First Mariner's earnings up 20% in fourth quarter

Bank parent's profit for year declines 27%

January 25, 2001|By Julie Bell | Julie Bell,SUN STAFF

First Mariner Bancorp., where profitability had suffered because of its aggressive expansion, said yesterday that fourth-quarter earnings grew 20 percent, marking one of the "most successful" periods in the young bank's history.

The Baltimore-based parent of First Mariner Bank reported quarterly earnings of $219,000, or 7 cents per diluted share, for the three months that ended Dec. 31, up from $183,000, or 6 cents, in the year-ago period.

For the year, earnings declined 27 percent to $640,000, or 20 cents per share, down from $877,000, or 26 cents per share, in 1999.

The company began offering Internet banking during the quarter, including bill-paying for retail customers and online wire transfers for corporate ones. And it raised $1.5 million in a December private placement, money it said would be used to boost its capital base for regulatory purposes and to support future growth.

The quarter may mark a turning point of sorts for the 5-year-old bank, which now has 26 branches, at least 41 automated teller machines and an Internet banking service.

The tools form the basis for a "blended approach" to community banking, said Dennis Finnegan, First Mariner's executive vice president for retail banking. Rather than adding another slew of branches, he said, the bank plans to focus on attracting more customers by using tools it has.

"With our branch network in place, our [data-processing] system conversion behind us and new capital to support our continued growth, we will focus on continuing our growth and enhancing profitability," Chairman and Chief Executive Officer Edwin F. Hale Sr. said.

"They'll be some fine-tuning," Finnegan said of bank branches, including the move of First Mariner's Woodlawn branch out of a supermarket into a free-standing building. But, he said of the company's next five years, "the focus is much more heavily targeted on profitability."

That is what Collyn Bement Gilbert, a banking industry analyst for Ferris Baker Watts Inc. in Baltimore, said she would like to see from First Mariner. Despite a quarter that Hale called its "most successful of this year and one of the most successful in our five-year history," earnings were below Gilbert's expectations of $267,000, or 8 cents a share.

Gilbert, however, liked the bank's decision to increase its provision for loan losses by $300,000 in the quarter, saying she thought First Mariner previously had underprovided for loan-loss reserves.

First Mariner reported total assets of $678 million as of Dec. 31, up from $616 million a year ago. For the year, the value of its loan portfolio grew 30 percent and deposits increased 29 percent to $477 million. Nonperforming loans totaled $7.4 million, or 1.72 percent of total loans, at year's end, down from $7.6 million, or 2.32 percent, a year ago.

The bank's stock has responded, gaining 12.5 cents, or 2.3 percent, yesterday to close at a six-month high of $5.63 on the Nasdaq stock market. The stock, trading at a six-month low of $3.75 on Dec. 12, has gained 50 percent in little over a month. Shares, however, remain far below their split-adjusted high of $16.59 on Feb. 19, 1998.

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