Hale seeks merger with bank in Arundel First Mariner chief to meet officials of Glen Burnie Bancorp

January 29, 1998|By Kevin L. McQuaid | Kevin L. McQuaid,SUN STAFF

The head of First Mariner Bancorp said yesterday that he hopes the bank's 19.5 percent stake in Glen Burnie Bancorp will serve as a launching point to merge the two financial institutions, despite anticipated resistance from the Anne Arundel County company.

First Mariner Chairman and Chief Executive Edwin F. Hale Sr. also said he hopes to meet with Glen Burnie Bancorp executives in the coming weeks to determine the status of the troubled bank, which has been rocked by a federal investigation of its executives and improper loans that have cost it $6 million.

"We ultimately would like to merge the two organizations, and we would like to take control," Hale said.

First Mariner has $257 million in assets; Glen Burnie Bancorp has $222 million.

Hale's comments came in the wake of a First Mariner filing yesterday with the U.S. Securities and Exchange Commission outlining its $4.5 million purchase Tuesday of more than 207,000 shares of stock in Glen Burnie Bancorp. In all, the thinly traded Anne Arundel banking company has roughly 1 million shares outstanding.

With nearly 20 percent of Glen Burnie Bancorp's outstanding shares, First Mariner becomes its largest stakeholder.

Unlike similar documents filed in error in November relating to the stock purchase -- which plainly said it hoped to take control of Glen Burnie Bancorp -- yesterday's SEC filing stopped short of revealing specific intentions.

Instead, First Mariner said the shares were purchased as an "investment."

The documents filed yesterday do leave First Mariner room to change course, though.

"[First Mariner Bancorp] reserves the right to change its intentions regarding its investment in the company's common stock and to take actions, presently undetermined, to the extent permitted by applicable bank regulatory and other legal requirements," the filing stated.

The SEC documents also stated that First Mariner "may in the future acquire additional shares of the company's common stock."

An analyst who tracks First Mariner praised the acquisition, and agreed that the 19.5 percent interest should serve as a platform for more stock purchases.

"It's a good move for them," said Collyn Bement, a Ferris Baker Watts Inc. banking analyst. "They've been thinking for a while about acquisitions, and I've been somewhat leery, given all the growth they've had, but Ed Hale is eager to grow the bank, and I think this is a logical way to do it."

But First Mariner will face opposition -- both legal and emotional -- to any attempt to wrest complete control of the Glen Burnie bank.

State law prohibits First Mariner, without majority ownership, from folding Glen Burnie Bancorp into its operations until 2003. Hale said that despite the five-year time frame, "there may be remedies" that would allow First Mariner to proceed, though he declined to elaborate.

Perhaps more important, Glen Burnie Bancorp executives have said repeatedly that they want to remain independent.

"Twenty percent does not give them control of the bank," said F. William Kuethe, the bank's president.

Still, Hale -- who took control of Baltimore Bancorp through a 1991 proxy fight -- hopes to meet with Glen Burnie Bancorp executives and discuss details of the purchase. He acknowledged, however, that "I can't imagine that they'll be in a great mood to meet with me."

He declined to say whether he will seek one or more seats on Glen Burnie Bancorp's board.

"I've not heard from Mr. Hale, but we'd be happy to meet and talk with him," Kuethe said.

Pub Date: 1/29/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.