In calmer times, the announcement of a regular quarterly dividend would hardly be cause for speculation and debate. Just about the only time it would even be noticed was when the check was late.
But not in banking. Not now.
The news last week that MNC Financial Inc. would keep, uncut, its 29-cent-a-share quarterly payout to stockholders sent the company's stock leaping 15 percent when the market opened the next day.
That is not the typical reaction when a company decides to not do something. But these are not typical times.
"Clearly, this is the worst we've seen in at least a decade," said Kyle Prechtl Legg, a banking analyst at Alex. Brown Inc. in Baltimore. "I am pretty pessimistic about the general industry for the indefinite future."
Analysts including Ms. Legg concentrate more on the stock prices of the banking companies than on matters involving depositors, but the vicissitudes of the industry are likely to affect both.
Already, fears of bad loans and rigid regulators have coupled to create an atmosphere of tighter credit. Cost-cutting efforts aimed at improving earnings and keeping stock prices elevated could result in little or no expansion of branch networks and lower employment, analysts warned.
Shareholders have been hurt, too, as stocks of the largest banks in the region from North Carolina to New Jersey to Ohio have declined an average of 30 percent over the past 12 months, said David S. Penn, a banking analyst at Legg Mason Inc.
The question is: How far down is bottom and will Maryland banks sink that low? In truth, no one knows and few are willing to guess. For every ray of hope that shines through the otherwise negative appearance of the overall industry, other problems seem to cloud the view.
The reality, the analysts said, is that all banks are different and, though the ones losing money get the attention, more are healthy than not.
Some industry analysts and local economists think the Maryland economy, in particular, is sufficiently diversified that the large majority -- if not all -- Maryland banks will remain intact even if the local economy hits bottom.
Although more bank losses are predicted as real estate and perhaps more general business loans continue to sour, the rough going is not expected to sink any sizable portion of the industry.
"We still have employment growth and population growth," Mr. Penn said. "And we're much more diversified than New England."
Overall, Maryland banks appear to be doing better than those in the rest of the nation.
Equity capital expressed as a percentage of assets -- a measure of the ability to withstand further losses -- remained above the national average as of June 30. Although slipping from a year ago, the state's banks had equity capital of 6.53 percent of assets compared with 6.43 percent nationwide, according to new figures from the Federal Deposit Insurance Corp.
Non-performing assets, including loans that have gone bad and repossessed assets, stood at only 1.69 percent of the $55.7 billion in total assets in the state. That compared with 2.44 percent nationwide and 3.33 percent in the Northeast.
But some ominous notes have been sounded. A recent survey by the FDIC found that "the real estate problems of the Northeast have spread to the mid-Atlantic states," as have sizable increases in the losses associated with related loans.
If problems in the real estate industry in Maryland and the surrounding area continue, the region's banks could be hit hard.
MNC Financial, Riggs National Corp. in Washington and Signet Banking Corp. in Richmond, Va., led a list of major banking companies in the nation with the largest exposures in the riskier area of construction lending, according to a report earlier this month from Bear, Stearns & Co. in New York.
"Banking looks like a tough time," said Mark Lynch, an analyst who co-authored the report at Bear, Stearns. "Real estate lending had a disproportionate level of loan growth at the greater Washington banks for the last couple years, and it's not there anymore. And now they have to start to worry."
Despite a relatively low level of non-performing loans, Maryland banks as a group saw that category more than double, to $942 million, as of June 30 compared with $450 million a year ago.
The increase in problem real estate loans also has led to a squeeze in profits.
Income for the first half of this year for the state's banks as a group plummeted to just $9 million from $250 million during the first half of last year, hurt primarily by a fivefold increase in the amount the banks put aside to cover possible loan losses, according to the FDIC. Statewide, $421 million was added to such reserves, up from $86 million last year, though much of that increase was a result of moves at MNC.
In New England, perhaps the most well-known center of banking problems in recent months, a number of institutions are in trouble and eight banks have failed since the start of 1989.