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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934. For the fiscal year ended December 31, 1999.
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the transition period from ___________________.
Commission file number: 0-21815
FIRST MARINER BANCORP
----------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 52-1834860
---------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification Number)
1801 SOUTH CLINTON STREET, BALTIMORE, MD 21224 410-342-2600
- ---------------------------------------- -------- ----------------
(Address of principal executive offices) (Zip Code) (Telephone Number)
Securities registered under Section 12(b) of the Exchange Act: NONE
# 7 Securities registered under Section 12 (g) of the Exchange Act:
COMMON STOCK, par value $.05 per share
(Title of Class)
Check whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
report, and (2) has been subject to such filing requirements for the past 90
days. Yes /X/ No / /
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-K is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /
The issuer's revenues for its most recent year were $47,737,000.
The aggregate market value of the voting stock held by non-affiliates
of the registrant as March 28, 2000 was $15,061,140.
- -------------------------------------------------------------------------------
The number of shares of common stock outstanding as of March 28, 2000
is 3,166,813 shares.
Documents incorporated by reference:
Annual Report of Stockholders - Parts II, IV
Proxy Statement - Part III
FIRST MARINER BANCORP
- -------------------------------------------------------------------------------
Annual Report on Form 10-K
December 31, 1999
Table of Contents
PART I
PAGE
Item I Business 3
Item 2 Properties 12
Item 3 Legal Proceedings 14
Item 4 Submission of Matters to a Vote of Security Holders 14
PART II
Item 5 Market for the Registrant's Common Stock and Related Stockholders Matters 15
Item 6 Selected Financial Data 16
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations 16
Item 7A Quantitative and Qualitative Disclosures About Market Risk 16
Item 8 Financial Statements and Supplementary Data 17
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures 17
PART III
Item 10 Directors and Executive Officers of the Registrant 17
Item 11 Executive Compensation 17
Item 12 Security Ownership of Certain Beneficial Owners and Management 17
Item 13 Certain Relationships and Related Transactions 17
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 17
2
FORWARD-LOOKING STATEMENTS
Part I and Part II of this Annual Report on Form 10-K contain
forward-looking statements that involve risks and uncertainties, such as
statements of the Company's plans and expectations, and unknown outcomes
including statements regarding growth strategies, new banking services and
payment of dividends. The Company's actual results could differ materially from
management's expectations. Factors that could contribute to those differences
include, but are not limited to, the federal government, changes in tax
policies, changes in interest rates, deposit flow, the cost of funds, demand for
loan products and financial services and changes in the Company's competitive
position, changes in the quality or composition of loan and investment
portfolios, and the ability of the Company to manage growth and are described
further in Exhibit 99 to this Form 10K.
PART I
ITEM I BUSINESS
GENERAL
First Mariner Bancorp (the "Company") is a bank holding company formed in
Maryland in 1994 under the name MarylandsBank Corp. The business of the Company
is conducted through its wholly-owned subsidiary First Mariner Bank (the
"Bank"), whose deposits are insured by the Federal Deposit Insurance Corporation
("FDIC'). The Bank, which is headquartered in Baltimore City, serves the central
region of the State of Maryland through 24 full service branches and 41
Automated Teller Machines ("ATMs"). At December 31, 1999, the Company had total
assets of $616,072,000. The Company and its subsidiaries had approximately 430
full time and part time employees as of December 31, 1999.
The Bank is an independent community bank engaged in the general commercial
banking business with particular emphasis on the needs of individuals and small
to mid-sized businesses. The Bank emphasizes personal attention and professional
service to its customers while delivering a range of traditional and
contemporary financial products and performing many of the essential banking
services offered by its larger competitors. The Bank offers its customers access
to local bank officers who are empowered to act with flexibility to meet
customers' needs in order to foster and develop long-term loan and deposit
relationships. The Bank offers residential lending services through its wholly
owned subsidiary, First Mariner Mortgage Corporation ("FMMC").
The Company's executive offices are located at 1801 South Clinton Street,
Baltimore, Maryland 21224 and its telephone number is (410) 342-2600.
MARKET AREA AND MARKET STRATEGY
The Bank's core market is central Maryland, which consists primarily of
Baltimore City, Baltimore County, Harford County, Talbot County and Anne Arundel
County. This area contains a high concentration of population and businesses and
the local governments are committed to business development in the region. The
Company believes that its market area is economically stable and is largely
middle-class with a median family income of $44,000, which is above the national
average.
As an independent Maryland-based community bank, the Bank is engaged in the
general commercial banking business with particular emphasis on the needs of
individuals and small to mid-sized business. The Bank emphasis personal
attention and professional service to its customers while delivering a range of
traditional and contemporary financial products and performing many of the
essential banking services offered by its larger competitors. The Bank offers
its customers access to local bank officers who are empowered to act with
flexibility to meet customers' needs in order to foster and develop long-term
loan and deposit relationships. The Company believes that individuals and
businesses in its market area are dissatisfied with the large out-of-state
banking institutions, which have acquired local banks. Management
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believes that the Bank has a window of opportunity to establish business ties
with customers who have been displaced by the consolidations and who are anxious
to forge banking relationships with locally-owned and managed institutions.
These consolidations also benefit the Bank by making available experienced and
entrepreneurial managers from larger financial institutions and acquisition
opportunities from the remaining small independent banks in the Company's market
area.
GROWTH STRATEGIES
The Company's continuing strategy is to capture market share and build a
community franchise for its shareholders, customers and employees. To do so, the
Company intends to:
- Expand its existing network of traditional branches and ATMs to
ultimately operate a contiguous delivery system to accommodate
customers' needs for a continuum of essential banking services;
- Continue to attract highly experienced, entrepreneurial managers
and staff with in-depth knowledge of the Bank's customers and
target market;
- Acquire financial institutions or branches, which offer compatible
products, marketing opportunities, potential cost savings or
economies of scale;
- Establish nontraditional joint ventures with retail establishments
such as Mars Super Market and other retail entities that have high
traffic patterns; and
- Invest in new products and technology, including internet and
online banking.
BANKING SERVICES
COMMERCIAL BANKING. The Bank focuses its commercial loan originations on
small and mid-sized business (generally up to $20 million in annual sales) and
such loans are usually accompanied by significant related deposits. Commercial
loan products include residential and commercial real estate construction loans;
working capital loans and lines of credit; demand, term and time loans; and
equipment, inventory and accounts receivable financing. The Bank offers a range
of cash management services and deposit products to its commercial customers.
Computerized banking is currently available to the Bank's commercial customers.
RETAIL BANKING. The Bank's retail banking activities emphasize consumer
deposit and checking accounts. An extensive range of these services is offered
by the Bank to meet the varied needs of its customers from young persons to
senior citizens including "Absolutely Free Checking." The Bank's services
include alternatives to bank accounts, such as mutual funds and annuities.
Consumer loan products offered by the Bank include home equity lines of credit,
fixed rate second mortgages, new and used auto loans, new and used boat loans,
overdraft protection, unsecured personal credit lines and the debit card.
MORTGAGE BANKING. The Bank's mortgage banking business is structured to
provide a source of fee income largely from the process of originating product
for sale on the secondary market. Mortgage banking capabilities include FHA/VA
origination; conventional and nonconforming mortgage underwriting; and
construction and permanent financing. The Bank intends to improve its
competitive position in this market by streamlining the mortgage underwriting
process through the introduction of advanced technology.
COMMUNITY REINVESTMENT ACT. The Bank has a strong commitment to its
responsibilities under the Community Reinvestment Act and actively searches for
opportunities to meet the development needs of all members of the community it
serves, including persons of low to moderate income in a manner consistent with
safe and sound banking practices. The Bank currently fulfills this commitment by
participating in loan programs sponsored or guaranteed by the SBA, FHA, VA, CDA,
Maryland Industrial Development Financing Authority, and the Settlement Expense
Loan Program.
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LENDING ACTIVITIES
LOAN PORTFOLIO COMPOSITION. At December 31, 1999, the Bank's loan portfolio
totaled $329.5 million representing approximately 53.5% of its total assets of
$616.1 million. The following table sets forth the Bank's loans by major
categories as of December 31, 1999:
(Dollars in thousands) AMOUNT PERCENT
------ -------
Commercial $ 67,665 20.5%
Real Estate Construction-Consumer 34,420 10.4%
Real Estate Development and Construction 17,051 5.2%
Real Estate Mortgage:
Residential 85,710 26.0%
Commercial 88,950 27.0%
Consumer 35,732 10.8%
Total loans $ 329,528 100.0%
========== ======
COMMERCIAL LOANS. The Bank originates secured and unsecured loans for
business purposes. Less than one percent of these loans is unsecured. Loans are
made to provide working capital to businesses in the form of lines of credit,
which may be secured by real estate, accounts receivable, inventory, equipment
or other assets. The financial condition and cash flow of commercial borrowers
are closely monitored by the submission of corporate financial statements,
personal financial statements and income tax returns. The frequency of
submissions of required financial information depends on the size and complexity
of the credit and the collateral which secures the loan. It is the Bank's
general policy to obtain personal guarantees from the principals of the
commercial loan borrowers.
REAL ESTATE DEVELOPMENT AND CONSTRUCTION LOANS. The real estate development
and construction loan portfolio consisted of the following as of December 31,
1999:
Amount Percent
--------------------------
Commercial Construction 6,799 39.9%
Commercial Acquisition and Construction 200 1.2%
Commercial Land Acquisition 1,961 11.5%
Residential Builders Construction 6,183 36.3%
Residential Builders Acquisition and Development 1,423 8.3%
Residential Builders Acquisition, Development and Construction 485 2.8%
===========================
Total Real Estate-Development and Construction 17,051 100.0%
===========================
The Bank provides interim real estate acquisition development and
construction loans to builders, developers, and persons who will ultimately
occupy the single family dwellings. Real estate development and construction
loans to provide interim financing on the property is generally made for 80% or
less of the appraised value of the property. Real estate development and
construction loan funds are disbursed periodically at pre-specified stages of
completion. Interest rates on these loans are generally adjustable. The Bank
carefully monitors these loans with on-site inspections and control of
disbursements.
Loans to individuals for the construction of their primary residences are
typically secured by the property under construction, frequently include
additional collateral (such as second mortgage on the borrower's present home),
and commonly have maturities of nine to twelve months.
5
Loans to residential builders are for the construction of residential homes
for which a binding sales contract exists and the prospective buyers have been
pre-qualified for permanent mortgage financing. Development loans are made only
to developers with a proven track record. Generally, these loans are extended
only when the borrower provides evidence that the lots under development will be
sold to builders satisfactory to the Bank.
Development and construction loans are secured by the properties under
development or construction and personal guarantees are typically obtained.
Further, to assure that reliance is not placed solely in the value of the
underlying property, the Bank considers the financial condition and reputation
of the borrower and any guarantors, the amount of the borrowers equity in the
project, independent appraisals, costs estimates and pre-construction sale
information.
RESIDENTIAL REAL ESTATE MORTGAGE LOANS. The Bank's wholly-owned subsidiary,
First Mariner Mortgage Corporation, originates adjustable and fixed-rate
residential mortgage loans. Such mortgage loans are generally originated under
terms, conditions and documentation acceptable to the secondary mortgage market.
The Bank will place some of these loans into its portfolio, although the
substantial majority are sold to investors.
COMMERCIAL REAL ESTATE MORTGAGE LOANS. The Bank originates mortgage loans
secured by commercial real estate. Such loans are primarily secured by office
buildings, retail buildings, warehouses and general purpose business space.
Although terms may vary, the Bank's commercial mortgages generally have
maturities of five years or less.
The Bank seeks to reduce the risks associated with commercial mortgage
lending by generally lending in its market area and obtaining periodic financial
statements and tax returns from borrowers. It is also the Bank's general policy
to obtain personal guarantees from the principals of the borrowers and
assignments of all leases related to the collateral.
CONSUMER LOANS. The Bank offers a variety of consumer loans. These loans
are typically secured by residential real estate or personal property, including
automobiles and boats. Home equity loans are typically made up to 80% of the
appraised value, less the amount of any existing prior liens on the property and
generally have maximum term of 10 years, although the bank does offer a 90% loan
to value product. The interest rates on home equity loans are adjustable.
CREDIT ADMINISTRATION
The Bank's lending activities are subject to written policies approved by
the Board of Directors to ensure proper management of credit risk. Loans are
subject to a well defined credit process that includes credit evaluation of
borrowers, risk-rating of credits, establishment of lending limits and
application of lending procedures, including the holding of adequate collateral
and the maintenance of compensating balances, as well as procedures for on-going
identification and management of credit deterioration. Regular portfolio reviews
are performed to identify potential underperforming credits, estimate loss
exposure and to ascertain compliance with the Bank's policies. For significant
problem loans, management review consists of evaluation of the financial
strengths of the borrower and the guarantor, the related collateral and the
effects of economic conditions.
The Bank's loan approval policy provides for various levels of individual
lending authority. The maximum lending authority granted by the Bank to any one
individual is $500,000 for residential mortgages, commercial loans and consumer
construction loans, and for other types of loans the lending authority is
$250,000. The Board's Loan Committee is authorized to approve loans up to the
Bank's legal lending limit, which currently approximates $6,300,000 as of
December 31, 1999. The bank has established an in-house limit of $2,000,000
which is reviewed periodically by the Board of Directors.
The Bank generally does not make loans outside its market area unless the
borrower has an established relationship with the Bank and conducts its
principal business operations within the Bank's market area. Consequently the
Bank and its borrowers are affected by the economic conditions prevailing in its
market area.
6
COMPETITION
The Company and the Bank operate in a competitive environment, competing
for deposits and loans with commercial banks, thrifts and other financial
entities. Principal competitors include other community commercial banks and
larger financial institutions with branches in the Bank's market area. Numerous
mergers and consolidations involving banks in the Bank's market area have
occurred recently, requiring the Bank to compete with banks with greater
resources.
The primary factors in competing for deposits are interest rates,
personalized services, the quality and range of financial services, convenience
of office locations and office hours. Competition for deposits comes primarily
from other commercial banks, savings associations, credit unions, money market
funds and other investment alternatives. The primary factors in competing for
loans are interest rates, loan origination fees, the quality and range of
lending services and personalized services. Competition for loans comes
primarily from other commercial banks, savings associations, mortgage banking
firms, credit unions and other financial intermediaries. The Bank also competes
with money market mutual funds for deposits. Many of the financial institutions
operating in the Bank's market area offer certain services such as trust and
international banking, which the Bank does not offer, and greater financial
resources or have substantially higher lending limits than does the Bank.
To compete with other financial services providers, the Bank principally
relies upon local promotional activities, personal relationships established by
officers, directors and employees with its customers and specialized services
tailored to meet its customers' needs. In those instances where the Bank is
unable to accommodate a customers' needs, the Bank will arrange for those
services to be provided by other banks with which it has a relationship.
Recent changes in banking laws facilitate interstate branching and merger
activity among banks. Since September, 1995, certain bank holding companies are
authorized to acquire banks throughout the United States. In addition, on and
after June 1, 1997, certain banks will be permitted to merge with banks
organized under the laws of different states. Such changes will result in an
even greater degree of competition in the banking industry and the Company and
the Bank may be brought into competition with institutions with which it does
not presently compete. As a result, intense competition in the Bank's market
area may be expected to continue for the foreseeable future.
SUPERVISION AND REGULATIONS
The Company and the Bank are extensively regulated under federal and state
law. Generally, these laws and regulations are intended to protect depositors,
not stockholders. The following is a summary description of certain provisions
of certain laws which affect the regulation of bank holding companies and banks.
The discussion is qualified in its entirety by reference to applicable laws and
regulations. Changes in such laws and regulations may have a material effect on
the business and prospects of the Company and the Bank.
FEDERAL BANK HOLDING COMPANY REGULATION AND STRUCTURE. The Company is a
bank holding company within the meaning of the Bank Holding Company Act of 1956,
as amended, and as such, it is subject to regulation, supervision, and
examination by the Board of Governors of the Federal Reserve System. The Company
is required to file annual and quarterly reports with the Federal Reserve and to
provide the Federal Reserve with such additional information as the Federal
Reserve may require. Federal Reserve may conduct examinations of the Company and
its subsidiaries.
With certain limited exceptions, the Company is required to obtain prior
approval from the Federal Reserve before acquiring direct or indirect ownership
or control of more than 5% of any voting securities or substantially all of the
assets of a bank or bank holding company, or before merging or consolidating
with another bank holding company. In acting on applications for such approval,
the Federal Reserve must consider various statutory factors, including among
others, the effect of the proposed transaction on competition in the relevant
geographical and product markets, each party's financial condition and
management resources and record of performance under the Community Reinvestment
Act ("CRA"). Additionally, with certain exceptions any person proposing to
acquire control through direct or indirect ownership of 25% or more of any
voting securities of the Company is required to give 60 days written notice of
the acquisition to the Federal Reserve, which may prohibit the transaction, and
to publish notice to the public.
7
Generally, a bank holding company may not engage in any activities other
than banking, managing or controlling its bank and other authorized
subsidiaries, and providing services to these subsidiaries. With prior approval
of the Federal Reserve, the Company may acquire more than 5% of the assets or
outstanding shares of a company engaging in nonbank activities determined by the
Federal Reserve to be closely related to the business of banking or of managing
or controlling banks. Under current Federal Reserve regulations, such
permissible nonback activities include mortgage banking, equipment leasing,
securities brokerage and consumer and commercial finance company operations.
Subsidiary banks of a bank holding company are subject to certain
quantitative and qualitative restrictions on extensions of credit to the bank
holding company or its subsidiaries on investments in their securities and on
the use of their securities as collateral for loans to any borrower. These
regulations and restrictions may limit the Company's ability to obtain funds
from the Bank for its cash needs including funds for the payment of dividends,
interest and operating expenses. Further, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease or sale of property or furnishing
of services. For example, the Bank may not generally require a customer to
obtain other services from itself or the Company, and may not require that a
customer promise not to obtain other services from a competitor as a condition
to and extension of credit to the customer. The Federal Reserve has ended the
anti-tying rules for bank holding companies and their non-banking subsidiaries.
Such rules were retained for banks.
Under Federal Reserve policy, a bank holding company is expected to act as
a source of financial strength to its subsidiary banks and to make capital
injections into a troubled subsidiary bank, and the Federal Reserve may charge
the bank holding company with engaging in unsafe and unsound practices for
failure to commit resources to a subsidiary bank when required. A required
capital injection may be called for at a time when the holding company does not
have the resources to provide it. In addition, depository institutions insured
by the FDIC can be held liable for any losses incurred by, or reasonably
anticipated to be incurred by, the FDIC in connection with the default of, or
assistance provided to, a commonly controlled FDIC-insured depository
institution. Accordingly, in the event that any insured subsidiary of the
Company causes a loss to the FDIC, other insured subsidiaries of the Company
could be required to compensate the FDIC by reimbursing it for the estimated
amount of such loss. Such cross guaranty liabilities generally are superior in
priority to the obligations of the depository institution to its shareholders
due solely to their status as shareholders and obligations to other affiliates.
STATE BANK HOLDING COMPANY REGULATION. As a Maryland bank holding company,
the Company is subject to various restrictions on its activities as set forth in
Maryland law, in addition to those restrictions set forth in federal law. Under
Maryland law, a bank holding company that desires to acquire a bank or bank
holding company that has its principal place of business in Maryland must obtain
approval from the Maryland Commissioner of Financial Regulation. Also, a bank
holding company and its Maryland state-chartered bank or trust company cannot
directly or indirectly acquire banking or nonbanking subsidiaries or affiliates
until the bank or trust company receives the approval of the Maryland
Commissioner.
FEDERAL AND STATE BANK REGULATION. The Company's banking subsidiary is a
Maryland state-chartered trust company, with all the powers of a commercial
bank. regulated and examined by the Maryland Commissioner and the Federal
Deposit Insurance Corporation (the "FDIC'). The FDIC has extensive enforcement
authority over the institutions it regulates to prohibit or correct activities
which violate law, regulation or written agreement with the FDIC or which are
deemed to constitute unsafe or unsound practices. Enforcement actions may
include the appointment of a conservator or receiver, the issuance of a cease
and desist order, the termination of deposit insurance, the imposition of civil
money penalties on the institution, its directors, officers, employees and
institution-affiliated parties, the issuance of directives to increase capital,
the issuance of formal and informal agreements, the removal of or restrictions
on directors, officers, employees and institution-affiliated parties and the
enforcement of any such mechanisms through restraining orders or other court
actions.
In its lending activities, the maximum legal rate of interest, fees and
charges which a financial institution may charge on a particular loan depends on
a variety of factors such as the type of borrower, the purpose of the loan, the
amount of the loan and the date the loan is made. Other laws tie the maximum
amount which may be loaned to any one customer and its related interest to
capital levels. The Bank is also subject to certain restrictions on extensions
of credit to executive officers, directors, principal shareholders or any
related interest of such persons which generally require that such credit
extensions be made on
8
substantially the same terms as are available to third persons dealing with the
Bank and not involve more than the normal risk of repayment.
The Community Reinvestment Act ("CRA") requires that, in connection with
the examination of financial institutions within their jurisdictions the FDIC
evaluate the record of the financial institution in meeting the credit needs of
their communities including low and moderate income neighborhoods, consistent
with the safe and sound operation of those banks. 'These factors are also
considered by all regulatory agencies in evaluating mergers, acquisitions and
applications to open a branch or facility. As of the date of its most recent
examination report, the Bank has a CRA rating of "Satisfactory."
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), each federal banking agency is required to prescribe, by regulation,
noncapital safety and soundness standards for institutions under its authority.
The federal banking agencies, including the FDIC, have adopted standards
covering internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth, and
compensation, fees and benefits. An institution which fails to meet those
standards may be required by the agency to develop a plan acceptable to the
agency, specifying the steps that the institution will take to meet the
standards. Failure to submit or implement such a plan may subject the
institution to regulatory sanctions. The Company, on behalf of the Bank,
believes that it meets substantially all standards which have been adopted.
FDICIA also imposed new capital standards on insured depository institutions.
Before establishing new branch offices, the Bank must meet certain minimum
capital stock and surplus requirements. With each new branch located outside the
municipal area of the Bank's principal banking office, these minimal levels
increase by $120,000 to $900,000, based on the population size of the municipal
area in which the branch will be located. Prior to establishment of the branch,
the Bank must obtain Commissioner and FDIC approval. If establishment of the
branch involves the purchase of a bank building or furnishings, the total
investment in bank buildings and furnishings cannot exceed, with certain
exceptions, 50% of the Bank's unimpaired capital and surplus.
DEPOSIT INSURANCE
As a FDIC member institution, deposits of the Bank are currently insured to
a minimum of $ 100,000 per depositor through the Savings Association Insurance
Fund ("SAIF"), administered by the FDIC. Insured financial institutions are
members of either SAIF or the Bank Insurance Fund ("BIF"). SAIF members
generally are savings and loan associations or savings banks, including banks
and trust companies that have converted from a savings and loan association or
savings bank to a commercial bank or trust company or bank and trust companies
that have acquired SAIF deposits. The Bank is a converted federal savings bank,
therefore, its deposits are through SAIF. Mergers or transfers of assets between
SAIF and BIF members generally are permitted with the assuming or resulting
depository institution making payments of SAIF assessments on the portion of
liabilities attributable to the SAIF-insured institution.
The FDIC is required to establish the semi-annual assessments for BIF- and
SAIF-insured depository institutions at a rate determined to be appropriate to
maintain or increase the reserve ratio of the respective deposit insurance funds
at or above 1.25 percent of estimated insured deposits or at such higher
percentage that the FDIC determines to be justified for that year by
circumstances raising significant risk of substantial future losses to the fund.
SAIF has not met the designated reserve ratio for the fund. Accordingly, federal
legislation that became effective September 30, 1996 assesses a one-time charge
on deposits insured by SAIF. This one-time charge for the Bank of approximately
$154,000, was paid in 1996.
This recapitalization has lowered the semiannual assessments paid by the
Bank as a SAIF member. Assessments are made on a risk-based premium system with
nine risk classifications based on certain capital and supervisory measures.
Financial institutions with higher levels of capital and involving a low degree
of supervisory concern are assessed lower premiums than financial institutions
with lower levels of capital or involving a higher degree of supervisory
concern. Before the recapitalization, the rates assessable on SAIF-insured
deposits ranged from $0.23 per $100 of domestic deposits to $0.31 per $100 of
domestic deposits; the Bank's assessment stood at $0.23 per $100. Rates
assessable to BIF members have been significantly lower at a range of $0.03 to
$0.27 per $100, with the highest rated BIF institutions paying the statutory
minimum of $2,000 per year. With recapitalization of SAIF, the assessment ranges
for both BIF and SAIF institutions has decreased. The Bank has an assessment
rate of $0.06 per $100 starting on January 1, 1999.
9
LIMITS ON DIVIDENDS AND OTHER PAYMENTS
The Company's current ability to pay dividends is largely dependent upon
the receipt of dividends from its banking subsidiary, the Bank. Both federal and
state laws impose restrictions on the ability of the Bank to pay dividends.
Federal law prohibits the payment of a dividend by an uninsured depository
institution like the Bank if the depository institution is considered
"undercapitalized" or if the payment of the dividend would make the institution
"undercapitalized". See "Federal Deposit Insurance Corporation Improvement Act
of 1991" below. The Company does not anticipate that such provisions will be
applied to the Bank. The Federal Reserve has issued a policy statement which
provides that, as a general matter, insured banks and bank holding companies may
pay dividends only out of prior operating earnings. For a Maryland
state-chartered bank or trust company, dividends may be paid out of undivided
profits or, with the prior approval of the Commissioner, from surplus in excess
of 100% of required capital stock. It however, the surplus of a Maryland bank is
less than 100% of its required capital stock, cash dividends may not be paid in
excess of 90% of net earnings. The Bank must obtain approval of the Maryland
Commissioner to pay dividends to the Company for so long as the Bank's statement
of financial condition reflect as it did of December 31, 1999, negative
undivided profits (accumulated deficit), the Company anticipates that such
approval will be required for the foreseen future. In addition to these specific
restriction bank regulatory agencies, in general, also have the ability to
prohibit proposed dividends by a financial institution which would otherwise be
permitted under applicable regulations if the regulatory body determines that
such distribution would constitute an unsafe or unsound practice.
CAPITAL REQUIREMENTS
The Federal Reserve and FDIC have adopted certain risk-based capital
guidelines to assist in the assessment of the capital adequacy of a banking
organization's operations for both transactions reported on the balance sheet as
assets and transactions, such as letters of credit and recourse arrangement
which are recorded as off balance sheet items. Under these guidelines, nominal
dollar amounts of assets and credit equivalent amounts of off balance sheet
items are multiplied by one of several risk adjustment percentages, which range
from 0% for assets with low credit risk, such as certain U.S. Treasury
securities to 100% for assets with relatively high credit risk, such as business
loans.
A banking organization's risk-based capital ratio are obtained by dividing
its qualifying capital by its total risk adjusted assets. The regulators measure
risk-adjusted assets, which include off balance sheet items, against both total
qualifying capital (the sum of Tier 1 capital and limited amounts of Tier 2
capital) and Tier 1 capital. "Tier 1", or core capital includes common equity,
perpetual preferred stock (excluding auction rate issues), trust preferred
securities, subject to certain limitations, and minority interest in equity
accounts of consolidated subsidiaries, less goodwill and other intangibles,
subject to certain exceptions. "Tier 2", or supplementary capital, includes,
among other things limited-life preferred stock, hybrid capital instruments,
mandatory convertible securities and trust preferred securities, qualifying and
subordinated debt, and the allowance for loan and lease losses subject to
certain limitations and less required deductions. The inclusion of elements of
Tier 2 capital is subject to certain other requirements and limitations of the
federal banking agencies. Banks and bank holding companies, subject to the
risk-based capital guidelines are required to maintain a ratio of Tier 1 capital
to risk-weighted assets of at least 4% and a ratio of total capital to
risk-weighted assets of at least 8%. The appropriate regulatory authority may
set higher capital requirements when particular circumstances warrant. At
December 31, 1999, the Bank's ratio of Tier 1 to risk-weighted assets stood at
11.2% and its ratio of total capital to risk-weighted assets stood at 12.1%. In
addition to risk-based capital banks and bank holding companies are required to
maintain a minimum amount of Tier 1 capital to fourth quarter average assets,
referred to as the leverage capital ratio, of at least 4%. At December 31, 1999,
the Bank's leverage capital ratio stood at 6.6%.
In August, 1995 and May, 1996, the federal banking agencies adopted final
regulations specifying that the agencies will include, in their evaluations of a
Bank's capital adequacy, an assessment of the Bank's interest rate risk ("IRR")
exposure. The standards for measuring the adequacy and effectiveness of a
banking organization's interest rate risk management includes a measurement of
board of director and senior management oversight, and a determination of
whether a banking organization's procedures for comprehensive risk management
are appropriate to the circumstances of the specific banking organization. The
Bank has internal IRR models that are used to measure and monitor IRR.
Additionally, the regulatory agencies have been assessing IRR on an informal
basis for several years. For these reasons the
10
Company does not expect the addition of IRR evaluation to the agencies' capital
guidelines to result in significant changes in capital requirements for the
Bank.
Failure to meet applicable capital guidelines could subject a banking
organization to a variety of enforcement actions, including limitations on its
ability to pay dividends, the issuance by the applicable regulatory authority of
a capital directive to increase capital and, in the case of depository
institutions, the termination of deposit insurance by the FDIC, as well as to
the measures described under "Federal Deposit Insurance Corporation Improvement
Act of 1991" below, as applicable to undercapitalized institutions. In addition,
future changes in regulations or practices could further reduce the amount of
capital recognized for purposes of capital adequacy. Such a change could affect
the ability of the Bank to grow and could restrict the amount of profits, if
any, available for the payment of dividends to the Company.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December, 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revised the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
made significant revisions to several other federal banking statutes. FDICIA
provides for, among other things, (i) publicly available annual financial
condition and management reports for financial institutions, including audits by
independent accountants, (ii) the establishment of uniform accounting standards
by federal banking agencies, (iii) the establishment of a "prompt corrective
action" system of regulatory supervision and intervention, based on
capitalization levels with more scrutiny and restrictions placed on depository
institutions with lower levels of capital, (iv) additional grounds for the
appointment of a conservator or receiver, and (v) restrictions or prohibitions
on accepting brokered deposits, except for institutions which significantly
exceed minimum capital requirements. FDICIA also provides for increased funding
of the FDIC insurance funds and the implementation of risked-based premiums.
A central feature of FDICIA is the requirement that the federal banking
agencies take "prompt corrective action" with respect to depository institutions
that do not meet minimum capital requirements. Pursuant to FDICIA, the federal
bank regulatory authorities have adopted regulations setting forth a five tiered
system for measuring the capital adequacy of the depository institutions that
they supervise. Under these regulations, a depository institution is classified
in one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized." An institution may be deemed by the regulators to
be in a capitalization category that is lower than is indicated by its actual
capital position if, among other things, it receives an unsatisfactory
examination rating with respect to asset quality, management, earnings or
liquidity.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a cash dividend) or paying any management
fees to its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to growth
limitations and are required to submit capital restoration plans. If a
depository institution fails to submit an acceptable plan, it is treated as if
it is significantly undercapitalized. Significantly undercapitalized depository
institutions may be subject to a number of other requirements and restrictions
including orders to sell sufficient voting stock to become adequately
capitalized, requirements to reduce total assets and stop accepting deposits
from correspondent banks. Critically undercapitalized institutions are subject
to the appointment of a receiver or conservator, generally within 90 days of the
date such institution is determined to be critically undercapitalized.
FDICIA provides the federal banking agencies with significantly expanded
powers to take enforcement action against institutions which fail to comply with
capital or other standards. Such action may include the termination of deposit
insurance by the FDIC or the appointment of a receiver or conservator for the
institution. FDICIA also limits the circumstances under which the FDIC is
permitted to provide financial assistance to an insured institution before
appointment of a conservator or receiver.
INTERSTATE BANKING LEGISLATION
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("Riegle-Neal") was enacted into law on September 29, 1994. Riegle-Neal
authorized federal banking agencies to approve interstate bank merger
transactions even if such transactions are prohibited by the laws of a state. An
exception to
11
such authorization arises if the home state where one of the banks which is a
party to the merger transaction is located opted out of the merger provisions of
Riegle-Neal by adopting a law after the date of the enactment of the Riegle-Neal
and prior to June 1, 1997. These laws must apply equally to all-out-of-state
banks and expressly prohibit merger transactions involving out-of-state banks.
Riegle-Neal also permits interstate branch acquisitions if the laws of the state
where the branch is located permits interstate branch acquisitions. The
interstate merger and branch acquisitions permitted by Riegle-Neal are subject
to nationwide and statewide insured deposit limitations as described in
Riegle-Neal.
Riegle-Neal also authorizes the federal banking agencies to approve DE
NOVO interstate branching by national and state banks in states which
specifically allow for such branching. Only two states, Texas and Montana, have
opted out of the Riegle-Neal provisions relating to interstate mergers,
acquisitions of branches and establishment of de novo branches. The Company
anticipates that Riegle-Neal may increase competition within the market in which
the Company operates although the Company cannot predict the timing or the
extent of such increased competition.
FINANCIAL SERVICES MODERNIZATION
In November 1999, the Gramm-Leach-Bliley Act ("GLBA") was signed into law.
Effective in pertinent part on March 11, 2000, GLBA revises the Bank Holding
Company Act of 1956 and repeals the affiliation provisions of the Glass-Steagall
Act of 1933, which, taken together, limited the securities, insurance and other
non-banking activities of any company that controls a FDIC insurance financial
institution. Under GLBA, bank holding companies can elect, subject to certain
qualifications, to become a "financial holding company". GLBA provides that a
financial holding company may engage in a full range of financial activities,
including, insurance and securities sales and underwriting activities, and real
estate development, with new expedited notice producers. GLBA also permits
certain qualified national bank subsidiaries to form financial subsidiaries,
which have broad authority to engage in all financial activities except
insurance underwriting, insurance investments, real estate investment or
development, or merchant banking.
ITEM 2 PROPERTIES
The principal executive offices of the Company and the main office of
the Bank are located at 1801 South Clinton Street, Baltimore, Maryland. The
Company and the Bank occupy approximately 49,000 square feet of space leased
from Edwin F. Hale, Sr., Chairman and Chief Executive Officer of the Company.
Rental for this space in 1999 was approximately $699,000 annually, of which
$664,000 is allocated for 47,830 square feet of office and $35,000 is allocated
for 1,170 square feet of Bank branch space and drive-up banking and customer
parking facilities. Management believes that such terms are at least as
favorable as those that could be obtained from an unaffiliated third party
lessor.
The Bank has branches at the following locations:
SQUARE LEASE RENEWAL
LOCATION FEET ANNUAL RENT EXPIRATION OPTIONS
-------- ------ ----------- ---------- -------
1801 South Clinton Street 1,170 $ 35,000 10/31/2013 5 Years
(Baltimore City)
115 East Joppa Road 2,750 Owns building - -
Towson (Baltimore County) (subject to $25 ground
rent)
1641 Joppa Road 2,480 Owns building - -
Towson (Baltimore County)
9833 Liberty Road 2,800 Owns building - -
(Baltimore County) (subject to $12,000
ground rent)
12
12 A. S. Bel Air Parkway 2,288 Owns building 6/30/2017 -
Bel Air (Harford County) (subject to $35,000
ground rent)
16 South Calvert Street 2,515 $ 26,595 5/14/2001 5 Years
(Baltimore City)
2375 Rolling Road (Mars Store) $ 36,500 11/1/2000 5 Years
667
Woodlawn (Baltimore County)
Chesapeake Center Drive (Mars 484 $ 36,500 3/1/2001 5 Years
Store) Glen Burnie (Anne Arundel
County)
1013 Reisterstown Town Road 4,156 Owns building - -
Pikesville (Baltimore County)
60 Painters Mill Road 2,350 $ 80,235 10/31/2005 5 Years
Owings Mills (Baltimore County)
161 Jennifer Road 4,400 $ 85,446 6/30/2001 5 Years
Annapolis (Anne Arundel County)
1401 Pulaski Highway (Mars Store) 484 $ 36,500 12/3/2001 5 Years
Edgewood (Harford County)
1770 Merritt Blvd 2,500 $ 32,500 2/19/2007 5 Years
Dundalk (Baltimore County)
1740 York Road 1,200 $ 36,000 4/30/2012 15 Years
Lutherville (Baltimore County)
1018 Beards Hill Rd (Mars Store) 525 $ 36,500 5/20/2002 5 Years
Aberdeen (Harford County)
15 E. Padonia Road (Mars Store) 276 $ 36,500 10/19/2002 5 Years
Timonium (Baltimore County)
8433 Bel Air Road 2,050 Owns building - -
Perry Hall (Baltimore County)
8133 Elliott Road 2,099 $ 31,485 3/31/2003 5 Years
Easton (Talbot County) x2
8206 Pulaski Highway 6,500 $ 38,350 2/28/2008 5 Years
Rosedale (Baltimore County) x2
360 Governor Ritchie Highway 2,200 $ 40,700 5/31/2008 5 Years
Severna Park (Anne Arundel County) x2
13
7878 Wise Avenue (Mars Store) 450 $ 36,500 9/15/2003 5 Years
Dundalk (Baltimore County)
8587 Ft. Smallwood Rd (Mars Store) 450 $ 36,500 10/31/2003 5 Years
Pasadena (Anne Arundel County)
176 Carroll Island Road 1,800 $ 25,200 2/1/2004 5 Years
Baltimore (Baltimore County)
1053 MD Route 3 (2) 2,480 Owns building 4/28/2015 15 Years
Crofton (Anne Arundel County) (subject to $30,000
ground rent)
12505 Coastal Highway (2) 1,800 $ 31,878 10/31/2004 5 Years
Ocean City (Worcester)
10065 Baltimore National Pike (2) 2,480 Owns building 8/1/2009 10 Years
Ellicott City (Howard County) (subject to $75,000
ground rent)
7400 L Ritchie Highway (1) 2,250 $ 38,250 12/1/2004 5 Years
Glen Burnie (Anne Arundel)
(1) Branch has opened in first quarter, 2000
(2) Branches are expected to open in second quarter, 2000
ITEM 3 LEGAL PROCEEDINGS
Neither the Company nor the Bank is a party to, nor is any of their
property the subject of, any material pending legal proceedings incidental to
the business of the Company other than those arising in the ordinary course of
business. In the opinion of management no such proceeding will have a material
adverse effect on the financial position or results of operations of the
Company.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
14
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDERS MATTERS
MARKET FOR COMMON STOCK
Shares of First Mariner Bancorp trades on The Nasdaq Stock Market's
National Market under the trading symbol FMAR. For the period January 1, 1999
through December 31, 1999 the high and low prices as quoted on The Nasdaq Stock
Market were $13.250 and $7.250, respectively.
As of December 31, 1999, First Mariner Bancorp had approximately 2,512
shareholders of record. On May 22, 1998, a 10% stock dividend was declared and
stock distributed to shareholders on record. The Company paid its first cash
dividend of 2 cents per share in May, 1999, also paid dividends of 2 cents per
share in August, 1999 and November, 1999 for total dividends of 6 cents per
share paid in 1999.
RECENT COMMON STOCK PRICES
The Company's Common Stock is traded on the National Association of
Securities Dealers' Automated Quotation System ("Nasdaq") National Market tier
of the Nasdaq Stock Market under the symbol "FMAR".
The following table illustrates high and low sale prices of the Company's
Common Stock for the periods indicated.
LOW HIGH
------- -------
1999 QUARTER ENDED:
Fourth quarter 7.250 10.250
Third quarter 9.875 11.750
Second quarter 10.750 12.063
First quarter 11.375 13.250
1998 QUARTER ENDED:
Fourth quarter 12.250 14.625
Third quarter 12.750 16.000
Second quarter 15.000 15.975
First quarter 14.175 16.425
15
ITEM 6 SELECTED FINANCIAL DATA
(Dollars in thousands except for per share data)
At or For Year ended December 31,
--------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Net Interest Income $ 17,651 $ 12,022 $ 7,753 $ 3,629 $ 1,292
Provision For Loan Losses 785 1,212 472 1,040 190
Noninterest Income 7,264 5,595 2,351 1,074 197
Noninterest Expense 22,743 16,246 9,459 5,836 2,581
Net Income 877 1,123 365 (2173) (1282)
Net Income Per Common Share - Basic 0.28 0.36 0.12 (1.56) (1.71)
Total Assets $ 616,072 $ 497,487 $ 256,984 $ 132,562 $ 52,798
Loans Receivable, Net 326,206 240,049 142,458 90,822 29,559
Deposits 368,751 262,311 196,962 102,289 41,487
Stockholders' Equity 21,863 28,488 26,966 23,796 10,702
Allowance For Loan Losses 3,322 2,676 1,614 1,242 376
Net Charge-offs 139 150 100 174 59
Non-Performing Assets To Total Assets 0.90% 0.63% 1.36% 1.19% 1.20%
Return on Average Assets 0.16% 0.32% 0.21% (2.64%) (3.45%)
Return on Average Equity 3.30% 4.07% 1.39% (21.67%) (19.62%)
Regulatory capital ratios
Leverage 6% 8% 15% 19% 28%
Tier 1 capital to risk weighted assets 10% 14% 17% 18% 34%
Total capital to risk weighted assets 15% 19% 18% 19% 35%
ITEM 7 THE INFORMATION REQUIRED BY THIS ITEM 7 IS INCORPORATED BY REFERENCE
HEREIN FROM THE ANNUAL REPORT OF STOCKHOLDERS ATTACHED AS EXHIBIT 13.
ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Results of operations for financial institutions, including the Company,
may be materially and adversely affected by changes in prevailing economic
conditions, including declines in real estate values, rapid changes in interest
rates and the monetary and fiscal policies of the federal government. The
profitability of the Company is in part a function of the spread between the
interest rates earned on assets and the interest rates paid on deposits and
other interest-bearing liabilities (net interest income), including advances
from Federal Home Loan Bank of Atlanta ("FHLB") and other borrowing. Interest
rate risk arises from mismatches (i.e., the interest sensitivity gap) between
the dollar amount of repricing or maturing assets and liabilities and is
measured in terms of the ratio of the interest rate sensitivity gap to total
assets. More assets repricing or maturing than liabilities over a given time
period is considered asset-sensitive and is reflected as a positive gap, and
more liabilities repricing or maturing than assets over a give time period is
considered liability-sensitive and is reflected as negative gap. An
asset-sensitive position (i.e., a positive gap) will generally enhance earnings
in a rising interest rate environment and will negatively impact earnings in a
falling interest rate environment, while a liability-sensitive position (i.e., a
negative gap) will generally enhance earnings in a falling interest rate
environment and negatively impact earnings in a rising interest rate
environment. Fluctuations in interest rates are not predictable or controllable.
The Company has attempted to structure its asset and liability management
strategies to mitigate the impact on net interest income of changes in market
interest rates. However, there can be no assurance that the Company will be able
to manage interest rate risk so as to avoid significant adverse effects on net
interest income. At December 31, 1999, the Company had a one year cumulative
negative gap of approximately $112,000 million.
16
ITEM 8 FINANCIAL STATEMENTS AND RELATED NOTED REQUIRED BY THIS ITEM 8 IS
INCORPORATED BY REFERENCE HEREIN FROM THE ANNUAL REPORT OF STOCKHOLDERS ATTACHED
AS EXHIBIT 13.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTATNS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain information relating to directors and executive officers of the
Company and Section 16(a) beneficial ownership reporting compliance is
incorporated by reference herein from the Company's proxy statement in
connection with its Annual Meeting of Stockholders to be held May 2, 2000, which
proxy statement will be filed with the Securities and Exchange Commission no
later than 120 days after the close of the fiscal year.
ITEM 11 EXECUTIVE COMPENSATION
Certain information relating to directors and executive officers
compensation, the Compensation Committee Report on Executive Compensation, and
stock performance is incorporated by reference herein from the Company's
definitive proxy statement in connection with its Annual Meeting of Stockholders
to be held on May 2, 2000, which proxy statement will be filed with the
Securities and Exchange Commission no later than 120 days after the close of the
fiscal year.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Certain Information relating to security ownership of certain directors, 5%
beneficial owners and management is incorporated by reference herein from the
Company's definitive proxy statement in connection with its Annual Meeting of
Stockholders to be held on May 2, 2000, which proxy statement will be filed with
the Securities and Exchange Commission not later than 120 days after the close
of the fiscal year.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain information relating certain relationships and related transactions
is incorporated by reference herein from the Company's definitive proxy
statement in connection with its Annual Meeting of Stockholders to be held May
2, 2000, which proxy statement will be filed with the Securities and Exchange
Commission no later than 120 days after the close of the fiscal year.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1), (2) FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Statements of Financial Condition as of December 31, 1999
and 1998
Consolidated Statements of Operations as of December 31, 1999, 1998
and 1997
Consolidated Statements of Stockholders' Equity as of December 31,
1999, 1998 and 1997
Consolidated Statements of Cash flows as of December 31, 1999, 1998
and 1997
Notes to Consolidated Financial Statements as of December 31, 1999,
1998 and 1997
(a)(3) Exhibits Required to be Filed by Item 601 of Regulation S-K
17
EXHIBIT INDEX
3.1 Amended and Restated Articles of Incorporation of First Mariner Bancorp (Incorporated by
reference to Exhibit 3.1 of the Registrant's Registration Statement on Form SB-2, as amended,
file no. 333-16011 (the "1996 Registration Statement"))
3.2 Amended and Restated Bylaws of First Mariner Bancorp (Incorporated by reference to Exhibit 3.2
of the 1996 Registration Statement)
10.1 1996 Stock Option Plan of First Mariner Bancorp (Incorporated by reference to Exhibit 10.1 of
the Registration Statement)
10.2 Employment Agreement dated May 1, 1995 between First Mariner Bancorp and First Mariner Bank
and George H. Mantakos (Incorporated by reference to Exhibit 10.2 of the 1996 Registration
Statement)
10.3 Lease Agreement dated March 1, 1996 between First Mariner Bank and Mars Super Markets, Inc.
(Incorporated by reference to Exhibit 10.3 of the 1996 Registration Statement)
10.4 Lease Agreement dated November 1, 1997 between Edwin F. Hale, Sr. and First Mariner Bank
(Incorporated by reference to Exhibit 10.4 of Pre-Effective Amendment Number 1 to Form S-1,
file no. 333-53789-01)
10.5 1998 Stock Option Plan of First Mariner Bancorp (Incorporated by reference to Exhibit 10.5 of
Pre-Effective Amendment Number 1 to Form S-1, file no. 333-53789-01)
10.6 Employee Stock Purchase Plan of First Mariner Bancorp (Incorporated by reference to Exhibit
10.6 of Pre-Effective Amendment Number 1 to Form S-1, file no. 333-53789-01)
10.7 Lease Agreement dated as of June 1, 1998 between Building #2, L.L.C. and First Mariner Bank
(Incorporated by reference to Exhibit 10.7 of Pre-Effective Amendment Number 1 to Form S-1,
file no. 333-53789-01)
13 1999 Annual Report of Stockholders filed herewith
21 Subsidiaries of Registrant filed herewith
22 Consent of KPMG LLP filed herewith
27 Financial Data Schedule for the 12 Months Ended December 31, 1999, filed electronically
herewith.
99 Risk Factors filed herewith.
(b) Reports on Form 8-K
None
(c) Exhibits required by Item 601 of Regulation S-K
See the Exhibits described in Item 14(a) (3) above.
18
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRST MARINER BANCORP
Date: 3/29/2000 By: /s/ Edwin F. Hale Sr.
----------- --------------------------------------
Edwin F. Hale Sr.
Chairman and Chief Executive Officer
Date: 3/29/2000 By: /s/Joseph A. Cicero
----------- --------------------------------------
Joseph A. Cicero
President & Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of the registrant in
their capacities as Director on the 31 day of March, 2000
/s/ /s/
- ---------------------------- ----------------------------------
Bondroff, Barry B. Lynch, Michael J.
/s/ /s/
- ---------------------------- ----------------------------------
Brown, Edith B. Mantakos, George H.
/s/ /s/
- ---------------------------- ----------------------------------
Cernack, Rose M. Matricciani, Jay J.
/s/ /s/
- ---------------------------- ----------------------------------
Cicero, Joseph A. O'Conor, James P.
/s/ /s/
- ---------------------------- ----------------------------------
D'Anna, Christopher P. Oliver, John J. Jr.
/s/ /s/
- ---------------------------- ----------------------------------
Friedman, Howard Schmoke, Patricia
/s/ /s/
- ---------------------------- ----------------------------------
Hale, Edwin F. Sr. Sibel, Hanan Y.
/s/ /s/
- ---------------------------- ----------------------------------
Hoffman, Bruce H. Stoler, Leonard
/s/ /s/
- ---------------------------- ----------------------------------
Kabik, Melvin S. Watson, Michael R.
19