MNC Financial Inc. Chairman Alfred Lerner said yesterday that he thinks the worst of times for the state's biggest bank holding company may be past and that the company may return to profitability by the end of the year.
"We don't predict or project [earnings] as a matter of policy," Mr. Lerner told a packed annual shareholders' meeting at the Sheraton Inner Harbor Hotel. "The best I can give you is a personal perspective. . . . I hope and expect that by the fourth quarter we will be profitable. That, I think, is a reasonable hope and a reasonable expectation."
He also said that the bank's capital base is now solid after shaking in 1990. "I think we're OK on that side," he said.
Mr. Lerner said that the company has narrowed its search for a new president and chief executive officer to six outside candidates, who will compete with at least one executive now at the company for the job. Mr. Lerner, who is MNC's largest shareholder, has been acting chief executive since last fall's resignation of former CEO Alan P. Hoblitzell Jr.
"It shouldn't be too many more weeks before we come to a conclusion," Mr. Lerner said. He said he has interviewed three candidates and will talk to the others by next week.
MNC is the parent company of Maryland National Bank, based in Baltimore, and American Security Bank of Washington. It has been battered in the past year by low levels of capital and an avalanche of shaky real estate loans, which contributed to the company's $440 million 1990 loss and threatened its survival.
"We are not in danger of any of that kind of stuff," Mr. Lerner said. "I think this bank is going to survive. I think this bank is going to do well in the future."
Mr. Lerner compared MNC to BankAmerica Corp., the San Francisco bank holding company that in the mid-1980s came back from death's door to become a Wall Street darling by de-emphasizing international lending and concentrating on California, much as MNC plans to de-emphasize real estate lending and concentrate on core banking activities in the Baltimore-Washington area.
Mr. Lerner said that "there's no doubt mistakes were made" at MNC. And he said that MNC will need at least a modest recovery in commercial real estate to return to profitability. "We can work at it as hard as we do, but we need some improvement in the real estate market," he said.
He said the level of non-performing assets -- loans more than 90 days past due -- have stabilized. But he said it's too soon to say whether that means there won't be a new burst of problems collecting on loans to developers. "You can hit false bottoms," he said.