Md. banks' health improved in 4th quarter

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

The health of Maryland's banking industry improved significantly in the fourth quarter of 1992, as some of the state's largest banks put their asset problems behind them, according to IDC Financial Publishing Inc.

An asset-weighted statewide measure of the banks, based on more than a dozen financial factors, saw Maryland's rating improve to 175 in the fourth quarter of 1992, from 130 the previous quarter. On IDC's scale, 1 is the worst and 300 is the best.

In the same period, the United States average climbed to 184 from 165, according to IDC.

Since the end of last year, most Maryland banks have continued to show strong earnings as the real estate problems that plagued them have abated. Banks also have continued to benefit from the high spread between the rates they pay depositors and the yields on their loans and investments.

Regardless of an individual bank's rating, deposits are federally insured up to $100,000 per accountholder.

The biggest contributors to Maryland's improved showing were MNC Financial Inc., whose rating rose to 136 from 26 in the third quarter, and MNC's largest subsidiary, Maryland National Bank, which showed a 92 in the fourth quarter, up from 34.

MNC's $35.5 million in fourth quarter earnings helped the company turn in a $42 million profit for the year. Its nonperforming assets, at one time as high as $1.8 billion, fell to $1.1 billion in the fourth quarter.

Baltimore Bancorp likewise moved past its worst troubles. Its fourth quarter rating rose to 62 from 1 in the third quarter, while its main subsidiary, the Bank of Baltimore, climbed to 28 from 2.

Although Baltimore Bancorp turned in a lower-than-expected fourth quarter profit, it managed to increase substantially its capital-to-assets ratios.

The rating of FWB Bank of Rockville remained in single digits, but the company has shown some improvement since then, says President Steven Colliatie. The bank has shed almost all its nonperforming loans, which at the end of 1992 were 6.8 percent of total loans.

"Earnings have been flat because we have been reducing our [foreclosed real estate] portfolio, so we have been taking some losses due to the sale of those properties," said Mr. Colliatie, whose bank now has $38 million in assets. "The overall bank has improved dramatically on an operating basis" since the fourth quarter, he added.

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