NationsBank's $200 million investment in MNC Financial Inc., in exchange for a 16 percent ownership stake, has shaken up the local corporate community. If giant NationsBank -- the country's fourth largest, with $111 billion in assets -- exercises its option during the next five years and acquires MNC, the parent of Maryland National and by far the state's dominant banking company, Baltimore's three largest banks would be owned by out-of-state companies. Will this development be detrimental to our community?
Judging from the experience of two other major banking companies that are no longer locally owned, probably not. First Maryland, which is owned by Allied Irish Banks, and Signet Bank of Maryland, formerly Union Trust Company of Maryland, are still vigorous lenders in this market and maintain high civic and charitable profiles.
It can be argued that MNC Financial was ripe for takeover as it struggled under the weigh of its poorly performing real estate portfolio. For years, MNC's management followed a strategic plan aimed at turning the company into a strong regional bank invulnerable to takeover. That concept failed when the bottom dropped out of the Baltimore-Washington real estate market two years ago. MNC found itself saddled with hundreds of millions of dollars in bad real estate loans.