A.B. "Buzzy" Krongard, new chief executive officer of Alex. Brown Inc., attributes the firm's record second-quarter profit of $14.2 million to a better stock market, better cost controls and "no snakes in the grass that bite you."
Alex. Brown, the venerable Baltimore investment banking firm, yesterday named Krongard its new CEO and vice chairman. Krongard has been chief operating officer since 1988.
At the same time, the company reported the highest quarterly and six-month earnings in its 191-year history and declared a quarterly dividend of 7 cents a share. The dividend is payable Aug. 13 to shareholders of record as of Aug. 2.
Mayo A. Shattuck 3rd was named the new president and chief operating officer and elected to the board of directors. Shattuck had been the San Francisco-based co-head of corporate finance.
The position of chief executive officer has been vacant since May 1990, when Donald B. Hebb Jr. stepped down from that position. In place of a CEO, a management committee consisting of Alex. Brown Chairman Benjamin H. Griswold, Krongard and Hebb had operated as a collective chief executive officer.
Hebb then relinquished his role as president in February and returned to the company's investment banking division.
Krongard, 54, has worked for Alex. Brown for 20 years. Before joining Alex. Brown he had worked for two years for Stein Brothers & Boyce, a Baltimore investment banking firm acquired by Bache in 1970.
Alex. Brown's net income in the second quarter was $14.2 million, or 87 cents a share, a 213 percent increase over the 1990 second-quarter earnings of $4.5 million, or 28 cents a share. Revenues for the second quarter were $105.1 million, up 36 percent.
For the first six months, the investment banking firm earned $24.8 million, or $1.53 a share, a 252 percent increase over the 1990 second quarter net income of $7 million, or 43 cents a share. Revenues in the first half of the year were $198.7 million, 36 percent above the $145.7 million in revenues received during the same period a year ago.
Krongard said one way the company improved earnings was by cutting the inventory of stocks and bonds that it sells from $130 million in early 1990 to less than $53 million now. The narrower inventory reduces the firm's exposure to fluctuations in the financial markets, which are reflected in its earnings.