Coming off a record year and first quarter, Legg Mason Inc. announced at its annual meeting yesterday a 2-for-1 split of its common stock.
The Baltimore brokerage and money management company also said it will pay a cash dividend of 6.5 cents per split share that would amount to an 18.2 percent increase for the quarter.
The stock split, payable Sept. 25 to shareholders of record Sept. 9, will double Legg's outstanding shares to 53.3 million. Legg shares closed yesterday at $61.25, up 43.75 cents.
Raymond A. "Chip" Mason, Legg's chairman and chief executive, categorized the company's year as "spectacular."
"With a rate of growth like ours -- and I don't expect it to continue -- all kinds of wonderful things happen to you," Mason said.
During the annual meeting at the Center Club downtown, Mason looked ahead. One of the trends the brokerage anticipates is the entry of banking companies into the brokerage business.
Brokerages deal with about 10 percent of the population, banks with 90 percent, Mason said. "But banks realize that the profit is in the 10 percent we have. So the business is ours to lose," he said.
As a defensive move, he said, companies such as Legg Mason must be able to provide banking services to their clients and offer them the convenience of receiving all of their financial transactions -- credit card balances, checking account balances and stock portfolio information -- on one statement.
"Soon, our clients won't need a separate banking relationship," Mason said. "I think that's where we're going for the high net worth person, and we're trying to get ready for that."
"Anyone can run a checking account. The tough part is investment banking. We have the ability to be the main source" for consumers.
To prepare for that eventuality, which Mason predicted is about three years off, Legg Mason filed in May for a federal charter as a savings and loan. If it is approved, the company will charter Legg Mason Trust Bank FSB, which would operate out of Baltimore. Legg would merge its trust company, Legg Mason Trust Co., into the savings and loan, which would then market trust products nationwide, according to the application for a thrift charter.
"We hope sometime in the month of August we can meet with regulators and discuss our application with them," said Timothy C. Scheve, Legg's executive vice president.
Mason also broached the possibility of the company's being acquired. "I'm opposed to being acquired, but I can't stop anyone from putting a bid in," Mason said.
For the fiscal year that ended March 31, Legg posted a $76.1 million profit, 33 percent higher than in the previous year. Last week, Legg Mason reported that its first-quarter net income, up 50 percent and first-quarter revenue, up 33 percent, both set records.
Pub Date: 7/24/98