For banks, good news is bad news...

For banks, good news is bad news is over

As the public (and the media) prepare for a flood of third-quarter bank earnings, analysts predict good news, with one caveat: Don't be fooled by dramatic year-to-year gains.


For many mid-Atlantic banks, the good news this year has been that the bad news largely is over. So, companies such as MNC Financial Inc., Signet Banking Corp. and Baltimore Bancorp, which reported some large quarterly losses in 1991, have been able to crank out equally large gains in comparison to last year's numbers.

Though the second-quarter to third-quarter change won't be quite as dramatic, investors should expect "more good news," said John Bailey, banking analyst at Ferris, Baker Watts. "It's gotta stop sometime, but not this quarter."


"I suspect even the weaker performers will be able to show good numbers," said Arnold G. Danielson, of Danielson Associates, a bank consulting firm in Rockville.

John Heffern of Alex. Brown says net interest margins are beginning to flatten out a bit, but that's being countered by improvements in asset quality.

One red flag would be a company whose troubled assets continued to grow substantially.

Another cause for concern would be a bank whose net interest margin contracted in the third quarter, says David B. Sochol of Legg Mason. But generally, he said, "Assuming [the region is] like the rest of the industry, it should be a very good quarter."

MNC offers more with Maestro card

If MOST is not enough, MNC Financial Inc. is now offering more with Maestro. The Baltimore-based banking company yesterday announced it has signed with the Maestro network, a MasterCard International Inc. subsidiary.

Like MOST, Maestro allows cardholders to withdraw money from their bank accounts electronically. There are two major differences: MOST is regional, Maestro is international; and MOST primarily is for transactions with banks, while Maestro works with merchants.

The card -- really just an insignia that gets added to your bank's ATM card -- is for "point-of-sale" purchases at participating merchants. So far, about 1,600 merchants in the United States accept Maestro, which started in August.


More merchants in Maryland are beginning to accept the MOST card. MNC's goal is to make its bank card useful when customers travel outside the region.

With Maestro, a debit card, MasterCard hopes to tap into the market that likes to pay now rather than use their credit card to pay later.

Ferris' researchers moving to Baltimore

Ferris, Baker Watts Inc.'s research team is on the move -- literally.

The five-member research department is moving to Baltimore, to be joined by three additional players to be named later. Also, the Washington-based company plans to hire two or three institutional salespeople, also to be located in Baltimore.

The moves come in the wake of last month's departure of Clifford F. Ransom II and Beryl "Budd" Bugatch, who were basically Ferris' entire institutional sales and research department. They went to Raymond James & Associates in St. Petersburg, Fla., reportedly for the chance to focus on research alone.


"We had two good men depart, and we are going to convert that into an opportunity to actually build the department," said chairman and chief executive officer George Ferris.

As before, the researchers will concentrate primarily on the Mid-Atlantic, especially small- to mid-capitalized companies, Mr. Ferris said.

The move will put research and institutional sales in the USF&G; building with the company's investment banking team, headed by Todd Parchman, and the over-the-counter trading unit, led by John Boo.

That will leave the Washington office with the syndicate, retirement planning, mutual fund, public finance and investment advisory departments, as well as the company's largest retail brokerage office and, of course, top management.

CHOICE is cutting its interest rates

CHOICE is offering a choice. CHOICE, the Towson-based Visa and MasterCard operation owned by Citibank N.A., currently charges 16.8 percent a year plus a $20 annual fee for most customers. On Nov. 1, the rate will drop to either 13.4 percent with the $20 fee or 15.4 percent and no fee.


That option will be available to all current CHOICE Visa and MasterCard holders and all new applicants who qualify for a card. CHOICE is Citibank's program for people with a solid credit history and no need for a card with bells and whistles. If a cardholder misses two payments in a row, the rate goes up to 19.8 percent until six monthly payments arrive on time.

CHOICE used to be known as NAC, for Baltimore-based National Acceptance Corp., which issued the cards before Citibank bought the operation in the late 1970s.

In April, Citibank said there were about 2 million CHOICE cardholders -- a good chunk of them in the Baltimore area -- out of 30 million Citibank cards in all.

The company also reduced its rates on the two types of Citibank VISA and MasterCards: The annual rate on Classic cards falls to 15.4 percent from 15.9 percent, with a $20 annual fee; and the rate for Preferred cardholders drops to 13.4 percent from 13.9 percent, with a $50 annual fee.