Changing faces of banking Newcomers: Four out-of-town banks have emerged as a dominant force in the Baltimore market. Opinions differ as to whether that will be good for the area.

August 04, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Their headquarters are in Charlotte, N.C., and Richmond, Va., yet they control at least 47 percent of greater Baltimore's estimated $22 billion in banking deposits.

Their signs dot street corners and are tucked into strip malls blaring their names: NationsBank, Signet, First Union and Crestar.

The four out-of-town banks are emerging as a dominant force in Baltimore's banking market, and they expect to thrive, making their parent companies that much more profitable.

It's a sea change from just over a decade ago, when a handful of local banks ruled Baltimore.

Alan P. Hoblitzell headed Maryland National Bank; H. Grant Hathaway ran Equitable Bank; and Stevenson Peck presided over Union Trust Co. of Maryland.

The only survivor is H. Furlong Baldwin, chairman of Mercantile Bankshares Corp.

The bankers were woven into the fabric of the community, invested millions in cultural and charitable causes and adopted economic projects that they thought would make Baltimore a better place to live.

Now, with only two large independent banks based in Baltimore, the questions arise:

Does it matter where a bank makes its headquarters? Does it matter where strategy is developed, marketing plans are plotted or where the profits go?

Those who have been in Baltimore a long time say it does -- a lot -- because out-of-town banks aren't as committed to seeing Baltimore thrive as local banks are.

"That is just absolutely nonsense," said William C. Harris, chairman of Crestar Financial Corp.'s greater Washington and Maryland regions. "The reason they are paying me the big bucks is to be a part of the community and make the right decisions.

"I don't hide behind the fact that I do have a staff of people in Richmond who work for me."

R. Eugene Taylor, president of NationsBank's mid-Atlantic banking group, which is based in Baltimore, says the country's fifth-largest bank has a "huge stake in the success of Baltimore."

"We have a huge amount of capital invested in this market. As the largest bank in the market, we have a responsibility," Taylor said.

Nevertheless, NationsBank angered Baltimoreans several years ago when its chairman, Hugh McColl, used his influence and financial power to bring professional football to Charlotte -- NationsBank's home -- instead of Baltimore, which was also vying for a team.

"It think it is unfortunate that the banking system in the state is so much in the hands of out-of-state banks," said Carl W. Stearn, chairman and chief executive of Provident Bankshares Corp.

"A bank in another state, their focus is going to be in their back yard."

Baldwin, who has run Mercantile for two decades, said locally owned banks have a stake in their communities unlike out-of-town institutions.

"When you have local ownership and local leadership, there is a vested interest," said Baldwin, who grew up in Baltimore and has been with the bank since 1956.

"It means that that institution must survive in that community and must be a working partner in that community. That frequently doesn't happen when it is just a branch of a broader universe.

"Many in Baltimore are concerned -- where is the leadership going to come from?"

Peck, former head of Union Trust, said that in the 1970s and 1980s, there was a network of "good old boys" who lobbied politicians.

"It was very close-knit," he said.

But the newcomers have been active. NationsBank's executives say they have nearly doubled what MNC, the company it took over in 1993, was giving annually to the community. It helped raise about $220,000 in a night for the Maryland Science Center.

"The most successful one [fund-raising event] they ever had, I might add," Taylor said.

Signet, Crestar and First Union also contribute and decide locally how the money is spent.

But the relationship between Baltimore and the newcomers is bittersweet.

Takeovers have meant layoffs, branch closings, rising fees and borrowers who have been told to take their banking elsewhere.

Alex Doyle, president of Micro Machining Inc., a precision machining company in Baltimore, said that when his local bank was taken over by a large regional, the new bankers told him they didn't want his business.

"We have found them very difficult to deal with, very inflexible," he said. "They are not very interested in smaller accounts."

Others think the newcomers have been good for Baltimore by offering innovative products and services such as computer banking, mutual funds and loans through the mail.

"It has brought some greater convenience to the consumer in terms of where there are branches and ATMs," said Alex C. Hart, a banking analyst with Ferris, Baker Watts Inc.

"Overall, with the exception of the job losses, I would have to say yes, it's been good for Baltimore."

Will the newcomers be more than flag wavers for the corporate office? Will they become players who shape the city's future?

"When I got here, the big flap was that there are no leaders left," said Kenneth H. Trout, who became president of Signet's Maryland region in 1991. "It is a much broader base of support taking place, and I think that is healthy."

William Couper, head of NationsBank's Baltimore-area operations, said "The leadership is starting to emerge now. I think that the marketplace is starting to recognize us as leaders collectively."

Pub Date: 8/04/96

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