Holding company offsets 1st Mariner Bank's losses

The Baltimore Sun

1st Mariner Bank posted a fourth quarter loss of $14.9 million as it continued to struggle with soured real estate loans but was able to maintain its capital levels with infusions from its holding company.

The Baltimore bank received $16.1 million from First Mariner Bancorp to offset the losses, leaving it with core capital of about 7 percent of its assets as of Dec. 31, according to documents filed with the Federal Deposit Insurance Corp.

A bank is considered "well capitalized" at 10 percent; 4 percent is generally considered minimally acceptable.

About $6 million of the infusion was cash from the holding company. The remainder is what the bank said is the equity in Canton Crossing II, a two-story building near its headquarters that houses a bank branch and restaurant.

1st Mariner, with about $1.28 billion in assets, is the second-largest bank based in the Baltimore area, and it would become the largest if M&T; Bancorp completes its pending acquisition of Provident Bankshares. Edwin F. Hale Sr., chairman and chief executive, is also chairman of the Baltimore Area Convention and Visitors Association, owns the Baltimore Blast professional soccer team and is the developer of Canton Crossing.

The FDIC report included earnings only for 1st Mariner Bank. The holding company said it could release consolidated earnings by late next week.

The capital infusion comes a month after First Mariner Bancorp said that it was deferring interest payments on $73.7 million in debt issued by seven trust subsidiaries. The company said at the time it was trying to preserve capital.

Executives said the transfer does not deplete the value of the holding company.

"We chose to make the capital contribution to the bank because it needs it at this time," said Joe Cicero, president of the holding company and chief operating officer of the bank. "It doesn't hurt the holding company earnings at all."

The bank also reported $7.3 million in loan losses, nearly $6 million in securities losses and an $800,000 charge for "compliance restitution."

Cicero said the bank is working out an issue with regulators, and the money was put aside in case it has to make a payout.

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