Mercantile Bankshares Corp., bucking an overwhelming trend in the banking industry, voted yesterday to increase its quarterly dividend 7.5 percent, from 20 cents to 21.5 cents a share.
It was the 14th consecutive year that the company, parent of Mercantile-Safe Deposit and Trust Co. and 17 other affiliate banks, had raised its quarterly payout to shareholders. The dividend will be paid Dec. 31 to stockholders of record Dec. 21, the company said.
Mercantile also said yesterday that Edward K. Dunn Jr., chairman of the board's executive committee at both Mercantile Bankshares and its flagship bank, will replace John H. Mosner Jr. as president of the parent company and vice chairman of the bank's board when Mr. Mosner, who turns 65 early next year, retires March 1.
The decision to raise its dividend to 86 cents a year from the current 80 cents further served to place Mercantile among only a handful of the East Coast's largest banks that have survived the real estate and economic downturns with little damage.
Mercantile's move comes at a time when many of the nation's largest banks have suffered serious financial blows resulting in slashed dividends.
"If anybody can raise their dividend in this environment, it's Mercantile," said David S. Penn, banking analyst at Legg Mason Inc.
Mercantile, with 28.2 million shares outstanding, earned $15.9 million, or 57 cents a share, during the third quarter. It earned $50.2 million during the first nine months of this year, up from $48.2 million in the same period last year. The company had $4.4 billion in assets as of Sept. 30 and $3.6 billion in total deposits.
The company raised its quarterly dividend a year ago to 20 cents a share from 17.5 cents, adjusted for a two-for-one stock split that accompanied the dividend payment.
Despite the announcement, Mercantile's stock fell 62 1/2 cents a share yesterday, to $18.625, over-the-counter trading.