MNC may get non-local ownership Shift would leave only 2 major banks locally owned.


NEW YORK -- Maybe not tomorrow, and maybe not next month, but soon, MNC Financial Inc., a Baltimore-based institution since 1933, is widely expected to have a new owner from outside Maryland.

If expectation becomes reality, of the six major banking companies that once dominated Baltimore's skyline, only Mercantile Bankshares and Baltimore Bancorp would be locally owned.

Union Trust is now part of Signet, First National is part of Allied Irish, and Equitable is part of MNC -- and thus part of whatever befalls that beleaguered institution.

Would that be a bad turn of events?

"We have looked closely at outside ownership [in the industry] for six years and we don't see major change," says Margie Muller, Maryland's bank commissioner.

The impact of an outside owner would far more likely be determined by its philosophy and its health rather than where it is located.

Undermined by more than a billion dollars in bad real estate loans, MNC has provided little ballast to the local economy during the recent recession. It has steadily been shrinking its loan portfolio, reducing employment and all but eliminating charitable contributions.

In contrast, First National Bank of Maryland has been successful and stable since an initial equity investment was made by its Dublin-based parent in 1983. It has consistently expanded its lending. Charitable contributions to local institutions have tripled to several million dollars annually, exceeding the amount MNC averaged even during its salad days in the 1980s.

"When an owner has confidence in the management that's in place, when the company's name is unchanged and when the acquisition is treated as an investment rather than as a merger, then the company can keep its local identification," said Charles W. Cole, First Maryland's president and chief executive.

Statistics collected by Ms. Muller's office through the middle of last year indicate that the 13 Maryland banks acquired during the 1980s by out-of-state owners have, on average, expanded their assets far more quickly over the past five years than the major local banks have.

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