Taneytown Bank aims at small businessesMany expect the...

BANKING & FINANCE

April 01, 1993|By David Conn | David Conn,Staff Writer

Taneytown Bank aims at small businesses

Many expect the U.S. banking industry to consolidate into a few huge banks and thousands of niche players. In that process, the fight for supremacy is no mystery -- you can follow it in the nation's financial press every day.

But another battle is being waged among the smallest banks, those too tiny to catch the attention of their larger, acquisition-minded brothers. Their battleground: the hearts and minds of depositors and small businesses.

Taneytown Bank & Trust Co. (seven branches; $165 million in assets) fires its best shot today with a new program aimed at small businesses in its Howard and Carroll county markets.

The bank has created a network of lawyers and accountants who will charge reduced fees for small companies looking to borrow from Taneytown, says Frank Neubauer, executive vice president and chief operating officer. The bank also will sponsor seminars, and is working with state and federal agencies such as the Small Business Administration to take the mystery and red tape out of government assistance for small companies, Mr. Neubauer said.

"We don't have the marketing clout, we don't have the retail infrastructure to go head-to-head with the larger banks," Mr. Neubauer admits. But he does have 10 percent to 20 percent loan growth lately. And he's confident his bank can beat the biggest competitors in Taneytown's mostly rural markets.

High jumbo CD rates noted at Md. banks

A sign of spring?

No fewer than seven Maryland financial institutions appear in this DTC week's "Jumbo Flash Reports," a newsletter listing the top rates on jumbo certificates of deposit (those with at least $100,000).

The Florida-based newsletter, which lists rates in eight categories, reports that Maryland National Bank is offering among the 20 highest rates for every maturity, from money market to five years. The bank is ranked among the top five in four of those categories.

The reason for the generosity, at a time of otherwise declining bank rates, is the $110 billion in CD rollovers expected in April. Because of the pace of rollovers, "We're pricing our jumbo CDs as competitively as possible," said a Maryland National spokesman.

Pondering mutuals? Note annual expenses

If you thought you had enough to worry about when picking mutual funds, Rockville-based CDA/Weisenberger, the mutual fund analysis company, has another factor to plug into your equation: expenses.

Not the front-end "loads" that many funds charge, but the annual management expenses that are reflected in the expense ratio (that does include so-called 12b-1 fees that often are assessed in lieu of a load). CDA looked at 501 general domestic equity funds, along with 100 bond funds, and compared performance to see if the funds' expense ratios had any predictive power.

The outcome wasn't that conclusive for the equity funds: Out of four expense rankings, those with the second-highest five-year average expenses did no better than those with the lowest. And the best five-year performance came from funds with the second lowest expenses.

For bond funds, the verdict was more clear. Expenses had an inverse relationship with performance. That is, the longer-term government bond funds with the lowest expenses had the best performance, while those with high expense ratios performed the worst.

"The implications for income investors are important," says CDA/Weisenberger. "A fund with high expenses but strong performance probably earned its gains by assuming added risk -- something investors should consider carefully, since these same aggressive strategies could backfire."

Father and son again team up

It ain't exactly Cal Sr. and Cal Jr., but. . . .

For 23 years, Matthew Sigmund worked with New York's Josephthal & Co., most recently in the taxable fixed-income division. He even brought his son, Christopher, on board. But when the company ran into financial problems a year ago -- to the point of shutting down before it found a buyer -- the elder Sigmund decided to come to Baltimore, while the younger moved first to Kemper Securities and then Tulett and Tokyo Forex Inc.

Now, after a year at Baltimore's Peregoff Rottman Barron, Matthew, 50, has moved (down the hall, actually) to the $l Baltimore office of Folger Nolan Fleming Douglas Inc., a Washington-based investment banking firm.

And Christopher, 25, has come to town to help his father establish a taxable fixed-income division to complement the tax-free division that has been running here for about 4 1/2 years.

Matthew says he can see the Camden Yards stadium from his World Trade Center office. "I know they do have a few [season] tickets," he says, "and I'm trying to twist some arms."

From the executive suite:

Signet Banking Corp. of Richmond has named Michael D. Sullivan to its board of directors. Mr. Sullivan, chief executive officer of Merry-Go-Round Enterprises Inc., also has been elected to the boards of Signet's Maryland and Virginia bank subsidiaries.

Kenneth T. Berents, a media analyst with Alex. Brown Inc., has moved to Wheat, First Securities in Richmond to head its research department.

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