Give First Mariner Bancorp's Edwin F. Hale Sr. credit for at least having his heart in the right place. He may be the only banker in America talking about bailing out his institution with his own money.
"I want this to work because I think it's a good investment," he said of the struggling bank he founded in 1995. "I think our stock right now - 50, 80 cents - is ridiculous. I think this is a great opportunity for us to move forward. And I'm going to put my money where my mouth is."
But not yet. "Dominoes have to drop" before he can come up with the funds, he says.
That's the story not only of his promised investment but also of other potential First Mariner rescues and, indeed, much of the U.S. economy. At stake is the future of Baltimore's biggest remaining banking company and Hale's influence over Canton redevelopment and other projects.
Hale can't invest in First Mariner until he raises money from his real estate ventures, which, in the worst economy in decades, is very uncertain.
The slump also hinders First Mariner's efforts to raise badly needed capital through selling its small-loan, consumer finance business. Who wants to buy a consumer finance company now?
First Mariner can't even get the federal bailout until it resolves nasty allegations that its Northern Virginia operation overcharged about 100 minority borrowers for mortgages in 2006 and 2007. Those incidents haven't been previously reported.
According to Hale, the bank is in talks with the Federal Deposit Insurance Corp. to settle the issue, which he blames on rogue Hispanic employees preying on Hispanic borrowers. The Treasury Department won't give First Mariner its requested bailout until it resolves the matter, Hale said.
Spokesmen for the FDIC and Treasury declined to comment. First Mariner has set aside $800,000 to pay a potential penalty.
That's the last thing it needs. Founded as a locally based alternative to out-of-town banks, First Mariner has lost $25 million in the past two years (mainly on bad mortgages), burned through much of its capital and been placed under an informal supervisory agreement with regulators.
Customers are fine. Deposits are insured up to $250,000 per account. The bank's capital - the shareholder stake that provides a gauge of viability - is below optimal levels but not in Davy Jones' Locker.
