Bramble to revamp First Maryland

June 21, 1994|By David Conn | David Conn,Sun Staff Writer

Frank P. Bramble Sr., the newly hired chief executive officer of First Maryland Bancorp, is prepared to launch a series of changes aimed at cutting costs, improving profitability and preparing the quiet banking company for an aggressive expansion campaign, according to executives inside and close to First Maryland.

Mr. Bramble, who helped pull MNC Financial Inc. from the brink of a federal takeover before its acquisition by NationsBank, is likely to replace some of the executive staff at First Maryland with his former colleagues at MNC.

The company, owned by the Allied Irish Group PLC in Dublin, Ireland, is the parent of the First National Bank of Maryland, the state's second largest banking company.

In meetings with First Maryland employees, Mr. Bramble has talked of the need to revamp operations at the company. In January, before the resignation of Chief Executive Officer Charles W. Cole Jr., the company hired consultants Deloitte & Touche to suggest ways to improve efficiency in practically all areas of the company.

Mr. Bramble did not return several calls to his office last week and yesterday.

"We felt that our efficiency, while adequate, was not at the level we would hope it would be, and we wanted to sharpen things up a little bit," Ronald C. McGuirk, chief of staff and head of corporate planning, explained in an interview last month.

After a decade of solid and steadily rising earnings, the company this year reported a decline in profits for the first quarter. Earnings fell to $26.1 million in the first three months of the year, compared with $28.5 million a year earlier, despite a $3.5 million drop in the provision for loan losses, which is subtracted from profits.

The company blamed the earnings decline on a one-time $5 million increase in employee retirement expenses.

"Given the interest rate environment and the lack of loan demand, it's highly questionable and maybe even unlikely that First National Bank in particular, and banks in general, are going to meet their 1994 budget goals," said Stuart Greenberg, a banking consultant in Baltimore.

As for Mr. Bramble, "I think he's going to bring in people he's worked with in the past, people he has a degree of comfort with," Mr. Greenberg said. "And that's perfectly understandable, and not a reflection on the current staff."

Among the former MNC executives reported to be under consideration is Walter R. Fatzinger Jr., who resigned earlier this year from the leadership of both Security Trust Co. N.A., and American Security Bank N.A., both Washington-based subsidiaries of MNC.

Mr. Fatzinger was on vacation in the Caribbean and could not be reached for comment.

Also, Michael C. Middleton, who was an executive vice president at MNC, said he will be retained as a consultant to First Maryland, probably toward the end of the summer.

In the recent employee meetings, Mr. Bramble told his staff that expenses are higher than they should be for a bank with $10 billion in assets, according to several employees who attended the meetings.

At the same time, he said the company will embark on an expansion drive -- both internally and possibly through acquisitions -- that will bring it to "the high teens" in billions of dollars in assets, according to the employees.

First Maryland has the second biggest share of the Baltimore market, and a significant operation in York, Pa., through the purchase of the 22-branch York Bank & Trust in 1991. But it has very little presence south of Baltimore.

One obvious solution for that is Riggs National Corp., parent of Riggs National Bank in Washington.

Riggs, which has $4.8 billion in assets, would give First Maryland a strong retail presence in Washington and Northern Virginia.

The company lost $94.2 million last year, but eked out a small profit in the fourth quarter, and in the first quarter of this year.

The company has been operating under heightened regulatory supervision for more than a year. But it has increased its capital to above regulatory requirements.

The resignation last month of Riggs' president and chief executive, Paul Homan, could indicate that Chairman Joe Albritton has decided not to sell the company, said Arnold G. Danielson, a Rockville-based banking consultant. Mr. Albritton has voting power over about a third of the company's stock.

But "I think his franchise is becoming so valuable, and with all the flak he's catching [about selling the bank], he may be getting tired of holding out," he said.

Another takeover possibility is Signet Banking Corp., which has signaled that it may be willing to spin off its banking operations from its lucrative credit card business.

Mr. Danielson said he expects to work with Mr. Bramble in examining First Maryland's expansion opportunities, most likely in the Washington area where Mr. Danielson has more expertise.

"Frank is not one to shake the boat," said Mr. Danielson, who once was a partner of Mr. Bramble's in the consulting business. On the other hand, he said, "Frank didn't come in here to sit still."

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