For a decade, 1st Mariner's name adorned the Baltimore arena, but now the bank's parent company says it does not plan to bid for naming rights that expired last year.
The bank's parent company has talked about the price for naming rights with Legends Sales and Marketing, a New York-based company hired by arena manager SMG Holdings to manage the sale.
"We talked some numbers. We weren't close to what they're suggesting," said Dennis Finnegan, executive vice president of retail banking at First Mariner Bancorp.
In all likelihood, the arena will be wearing a new corporate sponsor's name soon, changing part of the familiar fabric of downtown Baltimore. Naming rights remain desirable at arenas and stadiums across the country despite their questionable advertising value.
Who might bid for the Baltimore arena is unknown. Legends declined to comment.
First Mariner Bank was the first corporate sponsor of the 14,000-seat arena built in 1962, initially called the Baltimore Civic Center. The arena's 10-year naming rights were sold for $75,000 a year by the city in 2002 to Arena Ventures LLC, a company owned by First Mariner's founder and former CEO, Ed Hale. The bank, in turn, contracted to pay that amount to Arena Ventures for the right to hang its name on the facility.
Hale left First Mariner in late 2011 as part of an agreement with a New York investment firm that had planned to invest millions in First Mariner, which grew troubled during the recession with souring loans. This year, Hale sued arena operator SMG and Legends, alleging that they improperly used billboards he bought and installed on the arena.
Frank Remesch, the general manager of 1st Mariner Arena for SMG, said First Mariner will be missed.
"They were a great client. I would be happy to work with them again," he said. "I would love to see them back in some capacity."
First Mariner Bank does expect to maintain a presence there.
Finnegan said the bank is finalizing terms to keep the ATM franchise at the arena for five years and plans to maintain a billboard on the building.
"We're not abandoning it," Finnegan said. "We still feel the facility is important to the city."
Finnegan declined to disclose the price tag Legends placed on the arena's naming rights, but he said it was "multiples" of what the company had been paying.
First Mariner might reconsider if Legends comes back with a lower figure that's closer to what the company proposed, Finnegan said. But "we don't plan to go back to them to put a number on the table, other than what we have in the past."
First Mariner has been restricted in how it could spend in recent years. In 2009, federal and state banking regulators ordered it to boost capital to protect the bank's depositors from its ailing loan portfolio.
However, those restrictions, some of which were lifted last month, were not a factor in the decision not to bid for the arena's naming rights, Finnegan said, noting that the bank continues to invest in advertising.
Even if 1st Mariner's name comes off the arena, it might not have a negative impact on the company.
Michael Leeds, an economics professor at Temple University, said naming rights typically don't add to a company's bottom line. In his study several years ago of 50 stadiums, Leeds said he found that such deals "drove down profits more than drove up profits," but in the majority of cases naming rights had no impact on corporate earnings.
"The company might as well have spent its money on an alternative form of advertising," he said.
Banking consultant Bert Ely said it is hard to measure the value of naming rights to 1st Mariner.
"But it will lower the presence of the bank by not having their name there and getting free publicity when teams play at 1st Mariner Arena," he said.
First Mariner executives disclosed that the bank would not bid for the naming rights during a question-and-answer session after the parent company's annual meeting Tuesday.
At the meeting, they said the bank would close three branches May 24 in Odenton, Perry Hall and Columbia.
The closings come in response to the growth in customers using electronic services, such as online banking, Finnegan said. When the branches are closed, the bank will have 18 branches, down from a peak of nearly 30 about a decade ago.
Eighteen employees will be affected by the closings, and all but three or four will be transferred to other jobs at the bank.
Overall, First Mariner has added staff in the past year. At the end of March, it had 603 employees, up from 539 the year before. Though some areas of the bank have lost staff, the bank has added 75 positions in its mortgage operations, which originated more than $720 million in residential loans between January and March, an increase of 56 percent from a year earlier.
Also on Tuesday, the company announced a loss for the first quarter of 2013, its first loss after four profitable quarters in a row, as it disposed of bad loans and foreclosed real estate.
The bank holding company lost nearly $2.3 million, or 12 cents a share, in the quarter that ended March 31, compared with a profit of $1.8 million, or 10 cents a share, a year earlier.
The company said it took a charge of $4 million in the January-to-March quarter as part of a move to dispose of more than $14 million in nonperforming assets. The bank's ratio of nonperforming assets to total assets fell to 3.2 percent March 31, down from 4.1 percent at the end of last year.
First Mariner had $1.38 billion in assets at the end of March.
The company's stock closed Tuesday at $1.55 a share, down 28 cents.
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