But the economy continues to deteriorate, more losses are likely, and Hale badly needs to add to the cushion. Closing at 60 cents a share yesterday, First Mariner's stock price is Wall Street's way of saying the bank won't survive in its present form.
Hale's ability to bail out his own bank is limited. His stake in First Mariner has fallen from $20 million to less than $1 million. A real estate company connected to his Canton Crossing development has been sued over an unpaid, $10 million loan. ("We're close to working that out," he said.)
Beginning construction on a related shopping center, the District at Canton Crossing, with its planned Target and Harris Teeter stores, would generate cash that Hale could put into First Mariner, he said. He may also sell land he owns, he added.
That could take time, if it even happens. (Commercial real estate finance hasn't gotten the same kind of government support as consumer lending.) But Hale hopes the bank will have commitments for at least one other infusion by the end of the month. Third-party private investors are considering putting in money, he said. There are "five or six" other companies that want to buy Mariner Finance, the consumer finance unit, he said. (Analysts say that could raise about $20 million.)
The bailout from the government's Troubled Asset Relief Program would produce $32 million.
"If they got the TARP money, there'd be no problem," says Anthony J. Polini, who follows banks for Raymond James & Associates in New York. Even without new capital, he says, "I would think they could make it through the year, and with help from the economy they could survive."
Help from the economy is unlikely. Soaring unemployment will almost certainly put new loans under pressure.
Allegations of overcharging minorities are a blot on First Mariner's reputation and another kick in the stomach from its Northern Virginia office, which closed in 2007 and was the source of most of its mortgage losses. The bank says it fired the responsible employees immediately after management learned of the abuse in 2007.
Hispanic borrowers paid average excess fees of $3,500 apiece, according to First Mariner President Joseph Cicero. Hale defends the bank's record of serving Hispanics and blacks, saying, "We're the biggest lender to minorities in this area."
Like other bankers, he points to a big jump in operating profit driven by a low cost of funds and, in First Mariner's case, fees from hundreds of millions in refinanced mortgages being sold to other investors.
"We've had 30 months of this," he says of the losses. "I'm 62, and I've never worked so much in my life as I am now. I'm not being naive about this. It's going to be tough. But I think we have a shot to start earning our way out of this."
That shot could look a lot better if First Mariner scores some extra capital from Hale, the Treasury or anybody else.
