Study says banks could lend moreDoes the blame for the...

BANKING & FINANCE

July 15, 1993|By David Conn | David Conn,Staff Writer

Study says banks could lend more

Does the blame for the paucity of bank lending lie with banks or borrowers? Veribanc Inc., a Massachusetts research firm, says evidence points to the banks.

In a study of first-quarter data released this month, Veribanc says that of 11,473 banks the government considered "well-capitalized" (the highest category), 11,022 could boost lending by 10 percent or more and retain that rating. A 10 percent increase would amount to $778.2 billion in new loans, it says.

In Maryland, 87 of the 97 commercial banks could boost lending by 10 percent without dropping to either "adequately capitalized" or "undercapitalized." In fact, Maryland's banks could afford to increase lending by 30 percent, or $24.2 billion, Veribanc says.

As for thrifts, the Massachusetts firm found that 79 of Maryland's 88 thrifts and savings institutions were well- or adequately capitalized during the first quarter. That's 88.9 percent of the industry, just under the 92 percent of U.S. thrifts that fell into the highest capital ranks.

Five Maryland thrifts were under control of the federal Resolution Trust Corp. at the end of March, according to Veribanc. Of the $1.41 billion in deposits at those thrifts, $5.4 million was not federally insured.

Loan guarantee plan is back in business

The U.S. Small Business Administration's most popular loan guarantee program is up and running again, 11 days after President Clinton signed a $175 million emergency appropriation. The measure comes 10 weeks after the SBA's 7(a) program ran out of money, and should keep it running until the budget year ends on Sept. 30.

Since last week, 24 local loans that had been affected by the shutdown were guaranteed for more than $6.1 million, says Charles Gaston, director of the SBA's Baltimore office.

He says most of those loans had been funded by banks acting on SBA assurances that the loans would be guaranteed when Congress approved more money. He doubts that any approvable loans were rejected during the shortfall. But he adds that the SBA wouldn't know about loan applications that banks did not submit for guarantees.

Mr. Gaston says the $175 million will allow the SBA to guarantee $3.2 billion in loans. The program guaranteed $3.6 billion in loans between Oct. 1 and April 27, when it shut down.

Changing of the guard in commissioner's office

"I'm absolutely doing absolutely nothing -- and I'm not sure I'm enjoying it," laughed Henry L. Bryson, Maryland's deputy bank commissioner for most of the 32 years he worked in the commissioner's office.

Mr. Bryson, who stepped down at the end of last month at the age of 62, actually is enjoying retirement. Mr. Bryson -- "Roy" to almost everyone -- is a part-time woodworker who is looking forward to making things for his three grandchildren.

Mr. Bryson's replacement, announced last week, is David M. Porter, 45, who has been an assistant attorney general assigned to the Bank Commissioner's Office since 1989.

Before that, he was an associate at Piper & Marbury in Baltimore. A graduate of Johns Hopkins University and the University of Maryland School of Law, Mr. Porter lives in the Glyndon area of Baltimore County with his wife and two children.

One of his roles, he says, will be to "give the banking commissioner almost a full-time attorney, which is what I was originally hired to do."

Property/casualty insurance income falls

Results are in from 1992, and the property/casualty insurance industry took it on the chin.

The Insurance Services Office Inc. says the industry's net income after taxes fell 58 percent last year from a combination of three factors: slow premium growth, a rare decline in investment income and the highest level of insured catastrophic losses on record -- $23 billion.

The industry paid about $1.16 in claims for every dollar of premiums collected. That's the third-worst level since 1960, and 7 cents higher than 1991's level. The result: a $3.1 billion operating loss -- the first operating loss since 1985, says John Kollar, an ISO official.

Catastrophes, especially Hurricane Andrew, caused the most pain. Catastrophic losses last year surpassed those for the years 1989 through 1991 combined, the industry group says.

Baltimore Bancorp elects new directors

In the executive suite:

* Baltimore Bancorp recently elected two new directors: Bruce H. Hoffman, 45, executive director of the Maryland Stadium Authority; and James P. O'Conor, 63, chairman and chief executive of O'Conor, Piper & Flynn.

* Provident Bank of Maryland has hired John Feeley as vice president for commercial lending. Mr. Feeley, a University of Virginia graduate with an MBA from the University of Baltimore, most recently worked at Maryland National Bank as a vice president of the real estate industries group.

* Furash & Co., a Washington financial services consulting company, has hired James E. Lodge as a consulting associate. Mr. Lodge retired this year from a 20-year career with the American Bankers Association, most recently as executive director for communications, and executive director of the ABA Corporation for American Banking, a for-profit subsidiary of the trade group.

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