First Mariner's profit leaps 177% in quarter

`We expect this trend to continue,' Hale tells shareholders meeting

May 08, 2002|By William Patalon III | William Patalon III,SUN STAFF

First Mariner Bancorp's aggressive expansion strategy is translating into strong profit growth, and investors can expect that to continue, the banking company's chairman said yesterday during the annual shareholders meeting.

In its bid for market share, First Mariner initially emphasized expansion of its branch network over profitability, a strategy some criticized. The network having been built, profits are starting to flow, Chairman and Chief Executive Officer Edwin F. Hale Sr. told shareholders at First Mariner's headquarters on South Clinton Street.

"We expect this trend to continue," Hale said.

First Mariner had net income of $2.3 million last year, 260 percent more than the $640,000 earned in 2000. Hale said that momentum has carried over into this year. Net income in this year's recently completed first quarter was $863,000, a jump of 177 percent from the $312,000 earned in the first quarter of last year, he said.

Net income in the first quarter of 2000 was $55,000.

Profits have grown as First Mariner's branch-building campaign has slowed. The company has closed some unprofitable branches and is being selective about where it opens branches, Hale said.

First Mariner had 25 branches at the end of December, down from 26 at the end of 2000. It now has 22, Hale said.

New branches are planned for White Marsh and Cockeysville, where another branch will be consolidated into the new one. Hale said First Mariner will end the year with 23 branches.

"Everyone thought I was in here to flip [sell] the bank" after getting the network of branches in place, Hale said in an interview after the meeting. "But I like doing what I do. It's a lot of fun. There's a lot of positive energy here. And it's working and feeding on itself."

Investors have benefited. First Mariner's shares, which closed yesterday at $12.02, down 19 cents, are up about 30 percent since January and have reached levels not seen since mid-1999.

As a result, some of the bank's original stockholders - including Israel Freedman at yesterday's annual meeting - are asking the bank to "register" some warrants they received along with those initial shares. The warrants give investors the right to buy shares at set prices on different dates in the future, the earliest being in 2004, First Mariner said.

The rise in First Mariner's share price has pushed it above the exercise prices of the warrants, giving them value. If the bank registered the securities with regulators, shareholders could exercise the warrants when they come due and sell the stock immediately to reap their profit, the bank said.

As it stands, with the warrants not registered, the newly acquired shares would have to be held for a year before they could be sold, First Mariner said.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.