital Group are citizens of the
United States.
Item 3.
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Source
and Amount of Funds or Other Consideration
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In
aggregate, the PL Capital Group owns 311,724 shares of Common Stock of the Company
acquired at an aggregate cost of $4,168,824.
The
amount of funds expended by Financial Edge Fund to acquire the 164,771 shares of Common
Stock it holds in its name is $2,173,193. Such funds were provided from Financial Edge
Funds available capital and from time to time by margin loans provided by BN Paribas
Prime Brokerage, Inc. (BNP Paribas).
The
amount of funds expended by Financial Edge Strategic to acquire the 67,491 shares of
Common Stock it holds in its name is $918,492. Such funds were provided from Financial
Edge Strategics available capital and from time to time margin loans provided by BNP
Paribas.
CUSIP No. 055367106
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Page 12 of 18 Pages
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The
amount of funds expended by Goodbody/PL LP to acquire the 79,410 shares of Common Stock it
holds in its name is $1,076,229. Such funds were provided from Goodbody/PL LPs
available capital and from time to time by margin loans provided by BNP Paribas.
The
amount of funds expended by Mr. Lashley to acquire the 52 shares of Common Stock he holds
in his name is $910. Such funds were provided from Mr. Lashleys personal funds.
Any
purchases of Common Stock made by members of the PL Capital Group using funds borrowed
from BNP Paribas, if any, were made in margin transactions on those firms usual
terms and conditions. All or part of the shares of Common Stock owned by members of the PL
Capital Group may from time to time be pledged with one or more banking institutions or
brokerage firms as collateral for loans made by such entities to members of the PL Capital
Group. Such loans, if any, generally bear interest at a rate based upon the federal funds
rate plus a margin. Such indebtedness, if any, may be refinanced with other banks or
broker-dealers. As of the date of this filing the Financial Edge Fund, Financial Edge
Strategic and Goodbody/PL LP have margin loans outstanding secured by Common Stock.
Item 4.
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Purpose
of Transaction
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The
PL Capital Group acquired shares of Common Stock because it believes that the Common Stock
is undervalued. On August 13, 2008, the Common Stock was trading at $10.32, or 68% of the
Companys June 30, 2008 tangible book value of $15.27. On December 10, 2008 the
Common Stock was trading at $8.10, or 53% of the estimated September 30, 2008 tangible
book value.
The
PL Capital Group has discussed, and will continue to discuss, with management of BCSB
Bancorp their operating and strategic plans for (1) maximizing the performance of BCSB
Bancorp and its wholly owned subsidiary Baltimore County Savings Bank and (2) maximizing
the value of the Common Stock. The most recent discussion was held at a meeting with the
Chairman, CEO and CFO of the Company at the Companys headquarters on December 2,
2008.
On
December 10, 2008, Financial Edge Fund, L.P. submitted a stockholder proposal relating to
the elimination of the residency requirement for directors, pursuant to Rule 14a-8 of the
Securities Exchange Act of 1934, as amended. A copy of the letter submitting the proposal
and the proposal are attached to this Amended Schedule 13D as Exhibit 2. In that letter,
the PL Capital Group also recommended that the Company take the steps necessary to: (1)
adopt a majority vote standard for the election of directors; (2) declassify
the board; (3) amend its Integrity bylaw to allow all stockholders to nominate
candidates for director; (4) set the strike price of any stock options granted in the
future, if such plans are adopted and approved by stockholders, at the greater of $10.00
(the most recent stock offering price) or the market price on the date of the grant; and
(5) adopt performance based triggers for the granting and vesting of any future stock
benefit plans. In the letter, the PL Capital Group noted that if the board of directors
did not adopt these corporate governance recommendations, the PL Capital Group may present
these additional matters directly to stockholders at the 2009 Annual Meeting or future
stockholder meetings.
CUSIP No. 055367106
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Page 13 of 18 Pages
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Members
of the PL Capital Group may make further purchases of shares of Common Stock although it
has no present intention of increasing its ownership above 9.99%. Members of the PL
Capital Group may dispose of any or all the shares of Common Stock held by them at any
time.
To
the extent the actions described herein may be deemed to constitute a control
purpose with respect to the Securities Exchange Act of 1934, as amended, and the
regulations thereunder, the PL Capital Group has such a purpose. Except as noted in this
Schedule 13D, no member of the PL Capital Group has any plans or proposals, which relate
to, or would result in, any of the matters referred to in paragraphs (b) through (j),
inclusive of Item (4) of Schedule 13D. Such individuals may, at any time and from time to
time, review or reconsider their positions and formulate plans or proposals with respect
thereto.
Item 5.
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Interest
in Securities of the Company
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The
percentages used in this Schedule 13D are calculated based upon 3,120,945 outstanding
shares of Common Stock. This is the number of shares of Common Stock that BCSB Bancorp
reported as outstanding as of July 30, 2008 in its most recent Form 10-Q , which was filed
with Securities and Exchange Commission on July 31, 2008. The PL Capital Groups
transactions in the Common Stock within the past 60 days of the date of this filing are as
follows:
(a)-(b)
See cover page.
(c) Financial
Edge Fund made no purchases or sales of Common Stock within the past 60 days of
the date of this filing.
(d) Because
Mr. Palmer and Mr. Lashley are the Managing Members of PL Capital, the general
partner of Financial Edge Fund, they have the power to direct the affairs of
Financial Edge Fund, including the voting and disposition of shares of Common
Stock held in the name of Financial Edge Fund. Therefore, Mr. Palmer and Mr.
Lashley are deemed to share voting and dispositive power with Financial Edge
Fund with regard to those shares of Common Stock.
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(B)
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Financial
Edge Strategic
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(a)-(b)
See cover page.
(c) Financial
Edge Strategic made no purchases or sales of Common Stock within the past 60
days of the date of this filing.
CUSIP No. 055367106
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Page 14 of 18 Pages
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(d) Because
Mr. Palmer and Mr. Lashley are the Managing Members of PL Capital, the general
partner of Financial Edge Strategic, they have the power to direct the affairs
of Financial Edge Strategic, including the voting and disposition of shares of
Common Stock held in the name of Financial Edge Strategic. Therefore, Mr.
Palmer and Mr. Lashley are deemed to share voting and dispositive power with
Financial Edge Strategic with regard to those shares of Common Stock.
(a)-(b)
See cover page.
(c) Goodbody/PL
LP made no purchases or sales of Common Stock within the past 60 days of the
date of this filing.
(d) Goodbody/PL
LLC is the general partner of Goodbody/PL LP. Because Mr. Palmer and Mr.
Lashley are the Managing Members of Goodbody/PL LLC, they have the power to
direct the affairs of Goodbody/PL LP. Therefore, Goodbody/PL LLC may be deemed
to share with Messrs. Palmer and Lashley voting and dispositive power with
regard to the shares of Common Stock held by Goodbody/PL LP.
(a)-(b)
See cover page.
(c) PL
Capital has made no purchases or sales of Common Stock directly.
(d) PL
Capital is the general partner of Financial Edge Fund, Financial Edge Strategic
and Focused Fund. Because Mr. Palmer and Mr. Lashley are the Managing Members
of PL Capital, they have the power to direct the affairs of PL Capital.
Therefore, PL Capital may be deemed to share with Mr. Palmer and Mr. Lashley
voting and dispositive power with regard to the shares of Common Stock held by
Financial Edge Fund, Financial Edge Strategic and Focused Fund.
(a)-(b)
See cover page.
(c) PL
Capital Advisors has made no purchases or sales of Common Stock directly.
(d) PL
Capital Advisors is the Investment Advisor to Financial Edge Fund, Financial
Edge Strategic, Goodbody/PL LP and Focused Fund. Because Mr. Palmer and Mr.
Lashley are the Managing Members of PL Capital Advisors, they have the power to
direct the affairs of PL Capital Advisors. Therefore, PL Capital Advisors may
be deemed to share with Mr. Palmer and Mr. Lashley voting and dispositive power
with regard to the shares of Common Stock held by Financial Edge Fund,
Financial Edge Strategic, Goodbody/PL LP, and Focused Fund.
CUSIP No. 055367106
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Page 15 of 18 Pages
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(a)-(b)
See cover page.
(c) Goodbody/PL
LLC has made no purchases or sales of Common Stock directly.
(d) Goodbody/PL
LLC is the general partner of Goodbody/PL LP. Because Mr. Palmer and Mr.
Lashley are the Managing Members of Goodbody/PL LLC, they have the power to
direct the affairs of Goodbody/PL LLC. Therefore, Goodbody/PL LLC may be deemed
to share with Messrs. Palmer and Lashley voting and dispositive power with
regard to the shares of Common Stock held by Goodbody/PL LP.
(a)-(b)
See cover page.
(c) Mr.
Palmer made no purchases or sales of Common Stock within the past 60 days of
the date of this filing.
|
(H)
|
Mr.
Richard J. Lashley
|
(a)-(b)
See cover page.
(c) Mr.
Lashley made no purchases or sales of Common Stock within the past 60 days of
the date of this filing.
Item 6.
|
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities of the Company
|
With
respect to Financial Edge Fund and Financial Edge Strategic: PL Capital and/or PL Capital
Advisors are entitled to (1) an allocation of a portion of profits, if any, and (2) a
management fee based upon a percentage of total capital. With respect to Goodbody/PL LP:
Goodbody/PL LLC and/or PL Capital Advisors are entitled to (1) an allocation of a portion
of profits, if any, and (2) a management fee based upon a percentage of total capital.
Other
than the foregoing agreements and the Joint Filing Agreement filed as Exhibit 1 to the
Initial Schedule 13D, there are no contracts, arrangements, understandings or
relationships among the persons named in Item 2 hereof and between such persons and any
person with respect to any securities of the Company.
CUSIP No. 055367106
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Page 16 of 18 Pages
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Item 7.
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Material
to be Filed as Exhibits
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|
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Exhibit No.
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Description
|
|
1
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Joint Filing Agreement*
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2
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Letter dated December 10, 2008 to Company Regarding 14a-8 Stockholder Proposal and Other Corporate Governance Recommendations
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CUSIP No. 055367106
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Page 17 of 18 Pages
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SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
Date: December 15, 2008
|
|
|
FINANCIAL EDGE FUND, L.P.
|
|
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By: PL CAPITAL, LLC
|
|
General Partner
|
|
By:
/s/ John Palmer
|
/s/ Richard Lashley
|
|
John Palmer
|
Richard Lashley
|
|
Managing Member
|
Managing Member
|
|
|
|
FINANCIAL EDGE-STRATEGIC FUND, L.P.
|
|
By: PL CAPITAL, LLC
|
|
General Partner
|
|
By:
/s/ John Palmer
|
/s/ Richard Lashley
|
|
John Palmer
|
Richard Lashley
|
|
Managing Member
|
Managing Member
|
|
|
CUSIP No. 055367106
|
Page 18 of 18 Pages
|
|
|
|
|
|
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GOODBODY/PL CAPITAL, L.P.
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|
By: GOODBODY/PL CAPITAL, LLC
|
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General Partner
|
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By:
/s/ John Palmer
|
/s/ Richard Lashley
|
|
John Palmer
|
Richard Lashley
|
|
Managing Member
|
Managing Member
|
|
|
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GOODBODY/PL CAPITAL, LLC
|
|
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By:
/s/ John Palmer
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/s/ Richard Lashley
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John Palmer
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Richard Lashley
|
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Managing Member
|
Managing Member
|
|
|
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PL CAPITAL, LLC
|
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By:
/s/ John Palmer
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/s/ Richard Lashley
|
|
John Palmer
|
Richard Lashley
|
|
Managing Member
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Managing Member
|
|
|
|
PL CAPITAL ADVISORS, LLC
|
|
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By:
/s/ John Palmer
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/s/ Richard Lashley
|
|
John Palmer
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Richard Lashley
|
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Managing Member
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Managing Member
|
|
|
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By:
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/s/ John W. Palmer
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John W. Palmer
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By:
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/s/ Richard J. Lashley
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Richard J. Lashley
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Exhibit 2
Financial Edge Fund,
L.P.
c/o PL Capital, LLC
20 East Jefferson Avenue, Suite 22
Naperville, Illinois 60540
Via Fax and Overnight
Mail
December 10, 2008
Secretary of the Corporation
BCSB
Bancorp, Inc.
4111 East Joppa Road
Suite 300
Baltimore, Maryland 21236
|
Re:
|
Stockholder
Proposal Respecting Director Residency Requirement and Other Corporate
Governance Recommendations
|
Dear Sir or Madam:
Financial
Edge Fund, L.P. is submitting the attached stockholder proposal (see Annex A) relating to
the elimination of the residency requirement for directors of BCSB Bancorp, Inc. (the
Company), pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as
amended, and requests that it be included in the Companys proxy statement for the
2009 Annual Meeting of Stockholders (the Annual Meeting). The Annual Meeting
is currently scheduled for May 20, 2009.
A
letter from BNP Paribas Prime Brokerage, Inc. certifying the ownership of Financial Edge
Fund, L.P., continually for over a year, of at least $2,000 worth of the Companys
common stock, par value $0.01 per share (the Common Stock), is enclosed.
Financial Edge Fund, L.P. intends to continue to hold at least $2,000 worth of the Common
Stock through the date of the Annual Meeting.
Financial
Edge Fund, L.P. and its affiliates (collectively, the PL Capital Group) are
the beneficial owners of 311,724 shares of the Common Stock as of December 5, 2008. This
beneficial ownership includes shares held by Financial Edge Fund, L.P.; Financial
Edge-Strategic Fund, L.P.; Goodbody/PL Capital, L.P.; PL Capital Advisors, LLC; PL
Capital, LLC; Goodbody/PL Capital, LLC; Richard J. Lashley and John W. Palmer. We believe
the PL Capital Group is the largest outside stockholder of the Company, and we have
closely followed the Company during the past several years.
Reasons
for Stockholder Proposal
Section
3.b. of Article II of the Companys bylaws provides that for an individual to be
eligible to serve as a director of the Company, the individual must reside in either the
Baltimore, Maryland Metropolitan Statistical Area (MSA) or Cecil County,
Maryland. Our proposal seeks to eliminate this patently discriminatory and flawed
requirement, which in our view serves no purpose other than to entrench the existing board
of directors and management at the expense of stockholders rights.
We
also believe that the Companys residency requirement undermines the Companys
ability to attract and retain the most highly qualified directors. Artificially
restricting the composition of the board of directors to individuals residing in either
the Baltimore, Maryland MSA or Cecil County, Maryland, deprives the Company and its
stockholders of the freedom to select the most qualified and appropriate individuals to
serve on the board when such individuals reside somewhere else. We strongly believe that
it is in the best interests of the Company and its stockholders for the board to have the
flexibility to determine the best individuals to serve as members of the board, whether or
not the individuals reside in the Baltimore, Maryland MSA or Cecil County, Maryland.
As
we have discussed with the senior management of the Company on several occasions, we
believe the residency requirement is also an anti-stockholder standard which creates two
classes of stockholders: those first class stockholders who happen to live in
the local defined areas (the Baltimore, Maryland MSA and Cecil County, Maryland) and those
second class stockholders who happen to live outside the designated areas. We
believe this is a discriminatory standard against the PL Capital Group (your largest
outside stockholder) and all other stockholders who live outside the designated areas.
We
do not recall the Company offering the Common Stock only to local residents of Baltimore
when the Company was trying desperately to get its capital raise completed. Clearly, the
Company would likely be operating under severe regulatory constraints or worse (for
example, a distressed sale or a forced merger) if out of market investors did not
subscribe to the Companys stock offering.
We
also believe that the residency requirement is a poor business practice because it
precludes candidates from serving on the board of directors despite the fact that they may
otherwise have outstanding qualifications. In the current uncertain economic climate in
particular, we see no justification for limiting the pool of potential candidates to the
local geographic area. Indeed, these uncertain economic times highlight the need to retain
the most qualified individuals as directors regardless of where they reside.
Our
view on the inadvisability of residency requirements is apparently shared by the
Companys primary federal regulator, the Office of Thrift Supervision (OTS). In a
recently issued denial of another thrifts request to adopt a residency requirement
bylaw, the OTS said the current economic circumstances provide a strong reminder
that institutions can and do run into business problems and may need assistance to
overcome such events and a provision that excludes everyone who does not live
in a particular state from board membership may prevent an entity from bringing on board
members with the particular expertise necessary to deal with a business crisis and may
impair the entitys ability to raise capital from persons or entities that would want
board representation to protect their investments. (See OTS Order No. 2008-34, a
copy of which was provided by the PL Capital Group to senior management of the Company).
-2-
Regardless
of where an individual currently resides, the individual may intimately understand and
genuinely care about the community in which the Company operates. Furthermore, such
individual may be the best qualified individual to serve as a director. We believe that
stockholders can make up their own minds as to whether a director nominee, whether local
or not, should be elected, and that the board of directors and stockholders must have the
flexibility to nominate as directors the best qualified individuals available regardless
of where they reside.
For
the reasons discussed above, we are proposing the attached stockholder proposal (see Annex
A) and request that it be included in the Companys proxy statement for the Annual
Meeting.
Other
Corporate Governance Improvements
The
elimination of the director residency requirement discussed above would be a good start,
but we believe the Company also needs to adopt several additional corporate governance
improvements. The Company has adopted numerous provisions in its bylaws and articles of
incorporation that we believe undermine the rights of stockholders and are contrary to
proper corporate governance. We identify a number of these provisions below. We believe
the provisions below are contrary to proper corporate governance and may serve merely to
inappropriately entrench management and undermine stockholders rights.
If
the board of directors does not agree to adopt the standards we are recommending, we may
elect to directly present proposals on these matters to stockholders at the Annual Meeting
or at future stockholder meetings.
Majority
Voting
Section
7 of Article I of the Companys bylaws states that all elections shall be
determined by a plurality of the votes cast, and, except as otherwise required by law or
the Articles of Incorporation, all other matters shall be determined by a majority of the
votes cast. Therefore, a director is elected by a plurality of votes cast.
In
recent years, many corporate governance experts and boards of directors have recognized
that the standard used by the Company does not allow for stockholders to have a real say
in the election of directors, particularly in uncontested elections. In an uncontested
election, it is mathematically impossible for a company nominee to lose an election
(assuming the company nominee can garner at least one vote FOR their election) regardless
of how many stockholders vote AGAINST or to WITHHOLD. In short, the outcome is
pre-ordained regardless of stockholders wishes. While it is true that a dissatisfied
stockholder can always run a separate slate of directors (which currently have to be local
residents regardless of whether non-locals may be more highly qualified), this remedy is
expensive, time-consuming, complicated and beyond the reach of all but a handful of
sophisticated and wealthy stockholders.
To
remedy this lack of stockholder democracy, many boards of directors have adopted a
so-called majority voting standard respecting the election of directors. In an
uncontested election with a majority voting standard, only those directors that receive a
majority of votes cast FOR them are elected. Those directors who do not receive a majority
of votes cast FOR (namely, more votes are cast AGAINST or WITHHELD) are required to tender
their resignation from the board.
-3-
Under
this standard, stockholders votes are meaningful. Numerous public companies have
adopted this standard already and many corporate governance experts expect widespread
adoption of this standard. We note that RiskMetrics Group (formerly ISS) and other proxy
governance advisors generally recommends that its clients vote FOR
majority vote proposals.
We
recommend that the board of directors take the steps necessary to adopt a majority voting
standard for the election of directors after consulting with independent corporate
governance experts.
Declassified
Board
Article
Seventh of the Companys Articles of Incorporation provide that the Companys
board of directors is divided into three classes, with approximately one-third of all
directors elected annually to three-year terms. Eliminating this classification system
would require each director to stand for election annually, which we believe would give
stockholders an opportunity to register their views on the performance of the board
collectively and each director individually.
We
believe that electing all directors annually is one of the best methods available to
stockholders to ensure that the Company is managed in the best interests of stockholders.
A study by researchers at Harvard Business School and the University of
Pennsylvanias Wharton School titled Corporate Governance and Equity
Prices (Quarterly Journal of Economics, February 2003) looked at the relationship
between corporate governance practices (including classified boards) and firm performance.
The study found a significant positive link between governance practices favoring
stockholders (such as annual director elections) and firm value, though the study did not
break out the impact of
individual
governance practices.
We
regard as unfounded the concern expressed by some that the annual election of all
directors could leave companies vulnerable to takeovers. The Company is a thrift holding
company which is already adequately protected by regulatory restrictions on changes in
control. The Company is also protected by other significant anti-takeover protections.
Annual
director elections is a growing trend, as evidenced by a majority of S&P 500 companies
now electing their entire board of directors annually. We note that RiskMetrics Group and
other proxy governance advisors generally recommend that its clients vote FOR
repealing classified boards and electing all directors annually.
We
recommend that the board of directors take the steps necessary to declassify the board
after consulting with independent corporate governance experts.
Integrity
Bylaw
Section
3.c. of Article II of the Companys bylaws contains a provision that prohibits
certain ineligible individuals from serving as directors. Ineligible
individuals are defined as those individuals who have been the subject of a cease and
desist order, have been convicted of a crime involving dishonesty or breach of trust, or
have been charged for such a crime.
-4-
The
integrity bylaw also prohibits an ineligible person from nominating someone to serve as a
director. We believe this provision inappropriately diminishes the property rights of the
Companys stockholders. The integrity and qualifications of the nominee candidate,
not the nominator, is the relevant issue. Not only does the prohibition on an ineligible
individual nominating someone as a director diminish stockholders rights and run
contrary to affording stockholders a fair opportunity to nominate candidates for the board
of directors, it does not provide the Company with any valid protection. There is not any
evidence that a stockholder with bad character who nominates a person of
good character would in any way damage the reputation of the Company, or in
any way adversely affect the Company. Indeed, guilt by association is a
standard that is legally unsupportable, and one that is not appropriate or necessary to
mitigate any kind of reputational risk. Stockholders are fully capable of
assessing the nominees for election to the board and the nominator, and all stockholders
should, as part of their ownership right, be free to nominate qualified individuals to the
board.
We
also note that the OTS (in OTS Order No. 2008-34) recently rejected another thrifts
attempt to implement an integrity bylaw provision that would prohibit nominations by
ineligible stockholders. The OTS Order stated that it appeared that the proposed integrity
bylaw requirement exhibits managements lack of trust of stockholders,
and further noted that management is supposed to serve the interests of the
institution and its stockholders or members, not their own interests.
We
recommend that the board of directors take the steps necessary to amend the bylaws and
remove the restriction on director nominations by ineligible stockholders.
Strike
Price of Future Stock Option Grants
It
is our understanding that the Company is contemplating the implementation of a stock award
plan, which would likely allow for the award of stock options as well as stock. In this
regard, we believe that any awards to be made under such plan must be earned, not just
granted. Further, any such awards must represent a true incentive to management and the
board of directors to achieve results that are in the best interests of the Company and
its stockholders.
We
would also expect that any option awards made would have a strike price equal to the fair
market value on the date of grant. However, given the drop in the stock price below the
most recent $10.00 offering price (not to mention the substantial dilution incurred by
stockholders who owned the stock prior to the most recent second step offering), we
believe the Company should obligate itself not to issue any option awards with a strike
price of less than $10.00 per share. We do not believe this is a hardship on option award
recipients given that $10.00 is still substantially below the Companys tangible book
value. We note that this is a standard that another thrift in which the PL Capital Group
owns a stake has adopted (MSB Financial Corp.).
If
such plans are implemented in the future, we recommend that the board of directors take
the steps necessary to ensure that the granting and vesting of the awards be tied to
objective standards of financial and operating performance (for example, ROE, ROA, EPS
growth, credit quality, deposit growth, etc.) and that any stock options granted under
such plans contain an exercise price equal to the greater of $10.00 or the fair market
value on the date of grant.
-5-
Conclusion
As
we have mentioned to the senior management of the Company on several occasions, the PL
Capital Group will evaluate the corporate governance profile and actions of the Company
when voting on any stockholder proposals offered by the Company (for example, stock option
and stock benefit plans) in 2009 or beyond, including the Companys response to
removing the residency requirement, implementing the majority voting standard and the
other recommendations contained herein.
As
noted earlier, depending upon whether the Company adopts the recommendations contained
herein, the PL Capital Group may also propose its own proxy statement containing the other
corporate governance recommendations noted in this letter at the upcoming or future Annual
Meeting(s).
We
would be happy to discuss with you the stockholder proposal that Financial Edge Fund, L.P.
has submitted. Should the board of directors decide to adopt the attached stockholder
proposal and eliminate the residency requirement, Financial Edge Fund, L.P. will ask that
the proposal be withdrawn from consideration at the stockholder meeting.
Please
feel free to contact Rich Lashley at (973) 360-1666 or John Palmer at (630) 848-1340 if
you have any questions or need any additional information relating to this proposal.
|
Very truly yours,
|
|
FINANCIAL EDGE FUND, L.P.
|
|
/s/ Richard Lashley
|
|
Richard Lashley, Managing Member
|
|
PL Capital, LLC (General Partner of
|
|
the Financial Edge Fund, L.P.)
|
cc:
|
Mr.
Phillip Goldberg, Foley & Lardner LLP
|
-6-
Annex A
RESOLVED:
We
request that the directors take the steps necessary to amend the Bylaws of BCSB Bancorp,
Inc. (the Company) by eliminating the residency requirement under Section 3.b.
of Article II, which provides that for an individual to be eligible to serve as a director
of the Company, the individual must reside in either the Baltimore, Maryland Metropolitan
Statistical Area (MSA) or Cecil County, Maryland.
Stockholder
Supporting Statement:
We
believe that this residency requirement undermines the Companys and
stockholders ability to select the most qualified and appropriate individuals to
serve on the board of directors because such individuals may reside somewhere else.
We
strongly believe that it is in the best interests of the Company and its stockholders for
the board of directors and stockholders to have the flexibility to nominate and elect the
most qualified directors to serve as members of the board, whether or not they reside in
the Baltimore, Maryland MSA or Cecil County, Maryland.
This
is particularly true in difficult economic circumstances (as we have had in recent times),
when the Company may require specialized assistance. In this situation, a provision that
excludes everyone not living in a certain geographic area from serving on the board of
directors may prevent the Company from bringing onto the board individuals with the
particular expertise necessary to deal with a business crisis, or it could prevent the
Company from being able to raise capital from persons that want board representation to
protect their investment. We note that the Companys primary regulator, the Office of
Thrift Supervision (OTS), recently rejected another thrifts attempt to implement a
geographic restriction for similar reasons (OTS Order No. 2008-34 dated September 26,
2008).
We
believe the residency requirement serves no corporate governance or business purpose other
than to entrench the existing management and board of directors. Stockholders should be
allowed to decide for themselves whether local residency is an important factor when
electing or voting for directors.
In
effect, the residency requirement creates two classes of stockholders: those first
class stockholders who happen to live in the defined local areas and those
second class stockholders who dont. We believe this is a discriminatory
standard against all stockholders who live outside of the designated areas.
We
do not recall the Company offering their stock only to local residents of Baltimore when
the Company was trying desperately to get its most recent capital raise completed. In our
view, the Company would likely now be operating under severe regulatory constraints, or
worse, if non-local stockholders did not subscribe to the Companys stock offering.
1
Said
simply, all stockholders should have the same stockholders rights and the most
highly qualified individuals should be eligible to serve on the Companys board of
directors, regardless of where they reside.
We
urge you to vote
FOR
this resolution.
-2-
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