4th quarter was good for 3 Md. banks Mercantile, Provident First Maryland report their earnings

Banking

January 22, 1998|By Shanon D. Murray and Lorraine Mirabella | Shanon D. Murray and Lorraine Mirabella,SUN STAFF

Maryland-based banks that posted earnings yesterday -- Mercantile Bankshares Corp., Provident Bankshares Corp., and First Maryland Bancorp -- reported a successful fourth quarter, with Mercantile marking a 7.8 percent increase for that period to $32.7 million.

Led by an increase in lending, Mercantile's net income per share in the fourth quarter increased 9.5 percent to 46 cents, compared with 42 cents for the same period in 1996.

Net income for the fourth quarter of 1997 was $32.7 million, an increase over the $30.4 million for the fourth quarter of 1996.

For 1997, net income per share increased 12.8 percent to $1.85 compared with $1.64 for 1996. Net income was $132 million, an increase of 12.5 percent over the $117.4 million for 1996.

The year-end results include the acquisitions of two community banks, Newark, Md.-based Home Bank and Farmers Bank of Mardela Springs.

Mercantile's steady profitability proves it to be one of the best managed banks in the country, said Gerard S. Cassidy, senior vice president and equity analyst with Tucker Anthony Inc. in Portland, Maine.

"It has an incredibly clean balance sheet," Cassidy said. "It is a well-managed, highly profitable, conservative banking institution."

Mercantile's problem assets are well below one percent of the banking company's total loans.

Mercantile is Maryland's largest independently owned banking company.

Its shares yesterday closed at $36.625, down 37.5 cents.

First Maryland

First Maryland Bancorp -- ending a year in which it acquired a Pennsylvania banking company and sold its credit card business -- reported fourth-quarter earnings of $27.7 million yesterday.

Excluding the $12.5 million after-tax cost of merging with Dauphin Deposit Corp. in July, those results represent a 12 percent rise over 1996.

"That's pretty good performance," said Arnold Danielson, chairman of Rockville-based bank consulting firm Danielson Associates Inc. -- though he noted it's difficult to compare the fourth quarter prior to the merger to one after the merger.

For the year ended Dec. 31, First Maryland reported net income of $151.2 million -- a 14 percent increase over 1996.

Those results include a $17.4 million after-tax gain from the sale of First Maryland's Bell Atlantic Co.-branded credit card portfolio in the third quarter. Excluding that gain and merger-related costs, the company reported earnings for the year at $174.3 million, a 28 percent increase.

First Maryland, a subsidiary of Dublin-based Allied Irish Banks PLC, saw strong growth in retail lending, up 17 percent, commercial lending, up nearly 13 percent, and trust and investment advisory income, up 23 percent.

Provident Bankshares

Provident Bankshares Corp.'s fourth-quarter net income was $9 million, up 16.9 percent from the $7.7 million for the same period last year. Basic earnings per share in the last quarter of 1997 increased 14 percent, to 79 cents from 69 cents for the same period last year.

Net income for 1997, including merger-related expenses, was $25 million and basic earnings per share were $2.20. In August, Provident acquired First Citizens Financial Corp., a 15-branch banking company. The deal expanded Provident into the affluent Montgomery County market and Frederick County.

Excluding the merger charge, net income for 1997 was $33.6 million.

James R. Wallis, Provident's chief financial officer, cited brisk loan growth, fees generated by its brokerage business and customer accounts, and expense control as "the usual suspects" for the company's growth.

The stock split will be payable on Feb. 13 to stockholders of record on Feb. 2. Provident also raised the fourth quarter cash dividend 1 cent to 25 cents per share.

Provident Bankshares Corp. is the parent of Provident Bank of Maryland, the state's second largest independent bank.

Pub Date: 1/22/98

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