MNC names new CEO MNC Financial also posts $82 million loss for second quarter


Frank P. Bramble Sr., 43, has been named the president and chief executive officer of MNC Financial Inc., replacing Alfred Lerner, who has held the position of CEO since September. Lerner, the company's largest stockholder, will remain chairman of MNC and chairman of the executive committee.

The bank-holding company today announced a loss of $82 million, or 96 cents a share, during the second quarter. MNC also said it is shifting $1.8 billion worth of troubled loans to a separate subsidiary away from its two banking operations -- Maryland National Bank and American Security Bank in Washington.

The second-quarter loss includes $22 million for severance payments connected to plans to cut expenses by about $100 million by the end of the year. Bramble said 200 workers lost their jobs since the beginning of the effort in May and the full number of reductions will be known in August. It has been estimated that up to 1,000 jobs will be eliminated as part of the plan, although MNC has never confirmed that.

By the end of the second quarter, the company had put into effect $29 million of the $100 million target.

The second-quarter loss was 10 percent worse than the same period a year ago, when the company lost $74.7 million, or 90 cents a share. The primary cause of the second-quarter loss was souring real estate loans as the company took write-downs and added to its loan loss reserves.

During the second quarter, MNC made a $72.9 million provision for loan losses, compared to $233.3 million during the 1990 second quarter. Even though the provision for poor loans was higher in the 1990 period, the overall loss was not as great as the 1991 quarter's because the corporation still had the very profitable MBNA credit card operation. That subsidiary was sold in early 1991.

Because of that sale, during the first six months of the year, MNC had a net income of $71.7 million, or 78 cents per share, compared to a loss of $68.5 million, or 85 cents per share, for the same period a year ago.

Bramble has been with Maryland National since 1972 and in February was appointed chief operating officer at the holding company and MNC's two subsidiary banks. He also continued to hold his previous position as executive vice president.

Two of Bramble's most important assignments at the bank have been to head up the merger of American Security Corp. of Washington with Maryland National in 1987 and the absorption of Equitable Bank into Maryland National in early 1990.

Since his appointment as chief operating officer, he has become visible in the corporation, often being quoted in company press releases.

In an interview today, Bramble said his three main goals as CEO will be to reduce the company's portfolio of bad commercial real estate loans, to increase the amount of core deposits in the banks and to pursue the company's cost cutting efforts.

"We are doing everything we can . . . to accelerate the removal of non-performing loans from our books," Bramble said.

As part of that effort, the company has completed an exhaustive review of its loan portfolios and identified about $1.8 billion of specific troubled assets. These loans are being transferred to South Charles Realty Corp., an MNC subsidiary established last year to manage and dispose of MNC's troubled real estate loans.

The loans were primarily culled from the company's $5 billion commercial real estate portfolio, leaving about $3.2 billion worth of the loans with the banking subsidiaries.

The isolation of the bad loans will allow "absolute focus" by the 120 loan-workout specialists, attorneys and other personnel, Bramble said. He said these people will not have to be concerned about preserving relationships with customers, but only with getting money back.

The shift will also relieve other parts of the company from having to deal with the bad loans. "It allows healthy parts of our company to do healthy things," Bramble said.

Whether the loans left with the banks will remain good depends on whether the commercial real estate market stabilizes, which it has yet to do, Bramble said. "There is no guarantee that what is left is perfect," he said. But if the market does level off in the coming months, MNC may become profitable in the fourth quarter, Bramble said.

In other management changes, Peter L. Gartman, MNC's chief financial officer, was appointed vice chairman of the corporation, following his election as a director.

Gartman, 42, was appointed an executive vice president of MNC in 1989 and treasurer in 1991. He began his career with the company in 1989, after serving for the prior two years as president and chief executive officer of GranTree Corp.

Additionally, H. Grant Hathaway will remain a vice chairman and director of MNC Financial, positions he has held since January of 1990 when MNC and Equitable Bancorporation completed their merger. Hathaway was president and chief executive officer of Equitable.

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