A winner reflects on career

Strategy: H. Furlong Baldwin, Mercantile's longtime chief, stressed stability and not following the pack.

May 20, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

If one had to sum up H. Furlong Baldwin's life in a word, it would be "consistency."

The chairman of Mercantile Bankshares Corp. has always been a banker. He never wavered from his strategy. He refused to sell out while others did so for huge profits. And he always made money, even when other banks were losing millions of dollars or simply failing.

For someone who began his career counting checks in the back office of Mercantile-Safe Deposit and Trust Co., Baldwin's career has been remarkable in its duration and for its accomplishments. For a quarter-century he was Mercantile's chief executive officer and his results rank among the best in the industry.

Under Baldwin, Mercantile's net income grew every year - even in recession - from $9 million to $175 million at the end of 2000. Cash dividends increased 24 consecutive years. And its stock rose from $1.36 per share in 1976 to an all-time high of $44.69 in December. Of the top 60 banks in the country, Mercantile ranks first in capital strength, second in profitability and fourth in efficiency.

The numbers are "the best of the best," said John B. Bowers, the former head of the Maryland Bankers Association. "He has left a very undisputed footprint on the landscape of banking and in the community that he has lived and worked in for 40-plus years."

In an interview - his first since he stopped running the company's day-to-day operations - Baldwin, 69, a tall and imposing figure, sat in a small conference room on the eighth floor of Mercantile's headquarters in downtown Baltimore and reflected on his career. Three themes emerged: Baldwin's strategy for building the bank; his quest for profitability; and the pressure of the job.

Walked into a career

Baldwin was 24 in July 1956 when he took a job counting checks in the proof and collections department at Mercantile-Safe Deposit and Trust Co.

He had graduated from Princeton University with a degree in history in 1954, then spent two years in the Marine Corps. Baldwin needed work but didn't know what field to try. His family banked at Mercantile, so he decided to inquire about work there.

"I just walked in and said, `I am coming out of the Marine Corps, and I need a job,'" Baldwin recalled. The head of the banking division "offered me a job and I accepted it. I really didn't have a clue what a bank did. I didn't know what a debit and credit meant. I knew I had to get a job."

He moved soon to teller, worked in the loan cage and posted the general ledger - a mammoth, canvas-covered book about 2 feet high and a foot-and-a-half wide.

"You had pen and ink, and God bless you if you made a blur or a spill," he said. "It was a sacred book that you opened. ... You stood at a desk ... and you posted it by hand."

Eventually, Baldwin became the bank's first calling officer and was sent out to drum up business with freshly printed calling cards in hand.

He might not have known a lot about banking when he started, but he was good at it, quickly rising through the ranks.

Baldwin became a director of Mercantile-Safe in 1968. Two years later, at the age of 38, he was named president of the bank, and president and chief executive of the parent company, Mercantile Bankshares Corp. Six years later, he was given the additional titles of chairman and chief executive officer of the lead bank.

"All of a sudden, I realized this was fun. By the time I was president, I was hooked," Baldwin said. "You had the ability to do something and create something, and see things grow."

Baldwin wasted little time putting his stamp on the bank. Mercantile had been known for its huge trust department. But with the blessing of William E. McGuirk Jr., the parent company's chairman, Baldwin pushed the bank into commercial lending.

"Nobody had ever gone out and asked for commercial business," Baldwin recalled. "It seemed to me that is where the growth and profits were. In our case, it turned out to be the right thing."

Under Baldwin, Mercantile stressed lending to businesses, many of them family-run. It also handled their pension plans and cash management, and offered trust services for the owners' families. The bank helped sell businesses or pass them on to the next generation.

It was personal banking at its best, catering to the needs of customers - many of them wealthy - and Mercantile stuck with the strategy no matter how simple it was and no matter what other banks did.

Sometimes, though, Mercantile seemed out of stride.

In 1970, it became a multibank holding company. Instead of opening branches in various counties, as other banks did, Mercantile snapped up strong community banks, retaining their names and boards of directors. Not only did the approach keep customers happy because they saw familiar faces, but Mercantile instantly tapped into the market. The arrangement also offered the new partner Mercantile's expertise and a stock that traded frequently.

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