Bank chief cites need for interstate bank billWhat would...

BANKING & FINANCE

November 26, 1992|By David Conn

Bank chief cites need for interstate bank bill

What would make the perfect Thanksgiving gift for Hugh McColl, chief executive officer of NationsBank Corp.? A national interstate banking bill, of course.

Such a bill would allow banks to forgo the costly pretense of setting up distinct banks for each state in which they operate. "Multi-state banks would save $5 billion to $10 billion a year if they could simply merge their multiple state banks, now required by regulation, into one bank," Mr. McColl told the Greater Washington Board of Trade at its annual meeting this week.

"That could create $50 to $100 billion in newly available credit for small and large businesses, consumers and all other bank customers," he said.

Of course, Mr. McColl is not the most objective observer on interstate branching. His company operates in almost every state from Texas to Maryland. And if NationsBank's proposed acquisition of MNC Financial Inc. goes forward next year, the company will be the largest banker in Maryland.

Chairman says Ferris is changing for better

Ferris, Baker Watts Inc. Chairman George Ferris this week provided a look at the internal workings -- and finances -- of a private company that's been in the public eye lately.

With the loss this fall of the two members of its institutional sales and research department, and later its former head of retail trading, Ferris clearly is undergoing change, Mr. Ferris acknowledged in a meeting with Sun editors and a reporter.

But those changes are for the better, he insisted. And to back up his claims, he revealed some of his company's finances for the last few years. It's true Ferris lost $260,000 in fiscal 1989 (which ended Feb. 28, 1989), he said, but that was mostly due to a large employee stock ownership contribution, as well as the just-finished merger with Baker, Watts of Baltimore.

In the fiscal year that ended February 1992, the company earned $3.7 million, and so far this year, operating profits are up 5.9 percent, he said. Annual revenues, meanwhile, are expected to reach $45 million, up from $20.5 million in 1989.

Mr. Ferris intends to hire more brokers to expand the firm's presence, and market share, in northern Virginia, West Virginia and southern Pennsylvania. "But most of all, our bread and butter, we want to grow in Maryland," he said.

MBNA Corp. ranked tops by magazine

Mirror, mirror. . . Who's the best bank of them all? MBNA Corp., the former MNC subsidiary that now runs one of the nation's most profitable credit card operations out of its Newark, Del., headquarters.

That, at least, is Financial World magazine's assessment. The magazine, in its Dec. 8 issue, will print its annual survey of America's banks, rated according to their level of capital, overhead expenses and return on assets.

MBNA ranked first among 217 publicly traded banks with at least $750 million in assets for the year ended June 30, according to the calculations of Virginia-based SNL Securities.

"Since going public [in January 1991], MBNA's profits have increased 28 percent, from $129 million to $166 million," said Michael K. Ozanian, a Financial World editor. "The main reason: Delinquency charge-offs are running at an annualized rate of only 3.96 percent, compared with an industry Visa average of 6.1 percent."

Near the top of Financial World's list was Baltimore-based Mercantile Bankshares Corp., which came in fourth place on the list, down from third a year ago.

Other area banks didn't fare as well: Provident Bankshares Corp. (ranked 169); MNC (199); and Baltimore Bancorp (214).

At least no new banks failed in Maryland

Encouraged by the recent performance of Maryland's banks? Thinking of opening your own? Here are two items worth chewing on:

First, some numbers on the fortunes of new banks, courtesy of Danielson & Associates, a Rockville bank consulting firm.

The 15 Maryland banks that opened since 1986 earned an average of $141,000 in the year which ended June 30, 1992. With an average of $20 million in assets, that amounted to a return on assets of 0.7 percent, respectable but hardly stellar. Of the 128 (admittedly much larger) commercial banks that Keefe, Bruyette & Woods Inc. follows, for instance, the median bank had a 0.98 percent annualized ROA in the second quarter.

Still, new Maryland banks did better than their counterparts in most other Eastern Seaboard states. Maryland was the only state from South Carolina to northern New England where no new bank failed. (Delaware isn't included in the comparison.)

1 planned bank never got off the ground

And consider the efforts of a group of investors to start what would have been the first new Maryland bank since 1990.

Last year we reported on the efforts of ex-Commercial Credit Co. bankers William Tulley and William Rowe to raise $6 million in capital to start Enterprise National Bank. By July 1991, the group had raised $4.5 million in cash and pledges.

Alas, it was not to be. Mr. Tulley, now comfortable in retirement, recalls that fund-raising was hindered by the Persian Gulf war and the recession.

"I think in our case it was just [a matter] of bad timing," he said, adding that conditions clearly look better today.

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