Brown trust unit gets fresh capital

January 05, 1995|By David Conn | David Conn,Sun Staff Writer

A photo caption accompanying an article about Brown Advisory & Trust Co. in yesterday's Business section misidentified Truman T. Semans, vice chairman of Brown Advisory & Trust.

The Sun regrets the errors.

The Brown Advisory & Trust Co. got a vote of confidence from its parent companies in the form of an $11 million infusion of capital, the company announced yesterday.

The investment from Alex. Brown Inc. and the Philadelphia-based Glenmede Trust Co. brings to $12 million the capital at Brown Advisory, a 2-year-old joint venture. "We feel that this infusion of capital will be a signal to the community that we are going to another level," said David L. Hopkins Jr., chairman of the trust company, which advises wealthy individuals and families on financial and estate planning issues and manages their money.

FOR THE RECORD - CORRECTION

The company also announced that Richard K. White Jr., a partner at the law firm Piper & Marbury, will join it as a senior vice president. A business and estate planning lawyer, Mr. White will serve as a tax and estate adviser to existing and new clients.

Established in November 1992, Brown Advisory & Trust opened its doors in April 1993. It now has about $400 million under management. In Maryland, it is one of five nondepository trust companies, or those unaffiliated with a commercial bank. With the new investment, Brown will have roughly twice the capital of its next biggest competitor, T. Rowe Price Trust Co.

Most of the $11 million came from Alex. Brown, although the company would not say exactly how much.

Unlike bank trust departments, the growth of nondepository trust companies is not legally constrained by their level of capital, which is the cushion of money that financial institutions keep reserved to protect stockholders against possible losses, or collapse.

"As a nondepository trust company, we must have our own capital, whereas at a trust department of a bank, there's no requirement that the capital be segregated" from that of the parent company, said Executive Vice President Michael D. Hankin, also a former Piper & Marbury partner.

Still, the extra money will help the company expand by attracting clients that wouldn't have considered it before, he said.

"The custom -- somewhat unique to Maryland -- for a trust company to serve as corporate trustee, it must have a minimum level of capital and surplus," Mr. Hankin said.

Mr. White, 57, will join Brown Advisory & Trust on Feb. 1. He was a partner at Miles & Stockbridge, where he established and ran its Easton office, before joining Piper in 1989.

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