BALTIMORE- Dismayed by the number of local banks bought by out-of-staters, a group of Maryland businessmen is forming a community bank they can call their own.
The new bank will appropriately be named MarylandsBank.
"All one word with a capital B," said George Mantakos, a longtime local banker and CEO of the new bank. "We're just trying to make it very evident that this is Maryland's bank and not NationsBank."
The MarylandsBank moniker will be unveiled when the group renames two institutions, one it bought in February and a second it plans to buy later this month Ironically, one of the banks was acquired from an out-of-state banking company.
Dearth of Local Investors
While almost all of the large Maryland banks that survived the real estate debacle of the late 1980s have been sold - to Nationsbank, First Union Corp., First Fidelity, and others - the state has been dry in terms of local investors either starting new banks or making acquisitions.
The state was a hotbed of start-ups in the 1980s, but many new bank investors got burned when the recession hit. Arnold Danielson, a Rockville bank consultant, said many investors are just gun-shy.
"We were concerned Maryland was fast becoming a branch bank state, and we believe there is room for a good, strong community bank run by local investors and a local management," Mr. Mantakos said. "We believe the profitable wave of the future is small community banks and large nationals that handle multimillion-dollar accounts."
Mr. Mantakos' investor group - co-headed by accountant Jamie Jameson, the new bank's chief financial officer, locally known for crafting start-up bank transactions - assumed 100% control of Baltimore's Farmers Bank from Harrisburg, Pa.-based Dauphin Deposit Corp. earlier this year.
With money raised from a stock sale, the investors acquired Farmers' two branches and $15 million in assets for an undisclosed price. The transaction has remained relatively transparent, however. The bank has remained Farmers in name, pending the investor group's purchase of another local thrift, Garibaldi Federal Savings Bank. Once that is done the bank will assume its new name and combine the two institutions, creating a $30 million bank.
The draw of both thrifts, said Mr. Mantakos, is that they arc profitable, have solid customer bases, and are well capitalized, with a combined core capital ratio of 5.86% and a risk-based capital ratio of 12.78%.
"We didn't want to start from scratch, because it would take five years before we realized any return on our investment; [and] that's a very high hill to climb. And we didn't want to acquire a troubled institution."
Mr. Mantakos and Mr. Jameson both have histories with troubled institutions. Mr. Mantakos, a 25-year veteran of the old Union Trust Co. of Maryland before it was acquired by Richmond-based Signet Banking Corp., left that job to salvage a suburban Maryland thrift in 1989. He sold that thrift, Fairview Federal Savings and Loan, to a local bank in 1992, staving off a federal takeover
Mr. Jameson is the founder and former chief executive of Bank Maryland Corp.'s Bank of Maryland, which grew fast and big under his leadership but fell on hard times after he left in 1991.
Ms. Rath is a freelance writer based in Baltimore.
