|By Jamie Smith Hopkins, The Baltimore Sun|
|McClatchy-Tribune Information Services|
A group of investors, many with local ties, have agreed to buy the
Officials stressed that 1st
Federal and state regulatory approval would be required for the sale. Banking consultants said Monday they expect regulators to consent because the deal appears to be the only way for the bank to avoid a takeover by the
Company officials called the agreement the best option they had. They expect the sale, if approved, will close in April.
"For four years, the bank has been under a regulatory order that it's been trying to satisfy, and we've reached the finish line," said
The investment group is led by
Now Priam is back, the biggest investor on a team that will act as the stalking-horse bidder for the bank in the parent company's bankruptcy process. Feinglass would become a member of a reconstitued board for the bank if the deal goes through but said he otherwise would have no role in managing the bank.
"The bottom line is I'm incredibly proud to be supporting an investment in my own hometown that I think has great prospects," he said Monday of a recapitalized 1st Mariner.
Without an infusion of capital, the bank's prospects weren't good.
Most recently, the bank's parent company was unable to pay millions of dollars in interest payments on trust preferred securities -- a bond-stock hybrid -- that were due in December.
Something had to give.
Feinglass said the bank's woes mainly stem from so-called "Alt-A" residential mortgages -- loans that don't qualify as prime but were seen as less risky than sub-prime -- that soured quickly in the housing bust. Huge write-downs in value caused the capitalization problems, he said.
He's confident that a revitalized 1st Mariner can be a major player in commercial lending to local businesses, the small and midsize firms that he says aren't served well by big banks.