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First Mariner reports $7.9M third quarter loss

On the same day it reported a $7.9 million loss for the third quarter of 2011, troubled First Mariner Bancorp also lost its president.

First Mariner, parent company of 1st Mariner Bank, said Friday that Daniel E. McKew, who joined the bank in October 2010, had resigned “to pursue another professional opportunity.” McKew came to First Mariner from SunTrust Leasing Corp. where he served as president and CEO from 1998 to 2010.

The bank has been struggling to raise its capital levels to meet the terms of an agreement with a New York private equity firm, as well as comply with orders from federal regulators.

The quarter pushed those efforts back even though the pre-tax $7.9 million loss was smaller than the $9.1 million loss the company reported in the third quarter of 2010.

“We still continue to face strong headwinds in the real estate market,” said First Mariner CEO Edwin F. Hale Sr. “Our costs associated with foreclosed properties remain high as declining appraised values have forced us to take write downs on these assets.”

For the first nine months of 2011, First Mariner reported a pre-tax net loss of $26.3 million compared to $23.3 million in 2010.

The company also saw loans outstanding drop 12 percent in the quarter to $736.7 million, compared to $832.9 million at the corresponding point last year. Deposits also declined, dropping 7 percent in the quarter.

First Mariner’s total assets also dropped in the quarter, falling 13 percent to $1.14 billion from $1.32 billion the previous year.

The bank did see improvement in its non-performing assets, which decreased 4 percent.

Loans delinquent by more than three months decreased 35 percent compared to the third quarter of 2010.

First Mariner is working with New York-based Priam Capital Fund LP in an effort to raise more than $123 million. If First Mariner is able to hit that number, Priam will add $36.4 million of its own. Under the deal, Hale would have to step down and a new management team would be brought in.

The bank had already missed two deadlines, which were pushed back as the deal was revised. First Mariner now has until Nov. 30 to raise the money. Priam is allowed to terminate the deal if certain goals aren’t met.

First Mariner’s Tier 1 capital to risk weighted assets was 4.6 percent at the end of September, compared to 7.6 percent in the third quarter of 2010. According to terms mandated by federal regulators, First Mariner needed to raise its Tier 1 leverage and total risk-based capital ratios to 6.5 percent and 10 percent, respectively, by March 31, 2010, and to 7.5 percent and 11 percent, respectively, by June 30, 2010.

The Tier 1 capital ratio is a bank’s core equity capital compared to its total assets; the total risk-based capital ratio is the requirement that banks keep a minimum ratio of estimated total capital to estimated risk-weighted assets.

First Mariner’s shares lost nearly 27.8 percent Friday to close at 13 cents. The earnings were released after the markets closed.

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