First Mariner earnings more than triple in 3Q

Local banking firm earns $661,000, up from $181,000 in '00

October 17, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

First Mariner Bancorp's profit more than tripled in the third quarter as income surged from lending and fees it charges customers for services, the company said yesterday.

The Baltimore banking company made $661,000, or 18 cents per diluted share, in the quarter that ended Sept. 30, compared with $181,000, or 6 cents per diluted share, in the third quarter a year earlier.

Profit in the first nine months of the year also more than tripled to $1.5 million, or 41 cents per diluted share, compared with $421,000, or 13 cents per diluted share, in the corresponding period in 2000.

Shares of First Mariner closed at $8.05 yesterday, up 5 cents on the Nasdaq stock market.

"Good quarter," said Collyn Bement Gilbert, an analyst at Ferris, Baker Watts Inc. in Baltimore. "Good revenue growth ... which was well above peer levels, and loan and deposit growth continues to be strong."

Edwin F. Hale Sr., First Mariner's chairman and chief executive, said the quarterly results "exceeded our expectations."

"All the indicators are going in the right direction," he said.

Hale said the rest of the year looks "even better" because the bank's expenses should decline. In the third quarter, it paid $350,000 to close three supermarket branches, Hale said.

"We don't anticipate having to do that again," he said. "It's a big number that is behind us."

Profit in the quarter was spurred by a 30 percent rise in net interest income to $6.8 million. Net interest income is profit mainly from interest collected on loans.

Also, noninterest income - income from fees banks charge customers for services - rose 25 percent in the third quarter to $3 million.

Assets rose 4 percent to $724.8 million at quarter's end. Loans were up 11 percent to $467.3 million and deposits increased 20 percent to $551.8 million.

Hale said some analysts had criticized the bank for making too many loans too quickly, thereby exposing itself to credit-quality problems.

But First Mariner's credit quality improved in the quarter as nonperforming assets fell to $3.7 million, or 0.51 percent of total assets, compared with $6.2 million, or 0.89 percent of total assets, a year earlier.

"Our asset quality is something we are proud of," Hale said.

Until recently, First Mariner's plan had been to expand no matter what, but now it is focusing on building profit and capital.

Last year, federal and state banking regulators, concerned that First Mariner was growing too fast, made the company agree to a memorandum of understanding that detailed a plan for raising capital and improving profit.

First Mariner slowed its growth, boosted profit and raised $10 million in a secondary offering Oct. 11, raising its total capital to about $40 million. Hale expects the agreement to be lifted soon because the bank will have met the regulators' demands.

Hale said that he was advised to postpone the offering because of the weak stock market and the Sept. 11 terrorist attack.

"We were determined" to move ahead, Hale said.

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