First Mariner easing its pace

Earnings down 74.6%, fewer openings slated


May 03, 2000|By Rona Kobell | Rona Kobell,SUN STAFF

After five years of aggressive growth at First Mariner Bancorp, Chairman Edwin F. Hale said yesterday that he's holding tight for the rest of the year.

Hale told shareholders at the annual meeting for the parent company of First Mariner Bank that the Ellicott City and Crofton branches will be last ones opened in 2000. That will give First Mariner 26 branch offices and 10 mortgage offices, extraordinary growth for a 5-year-old bank.

Hale has said he envisioned building the bank to $2 billion in assets. Yesterday, he said the bank has reached $642 million in assets, up from $25 million when it opened.

"In three years, we opened a lot of branches; then we picked the spots with gaps and filled them in," Hale said. "We are where we want to be."

Although excited by the bank's growth, Hale said he was less than thrilled with First Mariner's first-quarter numbers. The bank's profit tumbled 74.6 percent to $51,069 in the quarter that ended March 31, down from $201,537 in the first quarter of 1999.

The 2000 numbers are in stark contrast with First Mariner's recent steady climb in profit. The company capped off 1998 with a fourth-quarter profit of $636,876 -- a figure four times 1997's fourth-quarter profit.

Hale attributed the drop to the rapid expansion and a rough winter for mortgages. "We had two bad months in January and February," Hale said. "A lot of houses that were built were not completed."

Mortgages are a big part of the bank's growth strategy. Its subsidiary, First Mariner Mortgage Corp., closed $83.1 million in residential first-mortgage loans in the first quarter of 2000, an increase of 9.2 percent over the $76.1 million it closed last year.

Analyst Collyn Bement Gilbert, who follows First Mariner for Ferris Baker Watts, said she was "very disappointed" with the bank's first quarter numbers. The bank entered the mortgage banking business just as interest rates rose last year, Gilbert said, and then it had to contend with a slow winter.

Gilbert considered the first-quarter numbers "a wake-up call" that the bank needed to focus on its earnings instead of its expansion.

When the bank does gear up for more growth, Hale said, it will look in the Northern Virginia, Washington and southern Pennsylvania areas. Growth by acquisition is unlikely because of First Mariner's sagging stock price. The company's shares rose 12.5 cents yesterday to $5.875, well beneath their 52-week high of $12.1875.

Hale said only three shareholders called with concerns about the stock price. Nevertheless, he brought a chart of other banks' performances to show First Mariner is in good company. Hale offered no predictions as to when the battering would end for bank stocks. "We've been dragged along with most of the other financial institutions, and there's nothing we can do about it," he said.

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