DATE: Wednesday, May 28, 1997               TAG: 9705280470

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   51 lines

CENIT' SHAREHOLDERS DERAILED BID TO SELL FIRM

In a three-minute conclusion to its 1997 annual meeting, CENIT Bancorp Inc. confirmed Tuesday that its shareholders narrowly rejected a proposal to put a value on the company and find a buyer.

The proposal, advocated by Mid-Atlantic Investors of Columbia, S.C., was voted down by only 7,012 shares, or fewer than 1 percent of the 1.33 million shares voting on the issue at CENIT's annual meeting.

CENIT, the Norfolk-based parent of CENIT Bank and Princess Anne Bank, suspended its April 23 meeting to allow election inspectors to examine shareholders' votes. That process was completed last week.

``As far as I'm concerned, this is it for 1997,'' CENIT president and chief executive Michael Ives said after Tuesday's gathering. ``We're back in the banking business and out of the proxy business.''

Jerry Shearer, managing partner of Mid-Atlantic Investors, said the results would have turned out differently if the inspectors had not set aside a proxy for 19,500 CENIT shares. A proxy is the card authorizing another party to vote on behalf of a shareholder.

The owner of these shares supported Mid-Atlantic's proposal for putting a value on CENIT and finding a buyer, Shearer said. However, the owner held his shares in the ``street'' name of a New York bank, and the election inspectors could not find a record of ownership in CENIT's books, Shearer said.

During a review conducted last week by the inspection service CT Corp., Mid-Atlantic and CENIT were given the opportunity to challenge the proxies received by the other side.

``Whether you count the 19,500 votes or not, there is a clear message to management,'' said Shearer, who attended the brief meeting at CENIT's headquarters. The narrow margin, he said, ``is evidence that shareholders aren't pleased with the management.''

Shearer said he had not yet decided what Mid-Atlantic will do next. Mid-Atlantic, which specializes in investing in community banks and thrifts it considers candidates for merger, controls about 9.7 percent of CENIT's 1.6 million shares.

Ives, CENIT's chief executive, attributed the slim margin to shareholder confusion about the way the proposal for selling CENIT and the choices of slates of candidates for the CENIT board were presented.

CENIT's slate of four incumbent directors received slightly more than 55 percent of the shares voting. Each of the three rival candidates put up by Mid-Atlantic received about 44 percent.

Despite the tiny margin of victory over Mid-Atlantic's effort to put CENIT on the market, CENIT's management has no plans to alter its strategy, Ives said. That strategy calls for expanding the company's asset size and broadening the branch networks of CENIT Bank and Princess Anne Bank.

CENIT's shares closed Tuesday at $43, down $1 in light trading.

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