Banking Companies

In the year 2001 we may receive this news flash:"Giganto Bank, the nation's largest with $1 trillion in assets, has announced its merger with Waterworld TV, an international network-entertainment conglomerate with 1,000 stations and 100 film studios."Synergy was the reason given for the combination. After all, banks have money. Media and entertainment executives are good at spending it."Wall Street rejoiced at the news, calling it long overdue. Stocks of both companies skyrocketed. One sticky point is the trimming of 5 million employees, but there's hopes of doing so primarily through attrition and misplaced records."

Baltimore Bancorp, one of Maryland's few remaining locally based banking companies, announced today that it has agreed to be acquired by First Fidelity Bancorporation of Lawrenceville, N.J., for $346 million in cash, or $20.75 a share.The news caps weeks of takeover speculation about the fate of Baltimore Bancorp, parent of the Bank of Baltimore. The 42-branch company, which has $2.2 billion in assets, has gone through a three-year struggle to survive a bitter management fight and large real estate-related losses, before returning to profitability in 1992 and 1993.

After prodding from stock exchange officials, Baltimore Bancorp Inc. disclosed yesterday that it was in preliminary discussions with several banking companies about a possible sale.The bank holding company said it had hired investment banker Alex. Brown & Sons Inc. to provide financial advice. Baltimore Bancorp, with $2.3 billion in assets and 42 branches, did not disclose the names of the suitors."We firmly believe that our progress and unique position in the Baltimore market continues to make us an attractive acquisition candidate," Edwin F. Hale Sr., chairman and chief executive said in a statement.

Baltimore Bancorp, parent of the Bank of Baltimore and one of the last big locally based banking companies, yesterday ended a wild three-year ride for its employees and shareholders by announcing it has agreed to be sold to the First Fidelity Bancorp. of Lawrenceville, N.J., for $346 million in cash.If approved by regulators and Baltimore Bancorp's shareholders, the deal, valued at $20.75 a share, would be First Fidelity's initial move into Maryland. The company, which has 650 branches in New Jersey, Pennsylvania, New York and Connecticut, is the nation's 24th-largest banking company, with $33.8 billion in assets.

Now that national interstate banking appears imminent, bankers in Maryland are reacting exactly as the situation demands: They're simply conducting business as usual.The bill that passed the Senate Banking Committee Wednesday provides for a one-year waiting period before interstate banking would take place -- that's one year from an expected Memorial Day bill signing, assuming the legislation continues to move smoothly through Congress.The Senate bill also calls for a two-year delay before companies may merge their subsidiaries into one multistate branch network.

Sometimes it pays to jump from the frying pan into the fire, as H. David Shumpert is beginning to learn.In late 1991, after 25 years at Maryland's largest banking company, Mr. Shumpert decided to leave the commercial lending division of MNC Financial Inc., whose real estate loan problems had sent the company into a tailspin. "The bank that I had joined had lost its soul," he recalled this week.Unable to sell his house quickly and move back home to North Carolina to take up teaching, Mr. Shumpert instead took a chance on the small, struggling Towson-based Bank Maryland Corp.

Nationsbank, the country's fourth-largest banking company, said yesterday that its first-quarter profits increased 95 percent, while Chase Manhattan reported earnings rose 20.5 percent.Like most other banking companies, Nationsbank and Chase said their first-quarter results benefited from a wider spread between the interest rates they paid for deposits and the rates they collected on loans and increased collections of fees from consumers.Both were badly hurt by losses on real estate loans the last few years, but Nationsbank seems to be recovering more quickly than Chase.

State Bank Commissioner Margie H. Muller, in a rare admission from a government official, dismissed her own report on interstate banking as "little more than a yawn."But banking in Maryland and the nation is "on the threshold of a new era" called interstate branching, Ms. Muller argued yesterday, and that calls for the state to exercise extreme caution.Interstate branching, should Congress authorize it, would allow companies such as NationsBank Corp. to dispense with the complications of establishing separate banks in each of the states in which it operates, and merely establish far-flung branches of one bank.

WASHINGTON -- Cuts in the prime lending rate spread yesterday as several of the country's largest banks reduced their rate a half percentage point, to 9.5 percent.At the same time, the White House acknowledged that the economy has fallen into a recession, although President Bush hesitated to use the term to describe the economy nationwide.Mr. Bush said Tuesday in an interview with David Frost that "in some areas, we're clearly in a recession, and this concerns me because people are hurting."

Another Labor Day has given us speeches, laments (cheers?) for the continued decline of unions and the incineration of 16.3 million pounds of meat in the summer's last great grilling frenzy. What it hasn't brought us is much serious discussion of the ways we work in a fast-changing economy that punishes laggards, whether they be people, communities or entire nations."Back to School Day" might be a more fitting label for what the first Monday in September represents to most of us. It's also a most accurate description of work force needs, for folks who'd like to retain a Labor Day theme.

The last time regulators ordered Ed Hale to fix a money-losing bank or have it seized by the government was the early 1990s. The trucking executive had gained control of the Bank of Baltimore, which lent itself into trouble in the last real estate crash. Hale and other dissident shareholders took over the board, pulled the bank from a pit and made millions of dollars when they sold it to First Fidelity a couple of years later. Now that 1st Mariner Bank is in the same flavor of soup, Hale is suggesting he can pull off a similar rescue.

First Mariner Bancorp and Sandy Spring Bancorp reported higher first-quarter profits yesterday as the Maryland institutions have joined other banks in expanding beyond traditional services such as deposit-taking and lending to become insurance agents, leasing companies and even landlords. Both banks reported their biggest gains in so-called non-interest income that includes service fees and other business lines. Olney-based Sandy Spring, which has acquired a financial planning company and an insurance agency in the past six months, reported its quarterly net income rose 6 percent to $8.3 million, or 56 cents per share, from $7.9 million, or 53 cents per share, a year ago. Baltimore-based First Mariner, which has expanded its consumer credit division and begun gathering rental income from commercial tenants at its Canton headquarters, reported a 21 percent profit gain to $1.7 million, or 25 cents per share, from $1.4 million, or 22 cents per share, a year ago. Diversification has shielded some banks from forces that are squeezing profit growth at banks across the country after five consecutive years of record earnings.

H. Bentley Glass, 98, a former Johns Hopkins University biologist who in the 1950s and 1960s led a provocative life as a writer, scientific policy-maker and theorist, died of pneumonia Jan. 16 at a hospital in Boulder, Colo. His death the day before his 99th birthday followed his prediction in 1967 that people in the 21st century would live to nearly 100, said his daughter, Lois Edgar of Boulder. His most influential scientific accomplishment was his work, begun at Hopkins, on what he called genetic drift.

With the economy in a downturn, delinquent loans rising and the potential for interest rates to rise later this year, the banking industry faces some significant challenges this year. Even so, the nation's banking sector is significantly stronger than it was before the 1990-1991 recession, meaning many banks and thrifts could navigate their way to a decent 2002, experts say. "Maybe it won't be quite as good" as last year, said Robert R. Davis, an economist and managing director of governmental relations for America's Community Bankers, a Washington-based trade group.

Shares of Mercantile Bankshares Corp. continued their recent ascent yesterday, pushing to yet another high and chalking up a 10.8 percent gain for the week. Analysts attributed the strength in the shares of the state's largest independently owned banking company to investors who are seeking havens for their money. Mercantile rose 12.5 cents to $43.69 yesterday. The shares have risen 13.9 percent in December alone, and 36.8 percent since the year began. "What is driving it is the flight to quality that is permeating the marketplace," said Gerard Cassidy, a banking analyst at Tucker Anthony Capital Markets, a Boston-based brokerage firm.

In the year 2001 we may receive this news flash:"Giganto Bank, the nation's largest with $1 trillion in assets, has announced its merger with Waterworld TV, an international network-entertainment conglomerate with 1,000 stations and 100 film studios."Synergy was the reason given for the combination. After all, banks have money. Media and entertainment executives are good at spending it."Wall Street rejoiced at the news, calling it long overdue. Stocks of both companies skyrocketed. One sticky point is the trimming of 5 million employees, but there's hopes of doing so primarily through attrition and misplaced records."

Baltimore Bancorp, parent of the Bank of Baltimore and one of the last big locally based banking companies, yesterday ended a wild three-year ride for its employees and shareholders by announcing it has agreed to be sold to the First Fidelity Bancorp. of Lawrenceville, N.J., for $346 million in cash.If approved by regulators and Baltimore Bancorp's shareholders, the deal, valued at $20.75 a share, would be First Fidelity's initial move into Maryland. The company, which has 650 branches in New Jersey, Pennsylvania, New York and Connecticut, is the nation's 24th-largest banking company, with $33.8 billion in assets.

Baltimore Bancorp, one of Maryland's few remaining locally based banking companies, announced today that it has agreed to be acquired by First Fidelity Bancorporation of Lawrenceville, N.J., for $346 million in cash, or $20.75 a share.The news caps weeks of takeover speculation about the fate of Baltimore Bancorp, parent of the Bank of Baltimore. The 42-branch company, which has $2.2 billion in assets, has gone through a three-year struggle to survive a bitter management fight and large real estate-related losses, before returning to profitability in 1992 and 1993.

Now that national interstate banking appears imminent, bankers in Maryland are reacting exactly as the situation demands: They're simply conducting business as usual.The bill that passed the Senate Banking Committee Wednesday provides for a one-year waiting period before interstate banking would take place -- that's one year from an expected Memorial Day bill signing, assuming the legislation continues to move smoothly through Congress.The Senate bill also calls for a two-year delay before companies may merge their subsidiaries into one multistate branch network.

After prodding from stock exchange officials, Baltimore Bancorp Inc. disclosed yesterday that it was in preliminary discussions with several banking companies about a possible sale.The bank holding company said it had hired investment banker Alex. Brown & Sons Inc. to provide financial advice. Baltimore Bancorp, with $2.3 billion in assets and 42 branches, did not disclose the names of the suitors."We firmly believe that our progress and unique position in the Baltimore market continues to make us an attractive acquisition candidate," Edwin F. Hale Sr., chairman and chief executive said in a statement.