The price of a banking victory Bank of Glen Burnie: At some cost, community institution finally rebuffs takeover by Hale's First Mariner.

November 20, 1998

OCCASIONALLY, the little guy wins. After a year of resisting a takeover from First Mariner Bancorp, Glen Burnie Bancorp was able to chase off the larger banking company and its principal shareholder, Edwin F. Hale Sr.

The cost of Glen Burnie's independence was considerable, however. First Mariner received $5.6 million, allowing it to reap a $1 million profit on the stake it bought a year ago. The payment reduced Glen Burnie's capital by 27 percent, substantial for any financial institution. Glen Burnie will also pay First Mariner $675,000 over the next five years.

Ironically, Mr. Hale's decision came after the Federal Reserve allowed First Mariner Bancorp to increase its ownership in Glen Burnie to 19.5 percent. The Baltimore shipping executive wanted to merge the Anne Arundel company into his fast-growing banking concern, which has $460 million in assets. The Glen Burnie fight was an unusual frame of reference for Mr. Hale, who has cast his own institution as the hometown underdog battling the conglomerates.

Despite the cost, Glen Burnie has a right to claim victory. In this era of consolidations, most takeovers of community banks succeed. The prices are hard to resist.

In addition, most small bank managements find it difficult to compete against larger banks, with their economies of scale, vast promotional budgets and array of financial services. Nonetheless, community banks continue to survive because of loyal clientele, a clear notion of their market and a strong capital -- base.

Glen Burnie Bank was founded in 1949 by local business people who needed a financial institution to handle their business and personal banking needs. Five decades later, many of these business people or their children are still Glen Burnie residents. As long as the local bank continues to serve them, perhaps it can survive another 50 years.

Pub Date: 11/20/98

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