Banks And Thrifts

On the 10th floor of a downtown Baltimore office building, in a room bigger than a football field, about 300 college-educated men and women sit at clean gray cubicles under subdued lights, answering phones that ring only in their headsets.On the line are callers from all parts of the country. They want to shift investments, balance checking accounts, place orders for deposits and discuss everything from German interest rates to tax-free Maryland bonds.In this room are the bank tellers of the future -- but they don't work for a bank.

WASHINGTON -- For most of this decade, buyers of homes and businesses enjoyed "easy" credit, allowing them to get low-interest loans with few questions asked. Suddenly, credit has become "tight." That means people with spotty credit records are no longer getting mortgages, the largest home borrowers are paying higher interest rates, and some corporate buyouts are in jeopardy. The changes have spooked financial markets, sending the benchmark Dow Jones industrial average last week more than 1,000 points below the record 14,121.

J. Clarence Jameson III swore he would never start another community bank after he sold his second in May 1995 for a handsome profit.His promise didn't last long. Three months later, he was hustling to raise money from friends and business associates for a third bank. "It was too good a transaction" to pass up, Jameson said.Two-and-a-half months ago, AmericasBank opened on East Lombard Street with about $10 million in assets, and with Jameson, a 66-year-old accountant, as its chairman.AmericasBank is part of a small bank revival.

A large shareholder of Lutherville-based WHG Bancshares Corp. is urging company executives to either immediately pay a special dividend of as much as $8 a share or sell out.The shareholder, Jerome H. Davis, owns 6.22 percent of the small savings bank holding company. He attacked management in a letter that called the company's financial situation "deplorable."He chided executives as not "performing your fiduciary duty.""You've had control of your company's destiny for long enough," Davis said in the letter filed with the Securities and Exchange Commission.

WASHINGTON -- In a move designed to spur lending to minority groups and residents of low-income neighborhoods, the federal government was expected to announce new regulations today that would require banks and thrifts to collect and publicize detailed reports on business lending by neighborhoods.Regulators will use the data, being assembled for the first time under government supervision, to decide whether financial institutions are serving all segments of the community in their business lending.

Most people hate being the subject of rumors, but Jeffrey R. Springer has come to expect it."Everything you hear in the market is no more than speculative gossip," said Mr. Springer, president of Citizens Bancorp in Laurel. "You wonder if people are just bored."Twice in the last four months, Citizens' stock has surged on rumors that the bank was about to be bought. And twice, it was just talk.But that hasn't stilled the rumor mill. It's working at a high pitch these days in Baltimore and other cities -- and with good reason.

The once high-flying Second National Federal Savings Bank, which fell victim to the real estate crash of the late 1980s and early 1990s, will be divvied up among 17 banks and thrifts, according to sources close to the breakup of the Salisbury-based savings and loan.The Resolution Trust Corp., which took over the floundering thrift in December 1992, has accepted bids from the banks and thrifts for the deposits at 34 Second National branches in Maryland, Delaware, Pennsylvania, Virginia and Washington, according to the sources.

When banks and thrifts across America fling open their doors this morning, they will do it more candidly, more sincerely, more honestly then ever before. They will usher in an era of disclosure and user-friendliness not seen in this country since . . . well, not seen in this country.No more hidden fees. No more word games with interest rates. No more cleverly worded ads that say just enough, but hint at so much more.Today marks the start of Truth in Savings, the sequel to the 24-year-old Truth in Lending law. It requires banks and thrifts to disclose -- in clear language -- a wide range of information about every deposit account they offer to consumers.

That deafening silence heard throughout Maryland and the nation today is the sound of bank and thrift doors remaining open.Despite months of dire warnings that hundreds of banking companies might be shut following the presidential election -- including a mid-debate caution from candidate Ross Perot -- federal agencies say there was no reason to fear a "December surprise." They say they have no intention of seizing large numbers of financial institutions in the wake of today's well-publicized deadline, which forces regulators to act against weak banks and thrifts.

China satellite purchase OK'dWaiving legislative restrictions, the State Department announced yesterday that China will be allowed to buy six U.S.-made communications satellites, a decision that could yield worth more than $650 million for U.S. exporters.It was the latest in a series of election-year announcements designed to increase exports and protect jobs for American workers. Earlier yesterday, President Bush announced the sale of 72 F-16 jet fighters to Saudi Arabia despite Israeli objections.

Months before the Bradford Bank's failure, the signs were there. Since early this year, the Towson-based bank had been operating under greater federal supervision, and - more tellingly - regulators in July gave the bank 30 days to find a buyer or merge with another institution. Regulators seized the bank Friday and sold it to M&T Bank. But banks often don't send up such red flares before failing. So what can you do to avoid being caught up in a failure? There are sources to check up on the health of an institution.

WASHINGTON -- For most of this decade, buyers of homes and businesses enjoyed "easy" credit, allowing them to get low-interest loans with few questions asked. Suddenly, credit has become "tight." That means people with spotty credit records are no longer getting mortgages, the largest home borrowers are paying higher interest rates, and some corporate buyouts are in jeopardy. The changes have spooked financial markets, sending the benchmark Dow Jones industrial average last week more than 1,000 points below the record 14,121.

YOU WON'T GET a toaster, but you might get a free lunch. Banks and savings and loan associations, which many years ago gave away small appliances to attract retail deposits, are promoting savings again. Savers who rediscover banks and thrifts stand to win the trifecta: competitive interest rates at traditional banks and thrifts and at online banks; an opportunity to capture higher rates as they occur; and government insurance of their accounts up to $100,000 through the FDIC. "Unlike the rest of the investment world, you don't have to take additional risk in order to earn additional return by finding higher-yielding CDs," said Greg McBride, senior financial analyst at Bankrate.

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.

The sign outside the future home of Pen Mar Community Bank at Clifton Boulevard and Woodward Road in Westminster has proclaimed "Coming Soon" for months. But the opening of the bank - scheduled for June - has been delayed because its board of directors was unable to locally raise the $5 million it needed through a stock offering. "At this time the [stock] offer has been terminated," said J. Geoffrey Sturgill Jr. a Gettysburg accountant who is chairman of the board of Pen Mar Bancshares Inc. He did not provide further details.

WASHINGTON - Senate Banking Committee Chairman Paul S. Sarbanes is asking for federal investigations into the failure of Superior Bank FSB, a suburban Chicago thrift that was half-owned by the multibillionaire Pritzker family. Sarbanes, a Maryland Democrat, requested the probes in letters dated Wednesday to the General Accounting Office, the government's main investigative arm, and the inspectors general of the Treasury Department and the Federal Deposit Insurance Corp. He said investigators also should explore "whether and how the regulatory early warning system is working."

Seeking to provide personalized banking services to Carroll County customers, a group of area businessmen are working to establish a community bank in Westminster. Penn Mar Bancshares Inc. recently received approval from the Securities and Exchange Commission to open Penn Mar Community Bank. Work has begun on the 4,500-square-foot building at Clifton Boulevard and Woodward Road. Kevin P. Huffman, president and chief executive officer of Penn Mar Community Bank, said recently that he hopes to open the bank by May or June.

WASHINGTON - The Federal Deposit Insurance Corp. kicked off a wide-ranging debate yesterday about revamping deposit insurance by asking whether to increase the $100,000 insurance limit or charge higher premiums to riskier banks. The deposit insurance system, though operating well, has structural problems that require banks "to fund insurance losses when they can least afford it," FDIC Chairwoman Donna Tanoue said. In addition, some banks have complained that the bank and thrift deposit insurance funds are over-funded, with reserves at $40 billion, and have called for rebates.

J. Clarence Jameson III swore he would never start another community bank after he sold his second in May 1995 for a handsome profit.His promise didn't last long. Three months later, he was hustling to raise money from friends and business associates for a third bank. "It was too good a transaction" to pass up, Jameson said.Two-and-a-half months ago, AmericasBank opened on East Lombard Street with about $10 million in assets, and with Jameson, a 66-year-old accountant, as its chairman.AmericasBank is part of a small bank revival.

A large shareholder of Lutherville-based WHG Bancshares Corp. is urging company executives to either immediately pay a special dividend of as much as $8 a share or sell out.The shareholder, Jerome H. Davis, owns 6.22 percent of the small savings bank holding company. He attacked management in a letter that called the company's financial situation "deplorable."He chided executives as not "performing your fiduciary duty.""You've had control of your company's destiny for long enough," Davis said in the letter filed with the Securities and Exchange Commission.