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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __2__)*
Portsmouth Bank Shares, Inc.
(Name of Issuer)
Common Stock ($0.10 Par Value)
(Title of Class of Securities)
737031104
(CUSIP Number)
John P.M. Higgins, President, Ram Trust Services, Inc.
45 Exchange Street, Portland, Maine 04101 (207) 775-2354
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 18, 1996
(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 / /.
Check the following box if a fee is being paid with the statement / /.
(A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover
page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Continued on the following pages.
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 737031104 Page 2 of 8 pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ram Trust Services, Inc.
I.R.S. #01-0363642
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)/ /
(b)/x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS
/ /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Maine
7 SOLE VOTING POWER
383,433.60
8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
383,433.60
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
383,433.60
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.68
14 TYPE OF REPORTING PERSON*
CO, IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
AMENDMENT NO. 2
ITEM 1. SECURITY AND ISSUER
The response set forth in Item 1 of the Schedule 13D remains the
same and is restated for clarity in amending this Schedule 13D:
This Schedule 13D relates to shares of common stock, par value $.10
per share (the "Shares") of Portsmouth Bank Shares, Inc. (the
"Company"), a bank holding company formed in 1987. The Company's
wholly owned subsidiary is Portsmouth Savings Bank, a New Hampshire
state-chartered guaranty stock savings bank. The principal executive
offices of the Company are located at 333 State Street, Portsmouth,
New Hampshire, 03801.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to its Investment Management Agreement with its private
investment accounts (the "Accounts"), Ram Trust Services, Inc.
("Ram") used the personal funds provided by the Accounts to purchase
the Shares and no part of the purchase price is represented by funds
borrowed by Ram. In addition to purchasing that number of Shares
previously disclosed by Ram in its Schedule 13D filed on September 13,
1995, Ram has made open market purchases on behalf of its Accounts
in the following amounts reflected in the following table:
<TABLE>
<S> <C> <C> <C>
Date of Number Type of Price
Transaction of Shares Transaction Per Share
1/24/96 2,900 Open Market (NASDAQ) Purchase $14.75
3/20/96 9,890 Open Market (NASDAQ) Purchase $13.75
4/11/96 803 Open Market (NASDAQ) Purchase $13.75
</TABLE>
ITEM 4. PURPOSE OF TRANSACTION
The response set forth in Item 4 of the Schedule 13D is hereby
amended and supplemented by the following information:
Since September 19, 1995 Ram, on behalf of its Accounts, has
purchased 13,593 Shares, received 7,591.60 Shares by dividend, sold
2,079 Shares, transferred 30,430 Shares among its Accounts and
transferred 19,672 Shares out of its Accounts, with the net result
that its holdings have been reduced by 566.40 Shares.
<PAGE> 4
Ram continues to hold the Shares for investment. Ram intends to
deliver a Shareholder's Resolution for inclusion in the Company's
1997 Proxy Statement for Annual Meeting of the Shareholders which
is attached hereto as Exhibit A (the "Shareholder's Resolution").
The Shareholder Resolution recommends that the Company's Board of
Directors immediately engage the services of a nationally recognized
investment banker to explore all alternatives to enhance the value
of the Company, including, but not limited to, possible sale,
merger, or other transaction for all assets of the Company, in
conjunction with the possible return of excess capital to the
shareholders. Further, Ram intends to propose two of its principals,
John P.M. Higgins and Robert A.G. Monks, as candidates for inclusion
in the Company's slate of Directors at the Company's 1997 Annual
Meeting of its Shareholders.
Ram continues to not to have any plan or proposal which relates
to or would result in any transaction described in paragraphs (a)
through (j) of Item 4 of Schedule 13D other than the information
disclosed in this Item that could be construed to be a plan or
proposal which relates to or would result in any transaction
described in paragraphs (a) through (j) of Item 4 of Schedule 13D.
Ram continues to bear the entire financial risk of its investment
in the Company. There continues to be no understandings between
Ram and Atlantic Bancorp ("Atlantic") with respect to the investment.
Ram is not aware of any discussions between the Company and Atlantic
concerning the possibility of a business combination between Atlantic
and the Company.
Depending upon trading prices of the Shares and upon the Accounts'
financial position and goals from time to time, Ram may, subject to
any applicable statutory or other limitations, purchase additional
Shares or dispose of Shares in the open market, in privately
negotiated transactions, or otherwise. Ram may continue to have
the Accounts purchase the Shares subject to a number of factors,
including, among others, the availability of the Shares at what Ram
considers to be reasonable prices and other investment opportunities
that may be available to the Accounts. Ram intends to review
continuously the equity position of the Accounts in the Company.
Depending upon future evaluations of the business prospects of the
Company and upon other developments, including but not limited to,
general economic and business conditions and money market and stock
market conditions, Ram may determine to cease making additional
purchases of Shares or to increase or decrease the Accounts' equity
interest in the Company by acquiring additional Shares or by
disposing of all or a portion of the Shares. Ram retains the right
to evaluate its position in the future and change its intent with
respect to any of the foregoing actions.
ITEM 5. INTEREST AND SECURITIES OF THE ISSUER.
The response set forth in Item 5 of the Schedule 13D is hereby
amended and supplemented by the following information:
<PAGE> 5
(a) Ram, as investment advisor to the Accounts, is deemed to be the
beneficial owner of an aggregate of 383,433.60 shares of the common
stock of the Company. The 383,433.60 shares of the Company's
common stock represent 6.68% of the outstanding common stock of
the Company. Neither Ram, nor to the best knowledge of Ram, any
of the persons named in Item 2, beneficially owns any other Shares
of the Company.
(b) Under their Investment Management Agreement, Ram, the investment
advisor to the Accounts, has the sole power to: (1) vote or direct
the voting of the 383,433.60 Shares owned by the Accounts; and
(2) dispose of the 383,433.60 Shares owned by the Accounts.
(c) Except as described herein, neither Ram nor to the best
knowledge of Ram, any of the persons named in Item 2, has effected
any transaction in the Shares during the past sixty (60) days. On
October 7, 1996, the William Alcorn IRA removed its 2,100 Shares
from its Account with Ram. On November 1, 1996, Ram sold 425 Shares
on the open market (NASDAQ) at $12.875 per share.
(d) Not applicable.
(e) Not applicable.
<PAGE> 6
Signature.
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.
Dated: November 18, 1996
Ram Trust Services, Inc.
By /s/ John P.M. Higgins
John P.M. Higgins, President
By: /s/ Robert A.G. Monks
Robert A.G. Monks, Director
By: /s/ William F.K. Monks
William F.K. Monks, Director
By: /s/ William S. Schaffner
William S. Schaffner, Director
<EXHIBIT 99>
<PAGE> 7
EXHIBIT A
PORTSMOUTH BANK SHARES, INC.
SHAREHOLDER'S RESOLUTION
(FOR INCLUSION IN 1997 PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS)
RESOLVED: That the shareholders of Portsmouth Bank Shares, Inc.
(the "Company") recommend that the Board of Directors immediately
engage the services of a nationally recognized investment banker
to explore all alternatives to enhance the value of the Company,
including, but not limited to, possible sale, merger, or other
transaction for all assets of the Company, in conjunction with the
possible return of excess capital to the shareholders.
SHAREHOLDER'S SUPPORTING STATEMENT
The Company has not been competitive with its shareholders' capital.
Total annualized returns to shareholders, including cash and stock
dividends, have been -6.7% and +12.5% over the last one and three
year periods, respectively. These results compare unfavorably with
small bank peer group returns over the same periods of +19.2% and
+20.4%, and with the S&P 500 of +24.1% and +17.7%, respectively.
The Company's net income has remained essentially flat or declined
over the past several years, reported at $6.1 million in 1993 and
annualized at $5.8 million for 1996. Return on shareholder's
equity this year projects at a disappointing 8.6%, well below peer
group levels.
The poor return on capital has been exacerbated by the
extraordinarily high level of equity in the Company. In a survey
of thrifts that converted prior to 1994, the Company ranks first
in the entire country in terms of its equity to asset ratio: 25.0%.
Peer group levels are closer to 8.7%.
Examination of the financial statements reveals indifference toward
the business of banking: the loan portfolio, as well as total
assets, have actually declined 9% since 1992. Furthermore, the
present ratio of loans to total assets is 31.9%, as opposed to a
peer group ratio approaching 60%. Fully two-thirds of total assets
is comprised of cash and investment securities.
In its 1994 Proxy Statement, the Company stated that: "The Board
of Directors firmly believe that, in order to maximize shareholder
value, the Company should remain strong and well capitalized which
should make us very attractive and positioned for maximum growth
through mergers or to be acquired by another strong banking
institution."
<PAGE> 8
It is clear that, with the decline in the loan portfolio and in
total assets since 1992, the Company has failed to leverage its
strong capital to participate in the subsequent regional economic
recovery. Further, it has failed to make any acquisitions to
achieve growth, at a time when, as evidenced by unprecedented
market activity, acquisition candidates have been abundant.
Moreover, despite the express interest of financially reputable
institutions in acquiring all or some portion of the business of
the Company, the Company has failed to respond realistically or to
position itself properly to be acquired by anyone.
Clearly, this Board needs a powerful reminder that we expect better
from them. If the other shareholders believe, as we do, that the
value of the underlying assets and franchise is not reflected
in the stock price, the Board and management have not met their
obligation to prove that they can add value. They can best do
so now by obtaining a valuation of the assets if sold currently.
