State-chartered banks in Maryland ended a dismal 1990 with their first quarterly loss in years as the local industry recorded a sixfold increase in the amount it put away to protect against a surge in problem loans.
The 78 state-chartered banks, which account for roughly half of the bank assets in Maryland, lost $12.1 million during last year's fourth quarter, according to figures released yesterday by state regulators. In the final three months of 1989, they had income of $59.6 million.
The figures released yesterday did not include the results for nationally chartered banks in Maryland, which include the state's two largest, Maryland National Bank and First National Bank of Maryland.
Earnings for the year as a whole also suffered. The state-chartered banks reported that their income fell nearly 53 percent last year, to $123 million from $260.6 million in 1989. Thirteen of the 78 banks recorded losses last year.
Though not a complete record for the state's banking industry, the figures did reflect a dramatic increase in the industry's desire to overtake or at least catch up to the impact of mounting troubled loans.
Some banks recorded those hefty charges earlier in the year. But many, hoping that the worst problems were behind them and that 1991 would bring better results, waited until the fourth quarter to put large amounts aside, according to regulators.
In all, state-chartered banks added $141 million to their allowance for further loan losses in 1990's fourth quarter, compared with $22.9 million a year earlier.
"It was banks taking an extraordinarily large provision for loan losses in order to protect against any eventualities in the year ahead," said Margie H. Muller, the state's bank commissioner.
"Banks reflect the condition of the economy, and the economy is not good right now.
"But the fact that all but a handful made money in 1990 is a sign that they are prudently managed and that they ought to get through a continuing recession," she said.
Ms. Muller, who has been bank commissioner for about eight years, said she could not recall the last time state-chartered banks in Maryland suffered an aggregate three-month loss.
The biggest moneymaker of the year among the state-chartered banks was Mercantile-Safe Deposit and Trust Co., which earned $29 million.