Kicking a bank while it's down $750 million

February 16, 2002|By Gregory Kane

NEVER KICK a man when he's down, the saying goes.

Or a woman either. Or a child. Or a donkey. Or even a bank.

But should I pass on the opportunity to bash Allfirst Bank for the $750 million that, if we are to believe John M. Rusnak's protestations of innocence, somehow grew feet and walked out the door?

"Don't kick the folks at Allfirst when they're down," the decent part of me says.

"But it's a bank," the dickens part of me says. "Allfirst folks are fair game."

Such was my quandary when the story hit about the Allfirst crisis last week. My first reaction was to fall down, cackling hysterically, lacing the air with pithy put-downs of Allfirst executives between guffaws.

"$750 million? Who's running that joint -- three guys named Larry, Curly and Moe? What morons! What idiots!"

But I had to stop myself in mid-chuckle.

"Wait a minute! Allfirst is my bank! So who's the real moron here?"

So, off I went to my Allfirst branch, so someone who works for the bank could reassure me, with a straight face, that my money was safe. I talked to Roop Sampathi, an investment representative at Allfirst's Old Court Road branch, who had helped me in the past.

"Our bank is really strong," Sampathi said, "but the media is spoiling it. We will be doing business as usual. We have $18 billion in assets; $750 million is really a drop in the bucket."

To put the loss in perspective, the missing $750 million accounts for only 4 percent of Allfirst's assets. Let me put it another way, for the less mathematically inclined: It's as if you're walking around with $18,000 and you lose $750. You're bugged about losing the $750, but the loss won't cripple you.

Sampathi said that coming on the heels of the Enron scandal, the media may be engaging in overkill and overreacting about Allfirst's problems. Yes, we in the media sometimes overreact. We are, at times, guilty of milking a story for all it's worth.

But it's not the media that lost 750 million smackers. Allfirst did. For, say, The Sun to commit a boo-boo of that magnitude, we'd have to reprint as serious journalism the virulently anti-Semitic Protocols of the Elders of Zion and then wonder, "Gee, how did that get in the paper?"

Sampathi hinted that some Allfirst account holders have bolted for other banks, though she didn't say how many. But, she said, that won't be a problem in a while.

"In a few months, my clients will come back to me," Sampathi continued. "The media needs to be a little patient, and the truth will come out. This institution looks after the customer's benefit first. That's why I'm proud to work for Allfirst."

Before you claim that Sampathi sounds like she's doing a promo for Allfirst, I'll be the first to testify -- from personal experience with her -- that she means exactly what she says. She's the main reason I didn't snatch all my money from Allfirst and head to another bank.

Sampathi then gave me the number of Philip Hosmer, Allfirst's vice president of corporate communications. Hosmer is the poor soul designated to handle Allfirst's media relations during this crisis. (Boy, you'd better bet they're not paying this guy enough.)

I wanted to ask Hosmer the question that's probably on the mind of every Allfirst customer these days. It's not a fear of Allfirst going belly-up that's causing some depositors to get rabbit in their blood and leave. It's the notion that Allfirst jacks up and nickels-and-dimes the little guy while letting the big shots get away with highway robbery.

Allfirst, like all banks, never misses that check you wrote for $10 when you have only $9.95 in your account, and then nails you with a $31 overdraft charge. How is it they never miss that but can't catch folks who make off with 750 million bucks? Is the analogy even valid?

Hosmer couldn't say and probably won't be able to until the middle of next month.

"The investigation is going to discover the answer to all those questions," Hosmer said. "We have people working actually around the clock. Right now, we can't say a lot because of the investigation."

But FBI agents, state and federal regulators, representatives of Allied Irish Banks -- Allfirst's parent company -- and the U.S. attorney's office, along with Allfirst personnel, are, Hosmer said, involved in the probe. Allied Irish officials want that investigation completed 30 days from last Sunday.

Hosmer reiterated Sampathi's claim that it's business as usual at Allfirst.

"Our business is doing well," Hosmer said. "Deposits are stable, and we've had feedback from our customers that's been encouraging to us. Our customers know their money's safe."

There's one other indication that Allfirst isn't quite a sinking ship yet. Hosmer said that the bank is actually getting new depositors.

Truth in advertising requires me to say, "Yeah, Allfirst is my bank." Truth in commitment requires me to say, "I think I'll keep 'em."

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