For a while, Alan Penniman Hoblitzell Jr. saw the future earlier and clearer than most.
As tumultuous changes loomed in the banking industry during the 1980s, he foresaw only two roles for mid-sized banks like his Maryland National. Swallow or be swallowed.
Mr. Hoblitzell never wavered.
He had spent his entire career at the bank, rising from trainee to chairman. To the outside world, he had become indistinguishable from Maryland National. He had nurtured it as it became Maryland's dominant bank and one of the region's most visible civic leaders. He wasn't about to stand by now and watch the big boys from outside sweep in and gobble up his bank. Maryland National, he was determined, would survive.
He succeeded. But in his success he had sowed his failure.
After 34 years with the bank, Mr. Hoblitzell is no longer its chairman. Many of his top executives are gone. Others have been pushed aside. And hundreds of lower-level employees may lose their jobs.
His company, staggered by a deteriorating real estate market, has reported its largest losses ever. MNC Financial Inc., parent of Maryland National, has seen its stock plunge in a yearlong free fall, forcing the corporation to put parts of its empire up for sale, including its most profitable divisions.
The hometown company, never before dominated by a single investor, is headed by its biggest shareholder, a blunt and savvy out-of-state businessman. And suddenly, a corporation determined to control its fate is now in the embarrassing position of needing federal regulators to approve once-routine company decisions.
Only a year ago, analysts were trumpeting MNC as one of the best-managed regional banking companies in the United States, jewel in a slumping industry.
NB That high praise is now remembered wistfully not only by those
who had invested their careers at Maryland National but by some of Maryland's business executives who valued having a banking giant rooted in Maryland.
"What we celebrated a year ago was that we had a shot at owning our own huge bank," said Robert Keller, executive director of the Greater Baltimore Committee, an organization representing the largest businesses in the metropolitan area.
As this year dawned, Mr. Hoblitzell seemed to have realized his goal of enlarging Maryland National to make it indigestible to outside banks.
But there was a fatal flaw in the bank's tactics. Mr. Hoblitzell had built the bank's growth on a foundation precariously weighted toward real estate investment. The imbalance left MNC particularly vulnerable to a collapse in the real estate market at a time when federal regulators were fiercely resolved to tightly rein in the banking industry.
When the reverberations from his failure became evident, the 59-year-old chief executive last month did what would have been unthinkable as the summer began. He left.
Mr. Hoblitzell, who received $1.2 million in severance and a $465,000-a-year pension, said he recognized that his hands-off management style could not heal his ailing company.
"I felt that the institution would thrive and do better with somebody else," he said.
That somebody else is Alfred Lerner, a one-time furniture salesman from Cleveland whose investments in real estate and stock made him a millionaire many times over. Although MNC directors once barred him from buying any company stock, they turned to him as their best hope for a turnaround.
Last week, the new chairman signaled how his rescue operation would proceed: Mr. Hoblitzell's far-flung, diversified corporation would have to be dismantled.
The Grand Design
If MNC executives came to take success for granted, it was hard to blame them. Since Mr. Hoblitzell had become its $H chairman in 1984, the corporation enjoyed a seemingly unending series of triumphs. Profits rose. Dividends increased. Market share grew.
"If you're doing better every year you get on a roll. It's hard to change your optimism into pessimism," said Mary Frances Wagley, a Maryland National Bank director.
She was one of more than two dozen MNC executives and directors and Baltimore business leaders interviewed for this article. Many of them spoke only on condition of anonymity, saying MNC told its employees and advised directors not to speak to reporters. Several former employees cited fears of losing severance pay if their names appeared in the press.
Mr. Hoblitzell seemed a perfect match for a company on the rise. Imaginative and aggressive, he determined the company's ultimate destination but left his deputies to chart the course.
The son of a USF&G executive, educated at Gilman and Princeton, Mr. Hoblitzell was regarded as an affable if distant employer, who disliked confrontation, according to several top executives.
He also firmly believed a locally controlled bank would be more attentive to Maryland than a banking giant run from Chicago or Richmond.