Beese may end up lone SEC RepublicanWhen J. Carter Beese...

BANKING & FINANCE

February 18, 1993|By David Conn

Beese may end up lone SEC Republican

When J. Carter Beese Jr. moved from Alex. Brown Inc. to the Securities and Exchange Commission a year ago, the commission had three Republicans, one Democrat and one independent.

Now, the tables seem to have turned. Chairman Richard C. Breeden, a Republican, announced last week that he will leave the commission by April 15. And another seat held by a Republican has been open since last summer. So, Mr. Beese faces the likelihood that he'll end up the lone Republican commissioner, not that he minds all that much.

"You can still be effective if you're outnumbered, particularly from the platform of making speeches," Mr. Beese said.

Mr. Beese is confident that his areas of interest -- the derivatives market, the regulation of investment managers and cross-border capital flows -- won't disappear from the SEC's radar screen. "A new chairman certainly will influence the agenda for the SEC for the next several years," he said, "but those items have to be on the agenda."

Besides, the job still has its perks. Mr. Breeden asked Mr. Beese to attend the annual meeting of the International Organization of Securities Commissioners this month -- in Trinidad.

The organization rejected Mr. Beese's plea to establish high capital standards for broker/dealers. But surely there was some consolation in visiting a Caribbean paradise?

"I didn't see much of it," he said. "I take it that Tobago is where the beaches are, Trinidad is where the industry is -- and we were stuck in a conference room for two days."

Venture capitalists unite to sponsor fair

The region's venture capitalists, no strangers to mergers and joint ventures, have themselves formed an alliance to bring what promises to be one of the nation's largest venture capital fairs to Baltimore this fall.

Baltimore's Charles W. Newhall III, of New Enterprise Associates, and James J. Millar, of DSV Partners, Princeton, N.J., were HTC among the investors who helped bring together three regional venture associations for the Mid-Atlantic Venture Fair '93, to be held Oct. 25-26 at the Stouffer Harborplace Hotel.

Since 1991, the Baltimore-based Mid-Atlantic Venture Association (MAVA) and Philadelphia's Delaware Valley Venture Group have traded places for a combined annual venture fair. Washington has had its own fair since 1987. Now all three groups will join forces and alternate each year between Baltimore and Philadelphia.

"The combined resources of the Mid-Atlantic, Delaware Valley and Washington, D.C., venture capital groups will attract some of the region's hottest growth companies," said Mr. Newhall, the chairman of MAVA.

And if the prestige of a combined fair doesn't do it, maybe past performance will. It's too early to guess how many investors will find financing this year. But since 1989, the Baltimore and Philadelphia fairs have generated $750 million in venture fund investments, according to MAVA, and an additional $250 million has been raised in public stock offerings by 12 companies that told their stories during the fairs.

Md. S&Ls' profits fell 72% in 3rd quarter

The worst may be over for Maryland's thrifts, but a recently released statistical portrait shows the health of the state's savings and loans continued to deteriorate in the third quarter.

Net income (before extraordinary items) for the industry fell almost 72 percent in the third quarter, as the return on average assets dropped to 0.07 percent from 0.36 percent in the second quarter, according to Sheshunoff Information Services Inc. of Austin, Texas.

While assets and loans stayed nearly flat in the third quarter, the industry did manage to shave nonperforming loans by almost 9 percent. And it's true that a few of the largest thrifts, including Standard Federal and Second National, contributed mightily to those losses in the third quarter. They were both taken over by regulators in the fourth quarter.

With any luck, by the end of the first quarter of this year, Maryland will have improved its national ranking for the percentage of profitable thrifts: In the third quarter 86.4 percent of the S&Ls were profitable, placing Maryland 14th from the bottom.

Bank in Lanham suffers double abuse

Talk about adding insult to injury.

Last fall, Maryland's bank commissioner and the Federal Deposit Insurance Corp. closed the tiny Lanham-based Universal Bank of Maryland, only the second such closing of a state bank in at least 40 years.

The bank, with $22.1 million in assets, was put in the hands of the FDIC, which agreed to pay off all of its insured deposits. Twenty-seven account holders also had $751,000 in uninsured deposits, but the FDIC agreed to pay them 56 cents on the dollar initially and a portion of what remains after liquidation.

As if Universal didn't have enough troubles, the FDIC just released its latest Community Reinvestment Act evaluations. The CRA exams purport to judge banks on how well they meet the banking needs of all socioeconomic segments of the communities they serve.

There are four possible grades: "outstanding." "satisfactory." "needs to improve" and "substantial noncompliance." In a November examination, the FDIC rated Universal "needs to improve."

That's not bad, considering the bank was shut down in October.

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