First Mariner Swings to 4Q Profit, Will Cut Three Branches

Fees from mortgage banking and fewer troubled loans lifted First Mariner Bancorp (FMAR) in the fourth quarter.

The $1.38 billion-asset company in Baltimore earned $1.6 million in the fourth quarter after losing $4 million a year earlier.

Net interest income rose 18.4% from the fourth quarter of 2011, to $9 million, because of higher balances of mortgage loans held for sale. The net interest margin increased by four basis points, to 3.17%, year over year.

Noninterest income rose 119% from a year earlier, to $16.9 million, because of higher revenue from mortgage banking and fewer one-time charges.

Noninterest expense increased 28% from the fourth quarter of 2011, to $21.9 million, because of higher personnel costs and expenses related to foreclosed properties. The efficiency ratio improved to 84.69%, from 111.96%, year over year.

The company's loan book fell 12.9% from a year earlier, to $610.3 million. The provision for loan loss fell 29%, to $2 million, year over year.

Management said it continues to take steps to boost the bank's capital position and expects to close or sell three of First Mariner's 22 branches.

In September 2009, regulators gave First Mariner 10 months to attain a Tier 1 leverage ratio of at least 7.5% and a total risk-based capital ratio of at least 11%.

As of Dec. 31, First Mariner had a Tier 1 leverage ratio of 3.9% and a total risk-based capital ratio of 7.3%.

"Our improved profitability has increased our regulatory capital ratios, but these ratios remain below the levels required by regulatory orders, and we continue to work diligently to increase capital to levels required in our regulatory agreements in the future," Mark Keidel, First Mariner's chief executive, said in a news release. "We are in the process of evaluating the effectiveness of certain branches in our network and will consolidate three branches during 2013, as the needs of our customers are evolving and many are utilizing online, mobile and remote banking in lieu of physical branch locations."

In November the bank called off plans to sell a minority stake in itself to a private-equity firm after determining that it could improve its capital levels without the investment.