First Mariner Bancorp reported yesterday that profit rose 38.7 percent in the third quarter, driven by increases in loans and revenue from service fees.
The parent of First Mariner Bank made $250,968 in the quarter that ended Sept. 30, or 7 cents per diluted share, compared with $180,991, or 4 cents per share, for the corresponding period a year earlier.
First Mariner's profit rose 42.8 percent to $694,124, or 20 cents per diluted share in the first nine months of the year, compared with profit of $486,233, or 14 cents per diluted share in the 1998 period.
"They delivered what they said they were going to deliver," said Collyn Bement Gilbert, a banking analyst at Baltimore-based Ferris, Baker Watts Inc. "It looked to me like they had some solid core earnings."
Shares of First Mariner were up 50 cents, closing at $9.50 on the Nasdaq market.
But First Mariner's stockholder's equity -- its capital base -- fell 13.7 percent to $24.4 million in the first nine months. And the company's book value per share of common stock fell 13.8 percent to $7.69.
Joseph A. Cicero, First Mariner's president, attributed the declines to $3.9 million in paper losses from investments in mortgage-backed securities. Those fell because of rising interest rates.
Cicero said the bank plans to hold onto the securities with the expectations that they will rise in value. "We are not really worried about it," he said. "We had no intention of selling. We knew this was a risk when we went in."
Despite the decline, First Mariner is considered by regulators to be "well capitalized."
First Mariner, a fast-growing community bank, has kept the accelerator down with assets growing 32.2 percent to $608.5 million in the first nine months of the year. Loans rose 48.5 percent to $325.4 million, and deposits were up 40.4 percent to $341.9 million in the nine-month period.
Edwin F. Hale Sr., chairman and chief executive officer of the 4-year-old company, said First Mariner plans to open four branch next year. First Mariner, which has 24 branches and eight mortgage offices, opened two branches this year.
"The asset growth will not slow," he said.
Hale expects the company to reach $1 billion in assets next year. "We have come a long way," he said. "We are right where we have expected to be."