Acquisition Would Add Resources, Clout To Dauphin Deposit's

Dauphin Deposit Corp.'s securities subsidiary, Hopper Soliday & Co., will get added financial muscle after the planned acquisition of the Pennsylvania bank by Allied Irish Banks PLC.

Dauphin, with assets of $6 billion, is the smallest banking company with a section 20 subsidiary, as bank holding companies' securities underwriting units are known.

The $1.36 billion acquisition by Allied Irish Banks, through its U.S. subsidiary, First Maryland Bancorp, will boost the unit's asset size to $17 billion and place it among the 50 largest U.S. banks.

Observers said that the post-merger bank's greater resources could augment the standings of Hopper Soliday's products, which include negotiated municipal bonds and financial advisory and consulting services.

First Maryland underscored the strategic importance of Hopper Soliday by naming Robert L. Fryer, currently the securities unit's CEO and president (and chief operating officer of Dauphin), as chairman of the section 20 company. He was also appointed to the executive steering committee directing the merger.

A statement from First Maryland said Mr. Fryer would work with the Baltimore bank's president and CEO, Frank P. Bramble, "to further develop First Maryland's nontraditional banking strategy."

Though acquiring Hopper Soliday may not have been a top reason for the purchase, it certainly adds to the deal's attractiveness, said James Schutz, an analyst at ABN Amro Chicago Corp.

"Clearly, that had to be one of the attractions for Allied Irish," said Mr. Schutz. Commissions and fees generated by the section 20 company last year totaled less than $10 million, making it "a long-term play," he said.

Retail and institutional brokerage services now account for most of Hopper Soliday's revenue, but it is still the top underwriter of tax-exempt municipal bonds in Pennsylvania.

It led 45 municipal debt issues last year, generating $519 million in volume, according to Securities Data Corp. It is now developing its equity and corporate finance capabilities.

Although the deal makes Dauphin Deposit, together with First Maryland's other Pennsylvania subsidiary, York Bank and Trust, the dominant financial player in central Pennsylvania, it does not appear to pose an immediate threat to in-state corporate finance competitors PNC Bank Corp. or Mellon Bank Corp.

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