Baldwin isn't retiring just yet He agrees to stay on as Mercantile CEO

September 11, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

H. Furlong Baldwin, who had been expected to retire in five months as chairman and chief executive officer of Mercantile Bankshares Corp., will remain on the job indefinitely, the company said yesterday.

Baldwin, who turns 65 Jan. 15, was asked by Mercantile's board of directors at a regularly scheduled meeting yesterday to continue to run the state's largest independently owned banking company even though by tradition he would be retiring in February.

"They just asked if I would stay," Baldwin said. "I have agreed to it, and I look forward to doing it. We haven't really put a date on it."

Edward K. Dunn Jr., who many had thought was about to succeed Baldwin, will remain as Mercantile's president, the company said.

"We asked them to stay on and they both agreed," said Donald J. Shepard, chairman and chief executive of Aegon USA Inc., and a Mercantile director. "The bottom line is we have a good winning team with Baldwin and Dunn. As a team they work together so well we just wanted them to continue in their respective roles."

Mercantile also elected to the board three new directors: William R. Brody, president of the Johns Hopkins University; Freeman H. Hrabowski III, president of the University of Maryland-Baltimore County; and Robert A. Kinsley, chairman and chief executive of Kinsley Construction Inc.

The board voted to increase its quarterly cash dividend to 26 cents a share, up 13 percent from the prior quarter.

Some analysts were surprised by the board's decision to retain Baldwin because he has been with the company 40 years and reached retirement age.

But Vernon C. Plack, a banking analyst with Scott & Stringfellow Inc., said the decision isn't that surprising because of the extent to which Mercantile has prospered under Baldwin.

"He has provided outstanding leadership for Mercantile for quite a number of years so I assume the transition to Eddie, they are not ready for," Plack said. "He [Baldwin] may have figured, 'What's my rush? Why retire for the sake of retirement when the bank has been a decent performer? Why not continue?' "

Janet McCabe, an analyst with Legg Mason Inc., said Baldwin has been a "very good manager and builder of the company." She said, however, that the decision does raise some questions.

"The fact that they aren't able to name a successor, or are unwilling to name a successor, causes one to wonder whether they are planning to have an institution for a successor to run," she said.

But Baldwin said he is not staying around just to find a buyer for Mercantile.

"The bank is sound; it is well capitalized; it is profitable; and we intend to stay independent," he said. "We remain strongly convinced that our market must have strong independent institutions who have a direct responsibility to the community beyond just earnings per share."

Baldwin joined Mercantile in 1956, and in 1970 he was named president of the bank, Mercantile-Safe Deposit & Trust Co., and the holding company, Mercantile Bankshares Corp. Six years later, he became chief executive of the parent company, and in 1984 he was named chairman.

Under his leadership, Mercantile has grown slowly and steadily by focusing on commercial and mortgage loans. The strategy for the $10.4 billion-asset banking company has paid off.

U.S. Banker magazine recently ranked Mercantile as the fourth best performing bank in the nation out of the 100 largest institutions, and No. 1 in capital strength.

Ryan Beck & Co., an Orange, N.J.-based brokerage firm, ranked Mercantile No. 1 of 20 regional banks based on its return on assets of 1.84 percent as of June 30.

"Things are going well for us," Baldwin said.

Pub Date: 9/11/96

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