Shift to state charter is sought for First National Parent says regulation would be more consistent


November 26, 1998|By Mark Guidera | Mark Guidera,SUN STAFF

State regulators confirmed yesterday that First Maryland Bancorp., the parent of First National Bank of Maryland, is seeking to switch from federally chartered to state chartered. The move would make First National the largest state-chartered bank in Maryland.

First Maryland's assets -- $17.3 billion -- are almost as large as the combined assets of the 66 banks currently holding state charters, said H. Robert Hergenroeder Jr., Maryland's commissioner of financial regulation.

The Baltimore-based financial institution has 300 banking offices in Maryland, Pennsylvania, Washington and Northern Virginia, and $11.7 billion in deposits.

Hergenroeder said the bank plans to consolidate its four affiliate banks under its Maryland charter. Banks are required to be chartered either nationally by the federal government or by the states where they have operations.

"For the customers, this will be transparent," said Hergenroeder. "It will be a seamless process that shouldn't affect their day-to-day business with the bank."

Reese Nank, a spokeswoman for First Maryland, said the bank sees several advantages in converting to a state charter.

For one, she said, the bank expects to shed some of the regulatory burdens of federally chartered status.

Under a state charter, the bank's records would be inspected by state banking regulators and Federal Deposit Insurance Corp. examiners. Under its federal charter, it is overseen by those regulators, as well as Pennsylvania bank examiners, inspectors from the U.S. Office of the Comptroller of the Currency and others.

"We want a consistent and consolidated system of regulation," Nank said.

The bank also wants to switch its charter status as part of its plan to bring all of its banks under a single name and corporate umbrella, said Nank. In addition to owning First National, First Maryland owns Dauphin Deposit Bank & Trust Co., the York Bank & Trust Co. and First Omni Bank.

Nank said First Maryland also expects to save about $600,000 annually in regulatory fees by converting.

Hergenroeder, whom Gov. Parris N. Glendening announced this week will be replaced by outgoing state Del. Mary Louise Preis, said the state expects to complete its review of First Maryland's application before the end of the year.

If a state charter is approved, it will generate about $1.4 million in fees to the state, Hergenroeder said. Maryland banking regulators would examine the institution's records every other year. Federal examiners would also continue to monitor the bank's records.

First Maryland is a key subsidiary of Dublin-based Allied Irish Banks PLC.

Pub Date: 11/26/98

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