Baltimore Bancorp adds $25 million to loss

March 05, 1992|By Timothy J. Mullaney | Timothy J. Mullaney,Staff Writer

Baltimore Bancorp added $25 million yesterday to the $69.6 million loss it had reported for last year's fourth quarter, as a review by federal regulators led the bank to write off even more problem real estate loans.

The new write-offs brought the fourth-quarter loss at the parent of the Bank of Baltimore to $94.6 million. The restated loss for the year was $126.5 million. Baltimore Bancorp recorded a $9 million profit in 1990.

Elisabeth Albert Hayes, a bank analyst for Chapin, Davis in Baltimore, said the bigger loss means more pressure on the bank's capital levels, which in turn means the company's planned restructuring might have to be more extensive than anticipated.

"I just sort of looked at [the announcement] and went, 'Oh, no,' " Ms. Hayes said.

The company, which announced the news after the stock market closed, ended yesterday at $7.375 a share, down 12 1/2 cents.

The company said all of the newly written-off loans had been classified "doubtful" or "substandard" by the bank before the review by the Federal Deposit Insurance Corp., and that all of the loans were made before the new management gained control in September.

Included was "a mixture of office buildings, hotels and land loans," said Daniel H. Burch, president of MacKenzie Partners, a New York public relations firm advising Baltimore Bancorp. Also included, he said, were construction loans and commercial mortgages, which had been considered less risky than construction loans earlier in the economic downturn.

The FDIC review covered July through October, but the company said it received the draft report recently. A final report is expected in the second quarter.

Stockholders led by Edwin F. Hale ousted Chairman Harry L. Robinson last year in a bitter proxy battle highlighted by fierce arguments over whether the former management had honestly assessed the quality of the bank's real estate loans. Mr. Hale is now chairman of Baltimore Bancorp.

A company official said he didn't know whether the FDIC's approach to examining the bank last year differed from its approach in 1990, when Baltimore Bancorp made far fewer write-offs and smaller additions to loan loss reserves.

"The real estate market has deteriorated significantly in the past year," said David L. Spilman, treasurer of Baltimore Bancorp. "The FDIC knows that and won't leave any stones unturned."

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.