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Ordered by regulators to improve capital ratios at its bank unit, First Mariner Bancorp of Baltimore is unloading a consumer finance arm for about half of what it thinks the business is worth.
October 13
With two regulatory orders adding capital pressure, First Mariner Bancorp of Baltimore is turning to its existing shareholders for a boost.
On Tuesday, the $1.5 billion-asset company filed a registration statement that would allow it to raise up to $20 million by extending rights to its shareholders to buy new common shares.
First Mariner said it also has standby purchase agreements with institutional and high-net-worth investors for an unspecified amount of its stock.
The filing did not specify the total number of shares the company might issue or the pricing.
The move to raise capital follows the company's October announcement that it struck a $10.5 million deal to sell Mariner Finance LLC, its consumer finance business, to MF Holdco LLC, a venture controlled by Milestone Partners, a private-equity firm in St. Davids, Pa. That deal is expected to close this month.
At the end of the third quarter, First Mariner's bank unit was adequately capitalized with a leverage ratio of 5.37% and a total risk-based capital ratio of 8.42%.
A September cease-and-desist order with the Federal Deposit Insurance Corp. and its state regulator requires the bank to have a leverage ratio to 7.5% and a total risk-based capital ratio to 11% by June 30.
Additionally, late last month First Mariner entered into a written agreement with the Federal Reserve that requires the company to submit a capital plan within 60 days.
