Personnel changes at PaineWebberSince an article appeared...

BANKING & FINANCE

January 28, 1993|By David Conn

Personnel changes at PaineWebber

Since an article appeared in The Sun in September detailing questionable trading activities at PaineWebber Inc.'s Hunt Valley office, the cast of characters has changed a bit.

Recall that office manager Kevin Broderick's name appeared on memos appearing to set up a questionable commission payment arrangement for a PaineWebber client, the First Financial Federal Credit Union. The credit union was charged excessive commissions on some trades, according to documents The Sun obtained.

Mr. Broderick in December became a broker at PaineWebber in McLean, Va., to be closer to his home, spokeswoman Maureen Fantz said. He was replaced this month by Kevin Botsford, who was a manager and then broker at Merrill Lynch's Towson office.

Meanwhile, McGraw-Hill's Securities Week newsletter has reported that PaineWebber's regional director vowed to "clean house" at the Hunt Valley office. Ms. Fantz, whose firm has

denied any impropriety, said the comment was never made. Hunt Valley reportedly was one of more than a dozen PaineWebber offices investigated by the Securities and Exchange Commission in September, investigations the firm said were routine.

Dismissed from the Hunt Valley office was operations manager Binnie Mizell. People quoted by Securities Week -- and several others close to the firm -- said Ms. Mizell was made a scapegoat.

Ms. Mizell could not be reached for comment. Ms. Fantz said PaineWebber doesn't comment on terminations.

MNC director Travers boosts his stake

Oliver S. Travers Jr. is this year's leading nominee for Most Loyal Director, for his role on the board of MNC Financial Inc.

Beginning the week after the NationsBank deal was announced in July, Mr. Travers went on a buying binge. Over the next five months, in blocks ranging from 10,000 to 40,000 shares, the president of Towson-based Schenuit Investments Inc. boosted his stake in MNC from 22,000 to more than 140,000 shares, according to the latest public filings. (Transactions made in January needn't be reported until next month.)

Mr. Travers paid an average of $10.94 each for the shares, so his profit on the newly acquired stock so far is about $262,200, or a 20 percent return on his $1.3 million investment. That may make the MNC officers (several of them now former officers) who exercised their stock options by the hundreds of thousands last winter think twice about having unloaded most of those shares.

Mr. Travers did not return calls seeking comment.

Baltimore Bancorp sees stock rebound

True believers in Baltimore Bancorp have enjoyed a 38.5 percent run-up in the company's stock since mid-December, when the company traded at $6.50.

Treasurer David Spilman offered a few reasons:

A Wall Street Journal article about a month ago called attention to a spate of insider purchases at the company. On Dec. 17, nearly 17,000 shares were bought by almost a dozen insiders, including Chairman Ed Hale, who bought 9,100 shares.

Unfortunately, yesterday's weak fourth-quarter earnings announcement ($312,000, compared with $3.3 million in the third quarter) led to a 75-cent drop in the share price, to $8.375.

But a full year of black ink and falling nonperforming assets boosted investors' faith that Bancorp's deep discount to book value no longer was deserved, Mr. Spilman said.

Finally, there was a report last month from First Boston analyst Thomas Hanley, who suggested that Baltimore Bancorp might be a candidate to acquire Provident Bankshares Corp.

"So if people read that, they think we must not be that bad off," Mr. Spilman said.

Analyst calls Provident candidate for merger

As for Provident, Thomas Hanley's December report named the company as one of four likely "takeout candidates" in 1993.

Because it sells at such a low discount to book value -- 69 percent in December when the report was written, and now about 83 percent -- Mr. Hanley said that as "a converted thrift [Provident] appears to be a commercial bank selling at thrift pricing."

The company, parent of Provident Bank of Maryland, should reach $18 a share, according to Mr. Hanley; it's already up to $15.125.

More intriguing is the merger prospect. "We believe that this franchise is attractive as an in-market consolidation measure by any one of the stronger players in Maryland," he wrote, "including Mercantile [Bankshares Corp.] and Baltimore Bancorp."

Legg Mason's Kunkel moves to Ferris, Baker

John Kunkel, 51, who headed institutional sales at Legg Mason Inc. for almost a decade, is moving to Ferris, Baker Watts Inc. He will restart its equity institutional sales department, which consisted of two analyst/salesmen who moved to a Florida securities firm late last year.

Having spent years on Wall Street with Donaldson, Lufkin & Jenrette and with C. J. Lawrence Securities, Mr. Kunkel came to Baltimore nine years ago to start Legg's institutional sales department, which now has 13 salespeople in offices here, New York, Houston and Boston.

At Ferris, he will work closely with Joseph J. Roberts, the new manager of fixed income institutional sales. Mr. Kunkel was replaced at Legg by one of his assistants, Tom Mulroy, 31.

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