What's in a name?
For Alex. Brown Inc., the answer is: $10.5 million.
That's how much the venerable Baltimore investment banking firm has agreed to pay for the use of its own name -- Alex. Brown.
In a brief but curious announcement yesterday, the 193-year-old company said it has agreed to pay $10.5 million to "certain lineal descendants of Alexander Brown, the founder of the firm in 1900."
As it turns out, those lineal descendants are Benjamin H. Griswold IV, chairman of the company, and his brother, Jack S.
Griswold, who is a director of Alex. Brown Realty Inc., and a principal in Armata Partners L.P., a small Baltimore investment banking firm.
The two, who will split the $10.5 million, are great-great-great-great grandsons of Alexander Brown.
Until now, Alex. Brown merely had been using its name -- borrowing it, so to speak -- under an agreement with the two Griswolds.
The company, whose main subsidiary is called Alex. Brown & Sons Inc., had no explanation of why it chose to buy its name now, although its revenues and profits have never been so high.
To indicate what the impact of this deal will be on the company's bottom line, Alex. Brown said it will amortize the payment over 40 years, which means that each year it will add $262,500 to the company's expenses.
Last year Alex. Brown's total expenses were about $360 million, according to Chief Financial Officer Beverly L. Wright.
"We felt that in many ways," Ms. Wright said, "it was a natural extension of being a public company -- owning your own name."