H. Furlong Baldwin, chairman and chief executive of Mercantile Bankshares Corp., will run Maryland's largest independent banking company for another 14 months, after directors voted yesterday to extend his contract to Feb. 1, 2000.
The directors also authorized Mercantile to buy back up to 3 million shares of its common stock, and approved a quarterly dividend of 22 cents per share, payable Dec. 31, to stockholders of record as of Dec. 22. The dividend matched the 22 cents paid to shareholders in September and June.
L Baldwin's contract extension surprised few industry experts.
"He has done a great job," said Collyn Bement, a banking analyst at Ferris, Baker Watts Inc. in Baltimore. "He has built an institution that is a banking powerhouse in this region."
The board first voted to extend Baldwin's contract to February 1999 two years ago, with an option to extend it until 2000. Yesterday, the directors exercised the option.
Baldwin, who will turn 67 next month, had been slated to retire in February 1997.
Mercantile has flourished under Baldwin, who joined the company in 1956 and became chief executive in 1976, and chairman in 1984. It is the largest independently owned banking company in the state with $7.4 billion in assets, highly profitable, and ranked as the best-capitalized large bank in the country.
"I think he is doing shareholders a service by being on another year," said John J. Rezai, a banking analyst at Blaylock & Partners LP in Baltimore. "Mercantile has done a better-than-expected job given the competitive environment in Maryland with these fairly large out-of-state banks."
Baldwin was out of town yesterday and could not be reached for comment.
Analysts said Mercantile's plan to buy back more stock is a sign that management is optimistic about the bank's future. Mercantile has repurchased 1.5 million shares this year, and is authorized to purchase another 1.7 million shares under a
previously announced program.
"They are putting their money where their mouth is," said Rezai, who expects the stock to regain the $40 range next year. Shares of Mercantile closed at $36.44 in trading yesterday, down 56 cents.
Pub Date: 12/09/98