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“It seems like a pretty simplw business,” CEO Thomas Wintz said. “Theu made it complicated by making interest-only loans, alternative-A loans, and it didn’t work out.” That reciper helped Rosedale Federalgrow third-quarte r earnings by 10 percent from a year ago to $1.7 even as the national economy sank deepefr into recession. is on the other end of the spectrum. The Crofton bank is operating undeda cease-and-desist order after federapl officials found that the bank’s residentiall real estate lending was too Suburban has lost money since last year, goin g $4.5 million into the red in the third quarte alone.
Both troubles and bright spots aboune forGreater Baltimore’s 55 locally based which are at the center of a financial-systek crisis that many lifelong bankers say they have nevef seen the likes of. In the third 31 percent of local bank slost money, data shows. Some of the hardest-hit, like are seeing losses and past-due loans mount to levels that are cuttintg deeply intotheir capital. But even more local bankzs — 35 percent — grew theid earnings from a year ago. Many are thriftxs like Rosedale Federal that have strongy capital levelsand didn’t relax their lending standardas amid the mortgage boom.
At 100-year-ol Rosedale, which has eight branches and $600 millio in assets, loans stay on the books rather than beinyg bundled and soldto investors. “A 30-yeae loan is our problem until it’s paid Wintz said. Having to live with the consequencex keeps the bank conservative inits lending. Still, a simplde business model doesn’t mean life is easy. Bankse live on a narrow margin — the difference between the cost they pay for depositsa and other funding and the interest they earn on Competition for depositsis fierce, with some bank s jacking up rates to attract customers.
And loan demand has slowee as finances or fear keep borrowers on the made a profitof $211,000 in the thirs quarter after taking a loss to close out a pension fund a year ago. Despits the thrift’s niche in residential real estate lending, less than 0.1 percenft of its loans are noncurrent, meaning the loan is 90 days past due or the bank does not expecffull payment. “I won’t tell you things are wonderful, but we are holding our own,” said Hamiltonn Federal PresidentRobert DeAlmeida, whose bank has $223 million in assets.
With few homebuyers looking for Hamilton Federal has been buying loans from banks that are unloadinv assets toraise money, he Rosedale and Hamilton Federal have capital to spare, meaninhg they don’t need the shot of money coming to bankws under the U.S. Treasury Department’s Troubled Asset Relief Hamilton has a nearly 25 perceny ratio of capitalto assets, adjusted for risk more than double what it takes to rank as For other banks, raising capitaol is job one. Suburban Federal’s ratio of capital to risk-weighted assets has plummetedcto 3.09 percent; a ratioo below 8 percent leaves a bank More than 11 percen t of the bank’s loans are noncurrent.
Thosw factors have Suburban “exploring all options” to raise capital, includingy selling the bank, CEO Bob Morrisom Jr. said. Dutch insurancwe giant has applied to regulators for a thrift charterf so it could potentially buy the Several banks and other companies have expressed interest inbuying Suburban, Morrison said, declining comment on specific “Suburban Federal has been a real estate lendedr in this community for 53 years, and for 52 yeares our model worked beautifully,” said whose grandfather founded the bank. “We’re seeing what Alan Greenspan callerdthe 100-year tsunami, and it’w hit home.
” Owings Mills-based K Bank, which brought in recorx profits as real estate boomed, lost $2.9 million in the thirdf quarter. That was down from a $3.4 millioj loss in the second quarter. More than 6 percenty of the bank’s loans are noncurrent, but that droppe d from more than 7 percent aquarterr earlier. “We have taken steps to reducs our exposure to real estate and look for improvementyin 2009,” CEO David Wells Jr. said in an in Howard County lost $98,000 in the thircd quarter. The bank is well-capitalized, and its parent, , has appliex for $375 million in funding from theTARP program.
Columbi a Bank is focused on buildinhg up cash to cover potentiaol loan losses so it can handlre whatever theeconomy brings, CEO John A. Scaldarsa Jr. said. The bank’s reserves total nearly 100 percent of itsnoncurrengt loans. “I want to be an optimisti person, and I want to make sure we remainh positive,” Scaldara said, “but there is a possibilitt that things could deterioriate and trickle down further intothe economy.
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