The Baltimore Sun
A key deadline for 1st Mariner Bank to boost capital levels passed Wednesday, but the bank is expected to take more time to improve its finances.
First Mariner Bancorp Chairman and Chief Executive Edwin F. Hale Sr. said Wednesday that he can't comment on the situation, citing securities regulations. Federal and state banking regulators had ordered the bank to raise its capital levels by Wednesday under a "cease and desist" order issued last fall.
The Federal Deposit Insurance Corp. and the Maryland Division of Financial Regulation, which have regulatory authority over the bank, also declined to comment.
First Mariner has raised about $25 million since October, but still is short of boosting the bank's total risk capital ratio to 11 percent, as mandated by regulators. With the capital First Mariner has raised, that key measure stands at 10.3 percent as of April 12, according to a regulatory filing. The total risk capital ratio measures the bank's equity capital against its risk-adjusted assets.
Hale said in June that the bank will need to raise another $7 million to $10 million and plans another round of capital raising through stock sales to institutional investors, though he did not provide a time frame.
Banking analyst Bert Ely said these kinds of regulatory deadlines "tend not to be hard and fast."
"The odds are nothing will happen" even though the deadline passed, he said. "The sun will rise and 1st Mariner will still be in business."
According to the FDIC's enforcement order, 1st Mariner has additional time to raise capital levels.
The bank must submit within 30 days a new plan to increase its capital levels once the FDIC or state regulators notify the bank that it is still operating below mandated capital targets.
The bank may be required to take other measures to boost its capital levels, such as getting a cash infusion from parent company First Mariner Bancorp or finding a merger partner. 1st Mariner then has another 30 days after regulators approve the new plan to adopt it.
Anthony Polini, an analyst at Raymond James & Associates in New York, said 1st Mariner has made a lot of progress and could meet the capital requirements within a "reasonable period of time."
"Everything is moving in the right direction," he said.
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