Mercantile Bankshares Corp. said yesterday that it is boosting its quarterly dividend 10 percent, and that directors approved a definitive agreement to acquire Marine BanCorp in a stock swap valued at about $4.4 million.
Directors of the state's largest independently owned banking company, which has $7.1 billion in assets, voted to raise the dividend by two cents to 22 cents a share payable June 30.
"We have always been what we regard as good dividend payers, and a 10 percent increase on the dividend is in line with our earnings," said H. Furlong Baldwin, chairman and chief executive of the Baltimore-based Mercantile. "We think it is justifiable and proper and the right thing to do for the shareholders."
A year ago, Mercantile raised its dividend to 30 cents from 26 cents, and split its stock three shares for every two.
The company is coming off a solid first quarter in which net income rose 10.9 percent to $35.5 million, and assets, deposits and loans grew at a steady clip.
Shares closed yesterday at $35.25, down 25 cents.
Mike Coiro, director of retail research at Ferris, Baker Watts Inc., said Mercantile is a good buy at its current price, which is nearly 12 percent below its 52-week high of $40 on Dec. 8, 1997.
"I think it is a great company," Coiro said. "It is the type of stock you build a position in when they have a pullback."
Mercantile continues to build its network of community banks with the Marine BanCorp transaction, which is expected to be completed in the fourth quarter.
Marine, based in Chincoteague, Va., has $22 million in assets and two offices. Marine shareholders will receive 0.75 shares of Mercantile for each share of Marine.
Pub Date: 6/10/98