The longtime chairman of Brookline Bancorp in Massachusetts resigned late last month after his board voted to reject a buyout offer, but he did not leave quietly.

The $2.5 billion-asset company said that Richard P. Chapman Jr. had resigned after the board's decision to endorse the new chief executive's plan to remain independent. Chapman had given up his role as chief executive a year earlier.

Upon his departure, Chapman sent the board a tersely worded letter accusing it of falling for promises made by Paul A. Perrault, Chapman's successor as CEO, to turn the lean-profits bank into a powerhouse, rather than considering the merits of the purchase offer.

Analysts said the dispute offers a highly public glimpse of the tough choice facing some healthy banks: to buy or sell.

"These sorts of crossroads put boards in a dilemma," said John Carusone, the president of Bank Analysis Center Inc., an investment bank in Hartford, Conn.

"The question they have to answer is: Is this the right time to sell out to someone who isn't promising you much except the superiority of thinking in their business plan, especially when you have a new CEO whose own plan hasn't had time to manifest yet?" Carusone said.

Chapman, the former chairman, clearly thought that now was the time for Brookline to sell.

"The decision to reject the offer was reached by taking an enormous compilation of information and analysis assembled by our investment bankers and our own senior staff that strongly supported the offer and discarding it in favor of Mr. Perrault's strategic vision at 50,000 feet," Chapman said in the Feb. 12 letter, available in a filing with the Securities and Exchange Commission.

"I believe you fell sadly short. You have my resignation, effective immediately," he concluded.

Attempts to reach Chapman for further comment were unsuccessful. Perrault would only discuss the board's decision in broad terms.

"Suffice it to say, we went through a thorough and exhaustive examination on the matter, and the board voted overwhelmingly to reject the offer," Perrault said in an interview Friday.

"We are going to continue to run the company as best we can as we keep paying attention to what opportunities exist in the marketplace," he continued. "I have a long track record of being very shareholder-friendly."

Perrault was the chief executive of Chittenden Corp. in Burlington, Vt., which he built into a $7.4 billion-asset regional power through acquisitions.

The 140-branch company was sold to People's United Financial Inc. of Bridgeport, Conn., for $1.9 billion in 2008. Analysts said Perrault's record as an acquirer makes this tale a bit ironic, as he had been on the other side of the table many times.

"He has a reputation as being someone who leads and grows companies very well," said Damon DelMonte, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc. "Brookline has excessive capital, so when he joined, the expectation was that his approach would be to go for acquisitions."

Analysts said that, though Perrault's year at the helm of Brookline has included no deals, he may be looking at some acquisitions soon. "I definitely think he is looking to do some deals," DelMonte said.

Yet the acquisition market is fiercely competitive in the region as New England banks have remained relatively stable and few are expected to fail.

Companies have engaged in bidding wars like last year's three-way contest for the $297 million-asset CNB Financial Corp. in Worcester, Mass.

In June, United Financial Bancorp Inc. beat out Berkshire Hills Bancorp Inc. and an identified bidder with a $25 million offer for CNB.

As a former mutual holding company that completed a second-step conversion in 2003, Brookline has been bogged down with excess capital. At the end of the fourth quarter, it had a total risk-based capital ratio of more than 30% and a tangible common equity ratio of 17.2%.

Though Brookline has remained profitable and maintained strong credit quality, the capital has weighed on earnings, DelMonte said.

According to Chapman's letter, Perrault asserted that he could increase the company's per-share earnings to $1, more than three times the 33 cents a share it earned in 2009, should it remain independent.

Matthew Kelley, an analyst at Sterne, Agee & Leach Inc., said that goal is lofty, though not unattainable.

Still, he said, it could be achieved only by more than doubling the company's balance sheet — operating from Perrault's previous acquisitions playbook.

"Brookline will not earn $1 per share without acquisitions," Kelley said. "It is going to be extremely difficult still because there are not as many opportunities to deploy it."

The maximum he would expect a buyer to pay for Brookline would be $12 per share, Kelley added, a 1.6 premium to its tangible book value, given the company's equity and attractive branch network in the Boston area.

Analysts said it is hard to pinpoint the unidentified bidder in the rejected deal.

Speculation centers on People's United, New Alliance Bancshares Inc. in New Haven, Conn., and Webster Financial Corp. in Waterbury, Conn., as companies that might be on the prowl in the region.

Carusone also said he thought it likely a private-equity group has been searching for a platform bank.

In his letter, Chapman said Perrault initially supported the deal and that his ultimate push for rejection was "self-serving" and "emotion-driven."

Analysts said that Chapman's own emotions probably prompted his decision to air the company's turmoil.

"Something like this must be extremely disheartening for a board that you've worked with for so long to go against you and be rallied by someone else," said Theodore Kovaleff, an analyst at Horwitz & Associates and a former Brookline shareholder. "It means you have no influence at this juncture."

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