Mercantile's end

October 11, 2006

As an institution, the Mercantile-Safe Deposit & Trust Co. epitomized the banker's bank. Influential. Exclusive. Conservative. Rock-steady and highly profitable. Its history, pedigree and management under its previous chairman made the Merc the largest independent bank in Maryland. But that distinction is no longer relevant in today's world of finance, which is why the sale of Mercantile Bankshares Corp., to Pittsburgh-based PNC Financial Services Group is hardly surprising - and why the sale will have more of a psychological impact on Baltimore and Maryland than a financial one.

The Merc was an institution - and a legend - from its founding as a financial safe house for wealthy Marylanders during the Civil War to its business dealings and corporate philanthropy. In the past three decades, much of its reputation emanated from the power and personality of H. Furlong Baldwin, who led the bank for 27 years.

As other Maryland banks were bought up, the Merc held its ground, even as Mr. Baldwin turned over the keys to Edward J. "Ned" Kelly III, who has led Mercantile for the past 5 1/2 years. And if Mr. Kelly has resisted past offers, PNC clearly presented an offer too good to refuse - for the interests of the bank and its shareholders.

If Maryland banks held sway in years past, the medical and technology sectors are providing today's business leaders, investment opportunities and career paths. The high-tech, biotech and health care industries in the state are replacing financial institutions as the go-to jobs for young professionals.

But as outsiders go, PNC does have an established record of charitable giving and community reinvestment. Marylanders expect their corporate citizens to be involved and invested in their civic and community life. And to that end, PNC has already pledged $25 million to a Mercantile fund, which donated $5 million last year to 1,500 organizations, a commitment that should ease the immediate concerns of groups that relied on Mercantile's contributions to serve the needy.

In the short term, the bank's shareholders, who are expected to realize a 27 percent increase over the present share price, will reap the benefits of the sale. On the downside, some jobs will be lost, as happens with just about any merger.

The sale expands PNC's reach in the Mid-Atlantic area, but it also gives the banking company an opportunity to make a difference in Baltimore and across the state - and we await that with interest.

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