ARLINGTON, VA. - H. Furlong Baldwin is a throwback.

At an investor conference here last week, the chairman and chief executive officer of Mercantile Bankshares in Baltimore took the stage with no PowerPoint slides or glossy handouts.

Unlike executives from companies such as $11.2 billion-asset Centura Banks of Rocky Mount, N.C., or $2.2 billion-asset Wesbanco of Wheeling, W.Va., Mr. Baldwin said he has no interest in building $8.1 billion-asset Mercantile into a one-stop financial services shop.

"We do two things: lend and manage money," he said to an audience of investors and analysts at the conference, which was hosted by Scott & Stringfellow Inc. of Richmond, Va.

Top executives from 11 Middle Atlantic and Southeast banks discussed their companies' financial performance, recent acquisitions, and how the Gramm-Leach-Bliley Act could change the way they do business.

Many of these companies have diversified and plan to spread further, but Mr. Baldwin said that Mercantile, the parent of 21 community banks in Maryland, Virginia, and Delaware, "will fail or … succeed as lenders."

In an interview after the conference, Mr. Baldwin said Mercantile is too small to offer a wide menu.

"It's an economy-of-scale game. Unless you are quite large, you shouldn't be in the product-driven business," he said. "We focus on the handful of things we know how to do."

David Trone, an analyst at Credit Suisse First Boston in New York, said, "Where midsize banks get into trouble is trying to be all things to all people." Where Mercantile excels, he added, is its lean 45.76% operating efficiency.

Mercantile's bread and butter is commercial loans. Three-fourths of its $157.7 million in net income in 1999 was from interest income - about the average of its peers.

It also has a thriving trust business, which helped boost its fee income 10% in 1999. At yearend the trust division had $13.9 billion of assets under management.

Mr. Baldwin said deregulation may help Mercantile indirectly - "if competitors who deliver the same services … diversify and take their eye off the ball."

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