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BALTIMORE BANCORP REPORTS FOURTH QUARTER PROFIT; EXCEEDS REQUIRED CAPITAL RATIOS; REDUCES NONPERFORMING ASSETS

 BALTIMORE, Jan. 27 /PRNewswire/ -- Baltimore Bancorp (NYSE: BBB) today reported its fourth consecutive quarterly profit and that its wholly owned bank subsidiary, The Bank of Baltimore, had exceeded all regulatory capital requirements applicable at Dec. 31, 1992.
 The bank's adjusted Tier 1 leverage capital ratio was 5.10 percent at year-end, exceeding the ratio of 4.50 percent required by that date by the FDIC and the Maryland Bank Commissioner under an order issued last July. The Bank's Tier 1 risk-based and Total risk-based capital ratios were 7.12 percent and 8.39 percent, respectively, exceeding the regulatory requirements for an "adequately capitalized" bank of 4.00 percent and 8.00 percent, respectively. One year earlier, the bank's Tier 1 leverage, Tier 1 risk-based and Total risk-based capital ratios were 3.34 percent, 4.16 percent and 5.42 percent, respectively.
 Net income for the fourth quarter of 1992 amounted to $0.3 million, or $.02 per share, compared with a net loss of $94.6 million, or $7.42 per share, for the fourth quarter of 1991. For the full year, net income totalled $14.5 million, or $1.13 per share for 1992, compared with a net loss of $126.5 million, or $9.92 per share for 1991. The loss for 1991 was related chiefly to substantial loan loss provisions and the write-off of goodwill. The company's return on average total assets was .51 percent for 1992, compared with a negative return of 3.77 percent for 1991. The net interest margin for the fourth quarter of 1992 was 3.39 percent, compared with 2.45 percent for the fourth quarter of 1991. For the full year, the net interest margin was 3.15 percent for 1992, compared with 2.44 percent for 1991. The company's book value per share was $9.38 at Dec. 31, 1992, compared with $8.42 at the end of 1991.
 In the fourth quarter, nonperforming assets declined by 10 percent to $208.1 million at Dec. 31, 1992, from $230.5 million at Sept. 30, 1992. For the full year 1992, nonperforming assets were reduced by 12 percent from $237.3 million at Dec. 31, 1991. The coverage ratio of the allowance for possible loan losses to nonperforming loans increased to 54 percent at Dec. 31, 1992, from 51 percent at Sept. 30, 1992, and 46 percent at Dec. 31, 1991. The $65.9 million allowance for possible loan losses to total loans was 4.33 percent at Dec. 31, 1992, compared with $77.4 million, or 3.97 percent a year ago. Net loan losses of $28.7 million for the fourth quarter of 1992 resulted largely from restructurings and dispositions of nonperforming assets resolved prior to year-end. Net loan losses were $65.7 million for the fourth quarter of 1991.
 Edwin F. Hale Sr., chairman and chief executive officer of Baltimore Bancorp, said, "One year ago, we developed a plan for survival that set forth the actions we had to take and the results we had to achieve. There was little margin for error if the Bank was to celebrate its 175th anniversary in 1993. Although we are pleased that we exceeded our goals for 1992, we understand clearly the challenges which remain and that our progress will be measured one quarter at a time. We are prepared to meet the challenges. We have restructured and repositioned the bank to be an effective competitor in our marketplace, and have begun to actively and aggressively develop new business prospects."
 Core earnings (calculated as pre-tax income excluding the provision for possible loan losses, other real estate owned expense, and nonrecurring items) amounted to $31.1 million for 1992, compared with $20.6 million for 1991. The increase was attributed principally to increases in net interest income and mortgage banking revenue. The company's mortgage banking subsidiary originated $1.1 billion in residential mortgages in 1992 compared with $351 million in 1991, and was servicing a $1.9 billion portfolio at the end of 1992.
 Core earnings for the fourth quarter of 1992 amounted to $4.8 million compared with $8.8 million for the third quarter of 1992, reflecting a $1.7 million decline in trading account income caused by higher short-term interest rates, and a $1.4 million drop in net interest income related principally to interest reversals on nonaccruing loans and pre-payments on mortgage-backed securities. Compared to core earnings of $3.7 million for the fourth quarter of 1991, increases in net interest income and mortgage banking revenue accounted for the increase in core earnings in the last quarter of 1992.
 Other operating income for the quarter ended Dec. 31, 1992, included $1.6 million of gains on sales of investment securities, compared with investment securities losses of $2.8 million for the fourth quarter of 1991. Additionally, gains from the sale of mortgage servicing amounted to $1.2 million for the fourth quarter of 1992.
 There were no significant nonrecurring charges in other operating expense for the fourth quarter of 1992 (other than real estate owned expense), whereas the last three months of 1991 included $1.5 million of severance expense and corporate restructuring costs in addition to $35.8 million for the amortization and write-off of goodwill. Real estate owned expense was $2.3 million for the fourth quarter of 1992, compared with $5.5 million for the fourth quarter of 1991.
 Hale added, "In addition to our solid performance for the year, we are greatly encouraged by the early success of our new Dividend Reinvestment and Stock Purchase Plan. This expression of investor confidence has helped us move ahead of our original capital plan."
 Although dividends were suspended indefinitely in Oct. 1991, stockholders invested $3.2 million to purchase 514,745 shares during the fourth quarter of 1992. An additional $2.0 million has been received to purchase 271,103 shares on Jan. 20, 1993. The Stock Purchase Plan offers stockholders the ability to make optional cash deposits for the direct purchase of Baltimore Bancorp Common Stock at a 5 percent discount to an average market price without payment of any brokerage commission or service charge.
 Alan M. Leberknight, chief executive officer of The Bank of Baltimore and president of Baltimore Bancorp, said, "Under the regulatory Order, the bank is required to increase its adjusted Tier 1 leverage capital ratio to 6.0 percent and 6.5 percent by June 30, 1993, and June 30, 1994, respectively. We believe the Bank has a good chance of exceeding those ratios ahead of schedule through a combination of further asset contraction, continued earnings, and access to additional capital through the Stock Purchase Plan and possibly through an underwritten public offering."
 Baltimore Bancorp is a $2.4 billion Baltimore-based bank holding company. Its principal subsidiary, The Bank of Baltimore, founded in 1818, operates 47 branches within the Washington-Baltimore Common Market.
 BALTIMORE BANCORP
 (Thousands, except per-share data)
 Quarter ended Dec. 31 1992 1991 Pct.
 change
 Results of Operations:
 Net interest income $ 20,506 $ 19,158 7
 Provision for poss.loan losses 6,000 71,116 (92)
 Other operating income 8,006 5,818 38
 Investment securities gains 1,564 (2,790) 156
 Other operating expenses 23,808 64,076 (63)
 Income taxes (benefit) 12 (18,417) 100
 Income before extraord. item 256 (94,589) 100
 Extraordinary item (A) 56
 Net income (loss) 312 (94,589) 100
 Per Share:
 Income before extraord. item $ 0.02 $ (7.42) 100
 Extraordinary item (A) --- --- ---
 Net income (loss) 0.02 (7.42) 100
 Cash dividends declared --- --- ---
 Average Balances:
 Investment securities $ 482,075 $ 694,238 (31)
 Loans (net of unearned income) 1,619,806 2,256,859 (28)
 Earning assets 2,420,321 3,155,275 (23)
 Total assets 2,530,598 3,291,573 (23)
 Core deposits (B) 1,996,143 2,220,250 (10)
 Total deposits 2,330,457 2,901,955 (20)
 Stockholders' equity 123,300 181,728 (32)
 Earnings Ratios: PCT. PCT.
 Return on average total assets 0.05 (11.49) ---
 Return on average equity 1.01 (208.20) ---
 Yield on avg. earning assets 3.39 2.45 ---
 Credit Ratios:
 Net loan losses to avg. loans 7.09 11.65 ---
 (A) Gain, net of taxes, from early extinguishment of debt.
 (B) Total deposits excluding certificates of deposit $100,000 and over and brokered deposits.
 Year ended Dec. 31 1992 1991 Pct.
 change
 Results of Operations:
 Net interest income $ 85,617 $ 76,991 11
 Provision for poss.loan losses 29,881 125,368 (76)
 Other operating income 47,572 23,825 100
 Investment securities gains 3,877 (3,949) 198
 Other operating expenses 92,331 133,728 (31)
 Income taxes (benefit) 400 (35,527) 101
 Income before extraord. item 14,454 (126,702) 111
 Extraordinary item (A) 56 213 (74)
 Net income (loss) 14,510 (126,489) 111
 Per Share:
 Income before extraord. item $ 1.13 $ (9.94) 111
 Extraordinary item (A) --- 0.02 (100)
 Net income (loss) 1.13 (9.92) 111
 Cash dividends declared --- 0.40 (100)
 Book value 9.38 8.42 11
 Common stock mkt. value (NYSE) 6.875 5.250 31
 At Dec. 31:
 Investment securities $ 588,415 $ 597,756 (2)
 Loans (net of unearned income) 1,521,450 1,949,233 (22)
 Nonperforming assets 208,112 237,300 (12)
 Earning assets 2,239,398 3,002,264 (25)
 Total assets 2,429,329 3,186,293 (24)
 Core deposits (B) 1,988,952 2,249,689 (12)
 Total deposits 2,236,370 2,947,978 (24)
 Stockholders' equity 126,405 107,195 18
 Common shares outstanding 13,479 12,737 ---
 Average Balances:
 Investment securities 566,004 737,106 (23)
 Loans (net of unearned income) 1,713,120 2,262,975 (24)
 Earning assets 2,729,079 3,192,383 (15)
 Total assets 2,865,895 3,359,263 (15)
 Core deposits (B) 2,263,421 2,182,892 4
 Total deposits 2,634,425 2,875,458 (8)
 Stockholders' equity 116,136 221,265 (48)
 Earnings Ratios: PCT. PCT.
 Return on average total assets 0.51 (3.77) ---
 Return on average equity 12.49 (57.17) ---
 Yield on avg. earning assets 3.15 2.44 ---
 Credit Ratios:
 Nonperform loans/total loans 8.04 8.63 ---
 Nonperform assets/total assets 8.57 7.45 ---
 Allowance to total loans 4.33 3.97 ---
 Allowance to nonperform loans 53.89 45.99 ---
 Net loan losses to avg. loans 2.41 3.69 ---
 Capital Ratios:
 Equity to total assets 5.20 3.36 ---
 Tier 1 risk-based cap. 6.81 3.98 ---
 Total risk-based cap. 8.39 5.51 ---
 Bank only:
 Tier 1 leverage capital 5.10 3.34 ---
 Tier 1 risk-based capital 7.12 4.16 ---
 Total risk-based capital 8.39 5.42 ---
 (A) Gain, net of taxes, from early extinguishment of debt.
 (B) Total deposits excluding certificates of deposit $100,000 and over and brokered deposits.
 -0- 1/27/92
 /CONTACT: David L. Spilman, treasurer of Baltimore Bancorp, 800-722-8823/
 (BBB)


CO: Baltimore Bancorp ST: Maryland IN: FIN SU: ERN

CC -- PH015 -- 9768 01/27/93 14:52 EST
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