First Fidelity Bancorp. lays out its plans

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

First Fidelity Bancorp. promised yesterday to bring an intensive community focus to Maryland when it completes its expected purchase of Baltimore Bancorp later this year.

"Right now we see tremendous opportunities and we feel we have terrific advantages in trying to be the most important bank in any community in which we operate," said Wolfgang Schoellkopf, vice chairman and chief financial officer of the Lawrenceville, N.J., company.

In March, First Fidelity announced plans to buy Baltimore Bancorp, parent of the Bank of Baltimore, for $346 million, or $20.75 a share, in cash. Once the acquisition is complete, probably by December, First Fidelity will become the fifth-largest banking company in Maryland.

The company is already the 25th-largest in the country, with $34 billion in assets and operations in six states, from Maryland to Connecticut. But as Mr. Schoellkopf told yesterday's lunchtime audience of the Baltimore Security Analysts Society, First Fidelity is the 13th-largest banking company in terms of branches.

This focus on retail locations has allowed the company to profit without having to compete for large corporate customers, which has been a diminishing market for commercial banks, Mr. Schoellkopf maintained. The company has instead shifted its loan portfolio in recent years toward consumer loans, which now account for 53 percent of the bank's loans, up from 49 percent a year ago, he said.

Despite First Fidelity's passion for branching, some Bank of Baltimore branches are bound to be closed during the consolidation period after the merger, and some employees will be laid off. In March, the company said about one-quarter of Baltimore Bancorp's 1,125 jobs would be eliminated.

"We have never [cut] less than 40 percent of the expenses of the acquired bank" after the company's recent acquisitions, Mr. Schoellkopf said yesterday. That rule will hold for Baltimore Bancorp, he added.

First Fidelity's tight rein on expenses has allowed it to become the sixth-most efficient banking company in the country, measured by noninterest expenses as a percentage of revenues, despite its reliance on branches.

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