First Mariner growing fast, and still eating spinach

Hale tells stockholders bank is wary against pitfalls of imprudence

2 cash dividend declared

Banking

May 05, 1999|By Bill Atkinson | Bill Atkinson,SUN STAFF

First Mariner Bancorp, which is on a blistering growth pace, plans to keep the throttle wide open, the company's top executive said yesterday.

"We are committed to growing the bank," Edwin F. Hale Sr., chairman and chief executive officer of Baltimore-based First Mariner, told shareholders at the company's annual meeting yesterday at the Sparrows Point Country Club.

"We will be the bank that people think about."

First Mariner turns 4 years old this month, and it already has $537.7 million in assets.

Hale envisions a company growing to about $2 billion in assets in the next 2 1/2 years, the growth fueled in part by acquisitions, he said after the annual meeting.

He said there are no deals in the works now, partly because First Mariner's stock price has slipped and its purchasing power is weak.

"We will wait" to make an acquisition, Hale said.

First Mariner declared a 2-cent cash dividend per share payable May 31 to shareholders of record May 17. The dividend, which will cost First Mariner $250,000 annually, is the company's first since it was formed.

First Mariner's growth has been rapid, but Hale assured shareholders that loans are not being booked for the sake of adding size. He said the company rejects about two-thirds of all loan applications.

"We don't want to get into the same trap that other banks have gotten into in the past," Hale said.

Since Dec. 31, 1994, First Mariner's loans have shot up from $19.8 million to $240 million as of Dec. 31, 1998; deposits have soared from $20.9 million to $262.3 million; and stockholders' equity, or the company's capital cushion, has risen from $2 million to $28.5 million.

The company has grown to 400 employees and 24 branches, and plans to open another four banks between now and next year's first quarter.

Its mortgage banking subsidiary, First Mariner Mortgage Co., has grown from $80 million in originations in 1997 to $239 million.

Hale's strategy does meet with skepticism in some quarters.

"It is not a traditional approach," said Arnold Danielson, chairman of Danielson Associates Inc., a Rockville-based bank consulting firm. "It has produced rapid growth. Only the future will tell if it will be matched by equivalent earnings."

First Mariner President Joseph A. Cicero said the company might raise additional capital to finance the growth.

"We are looking at our options right now," he said.

Yesterday, the company elected to its board of directors, Dr. Patricia A. Schmoke, an ophthalmologist and wife of Baltimore Mayor Kurt L. Schmoke; and Howard Friedman, chairman of Arca Capital and publisher and chief executive officer of Water Press.

Shares of First Mariner rose yesterday, advancing 50 cents to $12.

Pub Date: 5/05/99

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