Mercantile raises its dividend

September 14, 1994|By David Conn | David Conn,Sun Staff Writer

Mercantile Bankshares Corp. announced the company's largest-ever dividend increase yesterday, a 17.6 percent boost that will raise the quarterly payout to 20 cents a share from 17 cents.

The company also hired a new executive vice president, Jay M. Wilson, and promoted three officers to that rank in its primary subsidiary, Mercantile-Safe Deposit and Trust Co.

Baltimore-based Mercantile said it would pay the new dividend Sept. 30 to shareholders of record as of Sept. 23. The company last raised its dividend a year ago, when it also declared a three-for-two stock split. Adjusting for that split, the dividend was raised to 17 cents from 15 cents.

Mercantile's stock gained 12.5 cents yesterday, to close at a 52-week high of $22.625 a share.

With 45.9 million shares outstanding, the new dividend rate increased the company's quarterly payments to about $9.2 million. The increase made 1994 the 18th consecutive year in which the annual dividend paid on common stock exceeded the prior year's level, the company said.

"We think it's a sign of confidence in our future earnings power," said investor relations officer David Borowy. "It's a sign of our great strength in capital."

The company's earnings increased 4 percent in the first half of the year, to $42.6 million, or 93 cents a share, from $40.9 million, or 89 cents a share in the first half of 1993. It was roughly half the average increase it has reported in recent quarters.

Mr. Wilson, who will have general management duties at Mercantile, the company said, has been on the company's board since 1989. As part of his hiring, however, he will relinquish his board seat. The company has not elected a replacement.

Mr. Wilson, 47, retired from his family's business, the Steeltin Can Co., in January after selling it to U.S. Can Co. He became president and chief executive of Baltimore-based Steeltin in 1978, the fourth generation of his family to run the company.

Mercantile-Safe Deposit and Trust promoted three others to the position of executive vice president yesterday:

* Hugh W. Mohler had been a senior vice president of the bank, and remains an executive vice president of the parent company. Before that, he was president and chief executive of Peninsula Bank, a Mercantile subsidiary in Somerset County.

* J. Marshall Reid, who had been senior vice president for commercial lending. Mr. Reid came from Maryland National Bank in 1993.

* Donald J. Trufant, who had been senior vice president for secured lending. He created the secured lending group at Mercantile-Safe Deposit in 1976.

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