Pennsylvania bank submits highest bid for 1st Mariner
|By Kevin Rector, The Baltimore Sun|
|McClatchy-Tribune Information Services|
A hearing is scheduled for Monday in
If it goes through, a sale of 1st Mariner would bring to a close a once-grand
"You had a number of really significant banks headquartered there," said
First Mariner was founded in 1995 by
Still the largest shareholder, Hale resigned as chairman of First Mariner in 2011. He also owns the soccer team the Baltimore Blast.
The bank, meanwhile, struggled with soured residential loans during the housing crisis and was operating under orders from regulators to boost its capital levels.
First Mariner filed
The debt in default is owed by the parent company and not the bank, which is not in bankruptcy. Bank deposits, loans and contracts are not affected.
Hughes said he is optimistic his company's bid to buy the bank will be sealed and consummated before
"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."
Monday's hearing on 1st Mariner's sale could prove perfunctory. National Penn's emergence with a competing bid may have eased concerns about a lack of competing bids expressed by creditors.
The official unsecured creditors committee in First Mariner's bankruptcy objected last month to the planned auction because the
Priam's investment group included
Before First Mariner filed for bankruptcy, Priam agreed to pay
If National Penn's deal stands, Priam will receive a
Word of an unidentified second bidder 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 wondered why the bid jumped so high from Priam's initial offer. Still, it makes sense if there was intensely competitive bidding war with Priam, 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 also should be able to come into 1st Mariner and drop expenses by cutting overhead costs immediately, Ely said.
With the 1st Mariner brand, Hughes said, National Penn would focus on expanding commercial banking and 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.
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
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