Hungry First Mariner Bancorp of Baltimore took its first big bite out of the Maryland bank market last week, buying an Annapolis bank nearly twice its size.
First Mariner, started just last spring by the former chairman of one of the state's largest banks, intends to acquire Annapolis Bancshares, for $17.7 million, or about two times book.
"This is the first volley of many that we will see from First Mariner," said Lew Sosnowik, analyst with Koonce Securities in Rockville, Md. "If you think Edwin Hale will be happy running a two-office institution, then you need to stop inhaling."
Edwin F. Hale, chairman of First Mariner, is a well-regarded local banker whose reputation was enhanced by his turnaround performance at the $2.3 billion-asset Baltimore Bancorp, which was sold for a hefty profit about a year ago.
First Mariner, whose officials could not be reached for comment, opened at about $25 million of assets, has grown internally to $42 million since then, and will become a $118 million-asset institution when the Annapolis deal closes by the second quarter.
Mr. Sosnowik said he thinks First Mariner could grow, if it wanted, to about $1 billion in assets within a year. Other analysts said it will probably expand to about $250 million.
"I think everybody in the local banking community has the same comment: 'Watch out for Ed Hale. He will be a force in this market,'" said Alex Hart, analyst with Ferris, Baker Watts Inc., a Baltimore investment firm.
The best evidence of the strength of Mr. Hale's reputation is the spectacular run-up in Annapolis Bancshares stock. In the four days since the deal was announced last week, more than 46,300 shares were traded, with the price surging $4.50, to $21.50 a share.
In the entire preceding month, only about 1,000 shares were traded.
Investors are buying up Annapolis Banchshares stock not to make a profit on the pending deal - the per-share deal price is only about 60 cents more than this week's trading price - but to get First Mariner stock, analysts said.
Privately held First Mariner will exchange two-thirds of a share of its stock plus $15.50 for each outstanding share of Annapolis Bancshares.
First Mariner can eat the larger fish because it has raised more than $10 million of capital, much more than Annapolis Bancshares' capital reserve.