First National Bank is object of tax lawsuitThe name...

BANKING & FINANCE

September 09, 1993|By David Conn | David Conn,Staff Writer

First National Bank is object of tax lawsuit

The name Elleck Seymour may not ring a bell for you, but it tolled this month for First National Bank of Maryland.

Mr. Seymour and his Richmond, Va.-based Resort Broadcasters Inc. in the mid-1980s were rising stars in the East Coast radio firmament, having owned Baltimore's WCBM-AM, among many others.

But Mr. Seymour's star burned out fast, and most, if not all, of his companies declared bankruptcy in 1988. Among other creditors that he failed to pay was the Internal Revenue Service, which wants its payroll taxes.

Last week, the Justice Department, seeking about $360,000 of those taxes, filed suit against First National in U.S. District Court in Baltimore.

The suit contends that First National owes the back taxes because it lent money to Mr. Seymour's companies to meet the payroll, and the bank knew, or should have known, that Resort Broadcasters could not or would not pay its taxes.

How can the government prove this? The Justice Department won't say, and First National is likewise mum on how it plans to handle the complaint.

Slated for Sugar Bowl: a new USF&G logo

Stay tuned, sports -- and insurance -- fans. In addition to the usual football festivities in New Orleans, the USF&G Sugar Bowl will feature an unveiling: a new corporate logo from its Baltimore-based corporate sponsor.

"USF&G is a completely repositioned company, and we have a new corporate culture," said a spokeswoman, Kerrie Burch-DeLuca. That calls for a new look to replace the seldom-used ship's wheel with eagle. The Sugar Bowl, she said, "provides a good opportunity to unveil it."

The company's executive committee approved the logo about three weeks ago, and the board of directors did so a week or so later, said Eugene Grossman, a partner in the New York-based image consulting firm Anspach Grossman Portugal Inc., which USF&G hired about seven months ago to design the new look.

"As you probably know, Norm Blake is really trying to turn that company around and resurrect it and put it on the map," Mr. Grossman said, referring to the company chairman.

Rather than go with the literal symbols favored by others in the industry -- a rock, an umbrella, a stag -- Anspach Grossman came up with something a bit more abstract. The new logo design looks like an open door with rays of light emanating from it.

"The values that we wanted to reflect were customer service, strong teamwork between the company, its agents and the customers," Mr. Grossman said. "They want to suggest that this is a company that is open to meet your needs."

The image, Mr. Grossman said, should convey the idea "that we're shedding light on the secrecy of the insurance industry."

Of course, the actual design is secret until Jan. 1.

Zurich sees wisdom in 2 autonomous units

Back in 1989, after Zurich Insurance Group bought Maryland Casualty Co., Michael G. Repoli became president and CEO of the newly named Maryland Insurance Group. One of the first things he did was set up two distinct divisions -- commercial lines and personal lines -- and he brought on board Barry J. Gilway and John A. Karanik to run those divisions.

So it should be some comfort to Mr. Repoli that as his job is phased out by the parent company, his proteges will end up on top of the Maryland operations.

Zurich announced this month that the two divisions within "The Maryland," as they call it in-house, are being formalized into autonomous business units.

The main effect: to separate the administrative, support and research staffs that have served both divisions, says Sarah Adams, a spokeswoman. There will be no layoffs, she adds.

Mr. Gilway, originally head of the commercial unit but later put in charge only of the construction "sub-unit," has been promoted to CEO of the commercial insurance operation. Mr. Karanik is CEO of the personal insurance operation.

Both executives will report to William Bolinder, the head of Zurich's U.S. operations, in Schaumburg, Ill.

Mr. Repoli, meanwhile, who is active in the Greater Baltimore Committee, the United Way and the Boy Scouts, is "considering another position within the Zurich," Ms. Adams said. "He has not stated whether he will take that position."

Alex. Brown rewards 'certain employees'

Other notes:

* On Tuesday, Alex. Brown Inc. announced that it had sold 544,000 shares of stock and $25 million of debt (convertible to 1.056 million shares) to certain employees as part of its incentive plan. The sale and conversion price of the stock and debt were $23.75 a share, which was the market price when the shares were first awarded.

As of yesterday, the stock had risen to $27.125 a share, which means that the "certain employees" had a cool two-day paper gain of $5.4 million.

* A bank that reports a 35 percent increase in earnings, including a 3.3 percent gain in assets and a 15 percent increase in capital, is on pretty solid ground.

That's what happened to Maryland's state-chartered banking industry. On an aggregate basis, the 73 banks and four trust companies with state charters earned $119 million in the quarter that ended June 30, up from $88 million earned a year ago, according to the Maryland bank commissioner.

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