Abrupt change in the leadership of Maryland's $27.5 billion banking colossus, MNC Financial, is cause for short-term relief and long-term concern. The replacement of Alan P. Hoblitzell Jr. as chairman and chief executive officer by Alfred Lerner, a Cleveland financier, was predictable after MNC's stock plunged, pulled down by recession and an excess of high-risk commercial real estate loans.
Mr. Lerner is no newcomer to the Baltimore scene, having owned Equitable Bancorp. for seven years until it was merged in January into the Maryland National Bank network. Known for shrewd, hands-on management, he is likely to spend a lot of his time in Baltimore "operating to fix" MNC Financial until a permanent successor to Mr. Hoblitzell is named.
As MNC's biggest stockholder, with an ownership share that could climb to 24 percent through a $180 million infusion of needed capital, Mr. Lerner has suffered a paper loss of over $100 million since MNC shares fell from $21 to the $6 range.
So his attention has been captured, and he is likely to supervise closely a real estate loan portfolio that the Wall Street Journal unkindly described as "junk" last August.
Like many other financial institutions around the country, MNC was caught up in growth fever during the go-go Eighties. Its loosely supervised real estate division plunged into many problem loans. Now the emphasis will be retrenchment in this field, as MNC seeks profits in its highly successful credit-card operations -- one of the largest in the country.
It is of overriding importance that MNC Financial's affairs be put right. By a factor of three, it is the largest bank in Maryland and a heavy-hitter in most phases of business activity.
Mr. Lerner cannot be expected to display the zeal for community activities that made Mr. Hoblitzell the kind of leader sought by charities and causes. But he has an obvious personal interest in the bank's recovery and insists he has no plans for selling the corporation to an out-of-state buyer.
Nonetheless, the banking industry is in such a turbulent state -- with a major contraction in sight -- that nothing can be ruled out. MNC is too large to be purchased by another Maryland financial house. Likely buyers -- if it ever comes to that -- would be large regional banks headquartered elsewhere or one of the big money-center institutions in New York. Therefore, local concerns about the long-term outlook are understandable.
Mr. Lerner, however, describes himself as "an investor, not a trader" whose interest is in turning MNC into "the business it is supposed to be." We are counting on him to do just that.