Mercantile shareholders hail ex-CEO's leadership

Baldwin built bank into model institution during 25-year stint

`We are indebted to you' Mercantile shareholders praise ex-CEO

April 26, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

Mercantile Bankshares Corp.'s annual meetings are normally subdued, businesslike affairs, but yesterday shareholders burst into applause and praised H. Furlong Baldwin, who ran the company for 25 years and built it into perhaps one of the finest banks on the East Coast.

Shareholders not only gave Baldwin, who stepped down as president and chief executive officer in March, a standing ovation, but also surprised him with a portrait of himself that will hang in the bank's boardroom.

"We are indebted to you, Furlong Baldwin, for your masterful management of this company," Calman J. Zamoiski Jr., a director emeritus, said on behalf of the audience of 70 people after Baldwin adjourned the 14-minute meeting.

Zamoiski, who like many associates refers to Baldwin as "Baldy," said Mercantile's motto has been "in Baldy we trust."

Little wonder. Since Baldwin became CEO in 1976, net income has grown every year, from $9 million to $175 million at the end of 2000.

Total cash dividends paid per share have increased for 24 consecutive years. And Mercantile's stock price has grown from $1.36 per share in 1976 to $36.84 yesterday, down from an all-time closing high of $44.69 on Dec. 27.

Last year, Mercantile ranked as the 54th-largest banking company in the country with $8.9 billion in assets, according to SNL Securities LC, a financial research and publishing firm in Charlottesville, Va.

While that is still small compared with industry giants such as Bank of America Corp., Mercantile ranked first among the group in capital strength, second for returning $2.11 for every $100 in assets, and fourth in efficiency.

"It is amazing," said Christopher Marinac, a banking analyst at Robinson-Humphrey Co. in Atlanta. "His [Baldwin's] long-term returns have been very good. In my opinion, Baldy has kept things so conservative, he is so old-school that it is refreshing. You can go to school with Baldy ... and learn a lot on how things should be done."

In February, Baldwin, 69, announced that he was stepping down from running the company's day-to-day operations. He selected Edward J. Kelly III, a top investment banker at J. P. Morgan Chase & Co. and head of its Global Financial Institutions group, as his replacement.

Kelly, 47, took over March 1, and Baldwin became chairman of the company's board of directors.

Yesterday, it was Kelly, not Baldwin, who addressed shareholders with a formal speech.

"It is impossible for me to stand here and not be humbled in at least two respects, one by the notion of succeeding Baldy and the second by the strength of the legacy that he has left us," Kelly said.

Kelly said that his main priority is to "generate as much value for Mercantile's constituents during my tenure ... as Baldy has during his. It is truly a remarkable legacy. We're all beneficiaries of it and all grateful for it."

Kelly called Baldwin a man with vision. Last year, when Baldwin addressed shareholders, he worried about the economy's health and warned them that Americans were speculating on stocks.

Baldwin believed that investors would return to companies that had capital, positive cash flow and profits, unlike so many young technology firms they had plowed money into.

"No one would be able to say that Baldy, in fact, didn't recognize the risk and cite it for us last year," Kelly said.

During the period in which he headed Mercantile, Baldwin ran a conservative bank that produced steady profits. To him, size never mattered as it did to many executives at large regional banks who believed that bigger would translate into more profits.

Today, a number of those executives have retired and their banks are working through problems.

"Bucking the trend and being right is really quite an achievement," said Mary Junck, a Mercantile director and the former publisher and chief executive of The Sun. "He has personified the company."

Baldwin's only remarks, other than leading the formal meeting, came after Kelly's address.

"It has been a great privilege to work for this institution and serve you," he said.

As the meeting began to break up, a portrait covered in a cloth was wheeled to the front of the boardroom, and Zamoiski took over. Baldwin sat down and looked surprised.

Zamoiski said Baldwin was Mercantile's "most valuable asset. ... He acts with integrity and sound judgment."

You have earned our respect and deepest appreciation," he told Baldwin.

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