State-chartered banks in Maryland suffered an overall $23.9 million loss during the third quarter as a number of the state's largest institutions showed continuing problems tied to souring loans.
But most of the drop was caused by large losses at two of the state's largest banks, Sovran Bank/Maryland and the Bank of Baltimore, and the majority of banks in the state showed consistent profits through this year, according to figures released by the state bank commissioner.
Excluding the results from those two large banks, the remaining 74 institutions earned $32 million during this year's third quarter. That compares with earnings of $35.8 million in the same period last year.
Despite the overall loss, only 11 of the state-chartered banks lost money during the quarter -- a figure that was considered a positive sign by the state's top regulator.
"There are no doubts that the economy's persistance in staying negative is damaging banks," says Banking Commissioner Margie H. Muller. "It really is a tribute to Maryland banking, though, that they're still showing a profit over nine months overall."
State-chartered banks earned a total of $49.9 million through the first nine months of this year.
The biggest loser in the third quarter was the Bank of Baltimore, which lost $39.8 million in the three months that ended Sept. 30.
The large loss came as the parent company, Baltimore Bancorp, decided to take a $47 million provision for possible loan losses in the period. It was the first quarterly result announced by the company after Edwin F. Hale Sr., newly appointed chairman of the company, won a bitter proxy battle for control of the $3.3 billion banking concern.
Sovran Bank/Maryland, a $4.2 billion banking subsidiary of C&S/Sovran, lost $16.1 million during the third quarter. The parent company said at the time that the loss came as continued softness in the real estate market led to a $300 million provision to its reserves to cover future loan losses. The provision, which had been expected, led to a $50.8 million loss at the parent company.
The figures released by Maryland regulators show the results for the banks themselves and are not consolidated results for the parent companies, which, in many cases, are publicly traded. The results also do not include Maryland's two largest banks, Maryland National Bank and First National Bank of Maryland, which are federally chartered and not overseen by state regulators.
Maryland National lost $3.5 million in the third quarter, while First National had a profit of $12.9 million.
Maryland National has $12.1 billion in assets, while First National has $6.5 billion.