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MNC portfolio servicing headed for Dallas firmThe...


MNC portfolio servicing headed for Dallas firm

The NationsBank/MNC Financial merger continues quietly, step by step.

Last week, in an internal memo that so far hasn't been reported publicly, the two companies said they would transfer the servicing of a portfolio of nonperforming commercial loans to a Dallas company that once was part of NationsBank. With it will go 40-plus employees who have handled the portfolio, although they'll be able to stay in the Baltimore area.

AMRESCO, a NationsBank subsidiary that was sold to a limited partnership last year, will take over $300 million in loans that are being handled by MNC's Special Assets Commercial Group, according to a "Transition Update" issued within the two companies last week.

With the transfer, to take place after the banking companies merge this fall, all MNC employees in the group will be offered jobs locally with AMRESCO, according to the memo.

"This will continue an ongoing relationship with AMRESCO," Douglas T. Ledwith, head of MNC's Special Assets group, said in the memo. "The move is consistent with the NationsBank strategy of using an outside third party to manage troubled commercial assets."

Mr. Ledwith will remain in charge of MNC's Special Assets Real Estate Group and its South Charles Realty Corp., which are whittling away the remainder of the company's $709 million in nonperforming assets (as of June 30).

In other merger moves, the Charlotte company said this week it would allow Washington-based ASB Capital Management to remain an independently run investment adviser. And The Sun reported that MNC planned to sell its 60-member stock transfer unit to Chemical Banking Corp. of New York.

More free fall remains in economy, Silber says

Time for our semiannual reality check with Baltimore's resident economic doomsayer, Arthur Silber, the president of Sterling Bank & Trust.

So far, Mr. Silber has not been wrong in the last two years as he's debunked all predictions of a strong recovery. A conversation this week finds him every bit as gloomy.

"I really feel the economy still has a good bit of free fall left in it," he said, "primarily because of the defense industry downsizing."

One example: At a dinner several weeks ago with members of the Richmond Federal Reserve Bank, Fed Governor John LaWare pointed out that the city of Charleston, S.C., alone was due to lose some 70,000 jobs because of Army base closings.

"I think we're already slipping back into technical recession," Mr. Silber suggested. It takes two consecutive quarters of decline in gross domestic product for economists to declare a recession.

The Federal Reserve, despite Chairman Alan Greenspan's warnings to the contrary, will have to keep interest rates stable or reduce them, says Mr. Silber. Inflation, except for the expected blip because of the Midwestern flooding, is nonexistent, he says.

As for the banks, "There's no loan demand," he said. And they don't have a lot of cash because deposits are flowing out of banks and into mutual funds and the like.

"And hopefully I'm wrong about everything I've said," Mr. Silber added with a laugh.

Owings Mills banker joins MasterCard forum

MasterCard International apparently is impressed with Robert M. Bouza and the operation he's running at little Key Federal Savings Bank in Owings Mills.

This week the credit card company named Mr. Bouza (rhymes with "yowza") as a charter member of its newly established Secured Card Advisory Forum. The group of 15 bankers will meet occasionally to address "critical issues facing banks entering the secured credit card market," according to a Key Federal statement.

Secured cards, a relatively new entry to the banking business, are like standard credit cards except that they're backed by money in a cardholder's interest-bearing savings account.

Mr. Bouza, executive vice president at Key Federal, came to the savings bank in 1982 after eight years with Chemical Bank in New York, most recently as vice president in charge of credit card operations. Before that he worked at Eastern National Bank on Long Island, and Chase Manhattan Bank in New York.

At Key Federal, Mr. Bouza has set up one of the nation's first secured credit card processing centers, in Havre de Grace. The company employs more than 200 people and has issued more than 350,000 cards.

A MasterCard spokesman says the company has decided to make secured cards one of its core products, and wants the advice of the forum members on how best to market the cards and to educate the public about them.

"It's not only a product to re-establish credit, but to establish credit," said MasterCard spokesman Steve Apesos.

Fidelity is offering more of others' funds

Sometimes even when you can beat 'em, you join 'em.

That seems to be Fidelity Investments' philosophy. This month the nation's largest mutual fund company announced it will expand a program that allows customers to invest in mutual funds of other companies.

Fidelity's FundsNetwork will add some 200 no-load funds offered by nine fund companies. The network already offers about 1,500 funds from other companies.

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