Hale as banker gets standing ovation

April 28, 1994|By David Conn | David Conn,Sun Staff Writer

If every dog has his day, yesterday belonged to Edwin F. Hale Sr., the Baltimore Bancorp chairman whose dogged determination helped rescue one of Maryland's largest banks from a federal takeover.

The 176-year-old company, parent of the Bank of Baltimore, held its last full annual stockholders meeting. A truncated meeting will be held this summer for shareholders to vote on Baltimore Bancorp's proposed $346 million sale to First Fidelity Bancorp., of Lawrenceville, N.J.

But yesterday was Mr. Hale's chance to take his final bows for a job that many in Baltimore's corporate establishment felt he couldn't do.

Mr. Hale has expressed an underdog's pride many times in being able to show that his gritty Dundalk upbringing wasn't a barrier to running a bank with the best of them.

John R. Hershey Jr., a Hagerstown stockbroker and chairman of the company's shareholders advisory committee, put it succinctly: "Ed Hale's accomplished everything he said he would."

Baltimore Bancorp also reported its ninth consecutive profitable quarter yesterday, and revealed that its president, Alan M. Leberknight, would leave the company after the expected sale to First Fidelity.

Given the adulation management received from the shareholders including a standing ovation for Mr. Hale -- that sale, which is due to close by Oct. 31, is already a foregone conclusion.

One woman strode to the microphone and praised Mr. Hale's "outstanding public service, not just extending to the Bank of Baltimore and its stockholders, but to the nation." She may have been referring to the cost that all taxpayers would have borne if the company had fallen to the regulators.

This reversal in stockholder sentiment from just two years ago was because of the turnaround engineered by Mr. Hale and his management team. They took charge of the institution after a bruising shareholder proxy fight in the summer of 1991. They found the company saddled with an enormous volume of problem loans, and a set of operating restrictions from state and federal regulators. The previous management had kept both of those problems secret, Mr. Hale said.

At yesterday's gathering at the Omni Inner Harbor Hotel, he recounted some of the high and low points of the past three years, and even managed to get in a last dig at his predecessors.

When they first arrived, the new management team had no idea how bad the problems were, recalled Mr. Hale, who until 1991 was a trucking and shipping executive and not a banker. "The [Federal Deposit Insurance Corp.] came in and told me, 'You're a trucker. Get out of here, you don't know what you're doing.' "

But he stuck it out, even as the company turned in a $95 million fourth-quarter loss in 1991, and a $126 million loss for the year. After Mr. Hale took over, and the problems were fully revealed, Baltimore Bancorp's stock fell to $4.25 a share in December 1991 before gradually rebounding. Prior to the company's announcement last month that First Fidelity had offered $20.75 a share, the stock had risen to about $16. It closed unchanged Tuesday at $19.25.

The financial health of Baltimore Bancorp, which has $2.2 billion in assets, is still below par compared with other commercial banks.

In the first quarter of this year the company earned $2.5 million, or 15 cents a share, it announced yesterday. It was the ninth consecutive profitable quarter, and apparently helped persuade state and federal regulators to take the long-awaited step of terminating their so-called "cease and desist order" with Baltimore Bancorp.

But the company's first-quarter profits were only half as large as a year ago, despite a sharp reduction this quarter in the amount set aside to cover problem loans, which is deducted from earnings. The drop in earnings was partly because of an extraordinary amount of securities gains in the first quarter of 1991.

Mr. Hale told shareholders he plans to serve on First Fidelity's parent board of directors, and will remain for a while as a director and possibly chairman of its Baltimore subsidiary.

But he added that along with his trucking and barge interests, he expects to end up leading another local

banking company after the sale to First Fidelity. He didn't say which one.

Baltimore Bancorp

*Ticker .. .. .. Yesterday's Symbol .. .. .. Cls. .. .. Chg.

BBB .. .. .. .. 19 1/4 .. NA*

Period ended

3/31/94 . .. .. .. 1st qtr. .. .. Year ago .. .. Chg.

Net income . .. ... $2,510 ... .. . $4,880 .. ..-48.6%

Primary EPS ... .. . $0.15 ... .. .. $0.35 .. ..-57.1%

Annualized return

on avg. assets ... . 0.47% ... .. .. 0.83% .. .. .. --

Add. to allowance

for loan losses ... $2,500 ... .. . $6,000 .. .. -58.3%

Balances as of .. .. .. .. .. .. 3/31/94 .. .. .. 3/31/93

Assets . .. .. $2,190,712 .. .. $2,353,297 .. .. .-6.9%

Deposits .. .. $1,927,904 .. .. $2,156,351 .. ...-10.6%

Loans outst. . $1,255,601 .. .. $1,459,342 .. ...-14.0%

Loan loss

reserve .. .. ... $33,745 .. .. .. $38,684 .. ...-12.8%

Figures in thousands (except per share data.)

* U.S. stock markets were closed yesterday

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