First Fidelity cuts Bank of Baltimore staff jobs by 50%

January 18, 1995|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer Bloomberg Business News contributed to this article.

First Fidelity Bancorp. announced today that it will cut the staff of its newly acquired Bank of Baltimore unit by half as part of a larger drive to cut costs throughout the $36 billion bank holding company, which is based in Newark, N.J.

The cuts are much deeper than First Fidelity had said it would make when its deal to acquire Baltimore Bancorp, the Bank of Baltimore's former parent company, was announced last March. At a press conference the day the deal was disclosed, First Fidelity chief financial officer Wolfgang Schoellkopf said he expected to reduce the Maryland staff by about 25 percent.

He said then that most of the cuts in the 1,125 Maryland jobs would be made through attrition. Today, however, the company said it had set aside $5 million to cover expenses from more forceful measures to cut staff in Maryland and elsewhere.

First Fidelity spokesman Paul Levine said no Maryland branches would be closed. He said about 50 Maryland employees were told last week they were being terminated, and that most state staff cuts will come after back-office and computer operations are merged with First Fidelity's systems in March or April.

The announcement accompanied a year-end earnings report that the company's chairman termed only "satisfactory" in a prepared statement. Chairman Anthony Terracciano said in the statement that the bank is moving to cut its expenses now because it expects higher interest rates to cut profits.

Also, Mr. Terracciano said, the bank sees a chance that higher rates will lead to "a moderate asset quality cycle," banker's lingo for an increase in the number of loans that are repaid late or not at all.

The announcement of the Maryland cuts accompanies First Fidelity's disclosure that it will cut 1,000 employees companywide this year, and that 300 of the cuts were actually made last week. The company will also be reducing its number of branch banks to 670 from 710.

The company said its goal is to "offset virtually all of the former Bank of Baltimore's expense base."

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