Maryland National Aims to Solidify Grip on Home Market, Then Grow Regionally: 'A State Boundary Shouldn't Stop Us,' Says Institution's New President

Article excerpt

BALTIMORE -- Maryland National Corp. has been the dominant banking company for a long time here in the nation's 14th largest city. But its top executives would like to improve upon that image.

They want people to think of Maryland National as a major mid-Atlantic regional bank that just happens to be headquartered in Baltimore.

"A state boundary shouldn't stop us," says William H. Daiger Jr., the newly elected president of Maryland National Bank. "We are a regional bank offering services in a regional market."

For the past four years, the company has been working on a strategic plan that would maintain its position as the dominant bank in Maryland and enter what its managers consider its "natural" market -- which includes northern Virginia, the District of Columbia, southern Pennsylvania, and Delaware -- and walk away with a significant share of business.

The ultimate goal calls for Maryland National, which is the nation's 40th largest banking company by deposits, to do one of two things: Emerge as a "survivor" in the deregulated financial services industry or (if necessary) merge with another institution with similar goals.

"Their strategy seems to be to do everything they can with the market they have and then develop national-scale operations in a few selected services," says Roger Powell, a bank analyst with Alex. Brown & Sons, a Baltimore investment house.

For several years, only people within the company were familiar with this plan, but as the pieces of Maryland National's strategy have been put into place, its thrust has become more evident to outsiders.

In addition, Maryland National's top executives have begun to talk about their vision of the company's future.

"I think we really have a story to tell," says Alan P. Hoblitzell Jr., chairman of Maryland National Bank and chief executive officer of Maryland National Corp. "We are performing well, and that is a result of strategy that we have been putting into place over the past four years." Results of Strategy

The banking company's second-quarter results appear to bear out that claim.

Its earnings of $12.5 million, or $1.53 a share, were 28% higher than 1983 second-quarter earnings of $9.7 million, or $1.17 a share.

For the first half of the year, Maryland National reported earnings of $23.3 million, or $2.85 a share, compared to $19.5 million, or $2.37 a share, for the first half of 1983, an increase of 20%.

Mr. Hoblitzell, who became chairman of the bank in June and is expected to become chairman of the bank holding company in 1985 when Robert D.H. Harvey retires, has been the principal architect of the company's current strategic plan.

In its simplest form, the plan calls for expanding while reducing costs. While Maryland's economy continues to grow and provides a continuing need for banking services, Mr. Hoblitzell and his team of managers believe this growth will not be fast enough for Maryland National to remain competitive in the deregulated financial markets.

But rather than expanding for the sake of expanding, Maryland National will have to carefully target the geographic areas it will go into and the types of new businesses it will enter.

In essence, the plan calls for Maryland National to provide a full line of banking services in Maryland and, if it gets regulatory approval, in adjacent states. On a nationwide basis, the bank will market a set of specialty products rather than its full line of services and products.

Before Maryland National starts expanding in markets beyond Maryland, however, Mr. Hoblitzell's plan calls for the bank to hold onto its predominant position in Maryland for years to come.

"Maryland National has made it clear that it wants to be the leading factor in the commercial and consumer banking market in the Washington-Baltimore area," says Mr. Powell, the bank analyst. …