Old York Road Bancorp, smarting from a fourth consecutive annual loss, has ousted its president after just six months.
Erwin K. Wenner has been replaced by James Mack, president and chief executive of the Pennsylvania company's subsidiary, Bank and Trust Company of Old York Road.
The move comes three weeks after chief financial officer George Rapp left the Willow Grove-based bank for a job with First Executive Bank, Philadelphia.
Mr. Wenner had been hired late last August by the $230 million-asset company after former chief executive Stephen P. Szemes went on disability leave. Old York officials declined to elaborate on Mr. Wenner's departure, except to say the decision was "mutual."
The management change follows the Dec. 30 announcement that Midlantic Corp. has agreed to buy the bank for about $28.25 million in cash and stock. The transaction is expected to be completed during the second quarter of 1995.
Old York Road's struggles over the past few years are mainly attributable to problem assets caused by the collapse of the local commercial real estate market.
The company lost $3.5 million in 1994, compared to net losses of $404,000 in 1993, $4.3 million in 1992, and $5 million in 1991.
At the end of 1994, the bank had $15.5 million in nonperforming assets, or 6.71% of all assets, down from its peak of $22.5 million in 1991.
The company is operating under February 1993 cease-and-desist orders from the state and the Federal Deposit Insurance Corp., which required the bank to reduce nonperforming assets, improve management's effectiveness, revise its lending policies, and maintain a leverage capital ratio of 6.5%.
Old York Road raised $6.2 million in capital in November 1993 to bring itself into compliance, but shareholders' equity dropped 22% in 1994 to $12.7 million.
That left the bank with a leverage ratio of only 5.58%, although its risk-based ratio of 9.29% met regulatory requirements.
Regulators had also criticized Old York Road for its community reinvestment record, for having inadequate reserve coverage for bad loans, and for concentrating its loan portfolio in commercial real estate. Officials have since shifted funds from commercial real estate to increase the bank's consumer loan portfolio.
