Pennsylvania bank emerges as winning bidder for 1st Mariner
By Kevin Rector, The Baltimore Sun | |
McClatchy-Tribune Information Services |
The deal, a sort of bookend on a once-grand
If approved, it would be the latest in a string of acquisitions of
"You had a number of really significant banks headquartered there," said
1st Mariner isn't part of the bankruptcy case, and its parent has stressed that bank deposits, contracts and other business will not be affected. First Mariner estimated in February that its obligations to creditors exceed
Hughes said he is "optimistic" his company's bid to buy the bank, announced late Friday, will be sealed and consummated in the second quarter of this year, at which time National Penn would begin reinvigorating 1st Mariner franchises throughout
"It's consistent with our business approach: local, decision-making community banking in a very strong market," Hughes said. "We like the First Mariner brand in that market, we like the retail franchise, and we think the opportunity is there to grow that brand at a greater rate."
A sale hearing, where challenges to the transfer and sale can be raised, is scheduled in
What, if any, objections will be raised is unclear, though the competition National Penn introduced into the auction process may have eased some of concerns about a lack of competing bids expressed by creditors.
National Penn won 1st Mariner over rival bidder
Priam's investment group included
Priam had put forward a
Last month, before National Penn had announced its interest, the
"Rather than encouraging competition among potential buyers for the Debtor's assets, the Auction Procedures -- and their condensed timeframes, excessive breakup fees, and preclusive requirements for competing bidders -- foreclose any realistic possibility of a competing bid," the committee's attorneys said in a court filing
Word of an unidentified second bidder, beyond Priam, first came in a court filing on Wednesday.
Hughes said National Penn's entry into the auction was consistent with its "acquisition strategy," and 1st Mariner met its two major criteria for banks to target: assets of
"When we looked at the market and the opportunity there and the franchise value, we saw great value and synergy" in 1st Mariner, he said.
The escalation of bids to its winning
"If you look at these transactions historically, across the country, I don't think that is atypical that the bid comes up substantially," Hughes said.
Ely, the banking consultant, said he also wondered why the bid jumped so high from Priam's initial offer. Still, if it was because of an intensely competitive bidding war with Priam, National Penn's decision makes sense, Ely said.
"I can see the logic of the geographical expansion," he said. "And what they may have figured is it's going to be a lot cheaper now than when new management comes in and cleans things up and gets things back on track."
National Penn should also be able to come into 1st Mariner and drop expenses by cutting down on overhead costs almost immediately, Ely said.
National Penn, headquartered in
With the 1st Mariner brand, Hughes said, National Penn would be focused on expanding commercial banking and expanding products for local customers. While some "administrative IT functions" would be consolidated, most customers would continue to see familiar 1st Mariner employees in their neighborhood branches, he said, declining to provide specifics about potential job losses.
"What we would bring is a broader array of products, and what we hope to see on the commercial side is the ability to grow the employee base," Hughes said.
1st
First Mariner stock -- which once traded above
In recent years,
Provident, based in
Created as a repository of Southern wealth in 1864, it was a place where executives served their elite clientele quietly and ran their business conservatively. It was a place where vault security rivaled
--The
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