An article in yesterday's Money section incorrectly stated th amount of stock that Baltimore Bancorp would sell to registered shareholders this fall. Shareholders could buy as many as 2 million shares, which at yesterday's closing stock price would be worth $12.25 million, representing 10.4 percent of stockholders' equity.
The Evening Sun regrets the errors.
Baltimore Bancorp, parent of the Bank of Baltimore, laid off 32 people Monday as part of a restructuring of its retail banking and real estate departments, the company said yesterday.
The restructuring cost the jobs of a dozen assistant vice presidents, vice presidents and senior vice presidents, as well as support staff. The move consolidated the branch system, consumer lending, credit card operations and marketing within the retail banking department. That group is now headed by Executive Vice President Larry Unger.
FOR THE RECORD - CORRECTION
The company also created a "special asset division" to deal with Baltimore Bancorp's portfolio of troubled loans, which stood at $226 million as of June 30, according to Treasurer David Spilman.
Senior Vice President Wayne Edwards will lead the special asset division, while Executive Vice President Thomas M. Scott III will head the unit charged with generating new real estate loans, including residential construction, home mortgages and some commercial lending.
"For some time, as we have allowed our business plan to unfold during the year, it became apparent that we had to realign principally our retail banking and real estate groups," Mr. Spilman said.
The realignment also led to job losses in areas as diverse as accounting, credit administration and the president of the company's Atlantic Independent Insurance Agency, described by Mr. Spilman as "basically an administrative position."
He said senior vice presidents also were terminated in branch administration, data administration and residential construction lending.
Excluding the costs of outplacement services and severance for the affected employees, Mr. Spilman said the reorganization would save Baltimore Bancorp "a little over $1 million a year."
The company is looking to save even more money by hiring outside companies to take over the bulk of its data processing operations, a move that could affect about 70 people, Mr. Spilman said.
Baltimore Bancorp has been under an operating agreement with federal and state regulators since July that requires the banking company to seek regulators' permission for various activities and mandates additional reporting requirements.
The agreement also calls for the company, which had $2.8 billion in assets as of June 30, to raise its ratio of capital to assets, a measure of the financial cushion that Baltimore Bancorp retains to protect the federal agency that insures deposits.
In one effort to raise capital, the company last week began mailing prospectuses for a planned stock offering to current shareholders, Mr. Spilman said.
Baltimore Bancorp has said it expects to issue up to $2 million in stock to registered shareholders, representing about 1.7 percent its current stockholders' equity.
The shares would be sold at a 5 percent discount from the average market price during certain periods in the coming months, Mr. Spilman said.
Baltimore Bancorp's stock closed yesterday on the New York Stock Exchange at $6.625 a share, up 12.5 cents.
The company has also said it plans to sell between $20 million and $35 million in stock to the public in the spring. How much additional capital the company would need depends on the success of the upcoming stock sales, how much it has been able to reduce assets -- which in turn reduces the need for capital -- and how well it has generated earnings, which increases capital.
During the first half of the year, Baltimore Bancorp earned $10.9 million, or 45 cents a share, compared with $8.1 million, or 63 cents a share, last year.
But after new management took over the company in the fall and declared large amounts of loans non-performing, Baltimore Bancorp ended last year with a loss of $101.5 million. Both the first and second quarters of this year have been profitable.