Feb. 3--A pair of Bancorp Rhode Island investors last week renewed their battle with the banking company's management, according to regulatory filings, this time seeking changes in the way the board of directors is constituted at the Providence-based financial institution.

Richard Lashley and John Palmer, partners in the PL Capital LLC hedge fund, have hounded management at Bancorp Rhode Island (BARI: Nasdaq) for nearly three years, as the two have pursued a sale of the company. Bancorp Rhode Island is the parent company of the 16-branch Bank Rhode Island.

The partners have a history of taking on the management at banks they consider underperforming, seeking to profit from improved earnings, a quick run-up in stock prices or the sale of their targets. PL Capital owns about 373,000 shares, or about 8.2 percent, of BARI stock.

Lashley and Palmer twice sought seats on the Bancorp Rhode Island board of directors as the partners pushed for the bank's sale. But neither of those things happened. Meanwhile, the company's share price has sunk along with the rest of the stock market, from about $45 in 2006 to below $20 last month. Shares closed yesterday at $20.89, up $1.27.

This year, the partners are pushing to reduce the size of the Bancorp board to less than the current 15 seats, require directors to stand for election annually and require directors to resign if they receive less than a majority of affirmative votes from shareholders.

"Bancorp Rhode Island's board missed several critical opportunities to maximize shareholder value in 2006 and 2007, and management has failed to improve the performance of Bancorp Rhode Island as they promised," Lashley said in a letter to the board.

In the past, the partners have pointed to Bancorp Rhode Island's low earnings, low return on assets and weak efficiency rating.

They said the bank's efficiency rating, essentially a measure of how much money an institution has to spend to make a $1, was a "critical" issue.

By that measure, the bank's performance has improved as the efficiency rating has dropped from 76 percent in 2006, to 73.4 percent in 2007, and 67.7 percent last year. Those ratings at similar banks often fall below 60 percent, the partners contend.

During last year's annual meeting, Bancorp officials contended the bank relies on a "high-touch" strategy based on cultivating commercial borrowers in its home state, some of whom are poached from the multistate competitors who dominate the Rhode Island market.

High-touch relationships, which require bank executives to become intimately familiar with a customer's business and financial needs, come with high costs, noted Merrill W. Sherman, the bank's president and chief executive officer. That management style can hurt a bank's performance in the short run.

Between 2003 and 2007, the bank built four new branches -- in Lincoln, East Greenwich, North Kingstown and Pawtucket -- and an operations center in Lincoln as well. Building those was expensive and recouping that investment takes time, she said then.

As the bank worked to improve its performance, the economy has tanked, taking bank stock values with it.

Bancorp Rhode Island's stock price has fallen 33.9 percent since the time of the annual meeting last May, from $31.76 to $20.89 a share yesterday.

Last Friday, company management issued a terse response to PL Capital's latest proposals.

"We intend to evaluate any such proposals and determine whether or not they are in the best interests of our shareholders," Malcolm G. Chace, Bancorp Rhode Island's board chairman wrote in a Jan. 30 letter to shareholders.

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