Officials of MNC Financial Inc. and First Maryland Bancorp disputed reports yesterday that some of their bank subsidiaries have capital levels that are too low to allow them to secure brokered deposits.
Under regulations issued this week by the Federal Deposit Insurance Corp. only well-capitalized banks are allowed to accept or renew brokered deposits, whose owners can move them quickly from bank to bank in search of the highest interest rates.
A second tier of banks that are just adequately capitalized may seek a waiver from the FDIC to secure the brokered deposits, so called because they go through brokers.
The New York Times and American Banker reported this week that MNC's Maryland National Bank and American Security Bank subsidiaries, and First Maryland's York Bank & Trust Co. in Pennsylvania are among the nation's 10 largest under-capitalized holders of brokered deposits and are prohibited even from seeking waivers from the new brokered-deposit rule.
But an MNC spokesman said the company's two banks are adequately capitalized and therefore could seek waivers under the new rules.
A First Maryland spokesman said York Bank & Trust is well capitalized and therefore doesn't need a waiver.
Both companies, however, said they had no intention of seeking more brokered deposits.